Feds Recommend FEMA Recover $1.5M in Duluth 2012 Flood Money

DULUTH, Minn. (AP) - A government audit recommends the Federal Emergency Management Agency recover $1.5 million given to Duluth for 2012 flood aid.

The Office of Inspector General of the U.S. Department of Homeland Security made that recommendation in a report last month.

Duluth received a $13 million grant for damage caused by severe storms and flooding in June 2012. But the audit found the city did not follow federal procurement standards in awarding $1.5 million for eight non-emergency contracts.

The audit says FEMA has no assurance that businesses owned by minorities and women had a chance to bid. The report notes that the state of Minnesota incorrectly advised the city to follow its own procurement procedures.

In a statement Wednesday, the city says it acted in good faith and disagrees with the recommendations.