The United States received hundreds of millions in foreign aid last year, after Hurricane Katrina devastated Gulf Coast. What happened to the Money?

By late October, the State Department had allocated $66 million of the $126 million in international assistance to FEMA, which then granted it to the United Methodist Committee on Relief (UMCOR), the nonprofit aid arm of the United Methodist Church. With the funds, UMCOR established Katrina Aid Today, a consortium of nine national aid agencies dedicated to case-management work for Katrina evacuees. But to date, only $13 million has actually been disbursed, and it has been allocated almost exclusively to salaries and training for case workers, not to evacuees.

As for the rest of the funds, some $60 million languished for more than six months in a non-interest-bearing account at the U.S. Treasury. Had the money been placed in Treasury securities, the GAO report notes, their value would have increased by nearly $1 million by the end of February. Instead, inflation meant the funds actually decreased in value as the government stalled. In mid-March, the Department of State finally agreed to sign over the remainder to the Department of Education for teacher salaries, books, and new school buildings along the Gulf Coast. But the Department of Education has yet to spend a dime. In response to inquiries from Foreign Policy, a spokesperson said that an announcement will be made this week regarding how the department intends to use the money.