New Jersey used inadequate data to vet and reject thousands of Hurricane Sandy aid applications, and the labyrinthine process resulted in many people giving up, officials and victims advocates say.

Despite state officials saying they investigated and addressed the error, applicants report they were never notified of the erroneous rejections. Rejection letters informed applicants they could appeal the decision.

“I’m not aware of anybody who didn’t appeal and nevertheless got an award,” said Kevin Walsh, associate director of the Fair Share Housing Center.

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On Wednesday, a report by the nonprofit advocacy group confirmed what many on the ground already knew: Thousands of homeowners were being erroneously rejected. Data Fair Share obtained through an Open Public Records Act request showed nearly 80 percent of those rejection decisions were reversed upon appeal, but 3,700 people in two major state-run programs never appealed their decisions. The deadline for appeals to be filed has since passed.

Fair Share’s report prompted calls from several politicians statewide for a review of the applications, even as a so-called “Sandy Bill of Rights” works its way through the Legislature.

The increased scrutiny came weeks after the state confirmed it had fired the contractor who oversaw the Sandy aid process, Hammerman & Gainer Inc., or HGI, in December. The company’s $68 million contract was terminated two years before it was set to expire.

The state Department of Community Affairs, which oversees the Sandy aid process, attributed the rejections in part to “inaccurate damage assessment data” provided by the Federal Emergency Management Agency.

But representatives of FEMA say the data the state used to evaluate applications weren’t intended for long-term damage assessments. The data, which helped determine FEMA benefits, were generated during the first weeks after the storm and given to the state for advisory purposes.

“It was never meant to be used for them for their payouts or their processes,” said Phyllis Deroian, a FEMA spokeswoman. “We were sharing information with the state, which we’re allowed to do by law.”

Representatives from the DCA would not speak on the record Thursday.

New York’s disaster recovery action plan, issued in April 2013, indicates the FEMA Verified Loss data would be a “starting point to assess damage” but needed to be adjusted to “scale up the true damage incurred.” In assessing applicants, the New York plan called for adjustments for renter-occupied properties and for “true replacement cost,” which it noted the FVL underestimated.

The adjustments were made according to a scale designated by the U.S. Department of Housing and Urban Development. For instance, properties that had an FVL range of less than $3,000 in estimated damage had an average of $39,453, according to the Small Business Administration’s assessments.

New Jersey’s action plan includes FVL data but makes no mention of possible adjustments.

“These figures merely scratch the surface in examining the extent of damage Superstorm Sandy visited on New Jersey’s housing stock,” the report states, referring to FEMA figures on how severe and major damage was spread throughout the state.

Stewart Farrell, director of the Richard Stockton College Coastal Research Center, said the FVL data were based on a complicated evaluation process that started in the field and was eventually finalized at FEMA’s New York office.

“At that point, it’s an internal decision based on a valuation of losses,” he said. “They have formulas for everything.”

For instance, different flooring materials have different valuations, and the contents of a home are included only if the property owner had them insured, Farrell said. FEMA did not account for how much it would cost to fully replace losses.

Farrell said each step of the “labyrinthine” aid-application process came with a long wait period and many steps that property owners had to follow.

“It hasn’t been smooth sailing,” he said. “Who’s fault it is, I couldn’t even begin to speculate. It’s definitely not working the way everyone thought it would.”

In a Press of Atlantic City editorial board meeting Thursday, state Senate President Stephen Sweeney criticized the state's handling of Sandy recovery. He also touted his recently introduced Sandy Bill of Rights legislation, which would establish minimal standards for hurricane recovery, such as fair access to benefits and the ability to know why an application was rejected.

Of HGI, he said, “This company completely screwed up the recovery.” While Christie was successful at securing federal aid, Sweeney said the administration of that aid was deeply flawed.

“It’s a year and a half later, and people are no further along,” he said.

DCA representatives would not comment on the record about HGI’s firing other than to confirm that the contract has been terminated and the state has taken over HGI’s responsibilities.

Like many homeowners, William Halbeisen immediately knew something was wrong when he received a rejection notice for the state Reconstruction, Rehabilitation, Elevation and Mitigation program. He was informed his home in the Beach Haven West section of Stafford Township hadn’t met the program’s minimum requirements of $8,000 in damage, according to the FLV, or being inundated with more than a foot of water.

“I had 4½ feet of water in my house,” he said. “Beach Haven West got really hammered.”

It wasn’t until October, nearly a year after Sandy, that Halbeisen received word that the state’s decision was reversed upon appeal. In the interim, in which restoring his pre-Sandy life became a full-time career for the retired school psychologist, he was never told about the faulty data. He didn’t realize so many people had also been wrongly rejected.

“That’s unheard of,” he said. “I didn’t think it was anywhere near as high. Unbelievable, just unbelievable.”

Halbeisen’s home is still many months from being raised and renovated. With temporary housing assistnace about to end, he expects to be living in a tent on his property soon.

“I know all the cleanest restrooms in the area,” he said with a sardonic laugh.

Staff Writer Derek Harper contributed to this report.

Contact Wallace McKelvey:

609-272-7256

@wjmckelvey on Twitter

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