Officials in two southern Ocean County municipalities say they have no money to return to the federal government following the findings of an audit related to funds for Hurricane Sandy debris removal.

Little Egg Harbor Township officials say almost $690,000 that the federal government has flagged as ineligible for reimbursement was never actually dispersed.

In Beach Haven, the federal audit of the borough’s funding determined it needs to repay $344,000 in unsupported claims and return more than $650,000 in unused money, while abandoning claim to $3 million more in storm recovery funding. Borough officials say they are working on documenting their expenses and that the numbers being used are misleading.

The audit report released this week by the Department of Homeland Security’s Office of Inspector General states that as of the Sept. 16 cutoff date, Little Egg Harbor had received a public assistance award of $5.57 million from the state — a Federal Emergency Management Administration grantee — for Sandy damage.

But so far, the township has received only $1.6 million of $4.5 million that was obligated for debris removal, said Assistant Township Administrator Michael Fromosky.

“So they owe us more than $3 million. I would assume that the money they questioned would be part of the unpaid portion,” Fromosky said.

The report on the Little Egg Harbor audit, which was dated March 24, determined $689,138 of the $5.57 million needed to be reviewed, as the claims were flagged in the audit as unsupported or ineligible for federal reimbursement.

But the audit was done before Little Egg Harbor’s project worksheets are complete, Township Administrator Garrett Loesch said.

“An audit like this one typically takes place two to three years after the project worksheets are closed, and our worksheets are not closed yet,” Loesch said.

The township has provided the additional requested documentation and made the requested revisions, Fromosky said.

In December, Loesch said he submitted responses to the individual findings and recommendations of the audit. The response noted that the scope of the audit examined the initial 30-day submission of Project Worksheet 558, which was based on estimations and limited documentation, Loesch said.

He added that the limited amount of documentation available for review by the Office of the Inspector General for the audit was a direct result of inaccurate or incomplete guidance from the many FEMA project specialists who were assigned to assist the township.

In Beach Haven, Borough Manager Richard Crane said there is no money to give back because the funding was awarded but not dispersed.

“These are not even FEMA auditors. They are from the Office of the Inspector General, and FEMA could tell them they are not going by this audit,” Crane said.

Crane said the debris removal funding in question is just one of about 30 work orders the borough still has to complete related to Sandy. There is still about $7 million that Beach Haven is looking to recover in connection to storm costs, Crane said.

“This is really much ado about nothing. There are so many numbers just being thrown around arbitrarily,” he said.

About five days after Sandy hit Long Beach Island in October 2012, Crane said, he sat down with borough Engineer Frank Little and emergency coordinators, and at that time they were told by FEMA to put together an estimate to clear storm debris.

“We came up with a little over $4 million, and then they ended up putting together an award of $4.8 million. We’re not giving it back because we never received $4.8 million. It was an award, it was never dispersed,” he said.

He said of that $4.8 million, FEMA then obligated 75 percent of it for storm debris removal, which translated to that initial award dropping to $3.6 million.

“They then take that figure and the state steps in and says they’re going to give Beach Haven half, or $1.8 million,” he said.

The $1.8 million cannot be used in its entirety until all the paperwork is completed and submitted, even though the borough has been borrowing money for the past 18 months to clean up storm debris, he said.

“Of that $1.8 million, we’ve only drawn down on $438,000,” he said.

Debris removal in the borough has cost about $1.1 million, he said. Beach Haven entered into an interlocal services agreement with the county following the storm for AshBritt to complete debris removal, with the county fronting the money for the service, which saved the borough a lot, he said.

“We still have a lot of work to do. We’re going to be coming back from this storm for the next two years. And 18 months later, we’re tired. We’re still working in the Coast Guard Station because we’re not even back in the Municipal Building yet,” he said.

Contact Donna Weaver:

609-513-6686

@DonnaKWeaver on Twitter

Senior copy editor for the Press of Atlantic City. Have worked as a reporter, copy editor and news editor with the paper since 1985. A graduate of the University of Delaware.