Case workers are getting paid much less per hour than what company receives from the state
The Jindal administration is paying the firm that runs its troubled Hazard Mitigation program $53 an hour for more than 200 case workers but the company is paying those workers less than a third of that sum, according to program documents.
View full sizeIn October, Dianne and Ivory James protest at the state Capitol, saying they are getting nothing but promises about their full grant payment through the state-run Hazard Mitigation Grant Program for their Marrero home. The Shaw Group was brought in by the administration in October 2009 to provide staffing for the troubled program, which is seeking to distribute $750 million to roughly 37,000 Road Home applicants for measures like elevating homes, installing shutters and repairing flood damage.
Under its contract, Shaw receives $53 an hour for 210 mitigation analysts, who process applications to the program. But pay stubs for current and former mitigation analysts show they are being paid $15 to $17 an hour.
Paul Rainwater, the state's commissioner of administration, said the difference doesn't constitute a profit for Shaw because it covers fixed costs, such as office space, computers, software and supplies.
The Jindal administration has been struggling with the Hazard Mitigation program, which in three years has distributed only $84 million of its $750 million and has been a source of frustration to applicants in ways reminiscent of the Road Home under former Gov Kathleen Blanco.
Last week, Robin Keegan, the head of the state agency running the Hazard Mitigation program, announced she would step down.
This week, the Jindal administration made a move it says will improve the program. William Croft, Shaw's director for their part of the program, resigned and was tapped to help run the program for the state.
While homeowners remain frustrated, payments have accelerated since Shaw got involved. In the first two years, the program paid out $3 million, but in 13 months of Shaw's contract it has distributed $81 million.
Shaw spokeswoman Gentry Brann declined to comment about what the company pays workers or specific information about its contract.
"Shaw is providing staffing for the state's mitigation program and following their direction and the processes they designed," said Brann.
Interviews with current and former mitigation analysts paint a picture of a program whose management creates chaos for homeowners and profit for Shaw.
In terms of homeowners served, the program has paid just 8 percent of the 37,000 home-raising, rebuilding and storm-proofing projects approved for aid by FEMA. But Shaw has already received a full third of the $66 million it could conceivably get under the Hazard Mitigation portion of the contract.
Rainwater said he is concerned about the continued slow pace and poor communication with applicants. But he said the Shaw contract is not the problem. He said the agreement is "front-loaded" and payments to the firm will decline as fewer employees are needed.
In one spectacular mishap, a state staffer in July erroneously sent letters to 13,000 applicants that didn't pertain to them. Mitigation analysts said the letters caused mass confusion, and they had to spend countless hours explaining the mistake to frustrated applicants. Christina Stephens, a state spokeswoman, confirmed that workers had to call all 13,000 applicants to explain the mistake.
Some of the mitigation analysts were given workloads that were a third higher than the specifications of the state's contract with Shaw.
Former analysts Barbara Redding and Tara Scoby, contract workers who say they were fired from the program, each said they were working on about 135 files from applicants with work under way at the time they left. Shaw's contract says analysts "will have a caseload of no more than 100 homeowner project folders ... in the construction phase" and no more than 200 total files.
Stephens said the state does not agree that the workers had too many cases because the total was between 100 and 200.
Scoby says she was fired for blaming the program's shortcomings on policy changes. Redding says she was fired for complaining about policies she believed slowed the payment process.
Both women said they believed Shaw was deliberately slowing the program because the firm is being paid on an hourly basis.
Brann and Stephens said they won't comment on why employees were let go.
Stephens disputed the suggestion that Shaw is slowing the program down. She said that since Shaw took over, the state has made more than a dozen rules changes to speed up payments and today the firm is expected to meet a benchmark for 3,500 final payments approved.