After housing advocates pointed out Wednesday that nearly 1,900 applicants were found on appeals to have been improperly deemed ineligible for aid, the state blamed faulty Federal Emergency Management Agency data as underassessing damage.
FEMA, for its part, then blamed the state, saying it misused damage assessments it says were conducted for short-term emergency aid immediately after the storm and were not to be considered accurate for determining long-term recovery and rebuilding needs.
On Thursday, officials with the state Department of Community Affairs expressed frustration with the characterization of the error rate, which it said had occurred in 7 percent of the total of 23,000 applications.
About 3,200 applications were found ineligible. Appeals were filed in 1,379 cases, leading to reversals in 1,090 cases, about 80 percent.
The DCA said it relied on the FEMA damage data for eligibility determination - $8,000 was the initial threshold - so that homeowners would not have to do additional assessments just to apply for the aid.
"FEMA gave us access to the database," said one state official who would speak only on background. "The presumption was the FEMA data was accurate."
Once problems arose - in some cases, large discrepancies between the cost of actual damage and initial FEMA assessments - the DCA applied in August to amend the action plan to allow third-party assessments.
The denial letters "explicitly" stated the rejections were based on "FEMA inspection data" and invited the applicant to appeal the process, according to the DCA, which provided a copy of a letter.
DCA officials said those whose appeals were granted were still eligible for funding prioritized by need and income and were not automatically put on the waiting list.
Adam Gordon with Fair Share Housing Center in Cherry Hill, which pointed out the erroneous denial rate, said New Jersey should have known not to rely on the FEMA numbers. New York's action plan takes into account the potential flaws of early FEMA damage assessments.
"New York knew this from the start," Gordon said. "Their action plan says you can't just use the data. It's apples and oranges. We pointed it out to them in April."
State Sen. Jim Whelan (D., Atlantic) said Thursday that he would look into holding further hearings by the Environment and Energy Committee into the error-riddled process. A Sandy Bill of Rights passed the Assembly Housing and Community Development Committee on Thursday.
"There's more than enough blame to go around," Whelan said.
Whelan said that he had just been denied for help elevating his Sandy-damaged house and that he and his wife found the process mystifying and frustrating.
"For everybody, it has been extremely frustrating," he said. "It's embarrassing for me as a senator, as somebody who has been impacted by Sandy - I don't know what the rules are."
Whelan said the DCA-FEMA blame game was operating on the same pattern as the earlier issue of FEMA's flawed flood maps, which Gov. Christie adopted as state policy even while locals were condemning them.
"That was the template: FEMA didn't have it right in the first place, but the state went about it anyway," Whelan said.
He urged the DCA to allow the thousands who were rejected but did not appeal to be allowed to reapply. But DCA officials said those rejected were sent clear letters and they believed their failure to apply indicated they were, in fact, ineligible, due to various factors, including the home not being the primary residence or not being above the $8,000 damage threshold.
DCA officials said they were working to streamline the process and train case managers better.
HGI, the company that was fired for poorly running the state's Sandy housing aid programs, was the lower of two bids for the contract, officials said. The company had been fired from work in Louisiana post-Katrina.
"No one is perfect," said one DCA official who did not wish to be identified. "Please find me the perfect company, and we will hire them. There's always issues in disaster recovery."
DCA spokeswoman Lisa Ryan said about 5,100 Sandy-impacted homeowners had been preliminarily approved for an RREM award. Grant-award signings have been completed with about 1,200 RREM applicants, obligating more than $137 million in grant assistance, including approximately $25 million in reimbursements for rebuilding work already completed, she said.
The DCA addressed another criticism Thursday - that people have been unable to find out where they are on the waiting list. That information is available by calling 1-855-SANDYHMN and supplying the RREM number and home address, officials said.