The report -- by Congress' non-partisan investigative wing, the Government Accountability Office -- said FEMA misspent the funds by failing to accept contracts with the lowest bids for maintaining trailers occupied by Hurricane Katrina survivors in Mississippi, The Washington Post reported Friday.
FEMA wasted $16 million on accepting higher bids and an additional $15 million on inspections the government agency could not prove actually took place, preventative maintenance with falsified documents and emergency repairs on non-FEMA trailers, the report said.
"Over 2 years have passed since the storms and FEMA is still wasting tens of millions of taxpayer dollars as a result of poor management and ineffective controls," the report said.
The GAO said the matter is being referred to the U.S. Justice Department for investigation.
"The American taxpayer should be outraged -- as I am -- that in a six-month period FEMA managed to waste approximately half of the $60 million it spent" on trailers in Mississippi alone, Sen. Joseph Lieberman, I-Conn., chairman of the Senate homeland security committee, said in a statement.