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West Virginia Homeland Security advisor resigns after investigation into flood spending

Photo courtesy of the West Virginia Governor’s Office Jimmy Gianato, the former head of the West Virginia Division of Homeland Security and Emergency Management, has resigned as homeland security advisor.

CHARLESTON — The former leader of the West Virginia Division of Homeland Security and Emergency Management has resigned as homeland security advisor after months of scrutiny over handling of federal grants, including grants allegedly used by Richwood city officials for personal use.

Jimmy Gianato retired effective Friday as the homeland security advisor for Gov. Jim Justice and the West Virginia National Guard. He announced his impending retirement to staff in an email Thursday.

“Friday is my last official day with the State of West Virginia,” Gianato said. “Working with all of the partners we have, we have been able to help many and provide that little bit of hope. I was told many years ago, you will not be able to make everyone happy. Be grateful for the ones you can and do your best for everyone else.”

Last October, the Division of Homeland Security and Emergency Management — an agency within the Department of Military Affairs and Public Safety — was put under the West Virginia National Guard. Gianato was removed as division director and replaced with his deputy director, retired Lt. Col. Michael Todorovich. Gianato remained as homeland security advisor, reporting directly to National Guard Adj. Gen. James Hoyer.

The move was the result of a legislative audit released in November of homeland security. Auditors discovered that the Federal Emergency Management Agency wrote Gianato a letter in November 2015 that said the state was being penalized for not following grant reporting requirements — a letter he never reported to his cabinet secretary or the governor’s office.

Starting in 2016, FEMA’s manual reimbursement penalty required homeland security to use state funds to make initial expenditures. FEMA would then only reimburse the state after homeland security officials justified the expenditures, adding up to 90 days for federal reimbursements exceeding $100,000.

According to auditors, homeland security was cited by FEMA for not following grant requirements and monitoring going back to 2009. Homeland security officials did not establish any internal controls on federal grants and had not corrected monitoring issues of grant sub-recipients since 2011. The manual reimbursement penalty was the last straw for federal officials.

During committee testimony last year, Gianato blamed the lapses in grant reporting on lack of staff to handle the reporting requirements, as well as the number of major flood disasters that have struck the state over the last several years, including the 2016 floods.

“We’ve been working with FEMA for some time on deficiencies that we had, primarily due to a shortage of personnel,” Gianato told lawmakers in November. “The one issue, sub-recipient monitoring, has been a continued issue with us primarily because we didn’t have sufficient staff to go out into the field and do a lot of those audits.”

In an investigation released Friday afternoon, the State Auditor’s Office specifically cited homeland security for not monitoring FEMA’s public assistance grant program after State Auditor J.B. McCuskey accused officials in Richwood of misuse of public funds.

Former Richwood mayor Bob Henry Baber, current mayor Chris Drennen, Police Chief Lloyd Cogar, and former city clerk Abby McClung were arrested and charged with various counts of embezzlement and misuse of state purchasing cards.

A specific incident cited was a $500,000 FEMA grant to repair the city’s water main intake, which was damaged in the 2016 flooding. According to the auditor’s report, the city used $400 for a temporary fix with PVC pipe and used the rest for city official salaries.

“Despite the influx of nearly $3.1 million from FEMA to assist the City of Richwood’s recovery from the devastating floods of June 23, 2016, greed, incompetence and total lack of fiscal management have left Richwood on the brink of bankruptcy,” McCuskey said.

Since reorganizing the homeland security division last year, the division now has an internal audit staff to monitor FEMA grants and has hired additional staff to handle the monitoring duties.

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