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When federal auditors earlier this year criticized the way Erie County spent disaster aid after the surprise snowstorm of October 2006, county officials were confident they had a response that would satisfy calls to pay back the $48 million.

They had dug up federal law in support of a decision to limit contractors to local companies and said they could provide more paperwork for $9 million in expenses that auditors said were undocumented.

But now, the Department of Homeland Security’s Office of Inspector General has revised its audit, de-emphasizing criticism that the county’s preference for local contractors had improperly limited competition and adding more explanation about how the county violated federal rules for spending the money.

And it still wants the Federal Emergency Management Agency to force Erie County to repay the $48 million paid to the county mostly during the last 15 months of the Joel Giambra administration.

“The county executive directed the purchasing department to award contracts giving preference to local contractors, but did not ensure the process followed open competition and documentation requirements,” the revised audit states.

The revisions, the audit says, came in response to a “congressional request” to clarify exactly how the selection of local contractors was “not made within the required context of open competition regulations.” The request was made by staffers of the House Committee on Homeland Security, said Tanya Y. Callender, spokeswoman for the Office of Inspector General.

The audit found:

• The county failed to ensure “full and open competition” when it selected contractors to clean up storm-damaged trees by relying on “unacceptable sole source and average bid methods” for setting prices. For example, the county in some cases averaged bids submitted by all companies to set contract prices. “The logic behind this method increased the cost that was passed on to the federal government,” auditors found.

• The county could not provide written evidence that it performed required cost analyses.

• The county failed to show that it took steps to “assure minority firms, women’s business enterprises and labor surplus area firms were used when possible,” as required by federal law.

• The county did not provide any written policies or procedures that explained its “preference in selecting local contractors while keeping the open competition principles” of the federal rules.

Some of the audit’s findings came down to sloppy record keeping. Auditors said the county was unable to provide proper documentation for $9 million in expenses.

County Executive Mark C. Poloncarz has since told the agency it has located additional records for the work.

In addition, it criticized the county for changing its overtime policy during the storm cleanup, allowing some workers who were previously exempt from collecting overtime to earn the extra pay. Seven out of 10 of the highest overtime earners retired shortly after the disaster period.

County officials continue to disagree with the audit’s findings, said Peter Anderson, a spokesman for Poloncarz.

“The findings in the latest audit were never discussed with us,” Anderson said.

The audit’s recommendations are focused on the Federal Emergency Management Agency and the state’s Division of Homeland Security and Emergency Services, which it says should have better managed the grants. But Poloncarz, along with members of the Western New York federal legislative delegation, are concerned about the recommendation that $48 million spent by the county be paid back.

Sen. Charles E. Schumer, Poloncarz and local members of Congress are expecting to attend an upcoming meeting with FEMA Administrator W. Craig Fugate to discuss the audit. Anderson said the county remains confident it will not have to repay the money, with the help of local members of Congress.

email: djgee@buffnews.com