State steps in on Katrina collections plan

State officials on Thursday took the reins from a private contractor that wanted to use a collections agency to recover as much as $175 million in suspected grant overpayments from Hurricane Katrina victims.

The Louisiana Recovery Authority cited a lack of confidence in ICF International’s ability to determine who owed money and who did not.

The LRA’s executive director, Paul Rainwater, says the state will establish a three-person panel to hear the cases of people suspected of owing money to the state’s flagship recovery program, Road Home.

If applicants believe they owe no money, the panel will review any documentation they have.

The panel will not include a representative of ICF, whose plans to hire a collector were first reported by The Associated Press.