From the article:
Asked why the congressional mandate was never fulfilled, Barry Scanlon, senior vice president in the consulting firm of former FEMA Director James Lee Witt, said he believes the agency did what it needed when it gave the money to the state.
"FEMA received an earmark which it processed through to the state as instructed by Congress," Scanlon said, Witt is now a private consultant to Gov. Kathleen Blanco, D-La., on the Katrina aftermath.
earmark, eh? It was explained that earmark is the congressional euphemism for "pork." IOW, we didn't think we had to account for it. Kinda thin defense.