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  • After superstorm Sandy ripped through New Jersey and destroyed tens of thousands of homes, the federal goverment sent $4.2 billion here for housing programs.
  • The state hired a Louisiana company to help set up and run three key housing programs, but it was fired after less than nine months on the job.
  • A federal government watchdog is now saying New Jersey should either prove the company it hired spent federal money appropriately or pay back up to $43.1 million.
  • New Jersey disputes the audit's findings, saying all the money is accounted for and was spent properly.

A federal fiscal watchdog wants New Jersey to justify how a government contractor spent $43.1 million in Sandy aid or be compelled to pay the money back.

The demand comes in a report by the U.S. Department of Housing and Development's inspector general. It concerns the activities of a contractor the state parted ways with after only nine months on the job due to performance issues.

All told, HUD has given New Jersey a total of $4.2 billion to rebuild communities that were battered, soaked or otherwise ruined by superstorm Sandy in October 2012. Almost half of that money was obligated to the state in 2013...