Where did Harris County's Ike money go?

SHOREACRES, TX Hundreds of millions of dollars were set aside to help victims of Hurricane Ike repair and rebuild their homes, so 13 Undercover wanted to know why so little has been done.

If you want to know why people don't trust the government to spend money efficiently, you need look no further than Shoreacres, where a disaster followed the disaster.

The sunrise on Galveston Bay hides the tears of Shoreacres, where Stevie Ray Littlejohn is already two years old. He was born in a FEMA trailer, and he still lives in one.

His brother Jesse jumps on the trampoline, which now sits where their house once stood. The house was demolished so long ago that the grass has grown back.

"You have not a clue what is going on in this community," Shoreacres Alderman Dana Woodruff said in a City Council meeting.

Shoreacres -- no place in Harris County took a bigger hit from Hurricane Ike, but that was 25 months ago. To most of us, the storm is just a bad memory, but not there.

Why are there still trailers, blue tarps, shells of homes? Why does Stevie Ray still have to live like this?

"They are blowing in the wind for how long? It's absolutely asinine," Shoreacres Alderman Nancy Schnell said.

Harris County got $56 million to help these people recover, so why were they so angry at last week's City Council meeting?

"It's ridiculous, it's ludicrous, and it's wholly and completely unacceptable. And I say shame on you," Schnell said.

Eighteen-hundred families in Harris County asked for a piece of a huge government grant after the storm.

You know how many homes have been repaired? Not one.

"It has been an absolute, absolute unequivocal disaster in that it has taken way longer than it should have," said David Turkel with the Harris County Community Development.

"This is the insult that comes to the injury," Shoreacres City Administrator David Stall said.

No homes have been repaired but Harris County defends the $5 million already spent.

"And yet the grant money that was supposed to help people after the storm, from our perspective, has been wasted. It's been wasted on the salaries and benefits and overhead," Woodruff said.

It's enough to rebuild every damaged home here "The people that were affected by the storms are not getting nothing," Shoreacres resident Marie Meehan said.

Now Marie and Mike Meehan have gotten a lesson in not trusting government.

"Now they're telling us we are not eligible for nothing," Marie Meehan said.

Harris County told folks in August of 2009 that if they got federal loans, the grants could be used to repay them. That's what Katrina victims could do.

Guess what? The state said no -- a year later.

Marie Meehan said she borrowed a $130,000 from the federal government and is now being told tough luck.

"People are mad," we told Turkel.

"They should be mad; they're mad, we're mad," Turkel said.

Victims were told there were possible reimbursements for work they did on their own. That turned out to be wrong, too. Then Harris County told them to stop repairs.

"Harris County told people stop rebuilding?" we asked Stall said.

"Yes," Stall replied.

"If you're going to apply for HUD assistance -- and all these disaster funds are 'Housing and Urban Development' funds -- then you got play by their rules," Turkel said.

That's why Mike Meehan will now have to go back to work.

"I did retire, six weeks before the storm," Meehan said.

Meanwhile, we asked Turkel if he'd still wait, and his response was "There's not much choice but waiting."

That's why Stevie Ray still lives crowded in a FEMA trailer.

The city of Galveston was promised $120 million for home repair and rebuilding. They've just broken ground on their second home.

You can see how much has been spent across Texas and the number of houses we've got for the money.

Thursdaynight on Eyewitness News at 10, we'll try and sort out where the bureaucracy has broken down. There's a word for what we found, but we can't say it on TV.