Katrina's $700 million awarded to help hurricane victims fortify their homes from future flood has somehow disappeared.

A report released from the inspector general's office showed that more than 24,000 homeowners who received grants up to $30,000 to elevate their homes either misspent or pocketed the money.

"The fact of the matter is that the money they received was for a specific purpose and the specific purpose was to elevate these homes to avoid future catastrophes," said David Montoya, the inspector general of the Department of Housing and Urban Development.

"We have $700 million that we can't account for and that certainly did not go to elevating homes and preventing future damage from storms," Montoya said in an interview in his office in Washington.

"This is money we can't afford to lose. This is money that we don't get back and this is money that we can't put toward other disaster victims."

The missing funds were part of nearly $1 billion relief effort of the Louisiana Road Home Program that was meant to help the victims that were hardest hit by the storm to get back on their feet. It was not intended for people to go out and replace their belongings, which is most likely what many did.

"Clearly, to give money out on the front end right after a disaster, when many of these people lost everything, with a promise to do something down the road, I think is counterproductive to what the program was designed to do," said Montoya.