TRENTON, N.J.—A federal audit has found New Jersey did nothing wrong when it used a no-bid contract to hire a firm to clean up debris left behind by Superstorm Sandy in 2012.

But the U.S. Homeland Security Department says that towns that continued to use the firm for more than 60 days without putting the work out to bid might not be fully reimbursed by the federal government.

The contract and the firm, Deerfield Beach, Fla.-based AshBritt, drew the ire of lawmakers months after Sandy struck. It marked the first major political debate over how Gov. Chris Christie's administration responded to Sandy and led to a testy legislative hearing a year ago.

Unlike many hurricane-prone places, New Jersey did not have a standing contract in place for debris removal in case of a massive natural disaster. When the storm hit, the state hired AshBritt using most of the terms of Connecticut's standing emergency deal with the company.

New Jersey officials and AshBritt said it was a cheaper option than using a contract negotiated by the U.S. Army Corps of Engineers.

Part of the reason for anger from Democrats was the firm's political connections. Former Mississippi Gov. Haley Barbour, a Christie confidant and fellow Republican, was a lobbyist for the firm. And several prominent New Jersey officials—both Republicans and Democrats—were hired as consultants.


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Under the state's deal, local governments could use the state contract to hire AshBritt. Fifty-one of them signed on eventually.

The audit, dated Feb. 27, was made public Thursday by Christie's office.

His office criticized Democrats and "complicit" media for treating the contract as a scandal last year. The overzealousness of critics and journalists is a theme Christie hit Thursday in a different context, a speech to the Conservative Political Action Committee.

In an email to reporters, Christie's office noted anger over AshBritt was "led by some of the same partisan Democrats that are attempting to politicize various issues today."

A legislative committee and federal investigators are looking into Christie's administration's involvement in shutting down of lanes near the George Washington Bridge as political retribution and complaints from the mayor of Hoboken, who said cabinet members told her city's post-Sandy aid would be tied to her support for a redevelopment project. Christie and his administration deny any wrongdoing.