Amazingly, FEMA's incompetence extended all the way to initially declaring a federal state of emergency in Louisiana in the wrong parishes. Really. Inland parishes were on the list whereas coastal parishes (including Orleans and Jefferson parishes) were not until someone noticed the mistake on the day the hurricane struck.
My best guess of what happened is this: FEMA decided that Gov. Blanco's request, which covered all of Louisiana to some degree, was excessive, and they decided not to give her all of the aid that she had requested. They drew up a list of the counties to include and the counties to exclude and, possibly in a rush to get done for the presidential press event covering the declaration, got the lists crossed. And then nobody noticed the mistake until the storm hit.... The worst part of all of this is that the only way for something like this to happen is if a lot of people didn't care enough about the situation to double check their decisions.