emergency responders in Hurricane Harvey U.S Border Patrol riverine agents launch an air boat in a Houston, Texas suburb as they evacuate residents in the flooded in the aftermath of Hurricane Harvey. (Photo by Glenn Fawcett)

Much of $35 Billion in Hurricane Recovery Spending Remains Unspent

Over a year after the first funds were appropriated for the 2017 hurricanes, much of the $35 billion remains unspent because grantees in Florida, Puerto Rico, Texas, and the U.S. Virgin Islands are still in planning phases.

The 2017 hurricanes (Harvey, Irma, and Maria) caused an estimated $265 billion in damage, primarily in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands. As of February 2019, Congress had provided over $35 billion in grants to help communities recover. Communities may use these funds to address unmet needs for housing, infrastructure, and economic revitalization.

The Government Accountability Office (GAO) was asked to evaluate the federal government’s response to the 2017 hurricanes. In its initial review, the findings of which were published on March 25, GAO examined the status of the 2017 grants, the Department of Housing and Urban Development’s (HUD) review of the initial steps grantees have taken and its plans for future monitoring, and the challenges HUD and grantees face in administering grants.

As of September 2018, the four states and territories that received the most 2017 Community Development Block Grant Disaster Recovery (CDBG-DR) funds had signed grant agreements with HUD. Before signing the agreements, HUD certified the grantees’ financial processes and procedures. It also approved the grantees’ assessments of their capacity to carry out the recovery and of unmet needs (losses not met with insurance or other forms of assistance). Before funding begins to reach disaster victims, the grantees need to take additional steps, such as finalizing plans for individual activities.

GAO found that as of January 2019, Texas had drawn down about $18 million (of $5 billion) for administration and planning only, and Florida had drawn down about $1 million (of $616 million) for administration, planning, and housing activities. Puerto Rico and the U.S. Virgin Islands had not drawn down any of the $1.5 billion and $243 million, respectively, they had been allocated.

As a result of its review, GAO says HUD lacks adequate guidance for staff reviewing the quality of grantees’ financial processes and procedures and assessments of capacity and unmet needs, and has not completed monitoring or workforce plans. The checklists used to review grantees’ financial processes and procedures and assessments ask the reviewer to determine if the grantee included certain information, such as its procurement processes, but not to evaluate the adequacy of that information. In addition, the checklists, which include a series of “yes” or “no” questions, do not include guidance that the HUD reviewer must consider. HUD also does not have a monitoring plan that identifies the risk factors for each grantee and outlines the scope of monitoring.

Further, HUD has not developed a workforce plan that identifies the critical skills and competencies HUD needs and includes strategies to address any staffing gaps. GAO says adequate review guidance, a monitoring plan, and strategic workforce planning would improve HUD’s ability to oversee CDBG-DR grants.

Without permanent statutory authority and regulations such as those that govern other disaster assistance programs, CDBG-DR appropriations require HUD to customize grant requirements for each disaster in Federal Register notices—a time-consuming process that has delayed the disbursement of funds. CDBG has been widely viewed as a convenient, expedient, and accessible tool for meeting needs in disaster-impacted communities that are not met by other federal and private sources, but CDBG-DR has proven to be slow for HUD and grantees to implement.

In a July 2018 report, the HUD Office of Inspector General found that as of September 2017, HUD used 61 notices to oversee 112 active CDBG-DR grants. Officials from one of the 2017 grantees told the GAO review that it was challenging to manage the multiple CDBG-DR grants it has received over the years because of the different rules. CDBG-DR grantees have faced additional challenges such as the need to coordinate the use of CDBG-DR funds with other disaster recovery programs that are initiated at different times and administered by other agencies. HUD officials said that permanently authorizing CDBG-DR would allow HUD to issue permanent regulations for disaster recovery.

GAO says permanent statutory authority could help address the challenges grantees face in meeting customized grant requirements for each disaster, such as funding lags, varying requirements, and coordination with multiple programs. The expected increase in the frequency and intensity of extreme weather events underscores the need for a permanent program to address unmet disaster needs.

GAO issued five recommendations in its March 25 report:

  1. The Assistant Secretary for Community Planning and Development should develop additional guidance for HUD staff to use when assessing the adequacy of the financial controls, procurement processes, and grant management procedures that grantees develop.
  2. The Assistant Secretary for Community Planning and Development should develop additional guidance for HUD staff to use when assessing the adequacy of the capacity and unmet needs assessments that grantees develop.
  3. The Assistant Secretary for Community Planning and Development should require staff to document the basis for their conclusions during reviews of grantees’ financial controls, procurement processes, and grant management procedures and capacity and unmet needs assessments.
  4. The Assistant Secretary for Community Planning and Development should develop and implement a comprehensive monitoring plan for the 2017 grants.
  5. The Assistant Secretary for Community Planning and Development should conduct workforce planning for the Disaster Recovery and Special Issues Division to help ensure that it has sufficient staff with appropriate skills and competencies to manage a growing portfolio of grants.

HUD will need to increase its staff to meet these recommendations. HUD currently has 24 full time employees in its Disaster Recovery and Special Issue Division but the division has developed a staffing plan to address long-term oversight and management of the CDBG-DR portfolio and, as of March 1, 2019, is expected to fill 14 positions over the next 3 months. In addition, it stated that it had identified an approach to secure 20 additional positions to support CDBG-DR and expected to finalize this approach in the next few weeks once it was approved by HUD’s financial and human capital officials.

GAO pointed out that while developing a staffing plan is a good first step, HUD still needs to conduct workforce planning to determine if the number of staff they will be able to hire is sufficient to oversee the growing number of CDBG-DR grants, identify the critical skills and competencies needed, and develop strategies for addressing any gaps.

Read the full report at GAO

Kylie Bielby has 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. She is an editor and contributor for Jane's by IHS Markit, a columnist for security and counter-terror publications, and a former managing editor for Homeland Security Today.

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