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OIG Tells FEMA to Improve Management of Hazard Mitigation Grant Program Property Acquisitions

OIG’s audit found that HMGP officials regularly granted states more funds than needed to complete projects.

The Office of Inspector General (OIG) says the Federal Emergency Management Agency (FEMA) did not oversee and manage Hazard Mitigation Grant Program (HMGP) property acquisition projects efficiently or effectively. The watchdog also reports that FEMA could not provide assurance that projects are awarded equitably. 

Through grants to states, FEMA uses the HMGP to purchase properties that are flood damaged or in flood-prone areas, demolish any structures on them, and ensure they are maintained forever as open space. 

Since 1989, FEMA has completed about 3,100 projects across the United States and spent about $1.73 billion for states to acquire and demolish about 32,000 individual properties. As of January 2022, FEMA had 637 active HMGP property acquisition projects underway, with over $1.01 billion in Federal funds obligated to 42 states and territories. 

OIG’s audit found that HMGP officials regularly granted states more funds than needed to complete projects, did not always deobligate unused funds promptly, and did not use Strategic Funds Management (SFM), an incremental funding process, as required. For example, OIG determined that 36 open projects, with approximately $12.2 million in obligations, have been open longer than the expected eight years. Further failings uncovered by the audit include incomplete property records.

Deficiencies have been attributed to FEMA’s inadequate oversight of its regions and OIG estimates that FEMA could put about $134.9 million to better use if it strengthens its HMGP project management. 

According to OIG, HMGP officials did not ensure that states and communities monitored open space properties, as required. Officials told the watchdog that FEMA allowed states to prioritize disaster response activities over collecting monitoring reports. Therefore, OIG determined that FEMA has no assurance that states are maintaining properties as open space. 

Additionally, OIG said that HMGP officials could not ensure that states considered demographic and economic data when selecting projects because FEMA has not yet developed a method for states to gather this data or guidance on using it when awarding funds. 

To FEMA’s credit, it is reviewing its programs to find ways to implement them equitably. OIG’s recommendations from the audit, with which FEMA has concurred, will also help the agency meet its HMGP mission.

OIG recommends that FEMA implement financial management procedures to ensure its regional officials monitor and close HMGP property acquisition projects in a timely manner, and that they conduct SFM reviews, document review decisions, and implement such decisions where appropriate. These actions will help minimize as much as $134,911,248 in funds that FEMA could put to better use. 

FEMA officials stated that HMGP is in the process of standing up a Monitoring and Closeout Team. In addition, FEMA has created closeout job aids to help states and communities complete closeout packages and expedite the closeout process. The new HMGP Monitoring and Closeout Team will assist regional offices through the remainder of calendar year 2022 and will update the SFM Frequently Asked Questions and SFM Implementation Guide by the end of calendar year 2023. The team will also conduct quarterly SFM reviews and annual trainings on the importance of SFM determinations and documentation.

OIG also called for management procedures to ensure HMGP property acquisition project applications and project information are complete and accurate when submitted, reviewed, closed, and maintained by FEMA. 

FEMA officials stated the Hazard Mitigation Assistance Division (HMAD), under the Federal Insurance and Mitigation Administration (FIMA), is developing the Application Review Tool, which FEMA regional offices can modify to fit their needs when reviewing HMGP projects. Throughout FYs 2021 and 2022, HMAD has developed acquisitions-specific job aids and documents for applicants to use when developing acquisition projects. HMAD anticipates completing the migration from NEMIS to the FEMA Grants Outcomes (FEMA GO) system by the end of FY 2023, with full import of legacy disaster data by the end of FY 2025. 

OIG recommended that the Acting Deputy Assistant Administrator for Resilience direct FEMA regions to ensure states monitor, inspect, and report to FEMA on acquired HMGP properties in accordance with grant requirements to confirm the properties are maintained as open space. 

FEMA officials stated FIMA is finalizing efforts to validate and categorize the spatial location of all open space records. The data will be hosted on an internal geoportal mapping application, allowing FEMA regional offices and grantees to visualize and verify properties’ spatial locations. Further, grant recipients may use spatial imagery to monitor records and verify they are being maintained as open space. This tool will help regional offices and grantees better comply with the monitoring requirement and continue efforts to validate records. FIMA will complete the data validation effort, working with FEMA regional offices and state, local, tribal, and territorial governments to continuously verify and monitor records. FEMA estimates this work will be complete by January 31, 2023.

Finally, OIG recommended that the Acting Deputy Assistant Administrator for Resilience and FEMA’s Office of Equal Rights continue initiatives to reduce barriers and increase opportunities pursuant to Title VI of the Civil Rights Act of 1964 for applying for and receiving FEMA HMGP property acquisition grants. The watchdog wants FEMA to develop guidance and implement equity considerations in program delivery, including the states’ use of demographic, economic, and other required data when selecting projects for HMGP property acquisition. 

FEMA officials stated FIMA is identifying barriers to equitable program delivery and developing action plans to address them. FIMA is now seeking ways to ensure greater consideration for equity in HMGP program delivery. FEMA will also develop baseline analysis recommendations for prioritizing equity across the program by the end of December 2022, and guidance by late 2023.

Read the full report at OIG

Kylie Bielby
Kylie Bielby has more than 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. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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