Breaking

A U.S. Government Accountability Office (G.A.O.) recently published study has found that though the U.S. Department of Housing and Urban Development (HUD), which administers the Community Development Block Grant Disaster Recovery (CDBG-DR) program, has released more than $1 billion in disaster funding to the U.S. Virgin Islands, the territory’s government had not expended any of the funds.

The study was published on Monday and provided to The Consortium by G.A.O. Relative to the U.S. Virgin Islands, the study found that not a single dollar from the $243 million announced in February 2018 and made available for use in September, had been expended — far less the nearly $800 million made available for use on March 1. Grantees of CDBG-DR funds, among them the U.S. Virgin Islands, Puerto Rico, Texas and Florida, have until 2023 to use the money.

The reason for the delay is because the territory’s government is still in the process of designing and setting up the activities approved in its action plan, and it planned to implement activities in stages, the study found.

The study found that the territory and the other grantees had met all the requirements for the funds’ release: Financial process and procedures, implementation plan and finally an action plan — all of which were accomplished during Governor Kenneth Mapp’s tenure. Even so, the territory had yet to begin expending the money, even as Governor Albert Bryan has said a major focus of his as federal dollars pour into the territory will be to assure that the government is spending the money.

“The U.S. Virgin Islands planned to first implement two housing programs that provide assistance for the rehabilitation or reconstruction of storm-damaged residential owner-occupied units and for the construction of new homes for first-time homebuyers,” reads the study. “U.S. Virgin Islands officials stated that as of November 2018, they were working on policies and procedures for the subrecipients that will help administer these programs and that they planned to launch both programs early in calendar year 2019. The U.S. Virgin Islands also planned to provide assistance for the rehabilitation or construction of affordable rental housing units but did not provide information on when it planned to implement this activity. In addition, officials said they anticipate funding some infrastructure projects in early 2019.”

All four of the 2017 grantees also planned to use contractors to help fill gaps in expertise and operational capacity. “According to a U.S. Virgin Islands official, the U.S. Virgin Islands hired a contractor to help set up the grant, including assisting with the development of its action plan. The official also told us that the U.S. Virgin Islands planned to hire contractors to help support the implementation of its CDBG-DR activities but it had not yet determined the number of contract staff needed,” reads the study.

The study was critical on HUD, and recommended changes in the way HUD administers the CDBG-DR program that the G.A.O. said is aimed at streamlining the process so that grantees could receive the monies in a more timely fashion. Indeed, it’s been almost two years since Hurricanes Irma and Maria ravaged the U.S. Virgin Islands.

“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,” reads the study. “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. Adequate review guidance, a monitoring plan, and strategic workforce planning would improve HUD’s ability to oversee CDBG-DR grants.”

It added, “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… “HUD officials said that permanently authorizing CDBG-DR would allow HUD to issue permanent regulations for disaster recovery. 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.”

Below are the recommendations:

Recommendation: 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. (Recommendation 1)