At least 30 federal agencies administer disaster assistance programs and  activities. These  steps had associated deadlines, which the four grantees generally met. All  four of the grantees had signed grant agreements with HUD by the end of  September 2018. Specifically, as of January  2019, Texas had drawn down approximately $18 million and Florida had  drawn down approximately $1 million of their allocations generally for  administrative and planning expenses. HUD’s Review of Grantees’ Initial Steps Was Limited, and It Has Not Developed Monitoring or Workforce Plans

		HUD Does Not Have Adequate Guidance for Reviewing Financial Processes and Procedures and Assessments of Capacity and Unmet Needs

HUD lacks adequate guidance for its staff to use when determining the  adequacy of a grantee’s financial processes and procedures and  assessments of its capacity and unmet needs. In addition, the financial certification checklist, which is  framed as a series of “yes” or “no” questions, does not include guidance  that the HUD reviewer must consider. HUD officials told us that HUD reviewers do  assess the quality of grantees’ submissions during their reviews. However, HUD does not have a monitoring plan  that identifies the specific risk factors for each grantee and outlines the  scope of its monitoring. HUD did not have  this information because it had not conducted strategic workforce  planning. Without strategic  workforce planning that determines if the number of staff HUD plans to  hire is sufficient to oversee the growing number of CDBG-DR grants,  identifies the critical skills and competencies needed, and includes  strategies to address any gaps, HUD will not be able to identify the  staffing resources necessary to oversee CDBG-DR grants. HUD and CDBG-DR Grantees Face Challenges with Program Design and Administration

Due to the lack of permanent statutory authority for CDBG-DR, CDBG-DR  appropriations require HUD to customize grantee requirements for each  disaster. As of February 2019, Congress had not permanently authorized  CDBG-DR or any other program to meet unmet disaster needs. As part of our current review, HUD officials reiterated that a permanently  authorized CDBG-DR program would allow HUD to issue permanent  regulations. In a July 2018 report, the HUD OIG found that as of September  2017, HUD used 61 notices to oversee 112 active disaster recovery  grants totaling more than $47.4 billion, and would issue additional notices  for funding provided in 2017 and 2018. Officials from one of the 2017  grantees we interviewed said it was challenging to manage seven  different CDBG-DR grants, each with different rules. Procurement. Monitoring. The  importance of establishing permanent statutory authority for such a  program is underscored by the expected increase in the frequency and  intensity of extreme weather and climate-related events. In the draft report, we acknowledged that the notice required grantees to  submit (1) an implementation plan that describes, among other things,  their capacity to carry out the recovery and how they will address any  capacity gaps for HUD and (2) an action plan for disaster recovery that  includes an assessment of unmet needs to help grantees understand the  type and location of community needs and to target their CDBG-DR funds  to those areas with the greatest need. In response  to HUD’s comment, we added similar language in that section. We recognize  that each disaster is unique, but as our past work and that of the HUD  OIG has shown, there are certain challenges associated with meeting  customized grant requirements for each disaster—such as funding  lags, varying requirements, and coordination with multiple programs— that could be addressed if Congress considered permanently  authorizing a disaster assistance program that meets unmet needs. GAO staff who made key contributions to this  report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine (1) the status of the 2017 Community  Development Block Grant Disaster Recovery (CDBG-DR) grants; (2) the  steps the 2017 CDBG-DR grantees have taken to establish financial  processes and procedures, build capacity, and estimate unmet needs; (3)  the extent to which the Department of Housing and Urban Development  (HUD) has reviewed the steps that grantees have taken and developed  plans for future monitoring; and (4) the challenges that HUD and grantees  have faced in administering grants. We focused our review on the states  of Florida and Texas and the U.S. territories of Puerto Rico and the U.S.  Virgin Islands—the states and territories most directly affected by  Hurricanes Harvey, Irma, and Maria and that received over $1 billion in  CDBG-DR funds to address unmet recovery needs. To determine the status of the 2017 CDBG-DR grants, we reviewed  relevant laws and the Federal Register notices allocating the CDBG-DR  funds and interviewed HUD officials to determine the steps grantees were  required to take before signing a grant agreement and expending their  2017 CDBG-DR funds. The initial  action plans for the four largest 2017 CDBG-DR grantees—Florida,  Texas, Puerto Rico, and the U.S. Virgin Islands—outline the various  activities they plan to implement to address unmet needs.
Why GAO Did This Study

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 to HUD for CDBG-DR grants to help communities recover. Communities may use these funds to address unmet needs for housing, infrastructure, and economic revitalization. GAO was asked to evaluate the federal government's response to the 2017 hurricanes. In this initial review of CDBG-DR, GAO examined, among other things, (1) the status of the 2017 grants, (2) HUD's review of the initial steps grantees have taken and its plans for future monitoring, and (3) challenges HUD and grantees face in administering grants.
GAO reviewed documentation from the four largest 2017 CDBG-DR grantees and HUD. GAO also reviewed prior work on CDBG-DR and interviewed officials from HUD and the four grantees.

What GAO Found

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 the Department of Housing and Urban Development (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. 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.
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. 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. 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 us 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. 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.

What GAO Recommends

Congress should consider permanently authorizing a disaster assistance program that meets unmet needs in a timely manner. GAO also makes five recommendations to HUD, which include developing guidance for HUD staff to use in assessing grantees, developing a monitoring plan, and conducting workforce planning. HUD generally agreed with three recommendations and partially agreed with two, which GAO clarified to address HUD's comments.