[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                     THE ADMINISTRATION OF DISASTER
                     RECOVERY FUNDS IN THE WAKE OF
                   HURRICANES HARVEY, IRMA, AND MARIA

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 26, 2019

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-11
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                               __________
                               

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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             PETER T. KING, New York
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            SEAN P. DUFFY, Wisconsin
ED PERLMUTTER, Colorado              STEVE STIVERS, Ohio
JIM A. HIMES, Connecticut            ANN WAGNER, Missouri
BILL FOSTER, Illinois                ANDY BARR, Kentucky
JOYCE BEATTY, Ohio                   SCOTT TIPTON, Colorado
DENNY HECK, Washington               ROGER WILLIAMS, Texas
JUAN VARGAS, California              FRENCH HILL, Arkansas
JOSH GOTTHEIMER, New Jersey          TOM EMMER, Minnesota
VICENTE GONZALEZ, Texas              LEE M. ZELDIN, New York
AL LAWSON, Florida                   BARRY LOUDERMILK, Georgia
MICHAEL SAN NICOLAS, Guam            ALEXANDER X. MOONEY, West Virginia
RASHIDA TLAIB, Michigan              WARREN DAVIDSON, Ohio
KATIE PORTER, California             TED BUDD, North Carolina
CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
BEN McADAMS, Utah                    JOHN ROSE, Tennessee
ALEXANDRIA OCASIO-CORTEZ, New York   BRYAN STEIL, Wisconsin
JENNIFER WEXTON, Virginia            LANCE GOODEN, Texas
STEPHEN F. LYNCH, Massachusetts      DENVER RIGGLEMAN, Virginia
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
              Subcommittee on Oversight and Investigations

                        AL GREEN, Texas Chairman

JOYCE BEATTY, Ohio                   ANDY BARR, Kentucky, Ranking 
STEPHEN F. LYNCH, Massachusetts          Member
NYDIA M. VELAZQUEZ, New York         BILL POSEY, Florida
ED PERLMUTTER, Colorado              LEE M. ZELDIN, New York, Vice 
RASHIDA TLAIB, Michigan                  Ranking Member
SEAN CASTEN, Illinois                BARRY LOUDERMILK, Georgia
MADELEINE DEAN, Pennsylvania         WARREN DAVIDSON, Ohio
SYLVIA GARCIA, Texas                 JOHN ROSE, Tennessee
DEAN PHILLIPS, Minnesota             BRYAN STEIL, Wisconsin
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    March 26, 2019...............................................     1
Appendix:
    March 26, 2019...............................................    35

                               WITNESSES
                        Tuesday, March 26, 2019

Ensenat, Fernbando Gil, Secretary of Housing, Puerto Rico........     7
Kirkland, Jeremy, Counsel to the Inspector General, U.S. 
  Department of Housing and Urban Development....................    10
Lemelle, Daphne, Executive Director, Harris County Community 
  Services Deoartment............................................     8
Mollegen-McFadden, Marion, Senior Vice President, Enterprise 
  Community Partners.............................................    12

                                APPENDIX

Prepared statements:
Ensenat, Fernbando Gil...........................................    36
Lemelle, Daphne,.................................................    44
Mollegen-McFadden................................................    49

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    Written statement of the Fair Share Housing Center...........    63
    Written statement of Ben Metcalf, Director, California 
      Department of Housing and Community Development............    67
Green, Hon. Al:
    Letter from Allen Bogard, City Manager, City of Sugar Land, 
      Texas......................................................    74

 
                     THE ADMINISTRATION OF DISASTER
                     RECOVERY FUNDS IN THE WAKE OF
                   HURRICANES HARVEY, IRMA, AND MARIA

                              ----------                              


                        Tuesday, March 26, 2019

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:03 a.m., in 
room 2128, Rayburn House Office Building, Hon. Al Green 
[chairman of the subcommittee] presiding.
    Members present: Representatives Green, Beatty, Velazquez, 
Perlmutter, Tlaib, Casten, Dean, Garcia of Texas, Phillips; 
Barr, Posey, Zeldin, Loudermilk, Davidson, Rose, and Steil.
    Ex officio present: Representatives Waters and McHenry.
    Also present: Representatives Axne and Wagner.
    Chairman  Green. Good morning, everyone. For those who may 
not know, I am Al Green, and it is my preeminent privilege to 
serve as the chairperson of the Oversight and Investigations 
Subcommittee.
    We have not officially called the hearing to order, and I 
have not done so because I would like to make a few comments 
before we actually start this, our first hearing of this 
session of Congress.
    I am honored to be seated next to our ranking member, Mr. 
Barr. He will make a few comments after I have made my 
comments. I would like to thank Mr. Barr for his willingness to 
work with me. He and I have had lunch together and we have 
discussed some of the issues that are of importance to us and 
to the American people. This is not to say that we will always 
agree, but it is to say that we will keep the lines of 
communication open so that we can talk to each other about 
these issues as they develop.
    I am also very appreciative of Mrs. Wagner--she is not here 
but sometimes what you say behind a person's back can be more 
important than what you say in their presence--and in her 
absence, I would like to thank her for initiating the effort to 
bring this bill to fruition. Obviously, it is something that we 
picked up from a hearing that we had but she broached the issue 
initially and called it to my attention.
    We started on this in the last Congress; it was the Wagner-
Green bill then. In this Congress, it is the Green-Wagner bill, 
but by any name it is an important piece of legislation that 
will benefit the people of this country, and Mrs. Wagner should 
be given an enormous amount of credit for calling it to our 
attention.
    I also want to thank the chairperson of the full Financial 
Services Committee, Chairwoman Waters. This is a great 
opportunity for us to present some issues and hopefully resolve 
some concerns. Getting things before the public when you have 
as many issues as we have in Financial Services can be a 
challenge, and the chairperson has permitted us to move forward 
with this hearing, for which I am greatly appreciative.
    I would also like to thank Mr. McHenry, who is the ranking 
member of the Full Committee; he and I have worked together on 
projects in the past and I look forward to working with him as 
well.
    Mr.  McHenry. Will the Chair yield for a question?
    Chairman  Green. The Chair yields to Mr. McHenry.
    Mr.  McHenry. Chairman Green, we have worked together. You 
were previously ranking member when I was chairman of the 
Oversight Subcommittee, a couple of Congresses back.
    If this sort of tactic to start the hearing without 
starting the hearing is because we have more Members on the 
Republican side than the Democrat side, I would give the Chair 
assurances that it is not our intention to adjourn. We agree 
that this is an important subject matter, and there is 
bipartisan support for us fixing this program.
    I would just kindly announce that we have no intention of 
motioning to adjourn because we have more Members present than 
the Democrat's side of the aisle and I would welcome the start 
of the hearing, if that is the chairman's choice and decision.
    But thank you for your leadership and the relationship we 
have had over the years and open engagement.
    I yield back.
    Chairman Green. Well, thank you. Actually, you can be very 
proud of your ranking member. He already addressed the concern 
that you raised and the purpose of this quite candidly is to do 
something that we rarely do and that is to build a degree of 
collegiality, which is important for us to move forward, so I 
appreciate your commentary, and before embarking upon this, I 
got the consent of your ranking member to do so.
    I shall now yield to the ranking member of the 
subcommittee, Mr. Barr.
    Mr.  Barr. Thank you, Chairman Green. And I will be brief. 
Thank you for our lunch, and for getting us off to a great 
start.
    This is a new subcommittee for me. I returned to this 
subcommittee from my first term in Congress but I very much 
look forward to the opportunity to work on this subcommittee. 
Oversight is a critical function for the Congress and although 
congressional oversight authorities are broad, they are not 
unlimited, and they certainly need to be connected to 
legitimate legislative purposes. Today's oversight hearing is a 
great example of that. There is a very legitimate legislative 
purpose to ensuring that taxpayers are protected and that 
victims of disasters receive the assistance that they need in 
an expeditious manner.
    I want to also thank Ranking Member McHenry and the Members 
on this side of the aisle for having the confidence in me to 
lead this side of the subcommittee.
    And with that, I will turn it back over to Chairman Green, 
and I look forward to today's hearing.
    Chairman Green. Thank you, Ranking Member Barr. I greatly 
appreciate your kind words and I do look forward to working 
with you.
    At this point, we will call the the hearing to order.
    Today's hearing is entitled, ``The Administration of 
Disaster Recovery Funds in the Wake of Hurricanes Harvey, Irma, 
and Maria.'' And while that is the title of this hearing, I 
would mention to you that this could easily be about all of the 
various hurricanes and natural disasters, including wildfires 
and tornadic activity, that we have had through the years.
    This hearing is taking place because we believe that when 
you have it within your power to solve a problem and you do not 
do so, you can become the problem. We clearly have it within 
our power, we the Congress of the United States, to solve a 
problem, a problem that is plaguing the American people from 
coast to coast.
    What is this problem? It is our failure to codify and 
standardize the Community Development Block Grant Disaster 
Recovery (CDBG-DR) Program. Quite candidly, there is no 
standardized program in place, and as a result of not having 
codification and standardization, we find ourselves with many 
things happening.
    When we have a natural disaster, we find that there is a 
lot of finger-pointing. It starts at the top with HUD and OMB 
having to come together to come to conclusions as to what the 
rules of the road will be as it relates to a given natural 
disaster. And this is done after each and every natural 
disaster. We start all over again.
    It really is time for us to stop the reinventing, and to 
give us a program that we can rely upon.
    After HUD and OMB finally come to some agreement as to what 
the rules of the road will be, they then have to pass these on 
to the grantees; in the interim, the grantees and the people 
that they serve are suffering. We need to make sure that money 
gets to these various entities that are to dispose of them 
properly, in a timely fashion.
    In Texas, we still have not received all of the resources 
that are available to us from the last hurricane, Hurricane 
Harvey, which actually was a storm that took many lives. Over 
those 3 years, we had hurricanes that cost us about $182.3 
billion, and 85 lives were lost. These were hurricanes and 
natural disasters that occurred prior to 2018 so it is 
important for us to not overly complicate this issue and for us 
to seek solutions.
    This bill that we have, the Green-Wagner bill, would codify 
and standardize the CDBG-DR Program. It would give the large 
metropolitan areas the possibility of receiving direct funding 
and give smaller areas a better understanding of how they can 
access resources. My hope is that we will continue to have the 
bipartisanship that we have shown thus far and that we will get 
this bill passed as quickly as possible.
    I now yield 5 minutes to Ranking Member Barr.
    Mr.  Barr. Thank you, Chairman Green.
    And I am going to yield a minute of my time to the former 
chairwoman of this subcommittee, Ann Wagner, the author, along 
with you, of the legislation that is the subject of today's 
hearing. But again, thank you for holding this important 
hearing.
    Today, we will hear from a wide variety of witnesses 
including State grantees and the former HUD Administrator for 
the program, and the Counsel to the Inspector General, who has 
been involved in many investigations and audits of the 
Community Development Block Grant Disaster Recovery Program 
(CDBG-DR). We will also hear from our colleagues, Chairman 
Green and Congresswoman Wagner, on their working draft of the 
bill to codify the CDBG-DR Program.
    The bill seeks to balance our shared interests in quickly 
getting money to the people who are recovering from natural 
disasters and the need for oversight of the distribution of 
billions of dollars in disaster relief. When disaster strikes 
it is important that help comes quickly and that communities 
have a clear understanding of where to turn and how to access 
CDBG-DR funds.
    The CDBG-DR Program is one of several ways Congress and the 
Federal Government assist the local recovery process; 
specifically, the program is designed to address unmet needs in 
our most vulnerable communities to help low- and moderate-
income people and small businesses recover fully from the most 
severe natural disasters.
    Congress first appropriated CDBG-DR funds in 1993 to help 
with recovery efforts following Hurricane Andrew, and since 
then Congress has appropriated $87 billion in supplemental 
funds for CDBG-DR. Recently, the Supplemental Appropriations 
for Disaster Relief exceeded the annual appropriation for HUD's 
Community Development Block Grant Program. There are too many 
dollars at stake to manage this program on an ad hoc basis.
    One of our best allies in the effort to make sure disaster 
recovery money is spent efficiently and effectively is the HUD 
Office of Inspector General (OIG). The HUD OIG has spent years 
conducting audits and investigations of the CDBG-DR Program and 
advocating for codification of the Program. We are grateful for 
that work and I look forward to hearing testimony from Mr. 
Kirkland about the OIG's findings.
    Every time Congress passes another Supplemental 
Appropriation for CDBG-DR, HUD uses CDBG Program staff to 
administer and oversee the distribution of the funding. This 
program is too transitory with no permanent infrastructure; 
there is a higher chance of waste, fraud, and abuse. I 
understand that no disaster is the same and it is important 
that the affected communities are able to put this money to 
best use but it is crucial for the program to have the proper 
controls in place. We must ensure that money spent for recovery 
efforts and that the action plans approved by HUD are followed.
    There are so many stories about grantees using disaster 
recovery money for purposes outside of the scope of the action 
plan approved by HUD. For example, Louisiana is unable to 
account for nearly $700 million meant to be used to elevate 
homes in the flood zone. In another Louisiana case, $10 million 
allocated for housing purposes was used to build a new wing on 
the local World War II Museum. Mississippi used recovery funds 
to build roads and plumbing infrastructure in an area where no 
one lives. New York and New Jersey pooled unused disaster 
recovery money into a slush fund. This is not how the program 
is meant to work.
    HUD's Disaster Recovery Program is supposed to help rebuild 
homes and infrastructure damaged by a natural disaster and 
provide assistance to affected business owners with an emphasis 
on helping low- and moderate-income areas, but those 
requirements are often waived and money winds up being used for 
other purposes.
    It is my hope that in today's hearing we can better 
understand how to maintain the flexibility needed at the local 
level to apply disaster recovery money to unmet needs while 
increasing oversight of the program. I applaud my colleagues 
for their bipartisan effort and I want to thank the HUD OIG for 
its work to identify vulnerabilities in this important program. 
Communities affected by natural disasters need our help and 
they are counting on us to get this right.
    And with that, I will now yield 1 minute to the gentlelady 
from Missouri, Mrs. Wagner.
    Mrs.  Wagner. I thank my friend Andy Barr, the ranking 
member of the Oversight and Investigations Subcommittee, for 
yielding time.
    And, Mr. Chairman, I want to thank you. You have been a 
great partner in this endeavor and I appreciate your 
willingness to work with me to make sure disaster relief is 
being spent on the victims of natural disasters who need 
assistance. When a natural disaster strikes, the Community 
Development Block Grant Disaster Recovery Program helps rebuild 
our communities. These relief funds provide essential emergency 
aid and jump start the recovery process for those most in need.
    Last Congress, the Subcommittee on Oversight and 
Investigations began a bipartisan effort examining ways to 
improve the CDBG-DR Program.
    Mr. Chairman, I am proud to say that today's legislation is 
a product of that work and I look forward to working with you 
again this Congress to codify the CDBG-DR Program.
    With that, I yield back.
    Chairman  Green. Thank you.
    I will now yield time to the chairwoman of the Full 
Committee, Chairwoman Waters.
    Chairwoman  Waters. Thank you very much, Chairman Green. I 
want to start by saying congratulations to you on convening 
your first hearing. And I want to thank the witnesses for being 
here today.
    Mr. Chairman, many of our communities continue to struggle 
following the destruction of Hurricanes Harvey, Irma, and 
Maria, the wildfires in California in the West, and numerous 
other natural disasters across America. I am deeply concerned 
that 2 years after these disasters struck, and more than a year 
after Congress appropriated funding, not one penny has gone to 
the victims. The CDBG Disaster Recovery funding process is in 
desperate need of reform. It is also important for us to be 
diligent in our oversight of the Federal programs that aid 
recovery efforts.
    Historically, we have seen troubling inequality in how the 
Federal Government responds to a natural disaster. The U.S. 
Government Accountability Office reported that Federal disaster 
assistance has primarily benefited wealthy homeowners at the 
expense of lower-income renters.
    When the government does not prioritize the rebuilding of 
affordable rental housing it pushes out low-income residents 
who once lived in those areas, which can deepen segregation in 
our neighborhoods. We are also aware of racial inequalities in 
the distribution of funding, as took place with Louisiana's 
Road Home Program, and I think about that; I am very much aware 
of what happened there.
    These well-documented inequalities are precisely why this 
committee must ensure that our ongoing and future disaster 
recovery efforts are fair, transparent, efficient, and 
consistent, so I am looking forward to hearing from our 
witnesses today about how we can improve our response in the 
aftermath of disasters.
    Thank you. And I yield back the balance of my time.
    Chairman  Green. Thank you, Madam Chairwoman.
    I would like to, without objection, submit my entire 
opening statement for the record.
    I would like to also submit for the record a statement from 
HUD concerning disaster relief, which codifies what you have 
said in terms of their encouraging us to take affirmative 
action.
    Also, I would like to submit for the record, without 
objection, a chart that will give some indication as to the 
amount of time it takes for the resources to be agreed upon and 
to get to the various grantees.
    Without objection, it is so ordered.
    And moving forward, I would like to welcome the witnesses 
who are appearing today. I want to thank you for being here.
    First, we have with us today Mr. Fernando Gil Ensenat, the 
Secretary of Housing for Puerto Rico. I had the preeminent 
privilege of visiting his country just recently.
    Second, we have Ms. Daphne Lemelle. She is the executive 
director of Harris County Community Services in Texas, in 
Houston, I might add.
    Third, we have Mr. Jeremy Kirkland, the Counsel to the 
Inspector General at the U.S. Department of Housing and Urban 
Development.
    And finally, representing Enterprise Community Partners is 
its vice president, Marion Mollegen-McFadden.
    Welcome to all of the witnesses. I want to thank you again. 
You will each have 5 minutes to make your opening statements. 
And without objection, your written statements will be made a 
part of the record.
    Once the witnesses have finished presenting their 
testimony, each member of the subcommittee will have 5 minutes 
within which to ask questions of the witnesses.
    I will remind the witnesses that while you are not under 
oath, you are subject to 18 U.S.C. Section 1001, which makes it 
a crime to knowingly give a false statement in a proceeding 
such as this one. You have lights before you, and you will note 
that the three lights are there for a reason. The green light 
indicates that you should start your testimony. The yellow 
light indicates that you will have one minute left. And then of 
course there is a red light which means that you are out of 
time.
    Mr. Ensenat, you are now recognized for 5 minutes to make 
your opening statement.

STATEMENT OF FERNANDO GIL ENSENAT, SECRETARY OF HOUSING, PUERTO 
                              RICO

    Mr.  Ensenat. Chairman Green, Ranking Member Barr, members 
of the subcommittee, thank you very much for the invitation to 
appear before you today regarding the administration of 
disaster recovery funds in the wake of Hurricanes Harvey, Irma, 
and Maria.
    One of the greatest lessons my parents taught me is the 
virtue of being grateful. And I would like to take the 
opportunity to personally thank you for all the overwhelming 
support that Congress has shown to Puerto Rico after the 
impacts of Hurricanes Maria and Irma.
    The proactive approach taken by our Resident Commissioner 
Gonzalez-Colon and Governor Rossello set the pace for swift 
congressional action in the wake of the devastation of these 
storms to appropriate resources for our recovery. The support 
has been bipartisan and it is a symbol of the U.S. citizens, of 
how we can come together in times of need putting aside our 
difference and acting for the good of all members in this great 
nation. On behalf of the 3.2 million U.S. citizens who live in 
Puerto Rico, I thank you.
    I would also like to thank our partners in HUD from 
Secretary Carson, Assistant Secretary Wolf, CFO Irv Dennis, 
their respective staffs and all the people who work at HUD for 
their support that they have given us to enhance our recovery 
strategies and drive us to enhance our capabilities.
    My most sincere appreciation to Miss Tennille Parker who 
has been working with us since day one and especially to my 
Agency, the Department of Housing in Puerto Rico and all my 
coworkers there; to Governor Rossello and my family who has 
shown unconditional support.
    Mr. Chairman, it has not been an easy road for us. The 
devastation wrought upon Puerto Rico by these hurricanes was 
immense, but as terrible as those storms were, the recovery has 
been equally grueling. As Secretary of the Puerto Rico 
Department of Housing, I oversee over half a billion dollars in 
Federal funding; I manage the second largest public housing 
authority in the nation, as well as many other HUD programs.
    As familiar as I can be with HUD's statutes, regulations, 
and policies and with other Federal funding programs, CDBG-DR, 
a program which changes from disaster appropriation to 
appropriation is in a class of its own. We were very fortunate 
to find contractors to help guide us through the maze and help 
us--our vision in actionable plans.
    From the moment the dollars were appropriated, even before 
the HUD allocation, we sprang into action working on preparing 
a myriad of required documents and then solicited comments from 
stakeholders and executing a comprehensive citizen 
participation plan. In all, we have been allocated almost $20 
billion from the September 2017 appropriations bill and the 
February 2018 bill.
    Since CDBG-DR is not an authorized program, the regulations 
stem from the language of each appropriations act and can be at 
the mercy of the policy preference of the political leadership 
at the time. This has meant multiple Federal Register notices 
and action plans workflows.
    In our case, because of the new leadership, some programs 
approved in July 2018 were reversed in March 2019. Our first 
amendment to the action plan has been approved but we are 
currently waiting for a grant agreement from HUD so we can 
access the next tranche of $8.2 billion. This amendment 
included 9 new programs plus the 19 programs previously 
approved in the areas of economic development, housing, 
infrastructure, and planning.
    Each of our tranches of recovery funding will come from a 
unique grant agreement. We are hopeful that since our initial 
action plan and first amendment are substantially similar, it 
won't take HUD that long to send us the agreement and that 
version to be-current executive agreement.
    In that sense I am fully supportive of any efforts to make 
disaster recovery easier, and having authorized programs and 
processes in place that will help that cause, but I have some 
concerns. Flexibility is one of the greatest aspects of CDBG-DR 
and understandably with flexibility, complexity shouldn't be 
bound to it however just because monitoring a complex program 
is hard, it does not mean we should remove the flexibility that 
allows grantees to meet unique pressing recurring needs on our 
jurisdiction.
    Regarding HUD to determine what is credible, distribution 
within activities and geographic distributions for a grantee 
based on FEMA and SBA data is based on an assumption that FEMA 
and SBA have the correct data. According to available data as 
of September of 2018, FEMA registered 1.1 million applicants in 
Puerto Rico, however the data reveals that only less than 
217,000 were approved for housing repairs and repairs 
assistance.
    Removing grantee ability to reclassify eligible projects as 
the recovery matures and evolve, 3 months maximum difference. I 
have other things to say Mr. Chairman but I believe that 
standardization and the expertise between the recovery 
framework should be one thing that leads to a better 
codification of this law.
    And again, thank you all for inviting me to appear before 
you today. And thank you for your continued partnership as we 
seek not just to recover from the horrific storms but to 
transform the future Puerto Rico and the 3.2 million U.S. 
citizens who live on the island, under disparate treatment due 
to our non-inclusive territorial status. Thank you.
    [The prepared statement of Secretary Ensenat can be found 
on page 36 of the appendix.]
    Chairman  Green. Thank you for using your time 
efficaciously. You have set a good example for the rest of us.
    Let us move now to Ms. Lemelle. You are recognized for 5 
minutes.

STATEMENT OF DAPHNE LEMELLE, EXECUTIVE DIRECTOR, HARRIS COUNTY 
                 COMMUNITY SERVICES DEPARTMENT

    Ms.  Lemelle. Good morning, Chairman Green, Ranking Member 
Barr, and members of the subcommittee.
    As executive director of the Harris County Community 
Services Department, I serve in the capacity as administrator 
of the County's Community Development Block Grant Program, for 
both the County's Entitlement Program and the Disaster Recovery 
activities.
    Thank you for the opportunity to provide information on 
recovery efforts and activities in Harris County following the 
aftermath of Hurricane Harvey, specifically related to the 
local perspective in carrying out CDBG-DR activities.
    First, I want to express my gratitude to the committee for 
holding this hearing and for the work that has been done to 
ensure that disaster relief to our residents who are still in 
recovery are flowing to them.
    For context it is important to understand the County's 
makeup. Harris County, Texas, is the third most populous county 
in the United States. It is home to the City of Houston; the 
Texas Medical Center; the Port of Houston; the NASA Johnson 
Space Center; and one of the largest petrochemical industry 
clusters in the country. At the end of last year, Harris County 
had a total population of 4.8 million persons.
    One unique aspect of the county is that nearly half of the 
population resides in unincorporated areas of the county, and 
if incorporated would make up the second largest city in Texas 
and the fifth largest city in the country.
    Understandably, Hurricane Harvey impacted this population. 
It dumped more than 1 trillion gallons of water on the county 
for a 1-day period, covered Harris County 1,778 square miles 
with an average of 33 inches of water. Per FEMA individual 
assistance data, 160,000 households applied for assistance with 
only a little more than 53 percent of those receiving any kind 
of immediate relief following the storm.
    Harris County has also been impacted by six presidentially-
declared disasters in the last 10 years. In 2015 and 2016, we 
saw 4 major flood disasters. The cumulative impact of these 
disasters with Hurricane Harvey has been devastating to local 
residents, businesses, and institutions. Recovery from one 
disaster has been exacerbated by those floods that followed.
    CDBG-DR is a critical relief program for our community. 
Harris County has suffered from significant national disasters 
and without CDBG-DR we would not be able to rebuild and recover 
appropriately. Most recently, we did a Hurricane Ike Recovery 
Program following the 2008 storm, CDBG-DR was critical in 
helping our residents and also standing up a local 
Infrastructure Recovery Program.
    For Hurricane Harvey, Harris County is utilizing a $1.2 
billion allocation from CDBG-DR from the State of Texas to 
again stand up recovery programs that will aid in the buy-out, 
rebuilding and replacement of housing, and implementation of 
local drainage improvement systems.
    At this point my testimony will focus on our local 
perspective, as a subgrantee of the State, while CDBG-DR has 
been an effective funding source and program assisting Harris 
County's recovery the process by which the county has received 
its funds has often been fraught with delays and other 
impediments to efficient recovery. The delays have occurred 
because Harris County is not a direct grantee but is a 
subgrantee of the State and the nature of subgranteeing 
inherently adds time to the implementation of recovery 
programs.
    While Harris County did experience some improvement in 
reduction of time with Harvey, when compared to prior disasters 
the processing time is still far too long. Harris County 
executed its contract for $909 million of its $1.2 billion in 
CDBG-DR funds with the State of Texas on January 29, 2019, 17 
months post-storm.
    As a subgrantee Harris County had to await the State's 
publications of its plan. Following approval of the State plan, 
we had to await approval of our local plan, while the county 
has steadfastly developed its recovery activities and preparing 
its local plan, the subgrantee process delayed distribution of 
needed recovery resources.
    As a direct grantee Harris County may submit its plan and 
receive its grant agreement directly from HUD, removing the 
estimated timeframe to receive the funds. Harris County is a 
HUD-entitlement community and has capacity to implement its own 
programs.
    Lastly program flexibility, CDBG-DR is a very flexible 
program but it is important to recognize and understand that 
the local control and recovery plan is driven by its residents. 
Harris County CDBG-DR recovery programs become an extension of 
the State's plan and at times may conflict with the State's 
plan which adds more time to delivery.
    In closing, I would just add that I do support the 
codification and permanent authorization of the CDBG-DR 
Program. It would mean speeding up of the time for receipt of 
funds, and any reform to CDBG-DR, consider the facts that I 
have provided today and in my written testimony.
    Again, I appreciate the opportunity to appear here before 
the committee. Thank you for your support. And I will be glad 
to answer any questions.
    [The prepared statement of Ms. Lemelle can be found on page 
44 of the appendix.]
    Chairman  Green. Thank you very much.
    You have utilized your time wisely, thank you.
    Moving on to our next witness, Mr. Kirkland will be 
recognized for 5 minutes.

     STATEMENT OF JEREMY KIRKLAND, COUNSEL TO THE INSPECTOR 
   GENERAL, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr.  Kirkland. Good morning, Chairman Green, Ranking Member 
Barr, Chairwoman Waters, and members of the subcommittee. I am 
Jeremy Kirkland, Counsel to the Inspector General of the 
Department of Housing and Urban Development. It is a pleasure 
to be here with you today to talk about our work in disaster 
recovery oversight.
    I could not be more proud of our staff and their work in 
this important area.
    Since 2002 we have issued 119 audits, 7 evaluation reports, 
and have opened more than 600 investigations on this topic. 
Throughout our work we have noticed recurring themes including 
the need for codification, the need for model programs that 
provide clear, consistent, expectations for strong internal 
controls, and the need for accountability for and expenditure 
of funds at late stages in the process. And we know that 
mitigation of future disasters is important for this 
accountability.
    We believe the CDBG-DR's mission is an important one, one 
that is so important that we believe that it should be codified 
into its own program within HUD. One thing we know is that 
disasters aren't going away; in fact, in the past 12 years, 
there have been at least 10 separate disaster supplemental 
funding bills.
    We have all heard concerns about how long it takes funds to 
get out to those in need. The process is not only lengthy but 
confusing for everyone involved. Currently, there are 72 active 
Federal Register notices going all the way back to 9/11, which 
grantees must navigate to determine how to design and implement 
their local programs. It is difficult to determine what applies 
or does not apply, and oftentimes grantees may be brand new or 
inexperienced, further complicating an already cumbersome 
process.
    We strongly recommend a permanent framework to bring 
transparency and efficiency to this program. We believe it will 
reduce the time between appropriation and disbursement and 
provide clarity around the requirements of the CDBG-DR Program. 
We also hope any permanent authorization considers identifying 
core program activities more clearly.
    There is often a steep learning curve for new grantees, and 
adoptable core functions would mitigate the delay and mistakes 
in having each new grantee create its own disaster program. We 
believe that codifying even just the requirements for grantee 
action plans could trim 2 to 4 months off of this lengthy 
process.
    The OIG's work has demonstrated the need for strong 
internal controls. Our work has demonstrated that any grantee 
program should include good internal policies. It should 
include strong monitoring policies and procedures. It should 
include clear understanding of reporting responsibilities. It 
should include good financial management policies, procedures, 
and systems. It should include information systems that ensure 
accurate and timely reporting of receipts and expenses in HUD 
systems. It should include clear conflict-of-interest policies 
and procedures, and training for all employees on conflict of 
interest. And it should include strong, proficient, written 
procurement policies and procedures.
    Our work has continued to highlight that CDBG-DR could and 
should provide a clear, unequivocal blueprint for all grantees 
to follow, to meet expected strong internal controls.
    Finally, we have a concern regarding the late planning and 
expenditure of funds on projects, in some cases, 5 or more 
years after the disaster occurred. Examples of this include 
sewer and infrastructure development on land where homes are 
never built; dredging projects for commercial shipping ports; 
and a multimillion-dollar museum addition, among others. Then, 
there is the question of unspent funds, sometimes more than a 
decade after a disaster, and whether we can reprogram those for 
a greater existing need today.
    I want to thank the committee for their work on this 
legislation, and I look forward to your questions.
    Chairman  Green. And we thank you as well for staying 
within the timeframe.
    Let us move forward next to Ms. Mollegen-McFadden.

 STATEMENT OF MARION MOLLEGEN-MCFADDEN, SENIOR VICE PRESIDENT, 
                 ENTERPRISE COMMUNITY PARTNERS

    Ms.  Mollegen-McFadden. Chairman Green, Ranking Member 
Barr, Chairwoman Waters, and members of the Oversight and 
Investigations Subcommittee, thank you so much for the 
opportunity to be here this morning to testify about the CDBG-
DR Program and offer my recommendations which can shave months 
of needless delay from the time when Congress appropriates 
funding to when rebuilding begins. I am Marion McFadden, the 
senior vice president for public policy and senior advisor for 
resilience at Enterprise Community Partners.
    Enterprise is a non-profit organization, committed to 
making well-designed homes affordable. For more than 35 years, 
Enterprise has helped build capacity in both the public and 
private sector. We have invested more than $43 billion 
nationwide to produce or preserve homes in all 50 States, the 
District of Columbia, and Puerto Rico.
    Enterprise has helped communities rebuild after disasters. 
Since Hurricane Katrina, our current work in recovery and 
mitigation initiatives includes Texas, Florida, Louisiana, New 
York, California, Puerto Rico, and the U.S. Virgin Islands.
    I worked on disaster recovery at HUD for more than 15 
years, dating all the way back to the first multibillion-dollar 
grant after 9/11, working as Legal Counsel for the CDBG Program 
and Deputy Assistant Secretary for Grant Programs. I have 
worked in disaster-impacted communities all over the country.
    One of my greatest frustrations is that the lessons learned 
in one disaster have to be relearned over and over in 
subsequent disasters. The Federal Government has not been quick 
enough in improving support for disaster survivors. I commend 
the members of the subcommittee for making it a priority today.
    This morning I will emphasize the importance of CDBG-DR to 
all kinds of communities--urban, suburban, and rural--and 
recommend opportunities for making the program more efficient 
and fair.
    As the frequency and intensity of natural disasters 
continue to grow, CDBG-DR is an increasingly important funding 
source for recovering communities. After catastrophes, CDBG-DR 
is the last available source of assistance for property owners 
whose insurance proceeds, FEMA grants, Small Business 
Administration homeowner loans, and other sources have been 
insufficient to repair their homes or get them to stable new 
housing.
    This CDBG-DR assistance prevents families from entering 
years of financial hardship and distress. CDBG-DR is 
particularly valuable because it allows and requires States and 
localities to rebuild stronger and safer, helping to move 
households out of harm's way and ensuring existing and new 
housing is more resilient to future disasters.
    Mitigation measures more than pay for themselves, saving an 
average of six dollars in future disaster recovery costs for 
every dollar spent on mitigation.
    I would like to take a moment to highlight two major 
challenges for the CDBG-DR Program: first, the time it takes 
for HUD funds to reach communities after a disaster; and 
second, ensuring grant funds reach the people who are most in 
need.
    The disaster component of the CDBG Program, as you well 
know, lacks standing authority. This means that HUD must write 
new Federal Register notices after each appropriation and 
shockingly, unlike permanently authorized FEMA and Small 
Business Administration disaster programs, HUD's multibillion-
dollar CDBG Disaster Program has never gone through a Notice-
and-Comment Rulemaking. The public has never once been invited 
to offer comments on HUD's rules for disaster recovery; it is 
time to bring transparency to the post-disaster rule-making 
process.
    Once HUD issues its temporary rules, it is typically more 
than a year before HUD programs began serving families, 
meanwhile disaster survivors wait, often in unsafe housing, in 
hotels, doubled up with other families or worse. While reducing 
the time it takes to rebuild housing and infrastructure is 
challenging, codifying CDBG-DR will reduce bureaucratic delay 
in moving resources from Congress to impacted communities.
    In addition to improving the speed of the program, I ask 
that you make changes to ensure that disaster funds serve the 
people who are hardest hit. It is often said that storms, 
tornadoes, and fires are equal opportunity, causing damage 
regardless of race or income, however anyone who has worked in 
disaster recovery knows that is not the full picture.
    Low-income people are more likely to live in areas that are 
physically vulnerable, where land costs are lower, and they are 
more likely to live in poor quality buildings which are less 
stable in the high winds of hurricanes or tornadoes.
    Disaster recovery programs have too often prioritized 
homeowners over renters who are more likely to be lower income 
and people of color. HUD's largest fair housing settlement 
resulted from New Jersey's failure to fairly balance Hurricane 
Sandy recovery resources, among apartment buildings, mobile 
homes, and single-family homes, and to communicate the 
availability of resources to people of limited English 
proficiency.
    By engaging in a comprehensive process to make CDBG-DR a 
standing program, Congress and HUD can focus on ensuring that 
this never happens again.
    In conclusion, CDBG-DR provides a quarter of the nation's 
disaster recovery funds and its permanent authorization would 
allow HUD to take steps to eliminate the months of unnecessary 
delay resulting from the makeshift structure. Rulemaking will 
also increase protections against fraud, waste, and abuse.
    I look forward to working together to better protect safety 
and property and communities resulting in fair outcomes for the 
most vulnerable households, and ensuring that the taxpayer 
dollars are invested with the future in mind. Thank you.
    [The prepared statement of Ms. Mollegen-McFadden can be 
found on page 49 of the appendix.
    Chairman  Green. I thank all of you for your testimony.
    Mr. Ranking Member, without objection, persons who are 
members of the Full Committee, but not members of the 
subcommittee, will be allowed to participate in this hearing 
today.
    Without objection, it is so ordered.
    I now recognize myself for 5 minutes.
    And I would like to start with Mr. Kirkland. Mr. Kirkland, 
is it true that you or someone associated with your agency has 
communicated with HUD, and HUD has indicated that it has some 
concerns with the codification and standardization of these 
rules?
    Mr.  Kirkland. As part of our audit on codification, they 
did communicate back to us that they did not see the need for 
codification as part of that audit.
    Chairman  Green. And you have indicated in your testimony 
today that you clearly believe that there is a need for 
transparency and codification, is this correct?
    Mr.  Kirkland. Yes, sir. Over the course of the time of all 
of these Federal Register notices, we have identified 59 either 
direct duplications or very similar Federal Registers across 
all of these disasters; we certainly see an ability to codify a 
program as part of that.
    Chairman  Green. And if we don't have HUD as the entity 
that will step forward and take this affirmative action, to 
codify and provide the transparency, then of course it does 
fall upon Congress, obviously Congress could step in at any 
time but Congress is the court of last resort as it were with 
reference to these issues?
    Mr.  Kirkland. I would agree with that, Mr. Chairman.
    Chairman Green. Thank you. I greatly appreciate what you 
have given us by way of testimony and encouragement to go 
forward with these issues.
    Let me go next to the three members of the panel who are 
remaining, I would like for you, notwithstanding all that you 
have shared with us and you have given us some salient points, 
but I would like for each of you to give me one point, one 
thing that you think is preeminent in your thinking with 
reference to the legislation that we should consider.
    And I will start with Ms. McFadden.
    Ms.  Mollegen-McFadden. Thank you, Mr. Chairman. I would 
like to start with a very practical point, which is in order to 
to make any real improvement in this program, HUD must devote 
more employees to its administration.
    Mr. Kirkland mentioned 72 active grants dating all the way 
back to 9/11. Those grants all have to have grant managers, and 
currently there are less than two dozen full-time permanent 
staff working on disaster recovery at HUD, so in order to 
really get HUD to put its muscle into improving the program, we 
just need to take more load off the individual public servants.
    Chairman  Green. Thank you very much.
    Mr. Secretary, you will be next but before you testify, let 
me just assure you, I did visit Puerto Rico and had an 
opportunity to visit one of the hospitals. I saw up close the 
needs that exist, and talked to many people associated with 
NGOs and the government and concluded that we have to do more 
to help Puerto Rico. With that said, would you kindly give us 
your one outstanding point?
    Mr.  Ensenat. Sure. And thank you, Chairman Green, for 
that, and thank you for the visit. And my point would be like 
standardization law, that the rules for a grantee be the same 
for anyone, that we can then standardize procurement, 
standardize pre-approved housing programs and standardized data 
coordination and especially damage assessment which varies 
between agencies from SBA, to FEMA to CDBG-DR and that will 
give us a greater scope into that sense.
    So I concur with Ms. McFadden, too, in terms of the 
employment and I urge you all to provide more staffing to HUD 
in that sense or funding so that they can have more staff.
    Chairman  Green. Thank you very much.
    Ms. Lemelle, you are from my home State and the very County 
that I happen to represent. Can you kindly give us your most 
important point?
    Ms.  Lemelle. Yes, Mr. Chairman. The point would be that in 
any codification of CDBG-DR, that similar to the regular CDBG 
Program, direct allocations be made to large communities or 
urban cities and counties that have the capacity to administer 
such programs, and that would also reduce the timeframe.
    In the case of Harris County, we have a long history of 
grant agreements directly with HUD to carry out such programs 
and that would be greatly beneficial to our residents and our 
local ability to recover quickly.
    Chairman  Green. Thank you.
    One of the things that we seek to do in the bill is provide 
some direct funding to the entities that are capable of 
managing the resources appropriately. Mr. Kirkland has 
indicated that there is a lot of concern for this and I assure 
you, Mr. Kirkland, we take this admonition seriously, we will 
work to this end but to all of you let me just share this 
thought.
    This is an important day for us because it provides us an 
opportunity to make a difference in the lives of people who are 
still suffering. I thank you for your testimony.
    And I shall now yield 5 minutes to the ranking member, 
having stayed within my time.
    Mr.  Barr. Thank you, Mr. Chairman.
    Mr. Kirkland, the IG's Office has released dozens of 
reports with details about waste, fraud, and abuse within the 
CDBG-DR Program. Obviously, our committee is trying to balance 
the needs of people waiting for disaster relief against the 
taxpayers' interests in ensuring that the program has proper 
controls in place to prevent waste, fraud, and abuse. Your 
office has found a series of cases where disaster recovery 
money was not used for its intended purpose, and those cases do 
make clear that there is room for improvement with respect to 
the program.
    Earlier, I referenced multiple cases in which your office 
uncovered millions of dollars that were misused or went 
missing. These demonstrate a concerning trend that suggests a 
lack of oversight over these funds. How does HUD currently 
track disaster recovery funds to prevent waste, fraud, and 
abuse?
    Mr.  Kirkland. They do have a system that currently tracks 
the money as it is expended. I do know that HUD has 
communicated to us their intention to track that money more in 
real time than they have been traditionally been able to do; I 
think they are working on upgrading their systems.
    As I pointed out in my testimony, I think it is very 
important that as HUD works with all of the grantees to ensure 
that all of those systems work together in collaboration so the 
grantees and HUD can have insight into what is being spent.
    Mr.  Barr. My understanding is that the Secretary can waive 
program requirements so long as he or she finds ``good cause'' 
to do so, is that a weakness in the program?
    Mr.  Kirkland. We have expressed consistent concerns on the 
ability in the waiver process. We have seen and certainly 
understand that there is a need for waiver in certain 
circumstances but we have seen that abused in many, many 
circumstances, some of the circumstances that you pointed out, 
other situations where the waiver process, multiple waiver 
processes were used to basically allow for the expenditure of 
the funds in any way ultimately that--
    Mr.  Barr. Whether or not it has anything connected to do 
with a natural disaster?
    Mr.  Kirkland. Whether or not it had anything to do a 
disaster.
    Mr.  Barr. And are waivers ever granted retroactively?
    Mr.  Kirkland. There are waivers granted retroactively all 
the time.
    Mr.  Barr. It is a big concern because if you don't get 
pre-approval you just spend the money however you see fit, 
whether it is connected to a disaster recovery or not and then 
you seek permission after the fact or forgiveness perhaps as 
opposed to permission in advance. I think that obviously is 
something that needs to be addressed in the legislation.
    How would codifying the program help HUD and your office 
make sure that the money goes to where it is supposed to go?
    Mr.  Kirkland. As we have noted, the concern that we see is 
that in every disaster, we basically reinvent the whole 
process, and that seems a very inefficient approach. As we have 
noted there are a lot of consistencies across all disasters and 
finding ways to efficiently approach that, and ultimately the 
goal is to get the money to the people who need it most and 
that is not being achieved by this inefficient process.
    Mr.  Barr. We have heard a lot about the pace of fund 
delivery and the slow pace of fund delivery, that is a problem 
because obviously if vulnerable victims of disasters are not 
getting their relief in a timely manner, it is not much help. 
In fact, many of the people affected by the 2017 disaster still 
haven't seen a single dollar from HUD, in most cases. Is that 
unusual or does it typically take 2-plus years to even see the 
first dollar?
    Mr.  Kirkland. The circumstances of this disaster have 
taken significantly longer than prior disasters. As we have 
noted, typically the first Federal Register notices go out in 
about 35 to 45 days; that is unnecessary time but that is the 
typical time that it takes. In this case, I think it took about 
154 days.
    Mr.  Barr. Codification and rulemaking under a permanent 
program would expedite preventing that Federal Register--
    Mr.  Kirkland. That is correct.
    Mr.  Barr. --notice.
    And then Ms. Lemelle's argument about direct assistance, is 
that, I mean, obviously Houston is a sophisticated 
jurisdiction, is that the right approach?
    Mr.  Kirkland. So obviously we have had experience with, 
like New York City did get a direct allocation of disaster 
relief. The internal controls are the important aspect from the 
work that we have done, ensuring that those are in place, 
whomever gets the money, I think those are the important 
things.
    Mr.  Barr. My time has expired. Thank you.
    Chairman  Green. The Chair now yields 5 minutes to the 
Chairwoman of the Full Committee, Chairwoman Waters.
    Chairwoman  Waters. Thank you very much, Mr. Chairman, and 
members.
    I want to just find out from you, Mr. Kirkland, if you know 
what is happening in California. We have had the Thomas fires, 
the Woolsey fires, the Camp fires, and I understand that there 
is some problem with OMB that may be holding up the process for 
rules. Do you know what is going on with California?
    Mr.  Kirkland. I do not know specifically whether OMB is 
holding that up. We can certainly check into that and get back 
to you on that.
    We have expressed and do have concerns that there may not 
be the level of expertise to understand how to respond from a 
disaster front as it comes to fires just because we have 
experienced many natural disasters but maybe from the 
standpoint of the expertise available, understanding how to 
respond to a natural disaster that is a fire. Anecdotally, we 
have had some concerns there, we don't have any specific work 
on that but that is a concern that we have expressed.
    Chairwoman  Waters. Well, I want you to know that it was 
unfortunate but we were not able to get the California 
Department of Housing and Community Development representative 
here today, Mr. Ben Metcalf, but he did send a statement and I 
ask unanimous consent that it be included in the record, Mr. 
Green?
    Chairman  Green. Without objection, it is so ordered.
    Chairwoman  Waters. Thank you very much.
    Let me just ask you because I have heard a lot about Puerto 
Rico and we are all concerned about Puerto Rico. We are 
concerned that perhaps Puerto Rico has not been assisted in the 
way that it should be assisted. Is there any interference in 
getting that assistance to Puerto Rico from any part of the 
government? We know that, we have heard about HUD, we heard 
that HUD is not staffed properly, that they are basically not 
doing the job that they should be doing. Is there any 
interference from the White House?
    Mr.  Kirkland. We have obviously received a request from 
Members of Congress to look into that interference. We are in 
the process of looking into whether or not there has been any 
interference and do plan to report back to Congress on what we 
find.
    Chairwoman  Waters. How long is it going to take you?
    Mr.  Kirkland. We will expeditiously do so and I know that 
our folks are out there right now doing that and we do intend 
to get back to you as soon as possible.
    Chairwoman  Waters. When was it started? When was your 
investigation into this issue first started?
    Mr.  Kirkland. I believe we received the request during the 
shutdown and so our review of it started right after the 
shutdown.
    Chairwoman  Waters. Well, it has been over a year and a 
half since Hurricane Maria devastated Puerto Rico, which 
resulted in billions of dollars of destruction and thousands of 
hurricane-related deaths. In response, Congress appropriated 
$20 billion in disaster recovery grants to help Puerto Rico 
rebuild and protect against future disasters. To date again, 
HUD has only made a fraction of this money available to Puerto 
Rico. Has the HUD IG--you said you are looking into what has 
been happening and whether or not there was interference, so 
tell me how your investigation is framed? Are you looking into 
whether or not there has been interference or are you just 
looking at HUD and its inability to do its job?
    Mr.  Kirkland. The questions raised to us did relate to the 
total of what you have asked about. Obviously, we may have some 
limitations on our jurisdictional ability to look into the 
totality of that but where we can, we have asked those 
questions that Congress asked us to get to the bottom of.
    Chairwoman  Waters. Thank you very much, Mr. Chairman. And 
I yield back the balance of my time.
    Chairman  Green. Thank you, Madam Chairwoman.
    The Chair now recognizes the gentleman from Florida, Mr. 
Posey, for 5 minutes.
    Mr.  Posey. Thank you, Mr. Chairman, for holding this 
hearing. And we thank the witnesses for your appearance today.
    Mr. Kirkland, as noted, the Green-Wagner Bill lays out some 
very general activities to be authorized by a codified CDBG-DR 
Program. The HUD Inspector General concluded that the agency 
already has sufficient authority to codify the Program. I 
assume that means you believe the existing statutes provide 
some clarity about which kinds of activities to fund and which 
kinds probably should not be funded. Has the IG's audit of the 
Program developed a set of principles for deciding when a CDBG 
grant would be duplicative of other Federal programs and if so, 
could you give us some examples?
    Mr.  Kirkland. Obviously, we are concerned that more 
progress has not been made on coordination and collaboration 
between the agencies that are responsible for putting out 
disaster relief, specifically FEMA, SBA, and HUD. We do think 
there needs to be additional collaboration to ensure that 
relief is being provided in whatever form necessary but also 
that the agencies are coordinating and collaborating on that 
front. We don't think that has been done enough, and then 
obviously Congress did pass some legislation directing that to 
be addressed last year; we don't know that a lot of progress 
has been made on that front, though.
    Mr.  Posey. Okay. Thank you very much for this; great 
answer.
    Ms. McFadden, your testimony runs counter to the direction 
of the Green-Wagner bill with respect to duplication of agency 
programs. As noted, the Green-Wagner bill would prohibit using 
funds for Flood hazard mitigation work that can be done under 
the National Flood Insurance Program already or FEMA programs. 
You recommend that reform explicitly state that eligible hazard 
mitigation projects include all activities permitted in FEMA's 
Hazard Mitigation Grant Program and Pre-Disaster Mitigation 
Program. Could you explain why that would be the right way to 
proceed with this program as opposed to adequately and 
consistently funding such work underneath FEMA rather than 
supplanting those efforts with the HUD money?
    Ms.  Mollegen-McFadden. Thank you for the question. And I 
certainly am not in favor of duplicating any funding that is 
already being provided for the same purpose but CDBG-DR is 
often used by communities to wrap around existing FEMA funds so 
communities often do not get sufficient FEMA dollars to 
complete the mitigation projects that are necessary and 
generally the CDBG-DR funding is coming later in time and so it 
can fill those gaps.
    Mr.  Posey. Okay.
    Do the other members of the panel agree with that answer?
    Mr. Kirkland?
    Mr.  Kirkland. We do feel that--our work has demonstrated 
that duplication of benefits--we think that is a policy call 
for obviously Congress working together with HUD, to HUD and 
the other agencies to decide. We do think though that the 
agencies need to make sure they coordinate and collaborate 
whatever decision they make.
    Mr.  Posey. Okay.
    Mr. Secretary, would you care to weigh in on that?
    Mr.  Ensenat. I definitely concur and I think the expertise 
is a key to it, and HUD should be focusing on housing, for 
example; if is energy, it should go to the the Department of 
Energy; if it is related to infrastructure, it can be DOT or 
the related agency, the Army Corps of Engineers, and that way 
we will definitely eliminate the duplication of benefits 
because each area will be handled by a single entity with the 
expertise.
    Mr.  Posey. Okay.
    Ms. Lemelle, your response?
    Ms.  Lemelle. I would just add that yes, there needs to be 
closer coordination between FEMA and HUD programming. I would 
just caution that funding to FEMA for mitigation, we need to 
make sure we are looking at the cost-benefit analysis and 
ensuring that it is equally and fairly being distributed across 
all the residents if we are going to go that route.
    FEMA historically, especially in the Hazard Mitigation 
Program, has looked at cost benefit, that in our community has 
benefited those more wealthier and higher-income areas. CDBG-DR 
has always been used to help those communities that otherwise 
would not receive assistance from FEMA.
    Mr.  Posey. Okay.
    Well, thank you for your answers.
    I see my time is up. I yield back, Mr. Chairman.
    Chairman  Green. Well, thank you sir.
    The Chair now recognizes the gentlewoman from New York, Ms. 
Velazquez.
    Ms.  Velazquez. Thank you, Mr. Chairman.
    Secretary Gil, in announcing the most recent award of $18 
billion, HUD also announced that it will require financial 
controls on this new tranche. What has HUD communicated to you 
about those fiscal controls and how will the controls impact 
your action plans?
    Mr.  Ensenat. It's nice to see you, and thank you for the 
question, Congresswoman Velasquez. But HUD preapproved our 
fiscal internal controls before actually approving the action 
plan. Afterwards they have been working shoulder to shoulder 
with us just strengthening some of the controls that we have 
and based on best practice.
    Last week for example, Mr. Irv Dennis, the CFO, led a 
delegation with about 15 people from the HUD Office who were 
there at the Puerto Rico Department of Housing, just to go and 
see the whole system work and the implementation process end to 
end.
    And based on previous stories and previous remarks from 
last year, I believe that HUD also is taking a corrective 
action plan in terms of wasted money from more than 20 years, 
and I think Mr. Kirkland already, the OIG did a hearing in 
which they established that between the Department of Defense 
and HUD, there was around $21 trillion missing in more than 20 
years. And well, I can see that they are taking more direct 
control into it so they don't waste taxpayers' money. If that 
is the case, then I am all for it. I am all for controls, I am 
all for compliance, but that communication has to be faster and 
it has to be quicker in that sense in order for us to implement 
faster.
    Ms.  Velazquez. Thank you.
    Mr. Kirkland, I, together with Bennie Thompson and Raul 
Grijalva, Natural Resources, Homeland Security, and I am the 
Chair of the Small Business Committee, we sent to you or to 
Helen Albert, a letter on January 17th, asking for an 
investigation regarding the fact that there were reports that 
Deputy Secretary Pamela Patenaude has resigned due to 
disagreements in part over Administration directives to 
interfere with the release of Puerto Rico Disaster Relief 
Funds. And this is disturbing, yet you are saying that you--
have you opened the investigation?
    Mr.  Kirkland. We are currently looking into the request 
and we have currently--
    Ms.  Velazquez. Are you going to depose Deputy Secretary 
Pamela Patenaude?
    Mr.  Kirkland. We are taking active steps to look into all 
of the information that was provided to us and we do intend to 
report back the results of that.
    Ms.  Velazquez. Do you understand that this is an important 
issue for 3.4 million Americans in Puerto Rico whose lives are 
at risk, given the vulnerability of the infrastructure, whether 
the hospital, the power grid, and yet if we have an 
Administration that is obsessed with the fact that Puerto 
Ricans--American citizens are not deserving of our help?
    Mr.  Kirkland. We absolutely see the importance of that--
    Ms.  Velazquez. This is about life and death.
    Mr.  Kirkland. In December of 2017, I had the great honor 
of going down to Puerto Rico and seeing for myself the extreme 
devastation that occurred on that Island and the impact that it 
had on those 3.4 million people.
    I experienced a tropical cyclone when I was in American 
Samoa and I know the absolute vulnerability that living on an 
island, following that type of devastation can bring and I can 
assure you we are taking those allegations very seriously.
    Ms.  Velazquez. Well, I expect that because yesterday The 
Washington Post reported that at an Oval Office meeting on 
February 22nd--we sent this letter on January 17th--Mr. Trump 
asked top advisers for ways to limit Federal support from going 
to Puerto Rico, believing it is taking money that should be 
going to the mainland, according to senior Administration 
officials. So this is disgraceful; it is a disgraceful way to 
treat United States citizens who have made so many 
contributions to this country. My uncle served in the Korean 
War, we owe the people of Puerto Rico an explanation, enough is 
enough.
    I yield back.
    Chairman  Green. The gentlelady yields back.
    The Chair now recognizes the gentlewoman from Michigan, Ms. 
Tlaib.
    Ms.  Tlaib. Thank you, Mr. Chairman.
    Good morning to all of you.
    The City of Detroit was rated, I think, one of the five 
least likely cities to have a natural disaster, however in 
2014, several cities in Michigan and in the Metro Detroit area 
were impacted by major unexpected flooding, meaning that any 
city, at any point, could impacted by a natural disaster and it 
is important to make that note.
    Disaster relief has been inequitably restricted amongst 
people of different races, ethnicities, and economic classes, 
and I am so glad that we are talking about home ownership 
status, meaning renters versus homeowners. According to the 
Fair Housing Act, recipients of Federal housing funds are 
required to quote--and I am learning what the interpretation of 
this is, is, Affirmatively Furthering Fair Housing. This 
requirement means that State and local governments must use 
disaster recovery grants to take meaningful actions to overcome 
historic patterns of segregation, promote fair housing choice, 
and foster inclusive communities that are free from 
discrimination.
    Disaster recovery funds have been shown to be incredibly 
hard for people with the greatest needs as some of you have 
testified, including low-income renters, people with 
disabilities, and people experiencing homelessness, to 
relatively higher-income homeowners.
    Ms. McFadden, how can HUD--and I am asking you because--and 
I am new here, Mr. Chairman, but we call the liaisons for 
various departments and the HUD liaison doesn't call us back, 
and I just want to put that on record; it's the only department 
that doesn't call me back.
    How can HUD ensure that communities are rebuilt in a way 
that actively deconstructs racial housing segregation and 
promotes accessible housing opportunities for people with 
disabilities?
    Ms.  Mollegen-McFadden. Thank you for the question, 
Congresswoman. CDBG disaster recovery funds only show up in 
communities when there has been catastrophic devastation so the 
silver lining--and I don't mean that disrespectfully--but the 
silver lining that comes with the award of CDBG-DR funds is the 
opportunity to fix mistakes of the past. So that includes when 
rebuilding housing, thinking about where low-income housing was 
located and the lessons that we have learned about the impact 
on children's lives, of what it means to grow up in a 
segregated low-income area versus a more robust community of 
opportunities. So one opportunity there is to locate new 
affordable housing in communities of opportunity.
    And another issue that I would highlight is the impact on 
homeless people. There is a misconception that people who were 
homeless before the disaster aren't really impacted because 
they didn't lose a home. But the reality is that people who 
were struggling to maintain their daily lives before the 
disaster have compounded traumas after going through 
catastrophic events, and are often really in hard times after 
FEMA rejects the ability to serve them permanently.
    So one recommendation I have there would be to direct HUD 
to work more closely with the Homeless Office inside of HUD as 
well as to direct the recipients of funding to work closely 
with the Continuum of Care providers of homeless assistance.
    Ms.  Tlaib. And historically what, as Members of Congress 
and those folks, we can direct various States to use certain 
things and various departments but what are some of the things 
we can do in accountability? Do we hold that money? What are 
some of the specific actions that we could take to push this 
really important element of the part of trying to really 
address natural disasters and the impact on especially renters 
and our homeless neighbors and our disabled residents?
    Ms.  Mollegen-McFadden. I agree. Oversight is a critical 
function of the Federal Government, and after making more 
strides in setting up the recipients of funding for success, 
they need to come in on the backside and look at the data. The 
numbers won't lie. Let us take a look at who the programs are 
serving by income, by race, by housing type, and look at that 
against the data on where the need was the greatest, based on 
where the disaster struck.
    Ms.  Tlaib. Yes. Well, thank you so much, all of you for 
your testimony and your advocacy today.
    Thank you, Mr. Chairman. I yield back.
    Chairman  Green. Thank you. The gentlelady yields back.
    The Chair now recognizes Mr. Steil for 5 minutes.
    Mr.  Steil. I appreciate you all coming in to testify. Mr. 
Kirkland, I understand there were concerns about whether 
disaster recovery funds were equitably distributed and whether 
community is rich or poor, urban, or rural, they should be able 
to get the same help it needs from a disaster recovery 
standpoint. As we debate codifying this program what can we do 
to ensure the future distributions have a positive impact on 
all communities, could you just comment on that please?
    Mr.  Kirkland. I do think it is incumbent on CDBG-DR to 
work with the grantee to identify what the needs are and but I 
think once those needs are identified, our concern has been you 
see sort of a moving target from the standpoint of are you 
really addressing the needs that were originally identified.
    And the waiver process is obviously a concern of ours, we 
do recognize there needs to be flexibility in ensuring that 
certain requirements can be waived for particular disasters and 
the like, but using the waiver process to allow anything and 
everything to change is, I think, a dangerous position to be 
in.
    Mr.  Steil. Thank you.
    Ms. McFadden, in your testimony you suggested requiring 
grantees to develop mitigation plans that anticipate future 
likely disasters and form the basis for proposed projects. Can 
you give an example of where that has been successfully done, 
maybe on a voluntary basis? Have you seen that play out?
    Ms.  Mollegen-McFadden. Well, one example I would cite 
would be through HUD's Rebuild by Design Competition. After 
Hurricane Sandy, HUD worked closely with philanthropy, the 
private sector and cities, counties, and States that were 
impacted by Hurricane Sandy, to come up with comprehensive 
plans for protecting their communities, looking not just at 
what would it take to make them physically safe but also how 
they could use the opportunity to achieve multiple benefits 
from the serious infrastructure investments that will be made.
    Mr.  Steil. Thank you.
    I appreciate your time here and I have learned a lot from 
today's discussion.
    I yield back my time.
    Chairman  Green. Thank you.
    The Chair now recognizes the gentlewoman from Missouri, 
Mrs. Wagner, who has been a great partner to work with on this 
legislation.
    Mrs.  Wagner. Thank you, Mr. Chairman.
    And I thank the witnesses for being here.
    Mr. Kirkland, in 2018, the HUD IG released an audit 
entitled, ``HUD's Office of Block Grant Assistance Had Not 
Codified the Community Development Block Grant Disaster 
Recovery Program.'' In that report, the IG's Office laid out 
reasons why it is so important to codify the CDBG-DR Program. 
Did you work on that audit sir?
    Mr.  Kirkland. Our Office worked with the Office of Audit. 
At the time I was the Acting Deputy Inspector General so 
obviously I worked directly with the Audit staff that was 
working on that.
    Mrs.  Wagner. Wonderful. Can you summarize why you think 
codifying the program would lead to better outcomes, please?
    Mr.  Kirkland. So as we noted as part of that audit, we 
identified 59 either direct duplications or similarities in--
    Mrs.  Wagner. Fifty-nine?
    Mr.  Kirkland. Fifty-nine in the Federal Register notices 
associated with the disasters over the years. That type of 
commonality seems to point to a consistency of approach, 
however the failure to take advantage of a consistency in 
approach leaves these grantees in a position that they can't 
act until HUD acts, they have to wait for HUD to do something 
first and that delay is absolutely unnecessary.
    Mrs.  Wagner. So those who need the assistance the fastest 
are delayed by a year, 2 years, depending upon how long it 
takes to set up.
    I know the purpose of using CDBG funds for disaster 
recovery is to help the most vulnerable people and businesses 
take care of needs that were not met by other disaster relief 
programs but in most cases those people and businesses have to 
wait years for CDBG-DR money to reach their community. The 
people affected by the 2017 disasters as has probably been 
stated, still haven't seen a single dollar from HUD in most 
cases. And I was there, and I voted to appropriate this money.
    Mr. Kirkland, is that unusual or does it typically take one 
to two years to disperse DR funds?
    Mr.  Kirkland. There are always delays in the process and 
as I noted in my testimony, even getting the action plan, the 
Federal Register notice out normally takes 2 to 4 months to do 
it, in this case it took 154 days so obviously a significantly 
longer time as part of these disasters. We do recognize that 
these were unprecedented disasters. But we think that argues 
even more for codification.
    Mrs.  Wagner. And so why is a process so slow, is it 
codification or there are other things we can do to streamline 
these disaster relief funds?
    Mr.  Kirkland. Our understanding obviously, this time 
around--well part of it is understanding what the money is and 
I think making sure HUD goes through its processes but as we 
noted in our audit report, a lot of those processes are, we 
believe, unnecessary.
    Mrs.  Wagner. What can we do to expedite the process so we 
can get these dollars to the people who really need the help 
rebuilding their lives?
    Mr.  Kirkland. I think you are well on your way in this 
bill that you all have introduced to creating a process that 
will streamline this.
    Mrs.  Wagner. Terrific. And that is great news, Mr. 
Chairman.
    One last question, Mr. Kirkland, what can Congress do to 
ensure CDBG-DR funds aren't duplicating benefits already 
received, and what can HUD do? For instance, how does HUD know 
whether SBA provided assistance already, so that it does not 
duplicate funding?
    Mr.  Kirkland. I think we have continue to encourage HUD to 
work with the other agencies that do provide benefits to 
coordinate their efforts, to ensure that they are 
communicating. I do think that ensuring that, as part of this 
bill, there is a dictate for sharing of information between 
State, local, Federal, agencies, to ensure there is 
transparency in that process for everyone involved, I think 
would be a good aspect.
    Mrs.  Wagner. And I thank you for that testimony, Mr. 
Kirkland, because I couldn't agree more. FEMA has to be 
speaking with SBA, with HUD, with the State, and local, 
everyone needs to be coordinating so that we can get the proper 
assistance to those in need, in the fastest manner forward; 
codifying this program, making sure that these organizations 
are working together is key along with the claw-back provisions 
to make sure too that this money isn't lingering out there and 
the billions of dollars for years and years and years.
    I thank all of the witnesses.
    I thank you, Mr. Chairman, for your tremendous work on 
this.
    I thank my friend, Andy Barr, who is the ranking member of 
the subcommittee for taking this mantle up also.
    And I yield back.
    Chairman  Green. I thank the gentlelady for her kind 
comments.
    The Chair now recognizes the gentlewoman from Harris 
County, Houston, Texas, Ms. Garcia.
    Ms.  Garcia of Texas. Thank you, Mr. Chairman. And I too 
want to thank you for bringing attention to this very critical 
issue. You and I both know that Texas and of course our 
Houston, Harris County has had more than its share of incidents 
that we have had to wrestle with as was stated earlier by one 
of our witnesses, in the last 10 years. So first I want to 
thank you for having this hearing and I know that it is, as 
well as everyone knows as well as I do that there has just been 
shocking devastation that Harvey has left not only in Harris 
County but in most of the Gulf Coast region of Texas.
    And while our recovery from Harvey has been impressive, it 
is beyond frustrating that we sit here today, 578 days after 
Harvey made landfall, still trying to grapple with these 
recovery programs. While Harvey may have drowned Harris County 
in rain, it has almost been drowned in red tape, both the 
Federal and State Government has piled on undue additional 
restrictions and delays, and now we must face the fact that a 
delayed recovery may become no recovery at all for many people, 
especially in my district.
    This committee has the opportunity to make sure that these 
holdups are not repeated with the next disaster, whether it be 
in Harris County or anywhere else in the country and 
unfortunately, we all know there will be a next time because 
there is always a next time. Let us learn from what we have 
heard here today so that we aren't back here after the next 
season of hurricanes, fires, or anything else in our country, 
asking again, what happened.
    Mr. Chairman, again I applaud you for working on this 
legislation and I look forward to working with you to make sure 
that CDBG-DR is codified and we thank you for your service on 
this important issue.
    And with this I want to begin my questioning, and I have so 
many because for those who don't know me, I have been dealing 
directly with many of these incidents in Harris County for 
many, many years, either as City Controller in Houston, 
watching the dollars and how our dollars have been spent or as 
a Harris County Commissioner, wrestling with recovery.
    So Ms. Lemelle, I want to start with you. You and I have 
worked together on many of these--it is really great to see 
you. I read your testimony. I really agree with everything you 
have mentioned. And you have mentioned the thing that we have 
wrestled with many, many times, which is the need for huge 
cities and cities that have the capacity to deal with these 
issues firsthand particularly the spending and the 
accountability issues. Is that the one thing that you wish got 
changed, was being able to receive the direct grants or is it 
precertification or is it cutting some of the red tape, if you 
could tell us the one thing we really need to get done that 
would help you tomorrow, what would that be?
    Ms.  Lemelle. Thank you, Congresswoman Garcia. And I 
appreciate the question. The one thing is that direct 
allocation for Harris County and the City of Houston would be 
beneficial and would cut a lot of the red tape.
    The other thing that has already been mentioned is that 
permanently authorizing CDBG-DR would also allow that to 
happen, that if you have the rules, we could start our planning 
much earlier; we could start our planning immediately following 
a disaster, even pre-disaster in the case of a hurricane, that 
we know will be hitting us. We know what the rules are prior to 
a disaster and having the codification of CDBG-DR would give us 
a lot of that. Under the other regular CDBG Program we do that 
on an annual basis, we pre-identify upfront, we go out to our 
community, work with our nonprofits--
    Ms.  Garcia of Texas. Right. We have worked on a lot of 
those together but--
    Ms.  Lemelle. Yes.
    Ms.  Garcia of Texas. I guess my concern would be, a 
concern I forget, somebody has raised it--we know that Harris 
County can handle--you were equipped to do that but I know that 
when I represented Houston as County Commissioner I also 
represented about 12 other municipalities around Houston, much 
smaller who couldn't so they went to Harris County for us to 
administer the program for them. How would we determine or what 
threshold would we use to be able to say, Harris County you get 
direct allocation but maybe Austin you don't or Boston you get 
it but maybe Baltimore doesn't--what guidance would you give us 
on that?
    Ms.  Lemelle. I would say that any institution that 
receives CDBG-DR and is a direct grantee, they have the 
monitoring history, they also have a pre-history of OIG audits; 
we are regularly audited and we are reviewed and I think 
capacity is shown via previous audits and ability to carry out 
these programs. HUD has a lot of the ways of looking at 
grantees already, I would say, and any ability to do that 
should be part of the review and capacity review to allow that 
to happen.
    In cases where a community does not have capacity or wishes 
not to be a direct grantee, you can always give that to the 
State to administer if that is your choice. I think the choice 
should be for a community to lead its direction and local 
ability to plan, and carry out those activities, are best for 
its residents.
    Ms.  Garcia of Texas. Mr. Kirkland, very quickly, I was 
really puzzled with your response to the chairwoman regarding--
I'm sorry--well, I will submit my question in writing.
    Thank you.
    Chairman  Green. The Chair will now recognize Mr. 
Loudermilk for 5 minutes.
    Mr.  Loudermilk. Thank you, Mr. Chairman.
    I appreciate the panel being here today and from most of 
what I have seen and from testimony we have heard and 
questions, a lot of the inefficiencies and delays in grant 
funding come from what appears to be the front end and the back 
end of the entire process and I know that a lot of my 
colleagues have already addressed the inefficiencies, delays, 
because of lack of formal structure and how codifying would 
benefit that. I want to look at the back end of that and see 
what we can do there.
    Mr. Kirkland, on the back end, it seems that there is a lot 
of unspent funds that end up sitting into the coffers that 
could be used for other things, it could be used in different 
areas, it seems to me that if we had an expiration date, on the 
use of those funds and if they are not utilized they go back 
into the Treasury would be one thing, a better use of taxpayer 
money but also may incentivize those funds to be used more 
efficiently. What do you think about a 6-year timeline or what 
are your thoughts about how to better improve that back-end 
process?
    Mr.  Kirkland. Obviously, we would want to leave the 
decision on the specific timeframe to the policymakers on 
exactly how long that should be. Our experience though has been 
the longer you get out from a disaster, the more troublesome 
issues that we see in the expenditure of funds; the more 
creative ways that we see that grantees use to expend funds, 
the further you get out, the more problematic that is from our 
perspective.
    And obviously we do think--and HUD I think has self-imposed 
a 6-year term but then they consistently waive that 6-year 
term. We do think a time limit should be set. We also recognize 
that there is money sitting out for many different disasters, 
long past--dating all the way back to 9/11, money is still 
sitting in the coffers of those particular disaster recovery 
efforts.
    Mr.  Loudermilk. So do you ever see when money sits out 
there for a longer period of time, there may be some localities 
or jurisdictions, little creativity in how that money could be 
spent?
    Mr.  Kirkland. That is where we see probably the most 
creativity of money being spent is the further you get out from 
a disaster.
    Mr.  Loudermilk. So you have this pot of money that we have 
utilized what we could for the initial disaster relief but 
there is still this pot of money that we need to figure out how 
we can use it, does that kind of summarize some of what we 
are--
    Mr.  Kirkland. Agreed.
    Mr.  Loudermilk. And a time period would obviously resolve 
some of that?
    Mr.  Kirkland. I do agree, yes.
    Mr.  Loudermilk. Okay. Thank you.
    I would also like to move on to the environmental review 
process and I know Ms. McFadden, you testified to that in your 
written remarks, what are some of the specific issues in the 
environmental review process that cause these back-end delays?
    Ms.  Mollegen-McFadden. Well, I think if you ask any 
recipients what their biggest headache is with Federal funding, 
they will probably tell environmental reviews--
    Mr.  Loudermilk. Yes.
    Ms.  Mollegen-McFadden. So while it is absolutely good 
public policy to have standards to ensure that when you are 
making a Federal investment in a property, it will for example 
do no harm to the environment or do no harm to the people who 
are living in or using the building; after a disaster some of 
the real pain points are when you are simply getting people 
back into their homes but having to do long and expensive 
reviews on properties which don't yield any benefit at all.
    Mr.  Loudermilk. What can be done to streamline that 
process?
    Ms.  Mollegen-McFadden. So the last several appropriations 
have taken great steps to allow HUD recipients to adopt a FEMA 
environmental review, that has been done, and I think that is a 
terrific effort and we would like to see some more loosening of 
the standards around rebuilding single-family and multi-family 
properties that are where they were before the disaster.
    Mr.  Loudermilk. While we are on the subject of the 
environment, because this kind of ties into it, I appreciate 
some of the things that you guys are looking at doing at flood 
risk mitigation, I think that is something that has been 
overlooked, I think that is something that we have looked at on 
this side in our National Flood Insurance Program 
Reauthorization, and my understanding is that if we properly do 
some type of mitigation, especially moving people out of harm's 
way, it is a six to one savings for every one dollar of Federal 
funds spent save, six dollars. Can you give us an update on 
HUD's implementation of the CDBG-DR mitigation and what are 
your recommendations?
    Ms.  Mollegen-McFadden. Being short on time, I would say it 
has been more than a year since Congress provided the funds, in 
February of last year, and Secretary Carson said recently that 
we could expect to see the rules for how to use that money in 
May, that is a call for codification and rulemaking right there 
so that we never have to see that kind of delay between when 
you make the funding available and when recipients learn how it 
can even be used.
    Mr.  Loudermilk. Okay. Thank you.
    I yield back.
    Chairman  Green. The gentleman yields back.
    The Chair will now recognize the gentlewoman from 
Pennsylvania, Ms. Dean.
    Ms.  Dean. Thank you, Mr. Chairman. I thank you for calling 
this hearing. And I thank those who have come to testify before 
us. We certainly know that in the last several years, 
especially this last year, our country has suffered tremendous 
losses and the need for disaster relief and the appropriate and 
prompt distribution of disaster relief is something we in 
Congress grapple with, and I thank you, Mr. Chairman, for the 
bill that you have crafted.
    I would like to at this time yield my time to Ms. Garcia.
    Chairman  Green. Ms. Garcia is recognized.
    Ms.  Garcia of Texas. I thank the gentlelady from 
Pennsylvania.
    And thank you, Mr. Chairman, for the additional time.
    I was caught in the middle of asking you a question--I was 
really troubled with your responses to the chairwoman regarding 
the disaster recovery dollars for Puerto Rico.
    I have seen more than one report about the White House 
either directly or indirectly through some of its agencies or 
some of its staff asking for delays or different criteria, 
restrictions, on Puerto Rico that have not been placed on other 
States and you said you were looking at that but your responses 
never seem to tell us anything specific. I think you used the 
words, ``we are actively doing it.'' What is going on and why 
is it taking you so long?
    Because it seems to me that for a group of people who are 
supposed to be reviewing the red tape to provide the 
inefficiencies and ineffectiveness that you are talking about, 
it seems like you are suffering from the same red tape.
    Mr.  Kirkland. We are making every effort to look into--
    Ms.  Garcia of Texas. And what does that mean, what are you 
doing--
    Mr.  Kirkland. That is including--
    Ms.  Garcia of Texas. And meanwhile, as my colleague from 
New York mentioned, meanwhile there are people waiting in 
Puerto Rico, I went to Puerto Rico, I have seen it firsthand--
    Mr.  Kirkland. Sure.
    Ms.  Garcia of Texas. There are more tarps than I wanted to 
count. I went to Ponce with the mayor, I visited San Juan, and 
I just was stunned at the lack of response.
    Mr.  Kirkland. We are--
    Ms.  Garcia of Texas. Your job is to review that and make 
sure that we know that it can happen quicker.
    Mr.  Kirkland. We are interviewing a number of folks. 
Obviously, some of those folks have subsequently left HUD so 
tracking those individuals down and going through the process 
of gathering information from them, we are working diligently 
to do so and we will make every effort to get that done as 
quickly as possible and report that.
    Ms.  Garcia of Texas. How many people do you have doing 
this as compared to any other review that you have done 
somewhere else or are you doing less also just as the President 
apparently, according to some reports, wants all the other 
agencies providing the relief in response?
    Mr.  Kirkland. The inquiry is a priority for us. We have 
dedicated a team of agents and attorneys that are working 
together to get the answers to those questions.
    Ms.  Garcia of Texas. And what is your timeline for a 
response?
    Mr.  Kirkland. As soon as possible. We did get--
    Ms.  Garcia of Texas. Well, tomorrow--
    Mr.  Kirkland. A report from--
    Ms.  Garcia of Texas. Next month--
    Mr.  Kirkland. We did--
    Ms.  Garcia of Texas. Next year? Again, the people in 
Puerto Rico are waiting.
    Mr.  Kirkland. We are prioritizing that. We obviously never 
know where a particular inquiry will take us so I hesitate to 
put a timeline on it but I give you every guarantee that our 
agency is providing every resource to ensure that we can get 
you the answers as quickly as possible.
    Ms.  Garcia of Texas. Well, I join many of my colleague who 
are concerned about this issue particularly--Ms. Velazquez and 
others because again I know how audits work. I was a 
comptroller, we did audits. And the key to an audit is, to go 
in and do it quickly as possible, as effectively and 
efficiently as you can so that you can get the lessons learned 
and the things that need to be done to ensure that the dollars 
get where they need to go. And sir, from, we are sorry, if we 
could hurry it up, we would. Because I do think that when you 
look at how some of the dollars have come in the past, yes, it 
is always slow. But it just seems that with Puerto Rico, it is 
just damn slow, and we need to get it going.
    Thank you so much.
    And thank you, Mr. Chairman. I yield back my time.
    Chairman  Green. Would the gentlelady yield the final 24 
seconds to me, please?
    Ms.  Dean. Absolutely. I yield to the Chair.
    Chairman  Green. Thank you.
    Mr. Kirkland, quickly, do you know, the number of people in 
HUD who are working on the DR Program? At one time I am told 
that we had but a handful of people.
    Mr.  Kirkland. So the last number that I heard obviously 
was between 20 and 25; the number I heard was 24.
    Chairman  Green. Twenty-four?
    Mr.  Kirkland. Permanent employees.
    Chairman  Green. Thank you very much.
    The Chair will now yield 5 minutes the gentleman from New 
York, Mr. Zeldin.
    Mr.  Zeldin. Thank you, Mr. Chairman, and Mr. Ranking 
Member, for holding this hearing. And I thank the witnesses for 
being here.
    And as I was listening to the last questions and comments, 
the two words that certainly ring true and really is the 
purpose of this hearing are the two words, ``lessons learned.'' 
My background is the Army, I have spent about 16 years or so 
between active and reserves and I think one of the things that 
makes our Military the greatest Military in the world is our 
ability to learn lessons of what works well and what doesn't 
work well.
    I will tell you from another perspective, which is more 
directly related to today's hearing, I would like to speak as a 
Long Islander who went through Superstorm Sandy and to share a 
few thoughts with regards to lessons learned from that 
experience, I hope the Chair doesn't mind just indulging me 
because it is personal for us on Long Island.
    At that time when so much was yielded to State and local 
governments to administer these programs for the Federal 
Government, very quickly there was a responsibility to staff up 
from zero to a hundred staffers. It was hundreds of staffers 
and it had to happen quickly.
    And there was a huge turnover with the staffing, changing 
of responsibilities. People would submit their paperwork and go 
several months not knowing that their paperwork was incomplete 
and they just assumed that they had submitted everything 
because they never heard back. They decided to follow up 6 or 9 
months later and they are told, well your paperwork is 
incomplete. You hear these stories from individuals, you hear 
these stories from businesses, and that was a problem.
    Here's another problem, people finishing their entire 
casework, completing their packet, or the government is telling 
them your paperwork is completed and then not hearing anything 
for several months, and when you follow-up it turns out that 
the staffer who was working on your case had left and the new 
staffer who is assigned to your case says, ``I have no 
documentation whatsoever,'' and you have to start all over.
    I believe that if our subcommittee, and the Full Committee, 
and this House, is able to draft legislation, learning lessons 
from some of those disasters most recently I would just request 
that we go back, even further, at the Chair and the Full 
Committee's indulgence to look at what went well, and what 
didn't, with the response to Superstorm Sandy.
    We have a lot of personal stories on Long Island, and I 
believe that we can never allow any other region of our country 
to experience what we went through on the East End of Long 
Island.
    I don't know if any of the witnesses have any perspective 
from that component with the lessons learned but I do have a 
couple of minutes remaining in my time, so feel free.
    Ms.  Lemelle. Yes, Congressman. I would just add, in Harris 
County we have learned lessons. We saw some of that after 
Hurricane Ike, which was in 2008, and we were prepared for this 
with Harvey. We understand our residents and I constantly tell 
our team that even if it is difficult for our staff in the 
office, it is difficult for us, we are looking at making it 
easier for the applicant and keeping them informed. That is a 
high priority for us in Texas.
    We understand many of our folks have gone through 3 floods 
in the last 3 years and so we are very sensitive to that and we 
keep constant communication, and we set up a program where we 
are constantly giving folks a way to call us, we reach out to 
them but we have lived that experience and we understand our 
residents and we are staffing for that.
    Ms.  Mollegen-McFadden. Congressman, I have a perspective 
to add. I served on the President's Hurricane Sandy Rebuilding 
Task Force as Chief Operating Officer and later acting 
Executive Director. And I would say one of the innovations that 
came from the Sandy work was the repayment of work that 
homeowners did before they entered the program so allowing them 
to be reimbursed for work they did themselves rather than 
telling everyone, you have to wait until our contractor can 
come to you, and that is something that HUD has continued to 
permit and should continue to be permitted so that those 
homeowners who have the ability to go out and hire their own 
contractors or do the work themselves don't have to stop and 
wait for their turn.
    Mr.  Zeldin. That is a hugely important lesson learned and 
I could certainly echo just thousands of examples from Long 
Island on that point.
    Mr.  Ensenat. I am just going to mention something quickly 
and it is between all the places that CDBG-DR has been 
implemented. HUD has always been taking the same IT system or 
the same kind of controls into it and I think HUD should have 
an IT system just dedicated to it and to all the grantees, and 
in that sense they can see real time, where the expenditure, 
who was served, and who was not and they don't have that so it 
is something that we want to be done.
    Mr.  Zeldin. Okay. Thank you.
    My time is up. I yield back.
    Chairman  Green. The gentleman yields back.
    The Chair will now, with the consent of the ranking member, 
accord the ranking member and the Chair 3 additional minutes 
for questions and/or comments.
    Mr. Ranking Member, you are recognized for 3 minutes.
    Mr.  Barr. Thank you, Mr. Chairman. Again, thank you for 
holding this hearing. Thank you, to the witnesses for their 
testimony and I would ask unanimous consent that our statements 
about today's hearings that occurred prior to the gavel be 
included in the hearing record.
    No objection?
    Thank you.
    Chairman  Green. Without objection, it is so ordered.
    Mr.  Barr. Thank you.
    A couple of final questions for Mr. Kirkland. On 
procurement standards, procurement standards are part of most 
HUD programs except for this, except for CDBG-DR. Based on your 
office's audit of the current program what are the risks of not 
using procurement standards when it dealing with disaster 
relief contractors?
    Mr.  Kirkland. We are absolutely perplexed by not having 
consistent procurement standards. Obviously, that lack of 
consistency creates amazing risks associated with fraud, waste, 
and abuse; that is open for being taken advantage of. We will 
note that FEMA requires standard procurements, standard--
    Mr.  Barr. Yes.
    Mr.  Kirkland. So we are not quite sure why HUD cannot.
    Mr.  Barr. I have heard some anecdotal stories of big 
problems with this program, with the lack of procurement 
standards and I urge the chairman and Ms. Wagner to address 
that in their legislation if it is not already.
    Final question, we have heard a lot about Puerto Rico today 
so let me just ask you, Mr. Kirkland, in November of 2017 your 
office issued a report that identified a number of concerns 
regarding Puerto Rico's newly created Office of Socioeconomic 
and Community Development Policy. This is the office that is 
charged with administering Puerto Rico CDBG?
    Mr.  Kirkland. It is not currently. I think that one of--
    Mr.  Barr. It is the Secretary now, correct?
    Mr.  Kirkland. It is the Secretary now, correct.
    Mr.  Barr. But was it before?
    Mr.  Kirkland. So that was initially one of the major 
concerns immediately after the disaster even identifying who 
the potential grantee would be. I do think there was some 
confusion in the time right after the disaster in concluding 
who the grantee would be but at that time that was the entity 
that was identified to us as the most likely grantee--
    Mr.  Barr. And so--
    Mr.  Kirkland. But obviously that is not so.
    Mr.  Barr. And one of your chief concerns at the time was 
that office staff consisted mostly of former employees from its 
predecessor which had a track record of mismanaging HUD funds?
    Mr.  Kirkland. That is correct.
    Mr.  Barr. Okay. And so obviously we have a new 
administrator now. But the point is that there were some 
concerns initially with who was going to be administering some 
of these HUD dollars?
    Mr.  Kirkland. That is correct.
    Mr.  Barr. And that could be a contributing factor to 
wanting some additional assurances that we have program 
integrity now in the Administration.
    And Mr. Secretary, thank you for what you are doing and 
working with HUD to make sure that the dollars are not just 
getting to the people of Puerto Rico in a timely way but with 
integrity so that there is not waste, fraud, and abuse in the 
process.
    Mr.  Ensenat. Accountability and transparency, that is 
right.
    Mr.  Barr. I yield back. And I thank you for your time.
    Chairman  Green. I thank the ranking member as well.
    I will now yield 3 minutes to myself.
    Mr. Kirkland, would you please address the staffing at HUD, 
because of this enormous amount of money and the limited 
staffing. Can you give us some indication as to how you think 
the staffing impacts the process?
    Mr.  Kirkland. We obviously have concerns with the current 
staffing in CDBG-DR. I think the 24 permanent staff members 
within HUD who oversee this, oversee over a billion dollars 
each in their portfolio--
    Chairman  Green. Was that a ``million'' or a ``billion?''
    Mr.  Kirkland. A ``billion.''
    Chairman  Green. Okay.
    Mr.  Kirkland. And $1.9 billion, I think to be exact, $43 
billion total overseen by 24 HUD employees. Compare that to 
HUD's overall budget for everything else of $54 billion 
overseen by 7,500 employees, it does seem a bit desperate.
    Chairman  Green. Well, I thank you very much.
    Let me move now to my closing comments.
    I had the opportunity to visit Puerto Rico and I did visit 
with the governor. I met with mayors. And I met with persons 
who were part of NGOs, visited various facilities in the 
Commonwealth of Puerto Rico, I must add the Commonwealth, where 
all of the persons are citizens of the United States of 
America. So these are our people. I understand the passion 
associated with what is happening there after having made my 
visit.
    And I want to just give an assurance that we do want to do 
all that we can--and I am speaking for myself, I suppose, and 
those who agree with me so when I say we, I and all who agree 
with me. We want to do all that we can to be of assistance to 
the Commonwealth of Puerto Rico simply because of the need that 
exist and the fact that these are American citizens.
    So I thank each of you for your testimony, and I would like 
to thank the witnesses for devoting your time and resources so 
that we could share your expertise.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    I do thank all of you.
    And I will now adjourn this, the first hearing of the 
subcommittee for this Congress.
    [Whereupon, at 11:51 a.m., the hearing was adjourned.]

                            A P P E N D I X



                             March 26, 2019
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