[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
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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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