[Senate Hearing 117-]
[From the U.S. Government Publishing Office]


 
RETHINKING DISASTER RECOVERY AND RESILIENCY: PROTECTING COMMUNITIES AND 
                    ACCELERATING ASSISTANCE, PART II

                              ----------                              


                        WEDNESDAY, MAY 19, 2021

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:01 a.m. in 
room SD-192, Dirksen Senate Office Building, Hon. Brian Schatz 
(chairman) presiding.
    Present: Senators Schatz, Reed, Van Hollen, Collins, 
Boozman, Hoeven, and Kennedy.

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

STATEMENT OF MR. ARTHUR JEMISON, PRINCIPAL DEPUTY 
            ASSISTANT, SECRETARY FOR COMMUNITY PLANNING 
            AND DEVELOPMENT


               opening statement of senator brian schatz


    Senator Schatz. Good morning. This hearing will come to 
order.
    This is our second oversight hearing to examine how 
departments under our jurisdiction manage disaster recovery 
programs and how we can make our communities more resilient to 
the effects of climate change.
    Today's focus is on the Department of Housing and Urban 
Development. I want to welcome our witnesses to the 
subcommittee this morning. And thank Senator Collins for her 
leadership in examining these issues.
    Across the country, Americans are feeling the effects of 
climate change every day. Last year alone this country faced 22 
extreme weather and climate-related disaster events with losses 
exceeding $1 billion each. The most on record since NOAA 
started recording billion-dollar disasters in 1980.
    Communities impacted by disaster are struggling to recover, 
and our Federal response is not equipped to deal with the 
repeated and severe events that are happening today. While FEMA 
and SBA are the lead agencies to respond immediately after a 
disaster, HUD's CDBG Disaster Recovery Program has become a key 
tool in the recovery process. Since 2005, more than $80 billion 
has been appropriated by this subcommittee for CDBG-DR.
    These flexible funds have been critical to not only 
rebuilding, but also reshaping communities in the wake of 
catastrophic disasters for decades. But the funds take far too 
long to reach the people who need them the most. While programs 
through FEMA and SBA are intentionally designed to move quickly 
after disaster, they often fail to get help to those that need 
it the most. This is where HUD is well positioned to help fill 
the gap.
    The assistance should not just go to the small business 
owner, it also needs to go to the small business worker, and 
not just to the homeowner, but the home renter. We also need to 
change how we finance recovery by establishing a fund for long-
term disaster recovery at HUD. Communities need to know that 
there will be a next stage of assistance available for large-
scale disasters. They should not have to wait for congressional 
action or for Federal notices to get started.
    I am committed to working on a bipartisan basis on a 
revised authorization bill to make common-sense changes to 
accelerate assistance.
    Today, we will also discuss how HUD can best support 
communities as they plan for the future and invest in 
resiliency. GAO has found that the Federal response to disaster 
risk reduction is reactive and fragmented. This needs to 
change. The Department should work with other agencies to build 
capacity support pre-disaster planning, and align policies and 
investments across Federal programs.
    From my experience in disaster recovery, local governments 
often struggle to make different sources of funds work 
together. The work we do here can help to reduce the burdens 
and improve the outcomes. The American Jobs Plan offers $50 
billion for resiliency activities, but we need to focus those 
resources to achieve targeted and tangible results. And this 
investment should be just the beginning.
    I look forward to hearing from our witnesses and the 
members of this subcommittee on their experiences and their 
recommendations.
    With that, I will turn it over to Ranking Member Collins 
for her opening statement. And I look forward to working with 
everyone to tackle these important issues.


                   statement of senator susan collins


    Senator Collins. Thank you very much Chairman Schatz.
    Today, as you have indicated, we hold our second hearing on 
disaster recovery and resiliency, this time focusing on the 
CDBG Disaster Recovery Program.
    I want to welcome our two witnesses from HUD and the GAO, 
and thank them for joining us this morning.
    Natural disasters affect housing and community 
infrastructure sometimes resulting in a scale of damage that 
state and local governments are simply unable to handle without 
Federal assistance. Helping to address this unmet need is an 
appropriate role for the Federal government.
    Such Federal engagement occurs through several agencies. 
FEMA is responsible for providing the primary immediate 
response. The Small Business Administration provides a 
secondary level of support to businesses and homeowners, and 
HUD offers critical funding for the longer-term recovery 
efforts through the CDBG program.
    The regular CDBG program provides state and certain local 
governments with the flexible block grant, allowing local 
decisions and needs to drive the use of the funds. This 
flexibility has made CDBG one of HUD's most popular programs 
with state and local governments, as well as one of the most 
sought after programs within the T-HUD Appropriation Bill, and 
if you look at the requests that we receive from our fellow 
senators.
    The CDBG-DR program maintains this flexibility, which can 
be even more critical when responding to emergencies. In the 
nearly 30 years of CDBG-DR funding this program has provided 
nearly $90 billion for recovery efforts. Currently 62 grantees 
are administering 130 grants worth $67 billion.
    These grants had been used to respond to hurricanes and 
winter storms, earthquakes and tornadoes, wildfires and floods, 
lava flows, and even recovery from terrorist attacks. Although 
it has been a critical resource for disaster-affected 
communities for nearly 30 years, oddly enough, the program has 
never been authorized and it could be improved.
    The statutory framework for this program exists only in the 
individual Supplemental Appropriations Act. Since 1993 there 
have been 39 such supplementals. In some cases, a single 
supplemental has covered disasters across multiple years. And 
other times multiple appropriations have been provided for the 
same disaster, further complicating matters, and the statutory 
language has been modified over the years to reflect changing 
needs and lessons learned.
    This ad hoc approach to the disaster program has meant that 
some grantees have had to concurrently administer multiple 
grants, applying slightly different rules and requirements for 
each one. This approach has also had, as the chairman 
mentioned, the unintended consequences of slowing the delivery 
of assistance to communities, sometimes by several years.
    That makes it challenging for communities to proactively 
design effective disaster response programs and to meet the 
needs of their residents. Natural disasters are not partisan in 
their impact, and our response should not be either. We can and 
must find bipartisan solutions to disaster recovery, 
mitigation, and resiliency.
    And I very much appreciate the chairman's leadership and 
commitment to work on a bipartisan basis to improve and 
authorize existing programs like CDBG-DR. We will be working 
together to develop bipartisan legislation with input from our 
committee members on both sides of the aisle.
    The need for such legislation is clear and authorization 
would enable HUD to develop and issue clear and consistent 
program regulations. That would mean simpler management and 
streamlined oversight for those who are managing the grants for 
multiple disasters. It would help speed the delivery of 
critical assistance to recovering communities.
    In any CDBG-DR authorization, however, it is critical that 
the programs remain flexible, such flexibility is needed given 
the geographic diversity of the potential recipients and the 
unique challenges presented by any particular disaster, as well 
as the fact that we may not be able to anticipate exactly what 
future disasters may look like.
    The administration's proposed American Jobs Plan includes 
$50 billion for disaster resiliency, the plan apparently 
intends for these funds to flow through a number of new and 
existing programs, as well as new initiatives at the Department 
of Transportation, and new tax credit proposals.
    Beyond this, however, the President's proposal does not 
include any details on the administration's intent for CDBG and 
the disaster program under CDBG. Today's hearing provides an 
opportunity for us to learn more about the administration's 
proposal and what it envisions for those programs.
    I look forward to hearing from today's panel, and working 
with the chairman, and other members of this subcommittee to 
advance our shared bipartisan priorities.
    Thank you, Mr. Chairman.
    Senator Schatz. Thank you, Ranking Member Collins.
    I want to now turn to our panel of witnesses before us 
today, and welcome both of you to the subcommittee.
    First we have Mr. James Arthur Jemison, the second 
principal deputy assistant secretary of the Office of Community 
Planning and Development at the Department of Housing and Urban 
Development.
    And next we will have Mr. John Pendleton, director of 
Financial Markets and Community Investment at the GAO.
    Mr. Jemison, you may proceed with your testimony.


                summary statement of mr. aurtur jemison


    Mr. Jemison. Thank you. Thank you. Chairman Schatz, Ranking 
Member Collins, and members of the subcommittee, I thank you 
for inviting me to testify here today.
    Every year, millions of people across the country are 
affected by natural disasters. Disasters can have wide-ranging 
impacts, from physical injury, and even death, to loss of home, 
property and community.
    Across the country American families are struggling to 
recover from natural disasters, ranging from hurricanes, 
floods, and landslides, to extreme heat and wildfires. Last 
year the country has had an ominous record, 22 disasters that 
each costs $1 billion or more worth of damage. This broke the 
prior record of 16 events that occurred in 2011 and 2017. We 
face a profound climate crisis and have a narrow moment to 
pursue action to avoid the most catastrophic impacts of that 
crisis and seize the opportunity that climate change 
represents.
    As the President has stated, we must listen to the science 
and meet the moment. The President signed, Tackling the Climate 
Crisis at Home and Abroad Executive Order on January 27th, 
2021, and charges the administration with implementing a 
government-wide approach to reduce climate pollution and 
increase resilience to the impacts of climate change.
    We must also end the endless cycle of disaster recovery by 
focusing investment on increasing resilience and reducing 
climate emissions to slow the rate of climate change. The 
Department's fiscal year 2022 discretionary requests and the 
President's American Jobs Plan include critical investments 
along these lines. Given the increasing severity and frequency 
of natural disasters, a coordinated whole-of-government 
approach to disaster recovery and response requires a permanent 
and reliable framework.
    HUD is uniquely positioned to carry out these priorities as 
we work with Congress to define HUD's role in disaster recovery 
through the CDBG Disaster Recovery Program, building on lessons 
learned from the existing approach of ad hoc supplemental 
appropriations acts.
    HUD is currently managing over 67 billion in active CDBG 
disaster recovery grants, supporting communities across the 
country from Hawaii to Puerto Rico, North Dakota to Louisiana, 
and the U.S. Virgin Islands to California. In total, funds 
appropriated for supplemental appropriations for disaster 
recovery exceed the annual budget of our Department. We welcome 
opportunities to strengthen their effectiveness.
    I want to highlight the Department's longstanding and 
ongoing relationship with the U.S. Government Accountability 
Office. The GAO reports on better monitoring of CDBG-DR grants, 
have led us to strengthen our reviews of grantee submissions, 
and improved guidance to grant managers.
    In recent years, the Department has played a significant 
role in helping low-income communities recover from, and build 
resilience to natural disasters through CDBG-DR. The CDBG-DR 
program, including the CDBG mitigation investments, has a 
unique focus on long-term recovery and resilience efforts 
targeted to families with low and moderate incomes in the most 
impacted and distressed areas.
    The focus is unique from other Federal disaster assistance 
programs administered by FEMA and by the small business 
administration, as well as the role of private insurance. While 
we work with Congress to develop a proposal that reflects the 
administration's shared priorities for disaster recovery 
programs, and incorporates lessons we have learned from our 
experience in CDBG-DR supplementals, the Department is 
developing a universal notice that will outline standing 
program requirements and an allocation notices to provide more 
clarity and transparency to grantees in the interim.
    I have outlined program elements in my written testimony 
that directly address obstacles within the CDBG-DR program as 
it exists currently. HUD seeks a permanent, reliable framework 
for the future. These elements align with current research and 
approaches, as well as consistency with the administration's 
priorities, including tackling the climate crisis.
    We look forward to working with Congress to maximize HUD's 
expertise, to ensure a reliable, whole-of-government approach 
to support the long-term recovery of communities devastated by 
natural disasters.
    I look forward to your questions.
    [The statement follows:]
           Prepared Statement of Mr. James Arthur Jemison II
                              introduction
    Every year, millions of people across the country are affected by 
natural disasters. Disasters can have wide-ranging impacts, from 
physical injury and even death to loss of home, property, and 
community. Across the country, American families are struggling to 
recover from natural disasters ranging from hurricanes, floods, and 
landslides to extreme heat and wildfires. Last year, the country set an 
ominous record: 22 disasters that each caused $1 billion or more in 
damage.
    This broke the previous record of 16 events that occurred in both 
2011 and 2017. The science is clear. Climate change is making many of 
these disasters more frequent and intense. As the most recent National 
Climate Assessment documented, climate-related risk is rapidly 
increasing. These risks are compounded where there is aging 
infrastructure and as our population becomes more urbanized, and as 
growth continues along the nation's coastlines.
    Essential local and regional infrastructure systems (e.g., water, 
energy, and transportation) are interdependent and increasingly 
disrupted by the effects of climate change. For example, heavy 
downpours, which are increasing nationally, can overwhelm combined 
sewer systems, where storm water runoff is combined with sewage from 
homes and businesses. During intense rainstorms, sewage can overflow 
into rivers, roads, and homes.
    The National Climate Assessment has also documented that climate 
change disproportionate ly impacts older adults, children, low-income 
communities, and some communities of color. That is because existing 
social inequities are exacerbated by the impacts of natural disasters. 
These adverse impacts are felt across the country in urban, rural and 
coastal communities from hurricanes and tropical storms that ravage the 
eastern seaboard and gulf coast to flooding in the upper Mississippi 
River basin and Ohio River basin.
    We face a profound climate crisis and have a narrow moment to 
pursue action to avoid the most catastrophic impacts of that crisis and 
seize the opportunity that climate change represents. As the President 
has stated, ``we must listen to the science and meet the moment.''
    The President signed Executive Order 14008, ``Tackling the Climate 
Crisis at Home and Abroad,'' on January 27, 2021. In this Executive 
Order the President recognized this crisis and charged his 
Administration with implementing a Government-wide approach to reduce 
climate pollution and increase resilience to the impacts of climate 
change.
    The Administration knows that the frequency and severity of 
disasters will increase due to climate change which, in turn, will 
magnify existing racial and socioeconomic gaps. As the Administration 
implements the policy goals articulated in Executive Orders ``Advancing 
Racial Equity and Support for Underserved Communities Through the 
Federal Government'' (EO 13985) and ``Tackling the Climate Crisis at 
Home and Abroad,'' (EO 14008) we see an opportunity to coalesce around 
shared priorities that will guide Federal disaster recovery investment 
to ensure it is: equitable, fair, and incentivizes resilient investment 
in vulnerable communities. I would like to highlight each of these 
priorities:
    Equitable. As part of Executive Order 14008, the Administration 
created a government-wide Justice40 Initiative with the goal of 
delivering 40 percent of the overall benefits of relevant Federal 
investments to address the disproportionate health, environmental, 
economic, and climate impacts on disadvantaged communities. Consistent 
with the EO, Federal disaster recovery efforts will be targeted to 
prioritize disadvantaged communities, turning neighborhoods that have 
been historically marginalized and overburdened by pollution and 
underinvestment into healthy, thriving communities.
    Fair: The Administration acknowledges that there are areas that 
have been and continue to be underserved and regions that will be more 
vulnerable than others to natural disasters. Identifying Federal, State 
and local disaster responsibilities and resources is key to balanced 
and fair policies that incentivize and support resilient communities. A 
priority would also be to ensure that the availability and eligibility 
of Federal programs allows impacted communities to understand their 
options, make an informed decision, and build back resilient to future 
risks while meeting the needs of their community.
    Resilient: People of color and low-income people are more likely to 
live in areas most vulnerable to flooding and other climate change-
related weather events. They also are less likely to have the funds to 
prepare for and recover from extreme weather events. The Federal 
government will support community engagement, as well as proactively 
invest in planning and resources for more comprehensive community-based 
disaster resilience, and will build back infrastructure, including 
housing, to above existing codes and standards after disasters.
    Given the increasing severity and frequency of natural disasters, a 
coordinated, whole-of- government approach to disaster recovery and 
response requires a permanent and reliable framework. HUD is uniquely 
positioned to carry out these priorities as we work with Congress to 
define HUD's role in disaster recovery through the Community 
Development Block Grant--Disaster Recovery (CDBG-DR) program, building 
on lessons learned from the existing approach of ad hoc supplemental 
appropriations Acts.
                        current cdbg-dr lessons
    HUD is currently managing over $67 billion in active CDBG disaster 
recovery grants, supporting communities across the country from Hawaii 
to Puerto Rico, North Dakota to Louisiana, and the U.S. Virgin Islands 
to California. In fact, every State represented by members of this 
subcommittee has had a CDBG-DR grantee in their State. In total, funds 
appropriated in supplemental appropriations for disaster recovery 
exceed the annual budget of the Department. We welcome opportunities to 
strengthen their effectiveness.
    I also want to highlight the Department's longstanding and ongoing 
relationship with the U.S. Governmental Accountability Office (GAO). 
The Department takes the work of the GAO to heart; GAO reports on 
better monitoring of CDBR-DR grants have led us to strengthen our 
reviews of grantee submissions and improve guidance to our grant 
managers. The GAO's recent report on fraud risk management 
appropriately recognizes steps HUD has taken to combat fraud in the use 
of CDBG-DR funds, but also calls for a broader fraud risk assessment an 
approach on which HUD has begun preliminary work. The GAO report on the 
need for improved coordination among Federal agencies in our efforts to 
restore Puerto Rico's electrical grid has also yielded results, 
including joint HUD-FEMA ``flex match'' guidance.
                   disaster recovery--looking forward
    In recent years, the Department has played a significant role in 
helping low-income communities recover from and build resilience to 
natural disasters through CDBG-DR. The CDBG-DR program, including CDBG-
Mitigation investments, has a unique focus on long-term recovery and 
resiliency efforts targeted to families with low and moderate incomes 
in the most impacted and distressed areas. This focus is unique from 
other Federal disaster assistance programs administered by the Federal 
Emergency Management Agency (FEMA), and the Small Business 
Administration (SBA), as well as private insurance.
    While we work with Congress to develop a proposal that reflects the 
Administration's shared priorities for disaster recovery programs and 
incorporates lessons we have learned from our experience in CDBG-DR 
supplementals, the Department is developing a ``Universal Notice'' that 
will outline standing program requirements and ``Allocation Notices'' 
to provide more clarity and transparency to grantees in the interim. 
However, underlying any broader proposal are program elements that are 
necessary to address issues with the program's current structure. The 
following are some highlights:
    Ensure fairness and predictability in allocations. HUD relies on 
data from FEMA and SBA to calculate unmet needs. Under the current 
structure, the allocation methodology is specified in the notice that 
is issued after the supplemental appropriations. Instead, the formula 
should be defined in regulation, enabling allocations to be based on 
the best available data, on a predictable timeline.
    Ensure flexibility to allow fungibility across allocations in the 
same jurisdiction. The current program does not allow for funding 
across multiple disasters, therefore CDBG-DR funds can be used only to 
recover from the disaster for which funds were appropriated. While 
Congress has provided fungibility between disaster appropriations in 
some supplemental appropriations Acts, Congress could include 
flexibility to allow funding to be used interchangeably when a 
community is recovering from multiple events within a defined period 
(for example, 5 years). Such flexibility could lead to better 
coordination on large-scale investments and projects (for example, 
nature-based solutions) and could reduce administrative burdens for the 
grantee.
    Ensure communities integrate mitigation and resilience measures to 
recover from the current disaster and the next one at the same time. 
Some CDBG-DR supplementals involve two or more awards for grantees, the 
first for unmet needs and a second for mitigation activities promoting 
resilience. This leads to confusion, inefficiency, and delays grantees' 
use of CDBG-DR funding. Disaster recovery funding should integrate 
investments for community resilience (e.g., stronger building codes) to 
future natural disaster risks from all climate hazards, not only from 
the current disaster, into a single award that includes funding for 
both unmet needs and mitigation and resilience measures.
    Retain broad waiver flexibility. Finally, in CDBG-DR supplementals, 
the Department is granted broad waiver and alternative requirement 
authority (except for fair housing, nondiscrimination, labor, and the 
environment). This authority is instrumental to providing grantees the 
flexibility needed to fully recover from disasters, and adapt to 
specific and novel recovery activities tailored to each disaster.
    The elements I have outlined directly address obstacles with the 
CDBG-DR program as it exists currently. HUD seeks a permanent, reliable 
framework for the future. These elements align with current research 
and approaches as well as consistent with the Administration's 
priorities, including tackling the climate crisis.
         other efforts related to climate change and resilience
    We must also end the endless cycle of disaster recovery by focusing 
investment on increasing resilience and reducing climate emissions to 
slow the rate of climate change. The Department's fiscal year 2022 
Discretionary Request and the President's American Jobs Plan include 
critical investments along those lines.
    HUD has an important role to play in reducing carbon pollution and 
fighting the underlying cause of climate change. In fact, HUD spends 
$6.4 billion annually on utilities in public and assisted housing. 
Further, HUD's role in the housing finance market can help move the 
overall market toward more green, healthy, and resilient housing. On 
average, low-income households pay 8.1 percent of their income on 
energy costs, compared to 2.3 percent for market households. Older 
adults also face disproportiona l energy burdens. Investments in green 
building can lower energy costs, provide good-paying union jobs, and 
improve building conditions in otherwise sub- standard housing.
    HUD's fiscal year 2022 Discretionary Request addresses climate 
change on two fronts: both in lowering the carbon footprint of HUD's 
public and assisted housing (mitigation), and at the same time helping 
the communities served by HUD programs to better withstand and increase 
their resilience to future disasters (adaptation). The Budget requests 
$800 million for targeted investments to improve the quality of housing 
through climate resilience and energy efficiency.
    As part of the Administration's whole-of-government approach to the 
climate crisis, the Department is committed to expanding energy 
efficient and climate-resilient housing options in public and assisted 
housing. Funds will be used for initiatives that align with or are 
structured within existing programs.
    HUD provides rental assistance to approximately 4.6 million 
households and plays a key role in the development and preservation of 
affordable housing through a wide range of programs.
    HUD's annual outlay on utility expenditures (energy and water) for 
the existing housing stock consume more than 10 percent of the agency's 
total budget and represent an estimated 13.6 million metric tons of 
carbon emissions. Improving the energy performance (through on-site 
generation and storage, for example) of HUD assets will play a 
significant role in reducing these outlays and lowering carbon 
emissions.
                           american jobs plan
    As described before, communities across the country have witnessed 
a historic number of deadly and destructive weather and climate events 
in the last 10 years.
    To address these risks, the American Jobs Plan includes funding for 
a new Community Development Block Grant program for resilience 
activities in communities vulnerable to climate change. HUD would 
target funding to low-and-moderate income areas with increased risk 
from climate related disasters. These investments are intended to focus 
on housing and housing-related resilient infrastructure to complement 
the FEMA BRIC program. This program would build on prior community-
scale resilience programs that HUD has administered in the past--the 
National Disaster Resilience Competition, Rebuild by Design, and CDBG-
Mitigation programs. The program could also benefit from ongoing 
interagency collaboration that has taken place among the Department of 
Energy (DOE), FEMA and EPA in recent CDBG-DR work.
                               conclusion
    Climate change is here. The time to act is now. As the President 
has stated we must deploy the full capacity of government to combat 
this crisis. The Department has an important role to play in reducing 
climate pollution and building the resilience of communities for future 
disasters. We look forward to working with Congress to maximize HUD's 
expertise to ensure a reliable, whole-of-government approach to support 
the long-term recovery of communities devastated by natural disasters.

    Senator Schatz. Thank you very much.
    Mr. Pendleton, please proceed.
STATEMENT OF MR. JOHN PENDLETON, DIRECTOR, FINANCIAL 
            MARKETS AND COMMUNITY INVESTMENT, 
            GOVERNMENT ACCOUNTABILITY OFFICE
    Mr. Pendleton. Thank you. You can hear me, okay, I hope.
    Chairman Schatz, Ranking Member Collins, and members of the 
subcommittee, thank you so much for having me up to talk about 
our work on HUD's Disaster Recovery Block Grant Program.
    Back in 2019 we concluded, after a pretty thorough study, 
that many of CDBG-DR's challenges were traceable to the way the 
program is funded, in specific appropriations by disaster with 
multiple Federal register notices to implement them. This is 
proving to be challenging to administer both at HUD and by the 
grantees who felt that they were having to navigate, often 
changing requirements, and rules, and unpredictable funding 
streams.
    We suggested that Congress permanently authorized a program 
for unmet needs rather than continuing the year-by-year, 
disaster-by-disaster approach. We stopped short of saying that 
that program should be placed in HUD, but we do stand by the 
recommendation.
    And we are pleased the subcommittee is considering it. I 
should acknowledge HUD's efforts to address management 
recommendations we made in that report. We made five 
recommendations to them, four of which they have acted on, and 
we appreciate the progress on the fifth. Those are described on 
page 7 of my prepared statement.
    Before the hearing, we put our heads together, virtually of 
course in the pandemic, to offer the subcommittee some factors 
to consider to frame the discussion about whether and how to 
authorize and codify a program.
    The first is to be careful to clarify how this program will 
fit into the broader Federal disaster framework. Dozens of 
agencies are involved, better joint planning across agencies 
will be essential to success, duplication of effort and 
redundancy of requirements are certainly a risk.
    The second factor we offered for you to consider is the 
need to clarify the purpose of the program and design it so 
that it fits that purpose. ``Unmet needs'' is a term of art and 
a tough thing to plan for prior to a disaster. Of continuing 
concern as well is the slow rate that the money has found its 
way to the folks that need it, the slow spending problem. In 
crafting this authorization, Congress needs to be as clear as 
possible about what--about what it wants the program to 
achieve, and how long grantees have to get this done.
    The third factor is capacity and infrastructure. If this is 
going to be a program, then it needs to be run like one. If it 
is in HUD, then HUD needs the right people with the right 
skills and mindset, and the right IT infrastructure. Critical 
to long-term success as well, and probably as importantly, is 
ensuring that the grantees have enough capacity to manage the 
programs and manage fraud risk, which is substantial in a 
program with this many layers and players.
    Mr. Chairman, codifying a DR-like program will not be a 
panacea, but we think it is an excellent starting point to 
formalize and standardize, and importantly, better integrate it 
into the broader Federal efforts.
    That concludes my statement. And I am happy to take any 
questions you may have, sir, ma'am.
    [The statement follows:]
                Prepared Statement of Mr. John Pendleton
    Chairman Schatz, Ranking Member Collins, and Members of the 
Subcommittee:
    I am pleased to be here today to discuss our work on one of the 
Federal government's key disaster recovery programs--the Department of 
Housing and Urban Development's (HUD) Community Development Block Grant 
Disaster Recovery (CDBG-DR) program. In numerous appropriations from 
fiscal years 1993 to 2019, Congress provided more than $90 billion in 
supplemental appropriations through HUD's Community Development Block 
Grant (CDBG) program to help affected communities recover from 
disasters.\1\ Just since 2001, HUD has issued at least 100 Federal 
Register notices linked to these funds. Communities use their CDBG-DR 
grants to address a wide range of unmet recovery needs--losses not met 
with insurance or other forms of assistance, including Federal disaster 
assistance--related to housing, infrastructure, and economic 
revitalization.
---------------------------------------------------------------------------
    \1\ The total amount of CDBG-DR appropriations is in nominal 
dollars.
---------------------------------------------------------------------------
    HUD is one of approximately 30 Federal agencies tasked with helping 
communities respond to, recover from, and mitigate the impacts of 
disasters. The Federal Emergency Management Agency (FEMA) is the lead 
agency, and several national frameworks, such as the National Response 
Framework, National Disaster Recovery Framework, and National 
Mitigation Framework, set a vision for a coordinated Federal 
approach.\2\ However, even with these and other coordinating bodies in 
place, successfully executing these wide-ranging and interrelated 
disaster recovery and mitigation programs is an immense challenge.
---------------------------------------------------------------------------
    \2\ Department of Homeland Security, Federal Emergency Management 
Agency, National Response Framework, Third Edition (Washington, D.C.: 
June 2016); National Disaster Recovery Framework, Second Edition 
(Washington, D.C.: June 2016); and National Mitigation Framework, 
Second Edition (Washington, D.C.: June 2016).
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    Over the years, questions have been raised about the administration 
of CDBG-DR, including the long life cycle of CDBG-DR grants and 
grantees' capacity to administer them. For example, as of April 2021, 
Florida, Texas, Puerto Rico, and the U.S. Virgin Islands had spent 5 
percent of the over $31 billion available to respond to the 2017 
hurricanes (Harvey, Irma, and Maria). In addition, we and others have 
noted that HUD has to customize grant requirements for each disaster 
due to a lack of permanent statutory authority.
    In this statement, I will discuss (1) challenges associated with 
the lack of permanent statutory authority for CDBG-DR and (2) factors 
to consider when weighing the possibility of permanently authorizing 
CDBG-DR or a similar disaster assistance program. In preparing this 
statement, we relied primarily on our March 2019 and May 2021 reports 
on CDBG-DR and our prior work issued between February 2004 and June 
2019 identifying useful considerations and principles for critical 
Federal policy decisions, such as government reorganizations.\3\
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    \3\ GAO, Disaster Recovery: HUD Should Take Additional Action to 
Assess Community Development Block Grants Fraud Risks, GAO-21-177 
(Washington, D.C.: May 5, 2021); Disaster Recovery: Better Monitoring 
of Block Grant Funds Is Needed, GAO-19-232 (Washington, D.C.: Mar. 25, 
2019); Federal Protective Service's Organizational Placement: 
Considerations for Transition to the DHS Management Directorate, GAO-
19-605T (Washington, D.C.: June 11, 2019); Fragmentation, Overlap, and 
Duplication: An Evaluation and Management Guide, GAO-15-49SP 
(Washington, D.C.: Apr. 14, 2015); and Combating Terrorism: Evaluation 
of Selected Characteristics in National Strategies Related to 
Terrorism, GAO-04-408T (Washington, D.C.: Feb. 3, 2004).
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    For our March 2019 report, we conducted a literature search for 
GAO, HUD Office of Inspector General (OIG), and other reports on CDBG-
DR funds used to recover from the 2005 Gulf Coast hurricanes and 
Hurricane Sandy and reviewed relevant reports. For our March 2019 and 
May 2021 reports, we also interviewed HUD officials and the four 
grantees that received the largest CDBG-DR grants to respond to 
Hurricanes Harvey, Irma, and Maria to obtain their perspectives on 
challenges administering the 2017 grants. Our work identifying useful 
considerations and principles for Federal policy decisions was based on 
our observation of efforts to reorganize or streamline government and 
prior work related to disaster recovery and resilience. Detailed 
information on the scope and methodology can be found in the issued 
products cited throughout this testimony.
    We conducted the work on which this statement is based in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
                               background
     overview of federal disaster recovery and resilience programs
    Federal agencies can respond to a disaster when effective response 
and recovery are beyond the capabilities of the affected state and 
local governments. In such cases, the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (Stafford Act) permits the 
President to declare a major disaster in response to a request by the 
governor of a state or territory or by the chief executive of a tribal 
government.\4\ Such a declaration is the mechanism by which the Federal 
government funds and coordinates response and recovery activities.
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    \4\ 42 U.S.C. Sec. 5170. Under the Stafford Act, the governor of a 
state may request a declaration of a major disaster w hen effective 
response and recovery are beyond the capabilities of the state and 
affected local governments. 42 U.S.C. Sec. 5170.
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    Major disaster declarations can trigger a variety of Federal 
response, recovery, and resilience-promoting programs and activities 
involving at least 30 Federal agencies. Under the National Response 
Framework, which governs any type of Federal disaster or emergency 
response, the Department of Homeland Security (DHS) is the Federal 
department with primary responsibility for coordinating disaster 
response.\5\ Within DHS, FEMA has lead responsibility and provides 
three principal forms of funding for disaster recovery--Individual 
Assistance, Public Assistance, and Hazard Mitigation Grants.\6\ The 
Small Business Act also authorizes the Small Business Administration 
(SBA) to make direct loans to help businesses, nonprofit organizations, 
homeowners, and renters repair or replace property damaged or destroyed 
in a federally declared disaster.
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    \5\ Department of Homeland Security, Federal Emergency Management 
Agency, National Response Framework. The National Response Framework is 
part of the National Preparedness System established in Presidential 
Policy Directive 8. It is to be used to manage any type of disaster or 
emergency response, regardless of scale, scope, and complexity. 
Specifically, this framew ork covers actions to save lives, protect 
property and the environment, stabilize communities, and meet basic 
human needs follow ing an incident.
    \6\ The Individual Assistance Program provides financial assistance 
directly to survivors for expenses that cannot be met through insurance 
or low -interest loans, such as temporary housing, counseling, 
unemployment compensation, or medical expenses. The Public Assistance 
Program provides Federal disaster grant assistance to state, local, 
tribal, and territorial governments and certain types of nonprofit 
organizations for debris removal, emergency protection, and the 
restoration of facilities. The Hazard Mitigation Grant Program is 
designed to help communities prepare for and recover from future 
disasters. It funds a w ide range of projects, such as purchasing 
properties in flood-prone areas, adding shutters to windows, and 
rebuilding culverts in drainage ditches.
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    HUD uses data from FEMA and SBA to make decisions on the amount of 
CDBG-DR funding to allocate to affected communities.
    We have previously identified the rising number of natural 
disasters and increasing reliance on Federal assistance as a 
significant source of Federal fiscal exposure. In 2013, we included the 
Federal government's fiscal exposure to climate change risks on our 
High-Risk List.\7\ Investments in disaster resilience are a promising 
avenue to address the Federal fiscal exposure because such investments 
offer the opportunity to reduce the overall impact of disasters. 
However, we have found that the Federal approach to disaster risk 
reduction, including investments in disaster resilience, has been 
reactive--revolving around disaster recovery efforts--and 
fragmented.\8\
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    \7\ The term fiscal exposure ref ers to the responsibilities, 
programs, and activities that may either legally commit the Federal 
government to future spending or create the expectation for future 
spending. For the most recent High-Risk List update, see GAO, High-Risk 
Series: Dedicated Leadership Needed to Address Limited Progress on Most 
High-Risk Areas, GAO-21-119SP (Washington, D.C.: Mar. 2, 2021).
    \8\ GAO, Disaster Resilience Framework: Principles for Analyzing 
Federal Efforts to Facilitate and Promote Resilience to Natural 
Disasters, GAO-20-100SP (Washington, D.C.: Oct. 23, 2019). We have 
defined fragmentation as those circumstances in w hich more than one 
Federal agency is involved in the same broad area of national need and 
opportunities exist to improve service delivery. See, for example, GAO, 
2019 Annual Report: Additional Opportunities to Reduce Fragmentation, 
Overlap, and Duplication and Achieve Billions in Financial Benefits, 
GAO-19-285SP (Washington, D.C.: May 21, 2019).
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    Funding disaster resilience in reaction to disasters after they 
have occurred has exacerbated fragmentation across Federal programs 
with different timelines and purposes. In turn, this creates challenges 
for nonFederal partners trying to use Federal funds in a way that 
maximizes overall risk reduction. For example, following Hurricane 
Sandy, we found that a lack of a strategic approach to disaster 
resilience may have resulted in lower returns on investments or lost 
opportunities to mitigate against known hazards effectively. 
Specifically, grantees noted that timing differences among Federal 
grant programs--some funding was available right away, other funding 
was available months later--contributed to a fragmented recovery 
process and made it difficult for grantees to invest in resilience and 
comprehensively plan to use the Federal funds for maximum risk 
reduction.\9\
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    \9\ GAO, Hurricane Sandy: An Investment Strategy Could Help the 
Federal Government Enhance National Resilience for Future Disasters, 
GAO-15-515 (Washington, D.C.: July 30, 2015).
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                 history and administration of cdbg-dr
    Recognizing the serious effects of natural disasters, including 
Federal fiscal exposure they can create, we developed the Disaster 
Resilience Framework in October 2019.\10\ This framework is intended to 
support analysis of Federal opportunities to facilitate and promote 
resilience to natural hazards. It provides a set of high-level 
principles to help those who have responsibility for oversight and 
management of Federal efforts to consider actions they might take to 
increase resilience to natural hazards. See appendix I for more 
information on the framework.
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    \10\ GAO-20-100SP.
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    The Housing and Community Development Act of 1974 created the CDBG 
program to develop viable urban communities by providing decent housing 
and a suitable living environment and by expanding economic 
opportunities, principally for low- and moderate-income persons. 
Program funds can be used for housing, economic development, 
neighborhood revitalization, and other community development 
activities. Because the CDBG program already has a mechanism to provide 
Federal funds to states and localities, the program is widely viewed as 
a flexible solution to disburse Federal funds to address unmet needs in 
emergency situations.
    When disasters occur, Congress often appropriates additional CDBG 
funding (CDBG-DR) through supplemental appropriations. These 
appropriations often provide HUD the authority to waive or modify many 
of the statutory and regulatory provisions governing the CDBG program, 
thus providing states with greater flexibility and discretion to 
address recovery needs.\11\ Eligible activities that grantees have 
undertaken with CDBG-DR funds include relocation payments to displaced 
residents, acquisition of damaged properties, rehabilitation of damaged 
homes and public facilities (such as neighborhood centers and roads), 
and hazard mitigation.
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    \11\ The HUD Secretary may provide w aivers or specific alternative 
requirements if such waivers are not inconsistent with the overall 
purpose of Title I of the Housing and
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    In numerous appropriations from fiscal years 1993 to 2019, Congress 
provided more than $90 billion in CDBG-DR funds to help states recover 
from Federal disasters. For example, Congress directed CDBG-DR funds 
toward recovery and rebuilding efforts in the Gulf Coast after 
Hurricanes Katrina, Rita, and Wilma in 2005; in New York after the 
September 11th terrorist attacks in 2001; in North Dakota, South 
Dakota, and Minnesota after the floods in 1997; in Oklahoma City after 
the 1995 bombing of the Community Development Act of 1974. The 
Secretary may not w aive requirements related to fair housing, 
nondiscrimination, labor standards, and the environment.
                      gao's prior work on cdbg-dr
    Alfred Murrah Building; in Southern California after the 1994 
Northridge earthquake; and in Florida after Hurricane Andrew in 1992. 
As of April 2021, HUD was overseeing 157 CDBG-DR grants totaling more 
than $84 billion.
    HUD's Office of Community Planning and Development (CPD) 
administers the traditional CDBG program and CDBG-DR funds. Before 
2004, existing CPD staff that administered the traditional CDBG program 
also administered CDBG-DR. In 2004, HUD established the Disaster 
Recovery and Special Issues Division within CPD's Office of Block Grant 
Assistance to manage large CDBG-DR grantees with allocations of $500 
million or more. CPD field office staff generally manage all other 
grantees.\12\
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    \12\ According to HUD officials, HUD headquarters staff may assume 
oversight of grants under $500 million if the grants prove to be high 
risk.
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    In our March 2019 report on CDBG-DR, we made five recommendations 
to HUD, four of which the agency has implemented.\13\ These 
recommendations were intended to help HUD improve CDBG-DR program 
management by better assessing grantees' processes and capacity, 
implementing a comprehensive monitoring plan, and developing a 
workforce plan.
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    \13\ GAO-19-232.
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    The recommendation that HUD has not yet implemented is for the 
agency to provide its staff with additional guidance on reviewing the 
capacity and unmet needs assessments that CDBG-DR grantees develop. In 
February 2021, HUD provided us with a draft of such guidance, which 
largely refers HUD staff to the associated Federal Register notice but 
generally does not describe how HUD reviewers should evaluate the 
adequacy of capacity and unmet needs assessments. For example, the 
guidance does not clarify how HUD staff could determine whether the 
number of personnel a grantee plans to designate for certain program 
functions, including management and monitoring, is reasonable. See 
table 1 for the status of our March 2019 recommendations.


    In our March 2019 report, we also recommended that Congress 
consider permanently authorizing a disaster assistance program that 
responds to unmet needs in a timely manner rather than continue the ad 
hoc approach taken since 1993. Similarly, as recently as April 2021, 
the HUD OIG called on HUD to pursue codification of the CDBG-DR 
program.\14\ Legislation has been proposed over the years that would 
have permanently authorized the CDBG-DR program or a similar program, 
but no proposal has been enacted.\15\
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    \14\ Department of Housing and Urban Development, Office of 
Inspector General, Review of HUD's Disbursement of Grant Funds 
Appropriated for Disaster Recovery and Mitigation Activities in Puerto 
Rico, 2019SU008945I (Washington, D.C.: Apr. 20, 2021).
    \15\ Ref orming Disaster Recovery Act of 2018, H.R. 4557, 115th 
Cong. (2018); Ref orming Disaster Recovery Act of 2019, H.R.3702, 116th 
Cong. (2019); Ref orming Disaster Recovery Act, S.2301, 116th Cong. 
(2019); and Natural Disaster Recovery Program Act of 2020, H. R. 8949, 
116th Cong. (2020). Most recently, the Natural Disaster Recovery 
Program Act of 2021, H.R. 2809, 117th Cong. (2021) w as introduced.
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permanent statutory authority would provide a more consistent framework
    Unlike CDBG-DR, other Federal disaster assistance programs, such as 
those administered by FEMA and SBA, are permanently authorized and 
activated upon a presidential disaster declaration.\16\ In our March 
2019 report, we identified a number of challenges that could be linked 
in part to the lack of permanent statutory authority for CDBG-DR, 
including lags in funding and varying requirements.\17\
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    \16\ SBA also makes disaster loans available w hen it issues a 
physical disaster declaration in response to a timely request by a 
state governor, based on the occurrence of at least a certain minimum 
amount of physical damage that meets certain tests. SBA can also make 
an economic injury disaster declaration in response to a determination 
of a natural disaster by the Secretary of Agriculture or by relying on 
a state certification that at least five small business concerns in a 
disaster area have suffered substantial economic injury as a result of 
the disaster and are in need of financial assistance not otherw ise 
available on reasonable terms. 13 C.F.R. Sec. 123.3.
    \17\ GAO-19-232.
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    Time lags in accessing funding. As shown in figure 1, it took 154 
days (or 5 months) after the first appropriation for the 2017 
hurricanes for HUD to issue the Federal Register notice establishing 
the grant requirements. According to HUD officials, they delayed 
issuance of the first notice for the 2017 hurricanes because they 
expected a second appropriation and wanted to allocate those funds in 
the same notice.\18\ After HUD issued the Federal Register notice, it 
took the 2017 grantees over 6 months to complete all of the required 
steps to enter into grant agreements.
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    \18\ Because the second appropriation took longer than HUD 
expected, the February 2018 notice allocated only the first 
appropriation.


    Establishing permanent statutory authority would allow for the 
issuance of permanent regulations and require less need for Federal 
Register notices and the use of waivers after each disaster, according 
to HUD officials. They said these changes would allow funds to be 
available for providing assistance sooner. They stressed that for a 
permanently authorized CDBG-DR program to be effective, Congress would 
need to provide HUD the flexibility to waive traditional CDBG statutory 
requirements and adopt alternative requirements to help address 
recovery needs. Moreover, two grantees that we interviewed also 
suggested that the CDBG-DR process could be shortened if there were an 
established set of rules for states to follow instead of waiting months 
for a new Federal Register notice to be published for each allocation.
    Varying requirements. CDBG-DR grant requirements vary from notice 
to notice. Officials from one of the CDBG-DR grantees we interviewed 
for our 2019 report said it was challenging to manage multiple CDBG-DR 
grants, each with different rules. As an example, they noted that 2015 
grant funds could not be used on levees, while funds from other years 
could be used for this purpose. To help manage these different 
requirements, they stated that they must tie each grant to the relevant 
public law in their grant management system. To further ensure 
compliance with the various notices, their legal department prepares a 
new template for the agreement that the state signs with subrecipients 
for each public law. Officials from another 2017 grantee stated that it 
was difficult to build infrastructure for managing current and future 
CDBG-DR funds, as the rules often could be different for each 
allocation. According to HUD officials, the requirements have varied 
because of differences in appropriations language and policies across 
administrations and changes made in response to input from the HUD OIG.
    In addition, a July 2018 HUD OIG report identified 59 duplicative 
or similar requirements in most of the notices that could benefit from 
a permanent framework.\19\ For example, the following rules or waivers 
were consistently repeated: (1) allowing states to directly administer 
grants and carry out eligible activities, (2) requiring grantees to 
submit an action plan, (3) requiring grantees to review for duplication 
of benefits, (4) allowing states to use subrecipients, and (5) allowing 
flood buyouts.\20\ The HUD OIG recommended that the Office of Block 
Grant Assistance work with its Office of General Counsel to codify 
CDBG-DR in regulations.\21\ HUD disagreed with this recommendation, 
stating that it lacked statutory authority to create a permanent CDBG-
DR program.\22\ In commenting on the report, HUD stated that 
congressional direction would be needed for a more standard, 
regulation-governed program.
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    \19\ Department of Housing and Urban Development, Office of 
Inspector General, HUD's Office of Block Grant Assistance Had Not 
Codified the Community Development Block Grant Disaster Recovery 
Program, 2018-FW-0002 (Fort Worth, TX: July 23, 2018).
    \20\ Flood buyouts ref er to the acquisition of property located in 
a floodw ay or floodplain that is intended to reduce risk from future 
flooding. Unlike traditional CDBG funds, grantees may use CDBG-DR funds 
for a buyout program. The purpose is to encourage revitalization 
through uses compatible w ith open space, recreational, and natural 
floodplain functions; other ecosystem restoration; or w etlands 
management practices.
    \21\ As previously discussed, the HUD OIG reiterated this 
recommendation in its April 2021 report. Department of Housing and 
Urban Development, Office of Inspector General, 2019SU008945I.
    \22\ HUD further stated that CDBG-DR funds are provided under a 
series of constantly changing appropriation statutes, and that it could 
not publish regulations that rely on statutory w aivers and alternative 
requirements, as it has not been permanently granted authority from 
Congress to do so.
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    Unpredictable timing of CDBG-DR appropriations. In a July 2015 
report on Hurricane Sandy, we found that the unpredictable timing of 
the appropriation for CDBG-DR created challenges for grantees' recovery 
planning.\23\ As shown in figure 2, the first CDBG-DR supplemental 
appropriation for the 2005 Gulf Coast hurricanes was enacted 4 months 
after the first of these hurricanes occurred. For Hurricane Sandy in 
2012 and Hurricane Harvey (the first of the 2017 hurricanes), less time 
elapsed between when the hurricane occurred and Congress's 
appropriation of funds--3 months and 2 weeks, respectively. In 
contrast, a presidential disaster declaration, rather than 
congressional appropriation, activates the provision of funds from 
FEMA's Disaster Relief Fund. The SBA Disaster Loan Program is also 
activated by a presidential disaster declaration. Congress funds both 
programs through annual appropriations.\24\
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    \23\ GAO-15-515.
    \24\ After large-scale disasters, Congress frequently provides 
additional funding for both programs through supplemental 
appropriations.


 factors to consider in authorizing a permanent statutory program for 
                              unmet needs
    Based on our prior reviews of CDBG-DR, our body of work on 
emergency management, and our past observations of broader government 
initiatives, such as reorganization efforts, we have identified factors 
to consider when weighing whether and how to permanently authorize a 
program for unmet disaster recovery needs.
    Clarify how the program would fit into the broader Federal disaster 
framework. In prior work, we have emphasized the importance of 
articulating a program's relationship to other programs.\25\ This is 
particularly important with disaster programs, given the approximately 
30 agencies involved. Therefore, when modifying or developing any new 
disaster assistance program, it will be important to take into account 
the similarities and gaps among existing programs; identify any 
opportunities to fill those gaps; and strategically position the 
program within an organization with a compatible mission and goals.
---------------------------------------------------------------------------
    \25\ GAO-19-605T.
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    CDBG-DR is widely seen as providing flexible grant funds that can 
address certain unmet recovery and resilience needs after other Federal 
programs have begun providing assistance. It may be helpful to assess 
what those unmet needs have been, whether other existing programs at 
HUD or elsewhere can or should address those needs, and whether the 
program's role addressing unmet needs would be affected by a permanent 
authorization.
    Careful consideration of any new program's alignment with other 
disaster recovery and resilience programs may also reduce fragmentation 
of Federal efforts. GAO's National Disaster Resilience Framework states 
that Federal efforts can facilitate coordination and promote governance 
approaches that mitigate fragmentation by requiring, or funding, 
mechanisms to enhance the continuity of different efforts across 
jurisdictions.\26\ For example, joint planning processes across 
different grant programs or resilience focal points with the 
responsibility and authority to oversee integrated risk-reduction 
processes can enhance collaboration. Putting into place agency 
coordination mechanisms, such as between FEMA and HUD, may better 
position these agencies to implement any new effort in a coordinated 
manner.
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    \26\ GAO-20-100SP.
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    In March 2019, we cited previous work in which we found that CDBG-
DR grantees faced difficulties coordinating with multiple Federal 
agencies.\27\ For example, in July 2015, we found that different 
disaster response programs are initiated at different times, making it 
challenging for state and local officials to determine how to use 
Federal funds in a comprehensive manner.\28\ In response to a survey 
that we conducted for that report, 12 of 13 states and cities reported 
that navigating the multiple funding streams and various regulations 
was a challenge that affected their ability to maximize disaster 
resilience opportunities. For example, state officials we interviewed 
for that report noted the redundancy of some Federal requirements for 
receiving disaster assistance such as the duplication of environmental 
reviews, which are required by both HUD and FEMA.
---------------------------------------------------------------------------
    \27\ GAO-19-232.
    \28\ GAO-15-515.
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    Clarify the purpose and design the program to address it. In prior 
work, we have stressed the importance of clearly identifying the 
purpose of government initiatives and the particular national problems 
they are directed toward.\29\ In considering whether to permanently 
authorize a new program or modify an existing program to address unmet 
needs following disasters, it may be helpful to identify the purpose 
and specific goals of the effort--what is not working in the current 
authorizing environment and why. The answers depend on the purpose the 
funds are intended to serve.
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    \29\ GAO-04-408T.
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    Given CDBG-DR's flexibility as a funding source for unmet needs, 
greater clarity about the program's purpose could help resolve some 
implementation issues we have previously identified. These issues 
include how much time grantees should have to spend CDBG-DR funds and 
the proportion of funds that should be distributed to renters.
  --In March 2019, we found that once grantees had entered into grant 
        agreements with HUD, it could take years for grantees to 
        implement activities and expend all of their CDBG-DR funds.\30\ 
        Since 2015, HUD had required that grantees expend their funds 
        within 6 years of signing a grant agreement, but we found that 
        some grantees had not met this requirement.

    \30\ GAO-19-232.
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  --In March 2019, we also cited previous work in which we found CDBG- 
        DR funds were not proportionally distributed to renters. In 
        January 2010, we reported that the proportional damage to 
        rental stock in Louisiana and Mississippi after the 2005 Gulf 
        Coast hurricanes was generally greater than damage to homeowner 
        units.\31\ However, 62 percent of damaged homeowner units 
        received assistance, compared to 18 percent of rental units. We 
        recommended that Congress consider providing specific direction 
        regarding the distribution of disaster-related CDBG housing 
        assistance; however, as of April 2021, this issue had not been 
        addressed.\32\
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    \31\ GAO, Disaster Assistance: Federal Assistance for Permanent 
Housing Primarily Benefited Homeowners; Opportunities Exist to Better 
Target Rental Housing Needs, GAO-10-17 (Washington, D.C.: Jan. 14, 
2010).
    \32\ Although Congress has not provided more specific direction w 
ith regard to CDBG-DR funds for homeow ners and renters, HUD's February 
2018 and August 2018 Federal Register notices provided guidance on how 
2017 grantees should direct their CDBG-DR funds. For example, the 
February 2018 Federal Register notice required ``each grantee to 
primarily consider and address its unmet housing recovery needs.'' See 
Allocations, Common Application, Waivers, and Alternative Requirements 
for 2017 Disaster Community Development Block Grant Disaster Recovery 
Grantees, 83 Fed. Reg. 5844 (Feb. 9, 2018) and Allocations, Common 
Application, Waivers, and Alternative Requirements for Community 
Development Block Grant Disaster Recovery Grantees, 83 Fed. Reg. 40314 
(Aug. 14, 2018).
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    Consider the necessary capacity and support infrastructure to 
implement the program. Our prior work has emphasized the importance of 
identifying the resources and investments necessary for government 
initiatives.\33\ These resources include budgetary requirements, human 
capital needs, and information technology investments. They also 
include necessary mechanisms for oversight to ensure proper use of 
program funds.
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    \33\ GAO-04-408T.
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    Given our past work on challenges ensuring appropriate use of CDBG- 
DR funds, it will be particularly important to consider these issues as 
part of discussions about permanently authorizing CDBG-DR or another 
program for unmet needs. Our prior disaster recovery work found that it 
had been a challenge for state, local, territorial, and tribal grantees 
and Federal agencies to build the technical capacity needed to manage 
large grants and ensure appropriate use of funds.\34\ For example, in 
March 2019, we found that grantees had experienced difficulties 
establishing the necessary capacity to manage large CDBG-DR grants.\35\ 
These capacity challenges might have contributed to the slow 
expenditure of funds mentioned previously.
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    \34\ We have a large body of w ork identifying capacity challenges 
for disaster grantees and Federal agencies, including FEMA, HUD, and 
the Department of Transportation. See, for example, GAO, Disaster 
Resilience: FEMA Should Take Additional Steps to Streamline Hazard 
Mitigation Grants and Assess Program Effects, GAO-21-140 (Washington, 
D.C.: Feb. 2, 2021); Disaster Recovery: Recent Disasters Highlight 
Progress and Challenges, GAO-20-183T (Washington, D.C.: Oct. 22, 2019); 
GAO-19-232; and GAO-15-515.
    \35\ GAO-19-232.
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    In addition, in May 2021, we found that CDBG-DR was vulnerable to 
numerous types of risks, including increased financial risks and fraud 
risks.\36\ Each time Congress appropriates CDBG-DR funds, HUD uses its 
authority to customize grant requirements--essentially creating new 
CDBG-DR programs. HUD officials expressed concern about grantees' 
capacity to implement increasingly complex CDBG-DR requirements and the 
potential for improper payments. We also identified fraud risks related 
to grantee capacity challenges, and we recommended that HUD 
comprehensively assess fraud risks, including by identifying the 
inherent fraud risks affecting CDBG-DR and examining the suitability of 
existing fraud controls. HUD acknowledged that it had not performed a 
comprehensive fraud risk assessment, but noted several actions it takes 
to minimize risks.\37\
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    \36\ GAO-21-177.
    \37\ HUD neither agreed nor disagreed w ith this recommendation and 
has not yet implemented it. HUD stated it took initial steps to create 
a template for fraud risk assessment in 2019, but this effort has been 
delayed due to the coronavirus pandemic and contracting issues. We 
continue to monitor steps taken to address this recommendation.
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    In sum, we continue to believe that establishing permanent 
statutory authority for a disaster assistance program that responds to 
verified unmet needs in a timely manner would provide a more consistent 
framework for administering funds going forward. The program could be 
administered either by HUD or another agency that has authority to 
issue associated regulations. Such a statute and regulations could 
create consistent requirements for grantees and specify how the program 
would fit into the Federal government's disaster assistance framework. 
Any such effort would require careful consideration of how the program 
fits into the broader Federal disaster framework, its purpose and 
design, and necessary capacity and support infrastructure.
    We continue to monitor the status of the four largest 2017 CDBG-DR 
grantees, including the expenditure of funds. In addition, we have 
ongoing work on how CDBG-DR assists vulnerable populations and on the 
disaster survivor application process and indicators of fraud or abuse 
in CDBG-DR program management.
    Chairman Schatz, Ranking Member Collins, and Members of the 
Subcommittee, this concludes my statement. I would be pleased to 
respond to any questions you may have.

    Senator Schatz. Thank you very much.
    I will start with you, Mr. Pendleton. Can you give me a 
concrete example or two of how not having permanent 
authorization impacts grantees, and HUD's ability to do 
oversight?
    Mr. Pendleton. Yes. I mean, at the front end, for example, 
with the work we did in 2019, looked at a number of things, 
including the 2017 disasters, it was a year from appropriation 
until the grant agreement was signed, and there was a lot of 
uncertainty in that time. So. you have got that. When we looked 
and talk----
    Senator Schatz. Can you walk us through how a permanent 
authorization would collapse that time period? I mean, delays 
exist in Federal government systems.
    Mr. Pendleton. Sure.
    Senator Schatz. Even when there is an authorization. So how 
does that actually collapse the time period?
    Mr. Pendleton. Right, people will know the rules going in, 
and you won't have to create a new Federal Register notice to 
describe anything that is specific in the appropriation.
    Senator Schatz. So, in other words, every time there is a 
disaster, you have to go through rulemaking?
    Mr. Pendleton. That is exactly right, sir. I mean, when we 
have done work in the past, I think about 5 years ago, we 
talked to grantees, and most said that this waiting in the 
beginning causes them a lot of unnecessary anxiety. They are 
not sure what is coming, it is hard for them to plan. So I 
think those are--I mean, as a practical matter that is the 
issue, sir.
    Senator Schatz. And historically the amount of funding that 
a grantee gets is dependent entirely on how much Congress 
provides, and that varies depending on the time of year, the 
mood politically and fiscally. How can we better link the 
mitigation funding then to the actual needs of a community?
    Because it is not just the kind of idiosyncrasies of where 
we are in a political or budgetary cycle, it is also the 
difference in mitigation going forward for, let us say the 
difference between wildfires and a volcanic eruption. I mean, 
these are not necessarily going to the same. So how do you kind 
of rationalize that part of the system?
    Mr. Pendleton. I have been thinking about this ever since 
you asked me to testify. And when we did the work in 2019, CDBG 
mitigation was not really a thing. And this adds a lot of 
wrinkles to the issue here, right? And, so I think it is going 
to put a premium on planning in advance. Both within the 
interagency process, but also working with the grantees so that 
they know that there is some potential money for mitigation and 
resiliency efforts and plan accordingly, as opposed to dealing 
with it when--you know, in the middle of a disaster.
    Senator Schatz. In advance of a disaster, you mean?
    Mr. Pendleton. Yeah, yeah, absolutely, you can preplan.
    Senator Schatz. So the local emergency management agency 
does some--they do not just do disaster planning, they do 
mitigation planning.
    Mr. Pendleton. Yes. Absolutely.
    Senator Schatz. And that is on the shelf for the next time 
the disaster occurs and then you throw it over it over to 
TRANSAM, to the Feds, when the disaster hits?
    Mr. Pendleton. Absolutely. And I think HUD needs to be a 
part of that planning, particularly if there is going to be 
efforts for long-term recovery and mitigation through this 
program going forward.
    Senator Schatz. Thank you.
    Mr. Jemison, GAO's testimony highlights the benefit of 
creating a permanent authorization. I think we also need to 
create a disaster recovery fund to allow HUD to get assistance 
out faster. What is your reaction to that idea, and where 
should the threshold be in terms of eligibility for funding?
    Microphone?
    Mr. Jemison. I will get this Chairman. I will probably get 
it together.
    Senator Schatz. You have got it now.
    Mr. Jemison. So my reaction to it is, listen, I think we 
have said very directly that we are interested in having a 
permanent reliable framework, you know, my secretary has been 
on the record. And so in terms of thinking about a fund, to the 
extent that GAO has already commented, a fund would enable us 
to deal with one of the major issues of the program, which is 
this distance between the incident happening and the money 
being available.
    If it is done correctly, it can also enable us to have--our 
grantees to have access to kind of resources to plan. And as it 
was just said a minute ago, be able to quickly move into the 
kind of planning for recovery, and planning for resilience that 
you want to come out of an incident.
    So I think the fund idea that has been discussed here is 
very interesting to us, and we would love to explore that 
further with you, through discussion.
    Senator Schatz. We also want to get into it, not 
necessarily during this hearing, about the thresholds for 
distributing funds.
    Mr. Jemison. Oh.
    Senator Schatz. And I don't want you to throw out a dollar 
amount, or specific criteria, but that is something we are 
going to have to kind of fuss out.
    Mr. Jemison. Absolutely.
    Senator Schatz. My final question for this round.
    Mr. Jemison. Happy to do it.
    Senator Schatz. Historically, the amount of funding that 
had--excuse me--I wanted to ask you about rental housing. I am 
seeing that most of the disaster recovery money that comes in 
for communities is for homeowners, and that is absolutely 
great. We want to support our homeowners who have lost an 
asset. It is a little harder to establish that someone has lost 
something if they do not own it. But they have lost something. 
They have lost their place to reside.
    And so I am wondering how we can tweak these programs to 
recognize that it is renters as well as homeowners that we want 
to provide assistance to. And I will just give each of you a 
moment to respond to that.
    Mr. Jemison, first.
    Mr. Jemison. Sure, Chairman. So our agency does have that 
charge to (a) look after HUD equities, and HUD equities are 
typically a HUD-assisted housing and also, you know, market 
apartments, et cetera, that may be supported through other HUD 
resources. So I think we see that as a major area, and a 
specific charge to HUD, as part of the CDBG-DR program.
    Senator Schatz. Sure. But just so we are clear. You know, 
it is not just HUD inventory that we are worried about, it is 
renters all over the lot who may be in, you know, market rate, 
un-subsidized.
    Mr. Jemison. Mm-hmm.
    Senator Schatz. So I don't want us to get too narrow and 
just worry about whether or not a HUD-subsidized building was 
knocked down. There are a lot of people who are renters, who 
are not in any kind of federally-subsidized scenario.
    Mr. Pendleton.
    Mr. Pendleton. Our work on looking at this, it is kind of 
old, about a decade old as a matter of fact, and it is out of 
the Gulf hurricanes. But about 62 percent of the money that 
went to homeowners, and only about 18 percent went to renters 
in those days, I cannot give you the dates, but this is a 
tricky problem, Senator Schatz, because I have the housing area 
at GAO, and we have been looking at the evictions moratorium, 
and other things going on as part of the CARES Act, and it is 
difficult to, from a Federal standpoint, help renters because, 
you know, you are dealing with landlords, and all sorts of 
other things.
    It is much easier, in some ways, to help homeowners. It is 
easier to trace who owns it, and a million other things. But it 
is going to--my point here is, if this is important to the 
committee, when you authorize it, you need to make that clear.
    Senator Schatz. And it is going to take some doing.
    Mr. Pendleton. Absolutely.
    Senator Schatz. Fair enough.
    Mr. Pendleton. Yes.
    Senator Schatz. Ranking Member Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Pendleton, an example of the kinds of delays that we 
have been talking about is what happened following the 2017 
hurricanes that struck Puerto Rico and other areas. In this 
case it took 5 months after the first appropriation to get 
through for HUD to issue the Federal Register notice 
establishing the grant requirements, according to your 
testimony. Then after those requirements were out there, it 
took the recipients another 6 months to complete all of the 
required steps to enter into the grant agreements.
    What can HUD do now to speed up the front end of the CDBG-
DR process? I think all of us agree that we need an 
authorization, that there could be rulemaking that is done that 
applies to every disaster, but they are probably going to have 
to tailor it for some. What could be done now?
    Mr. Pendleton. I think what Mr. Jemison said about having a 
framework where some things do not change that much. HUD IG 
looked across a number of Federal Register notices, and they 
found that certain things were common to all the disasters. So 
I think you have a core, you know, set of requirements, and 
then you tailor it from there, ma'am. That is what I would 
suggest.
    Senator Collins. Thank you.
    Mr. Jemison, getting people back into their homes and 
communities as soon as possible after a major disaster is 
essential to their lives, and to stabilizing the local economy. 
When I was chair of the Homeland Security Committee and HUD, we 
did an investigation into the response to hurricane Katrina. I 
remember traveling down with committee members, and we saw all 
these FEMA trailers, many of which had created problems because 
they had formaldehyde and they were not usable. They were very 
expensive, and obviously caused significant time to get them 
there.
    An alternative approach is being pursued by the University 
of Maine using 3D printing. And it is still in the early 
stages, but it is so intriguing. And one of our witnesses at 
the first hearing, Dr. Habib Dagher, is involved in it. It is a 
partnership between the University of Maine, Maine Housing, and 
local community action agencies.
    And they are essentially working on being able to print, 
believe it or not, using 3D printers, housing and temporary 
housing options. Now, part of what the administration wants is 
innovative construction techniques and materials for use in 
disaster recovery, but does HUD have the expertise and the 
resources to oversee a project like that, that might be the 
answer to providing rapid rehousing on a temporary means?
    Mr. Jemison. Ranking Member, we are very interested in 
this. I have heard about the research that you are talking 
about, and we are very interested in being part of that plan to 
investigate those technologies and find out if there are some 
of them that could be well deployed in disaster recovery.
    Each part of the country is different, has different 
housing stock, different codes, so we think there is going to 
be a series of solutions, or a suite of different solutions for 
different places, but we are very interested in--I would be 
happy to come up and meet some of the people you have described 
at the University of Maine and talk to them about these 
technologies, because we were very interested in doing, in 
doing them. We spend, through our grantees, a large amount of 
money through the DR program on that, and we would love to 
learn more about it.
    Senator Collins. Mr. Jemison, as we decide--as we work on 
designing a permanent CDBG-DR program, how can we ensure that 
the eligibility and allocation criteria are flexible enough so 
that we are not overemphasizing larger urban areas at the 
expense of rural areas, which actually may have more difficulty 
in recovering from a disaster because they have fewer 
resources?
    Mr. Jemison. Ranking Member, thank you for the question. So 
we are very interested in learning more about how--you know, 
what aspects of the formula concern you the most, that you are 
concerned, may be disadvantaged rural areas. We have got many 
rural and smaller CDBG-DR allocates, including Vermont, North 
Dakota, Arkansas, and West Virginia.
    So if there are ways that we can hear from you, and others, 
and make these parts of our standing notices, so that we are 
making sure that there aren't any biases against our rural 
communities. We are really eager to hear about it.
    Senator Collins. Thank you.
    Thank you, Mr. Chairman.
    Senator Schatz. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman, and thank you, 
and Senator Collins, for having this hearing today.
    Mr. Jemison, again, we appreciate all that you are doing, 
your hard work. Before getting into my questions, I would like 
to mention an issue that was brought to my attention that 
concerns one of my constituents, but I know that is going on 
all over the country.
    This constituent reached out to my office about 
difficulties regarding the finalization of their Rental 
Assistance Demonstration program with HUD.
    Mr. Jemison. Mm-hmm.
    Senator Boozman. My staff has been in contact with HUD to 
request further information on the status of final approval. 
And I believe that HUD is moving forward with this particular 
request. However, it is my understanding that this delay in 
finalizing the Rental Assistance Demonstration projects is not 
a new case. And the problem is that each month that goes by 
without a response can lead to our constituents paying 
unnecessary and burdensome extension fees.
    Mr. Jemison. Right.
    Senator Boozman. So what I would like for you to do is just 
commit to looking into that and see if we can resolve that. 
Again, this is something that I am aware of through a 
constituent, but I know it is going on all over the country, 
and it is just an unnecessary hassle.
    Mr. Jemison. Senator, you have my commitment. Me and my 
staff will get back to you. I think my colleagues in PIH are 
probably closest to this, but I will reach out to them 
immediately after this hearing, and will be back to you 
shortly.
    Senator Boozman. Good. Thank you very much. Homeless rental 
assistance, as you know, the administration's request for 
fiscal year 2022 funding would provide $3.5 billion an increase 
of $500 billion to prevent and reduce homelessness, the 
requested funding would also provide an increase of $5.4 
billion for housing choice vouchers to maintain services for 
all currently assisted families, and expand assistance to an 
additional 200,000 households, prioritizing those who are 
homeless or fleeing domestic violence.
    How will that increase funding prevent and reduce homeless 
in our rural areas? The COVID-19 pandemic has impacted 
everyone, but specifically rural communities. And it is 
important these communities are not forgotten or left behind by 
Congress and the administration.
    Mr. Jemison. Senator, thank you for the question. So, we 
are pleased that the discretionary request is going to include 
a significant number of new vouchers. Those vouchers, I think 
studies have shown, have a huge impact on household's ability 
to control, and get quality housing. I think, if I understand 
some of the direction of your question, it is only possible 
about quality housing if quality housing exists in the region 
and the area that you live.
    So especially for the households that we are talking about, 
and that who would be the beneficiaries of the programs you are 
mentioning, the importance of the recently-passed funds that 
will allow communities to develop new low-income housing, and 
in some cases, permanent support of housing through the HOME-
ARP Program, there is going to be--there is going to be a lot 
of new resources, than they produce the housing that people may 
want to choose to use through vouchers or if they lower 
incomes.
    You can only use the voucher if there is a unit available 
to use it. And as I understand it often that is not the case to 
the degree we like it in rural environments. And so making sure 
that communities have both the resources to develop the kind of 
housing that we want to have, safe, clean and decent units, as 
well as making sure people have the resources to choose great 
housing in every part of the United States, not just big 
cities, but also in our rural communities is a major priority 
of mine, and other people who work with me at our agency.
    Senator Boozman. Very good. We appreciate that. Thank you. 
Thank you.
    Thank you, Mr. Chairman.
    Senator Schatz. Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman, Ranking Member 
Collins, and our witnesses,
    Mr. Jemison, you note in your testimony that the CDBG-DR 
program, including the CDBG mitigation investments have a 
unique focus on long-term recovery and resiliency efforts 
targeted to families with low and moderate incomes in the most 
impacted and distressed areas. This focus is--it is unique, it 
is very different from other Federal disaster assistance 
programs that are administered by FEMA and the SBA, as well as 
from private insurance.
    Can you please tell us more about the types of gaps that 
CDBG-DR could uniquely fill for communities that are trying to 
make their homes, their roads and buildings more resilient in 
the face of climate change?
    Mr. Jemison. Senator, thank you for the question. So, DR 
is--CDBG-DR more specifically, is really a unique instrument 
that, as the ranking member highlighted, is one of the most 
popular of our programs, because it makes available flexible 
funding that communities can use to build or rebuild many 
public improvements and affordable housing.
    So when a crisis strikes, you know, DR serves that same 
purpose, but it has the ability to serve it in a way that is 
unique. In recovering from the crisis you might learn, for 
example, that the street, park, greenway that was damaged, you 
may be able to rebuild it in a way, for example, that takes 
more stormwater out of the system, or in a way that fights the 
heat island effect, or a number of other kinds of impacts of 
climate change.
    So what I think DR gives us the opportunity to do if we 
were able to make sure our communities are ready to absorb it 
and have the capacity to execute with it when they have it, is 
to make sure that all those pieces of a neighborhood that that 
count to make the quality of life in that neighborhood good. 
The open spaces, the affordable housing, market housing, 
streets, parks, all those things can be part of the process of 
creating resilience, I am hopeful community leaders can make 
that happen. So that is why DR is so important, and in some of 
the capacity it has to help us rebuild our communities.
    Senator Van Hollen. Well, thank you. And, you know, in my 
State of Maryland we see, sort of, perennial flooding now in 
Annapolis, which is also home to the Naval Academy, and that 
flooding impacts homeowners and small businesses, none of those 
floods, you know, rise to the level of a Stafford Act, 
emergency disaster declaration, but they still have very 
damaging impacts. And of course do reoccur on a regular basis.
    Are there ways to make sure that the CDBG-DR program is 
flexible enough to help a community like Annapolis in making 
long-term investments in resiliency and mitigation? Is that the 
kind of application that the program could be used for?
    Mr. Jemison. Senator, yes. I appreciate the question 
because, you know, as we--first, there is a dimension of it 
that has to do with how we select where allocations are made. 
And we look to, you know, where the disaster damage and 
geography has been, as well as what grantee capacity is in for 
Annapolis, or another community is well-prepared, and is really 
the right place for the money to be located, because the 
disaster is sort of localized in that community, those are the 
things that we think about in making these allocations.
    The second part of your question really speaks to some of 
the potential of the American Jobs Plan, where, we have 
proposed that a significant amount of the resilience money be 
part of a competitive program, that is going to help us learn 
from the National Disaster Resilience Competition, our 
mitigation awards, et cetera, where Annapolis or other 
communities could propose to make that exact kind of investment 
in their community as part of resources allocated through the 
American Jobs Plan.
    It is one of the ways that we would like to put new 
resources in the hands of places like Annapolis, so they can 
actually plan the improvements that are going to take will 
reduce the impact of that flooding long term.
    Senator Van Hollen. No. I appreciate that. Because, you 
know, I think our goal here is to make sure we have a program, 
like this one, I think, that is more attuned to different kinds 
of metrics and triggers than just the emergency disaster 
declarations. Those are blunt instruments, and that is often 
after the fact. And, here, I hope we can use this as a tool to 
address efforts by communities across the country, like 
Annapolis, to be better prepared, and more resilient in the 
face of rising sea level and climate change. So I look forward 
to continuing this conversation with you.
    Thank you, Mr. Chairman.
    Senator Schatz. Thank you, Senator Van Hollen.
    Senator Kennedy just arrived. Are you ready to ask your 
questions? Or should I move over to Senator Collins?
    Senator Kennedy. Thank you, sir.
    Good morning. Mr. Jemison, have you ever been to Louisiana?
    Mr. Jemison. Senator, I have.
    Senator Kennedy. Well, good. Come back, come back to see 
us. Louisiana is sometimes described as sort of a boot, the 
heel of our boots, Southwestern Louisiana, had a tough time 
last year, and I am not--for us it was a fantastic impression 
of hell. And I am not just talking about COVID-19.
    We got hit by two major hurricanes, since then we had a 
major freeze, right now we just had about anywhere from 8 to 15 
inches of water in that area, in other areas in our state too. 
And I don't mean to tell you our problems, but those two 
hurricanes did lasting damage. Disaster relief in terms of a 
block grant, you know the rule and the custom. The White House 
recommends to us, and then we act, we, Congress, in our wisdom.
    I cannot get an answer out of the White House. I have 
talked directly with President Biden about it. I have talked to 
the White House staff, my governor who happens to be a Democrat 
has, we have begged, we have pleaded, we have sent fruit 
baskets, we have done everything we possibly can to get an 
answer, and we just get silence. Can you help me get an answer?
    Mr. Jemison. Sure, sir. Senator Kennedy, thank you for the 
question. And obviously just in the spirit of the way you are 
asking the question we are--I sympathize. And HUD is ready to 
act, and moving all the ways that we have to support Louisiana 
in the part that you are describing specifically, when we get 
direction from our White House. And I will absolutely share 
what we have talked about today with them immediately after 
this call.
    Senator Kennedy. Who in the White House do you think, sir, 
would handle something like this?
    Mr. Jemison. Well, the first person I am going to speak 
with is our secretary, and I am going to highlight that this 
happened.
    Senator Kennedy. Right.
    Mr. Jemison. This part of our testimony, and I believe that 
she will probably reach out to--she is probably going to reach 
out to the various policy councils and others that she 
coordinates with every day. And that will probably get to the 
officer----
    Senator Kennedy. I don't mean to interrupt you, but I am 
about to run out of time. So HUD is recommending, yes. Is that 
correct?
    Mr. Jemison. Senator, I am not in a position to say that. I 
work for a secretary; she is the one who says what HUD is 
doing. And so I have to defer to her.
    Senator Kennedy. Would you mind calling me today or 
tomorrow, after you talk to the secretary. I will start with 
HUD first, if you are recommending yes, or no. Just tell me. 
And then if you could tell me who to talk to in the White 
House--I have talked directly to President Biden about it. And 
I know they are busy, I get it. But this has been going on for 
a while and we just need an answer.
    Mr. Jemison. Senator, you have my commitment. You will hear 
from me tomorrow after having spoken with the secretary.
    Senator Kennedy. You are a fine American. And thank you, 
sir.
    Mr. Jemison. Thank you very much.
    Senator Kennedy. That is all I have got, Mr. Chairman.
    Senator Schatz. Thank you, Senator Kennedy.
    I am going to take my second round now. The first question 
I have is, maybe starting with Mr. Pendleton, and then to Mr. 
Jemison.
    As we picture in our mind's eye how this authorization is 
going to work. And I think it was Mr. Pendleton that said, you 
know, you are going to need organizational capacity within HUD 
in order to run a program, right? This is, we are doing a 
permanent reauthorization if we can. And we are trying to 
rationalize this process, staff it up, build capacity. What 
does that look like? How many human beings? How much money is 
it going to take?
    And maybe I should start with HUD first, Mr. Jemison?
    Mr. Jemison. Chair, thank you very much for this question. 
We do need more, S&E to do this work. I think when you think 
about what grantees have to do, they have to rapidly develop 
capacity to execute large-scale projects in a very short period 
of time. So if we are going to support them in doing that, we 
need the same level of support.
    I think we need to look at this as really part of our, not 
a disaster recovery or reaction approach, this is about 
building and adapting to the conditions that we are presented 
with. And so I think that is as important a project as any. And 
I think that adequate resources for us, and also adequate 
resources for our grantees are important to making sure that, 
instead of having this be a kind of an ad hoc thing that we do 
well sometimes, it needs to be something that we do well every 
time, we have the resources and the grantees have them too to 
be successful.
    Senator Schatz. But I did not hear--with all due respect--I 
did not hear an answer there. And I am a little worried that we 
would just assign additional duties to existing staff in the 
same physical location. And just say, now you do this, and now 
you are also in charge of CDBG-DR, which is permanently 
reauthorized. Congress fixed it, but everyone is still in the 
same cube doing the same work. And so it seems to me, we need a 
discrete shop that does this, and I think we need to know what 
that is going to take in terms of resources.
    Mr. Jemison. Senator, I appreciate the question very much. 
You have no idea. I would further say that I want to give your 
question the due diligence that it requires. And I think within 
a short period, I can provide you with a specific 
recommendation to the memoranda.
    Senator Schatz. That is a much better answer than a wild 
guess. Thank you.
    Mr. Pendleton.
    Mr. Pendleton. Well, I appreciate you picking up on what I 
said. If you are going to spend tens of billions, you need to 
spend a few million to make sure the program is managed right. 
And so that is going to require HUD, I think to--should it land 
in HUD, to really think about what this program needs to be 
managed properly. It is going to require interagency planning. 
It is going to require a number of things that they may not 
currently be doing, well beyond just writing Federal Register 
notices.
    And I think it is going to require a proactive, technical 
assistance operation to help get at some of the rural issues 
that were brought up in other places, where I think FEMA is 
going to have to lean--or excuse me--HUD is going to have to 
lean forward sometimes like FEMA has learned how to do in the 
past few years, to really help the grantees execute the funds 
in a way that is consistent with what we hope they do.
    Senator Schatz. I just want to pick up on what you said 
about FEMA. You think FEMA has sort of developed, through 
iteration, a model for servicing local communities.
    Mr. Pendleton. You know, FEMA is not really in my 
portfolio, but I have done a lot of work on disaster recovery. 
I was in Louisiana right after Hurricane Katrina. I think they 
have gotten better, and they are leaning forward. Their 
capacity gets stretched sometimes, and they have got their own 
workforce challenges, but I think being proactive--I think it 
is going to require, bluntly put, a mindset change for our 
friends at HUD. And I think that is going to be as important as 
the organization, but you won't be able to do it without enough 
people to do it.
    Senator Schatz. Sure. A final question for this round. You 
know, I think what we are trying to achieve, in addition to 
speed, right, is the ability to kind of enable a conversation 
between the disaster managers, the emergency response types, 
and community planners, both at the Federal and the state 
level, because if we are doing mitigation money, I mean, I 
think about the volcanic disaster, CDBG money sort of lands.
    And then we are making some pretty big choices about where 
these homes are going to be located. Are they still going to be 
in Lava Zone 1? Should they be relocated to Hilo Town? What is 
the deal here? And the emergency response people are not even 
by law required to talk to the people who are in charge of 
housing, and where it goes, and how infrastructure is built. 
And so you are sort of at an--in the best case you are at an 
impasse, in the worst case, people are actually moving in 
opposite directions because that is sort of what the statute 
dictates.
    Would you like to comment on that Mr. Jemison?
    Mr. Jemison. Chairman, I would love to. I completely agree 
with the sentiment you are sharing here. The money you spend in 
an emergency, sometimes you look back and say, I would rather 
have spent that doing the larger project that actually is going 
to be baked into the work that is going to help my community to 
get stronger, right? And so I mentioned the parks, and 
greenways, and other things that were destroyed, maybe there is 
a way to build them back that does the thing you want.
    But when you are focusing on an emergency only, you do not 
have the benefit of knowing that you might have mitigation 
funds to actually build it back--the community improvement 
back, right, you can make mistakes. So I think it is a great 
idea to try to bring those pieces more closely together. And 
some of the things we have mentioned today will help us do 
that.
    Senator Schatz. We look forward to receiving your technical 
assistance on this particular question, because I worry a 
little bit that Congress is just going to say, there shall be 
coordination, and then assume that it is going to occur. And we 
have got to sort of dig into how to make sure that we 
effectuate this in a way that will work.
    Ranking Member Collins.
    Senator Collins. Thank you, Mr. Chairman.
    I have a question that I would like to get the opinions of 
each of you on. The regular CDBG program is administered both 
by states and larger metropolitan areas referred to as 
``entitlement communities''. And over the history of the 
disaster relief program, the grants have been provided to both 
types of grantees as well. And I can see the case either way.
    But let me start with you, Mr. Pendleton. GAO has reviewed 
the work of multiple DR grantees over the years. Do you have an 
opinion on whether or not, as we write this bill, we should 
limit the grants to states? Or should entitlement communities 
remain eligible grantees under the DR program?
    Mr. Pendleton. I cannot choose, but I can--but it should 
turn on an assessment of their capacity to handle the funding. 
And our open recommendation, if you remember my opening 
statement of the five, is that HUD needs to improve its 
assessment of grantee capacity. And I think that is--we are 
likely to leave that recommendation open for a little while, so 
I can pester Mr. Jemison about it.
    Because that, I think, it becomes the most important thing. 
If you give it to someone that does not know what to do with 
it, it is going to be a problem. But, on the other hand, the 
closer you can get to where the work needs to be done, the 
better off you are. So I think it is that assessment of 
capacity becomes the main thing, Senator Collins.
    Senator Collins. Mr. Jemison, do you have an opinion on 
that? Jemison, sorry.
    Mr. Jemison. Ranking Member, I do. Thank you for the 
question. Exactly as, Mr. Pendleton mentioned, grantee capacity 
is a very important dimension of the selection that the 
secretary makes about where the allocation should go. It is 
also considered, if a disaster crosses boundaries, a municipal 
county, et cetera, thinking about which jurisdiction should 
receive the funds, often states are chosen because they allow 
you to deal with--go across municipal or county boundaries.
    And finally, I guess I would say that the risk matter that 
was talked about is also part of the analysis. I would tell 
you, though, that we would like to go to the grantee where we 
are going to have the grantee will have the most possibility of 
success, obviously. And then as closest to the ground as the 
best understanding of what the improvements ought to be.
    And so when there are places where we have gone to the 
city, or county, or state levels, we try to bring--push it down 
to the most appropriate, lowest level of government.
    Senator Collins. Thank you. I am just going to ask one last 
quick question, since we have additional colleagues who have 
arrived.
    Mr. Pendleton, the National Institute of Building Sciences 
reports that for every dollar that we invest in disaster 
resiliency investments, that it saves $6, depending on the 
circumstances and the type of the hazard. But still that is a 
pretty good return on investment and shows the old saying that 
an ounce of prevention can be worth a pound of cure. The 
administration's plan includes 50 billion for improving 
infrastructure resilience, and a small slice of that would go 
through the CDBG program. There is other funding for new 
initiatives at DOT, there is tax credits, there is a FEMA, new 
FEMA program.
    And the rationale for investing in resilience is clear to 
me, but I am concerned about having too many agencies and too 
many programs focused on medication, and that that will leave 
to fragmentation, confusion for communities, and states and 
increase the risk of fraud, which you talked about in your 
report. What is your view?
    Mr. Pendleton. Yes, I agree with you. As more people get 
into the space, there is more opportunity for duplication, 
overlap, fragmentation, and all sorts of bad things. We have 
work ongoing looking at this very question, not mitigation or 
resilience specifically, and we are teaming inside GAO across 
the agency to really look at this space. And give me a few 
months and I might have a better answer for you about what some 
of the specific dangers are here.
    DR has not really been--and I mentioned earlier--it has not 
really been a mitigation thing in the past, right? So it is 
more money, more people moving into that space. So I think--
that is the reason why I keep coming back to joint planning, 
working together with stakeholders, and all that basic stuff.
    Senator Collins. Thank you.
    Senator Schatz. Senator Reed.
    Senator Reed. Well, thanks very much Mr. Chairman.
    And Mr. Jemison, the Community Development Block Grant 
Disaster Recovery program is absolutely essential. It is 
unique, it aids communities when they are in a desperate 
situation, and it gives HUD insights into the disaster 
operations, and many other Federal agencies and state agencies. 
And, in fact, it is episodic. It only happens after a major 
disaster.
    What steps has HUD taken to build a permanent capacity to 
administer this funding, to streamline its own administrative 
requirements, and coordinate among other agencies to move 
projects forward more quickly?
    Mr. Jemison. Senator, thank you for the question. So one 
thing, obviously you have heard us today say that we are 
interested in having a permanent, reliable framework for this 
work to go forward in the future. And I think there is a lot of 
consensus about that approach in this room.
    Second, we are developing a sort of universal notice, and a 
standing a notice that will help us unify all the things that 
my colleague, Mr. Pendleton, was talking about are different 
among all the different appropriations.
    So we are trying to make sure that there is, instead of 
having these little cracks and loopholes between different 
allocations, we have one standard that makes sense. I think the 
process that is being described here will help us, do that even 
more. So those are steps we are taking to streamline today.
    I would also highlight in the American Jobs Plan, as was 
highlighted by the ranking member, you know, we are very strong 
believers in the $1/$6 analysis that was highlighted, it was 
also in a Pew Trust report. And so in our American Jobs Plan we 
are proposing that the administration is proposing that there 
be a significant allocation to do this.
    One of the things I think we would like to do with that is 
to, kind of, run the kind of competition that helps communities 
prepare in advance for those kinds of funds being the influx 
coming into their community, and I would try to resonate with 
one other item you asked about.
    One of the reasons that DR administered through HUD is an 
important part of the sort of constellation, is because it is 
those plans and in the implementation of the plans that come 
out of these resources, that you are able to integrate 
resilience into the improvements that again, make life better 
in all of our communities. So that is an important dimension of 
it. I appreciate you giving me the chance to highlight.
    Senator Reed. One of the challenges that we face, we all 
face, and maybe they occurred in last year's hearing when we 
discussed this issue with HUD, and also in the Banking 
Committee hearing just this week, it is the National Flood 
Insurance Program, and that is the issue of quantifying and 
communicating risk. Having experience of disasters, HUD is in a 
position to provide an insight to what is coming next, if you 
will.
    And how can HUD and the Federal Government better provide 
information to communities about current and future risk? And 
maybe adding future information to flood maps that are being 
published now? But, unfortunately, it is likely that if there 
is a physical disaster in one place, it won't be the last time 
something like that happens. Any comments?
    Mr. Jemison. Senator, you are highlighting an important 
dimension. So, you know, FEMA, SBA, HUD and private insurers 
all have a role to play in the recovery of a community. And so 
the flood insurance portion of the work, is obviously a private 
activity, but the regulatory partner, for that industry is in 
FEMA, because they control mass.
    To the extent that we are involved, I mean, we have 
recently had FHA publisher rule allowing flexibility for the 
FHA insurance related to this. So we are have a role to play 
and we play it but this is one where we work through the 
National Disaster Recovery Framework with FEMA and rely on them 
for guidance on this.
    Senator Reed. Well, thank you very much.
    Thank you, Mr. Chairman.
    Senator Schatz. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman. Appreciate it.
    Mr. Jemison, the City of Minot, North Dakota and 
surrounding region had a very bad flood in 2011, something like 
4,000 homes were impacted. Many of them ruined, 11,000 people, 
I think, were out of their home for some period of time. 
Afterwards the State of North Dakota, working with the City, 
put together a flood protection plan. I think originally it 
cost us about $800 million. You know, it is probably gone up 
some since then.
    We have broken it into phases. Like eight phases. The first 
three phases are, you know, under construction, some completed, 
a lot of state and local funding, we are working with the Corps 
to get some funding. And of course, trying to get, you know, 
all the things addressed that they need. But we have also 
gotten CDBG money. And I think it was about $75 million, and 
Senator Kaine and I sponsored legislation.
    And so we have gotten some of that extended, along with 
some of the other resiliency grants, I think there were like 13 
of them. So I am going to ask you about that in a minute. Our 
grant was 75 million under the National Disaster Resiliency 
Program. They need some more flexibility there. I want to make 
sure you are working with them on that, as well as the other 
communities to get resiliency funding.
    But my question is, is there help that you can provide 
through CDBG, or the CDBG Disaster Recovery funding, to support 
our flood mitigation efforts, and our flood protection? And the 
reason I ask is because the Corps has all this cost benefit 
stuff, and so on and so forth. So some of these eight phases we 
can do with state, local, or Corps money, but others don't meet 
the benefit cost. And in some cases, that is in our lower-
income areas of the community and the surrounding regions. So 
we need other sources of funding to complete this project.
    We want to make sure that low-income areas are not left out 
because they don't meet benefit costs. So that is kind of a 
long question, but we need some help from agencies like yours, 
figuring out how to fund some of these phases and keep this 
moving, particularly for our, our lower-income areas, so you 
don't have some of the higher-income areas that get protection, 
and the lower-income don't, or they are waiting around for it, 
and they are having to pay flood insurance.
    So we need some help from agencies like yours. And I would 
ask for any thoughts you have as well as a commitment from you 
to work with us.
    Mr. Jemison. Senator, thank you for the question. You have 
my commitment today. But specifically what we will do is we 
will--we have got great professionals working in our Disaster 
Recovery and Special Issues area directly. We also have 
technical assistance providers who can come out and help you 
nab your Minot, which I have heard a lot about, by the way, as 
one of the communities where they got a designation and then an 
allocation even though they are a smaller community, but they 
have had great success.
    So when you have great success, sometimes you have unique 
challenges like the one you described. I am prepared to have 
people from our staff at headquarters respond directly, and 
also have TA providers help them navigate the issue you are 
talking about with the Corps, and the cost-benefit analysis. I 
think the flexibility of the CDBG resources that you have 
gotten, well, can help you through that problem. And I know 
that the staff and TA we can give you can help you too.
    Senator Hoeven. Yes. We absolutely need to link in with you 
and your staff to see if we can figure some things out. The 
community is about 50,000 people, there is an Air Force base 
there of about 12,000 people, and if they don't get this flood 
protection, the base actually can be cut off from getting to 
the missile fields, and some other things that they have to do.
    Mr. Jemison. Yes.
    Senator Hoeven. So it has got military implications. And 
then, like I say, we really have to look at some of these 
programs that help in lower-income areas, because those are 
some of the areas that, you know, we have not started their 
part of the protection yet. And so we really need you and some 
others to help us piece together some programs. And we 
purposely did it in phases to get it moving. So we did not have 
everybody sitting and waiting until all the hundred million was 
put together.
    But we have got about 60 percent of the protection 
underway, but about this 40 percent is an area where we are 
really trying to find ways to fund the flood protection. And so 
I appreciate that. We will follow up with you, and we would 
love to get you and some people out there, and see what can 
come up with creatively.
    And then just an update, if you will, on the Disaster 
Assistance Resiliency grants for the 13 or 14 communities, how 
are you doing as far as giving them some flexibility, and 
working with them? And is that going well? And is there 
anything else you need?
    Mr. Jemison. So, Senator, so far the report is back in. 
Again, I am in my, maybe, 120th day, but the reports back from 
grantees have been good. I know that there are--that some folks 
are reporting about their plans to finish their projects within 
the timeframes given are obviously causing them a little bit 
of--the kind of concern that any developer or development agent 
would be concerned about.
    But we are working with them as close as we can. And again, 
if we are hoping that as part of this process, things like that 
get managed so that people have enough time to finish their 
projects.
    Senator Hoeven. Yes. And again, that is why I think the 
community is trying to use these funds as effectively as 
possible, which is why they needed a little more flexibility 
and a little more time. So we appreciate, you know, you working 
with them to do that.
    Mr. Jemison. We absolutely will.
    Senator Hoeven. Again, thank you.
    Thank you, Mr. Chairman.
    Senator Schatz. Thank you, Senator Hoeven.
    I want to thank everybody for coming today to discuss this 
critical topic. And I especially want to thank Senator Collins 
and her staff for working with me to authorize the CDBG-DR 
program. GAO and HUD's expertise has been really valuable in 
thinking through how we structure and inform our disaster 
recovery systems.

                     ADDITIONAL COMMITTEE QUESTIONS

    I look forward to introducing this bipartisan bill with you 
in the very near future. The hearing record will remain open 
until next Friday, May 28th, to allow members to submit 
additional questions for the record.
                 Questions Submitted to Arthur Jemison
              Questions Submitted by Senator Brian Schatz
    Question. Staffing for HUD's disaster recovery program is largely 
provided through supplemental appropriations and impacts HUD's ability 
to conduct long-term oversight of grantees.
    What metrics does HUD use to plan for and estimate its workforce 
needs to support CDBG-DR and its responsibilities under the National 
Disaster Response/Recovery Frameworks?
    Answer. The Department has generally used five metrics for its 
estimates of workforce needs associated with the implementation and 
oversight of CDBG-DR funds: (1) number of grants; (2) number of 
grantees; (3) grant expenditure deadlines; (4) open GAO/OIG audits to 
be addressed; and (5) ratio of permanent staff to ``term'' staff funded 
through disaster-specific CDBG-DR appropriations. An additional 
consideration relates to the relative geographic remoteness of the 
grantees and the value of placing CDBG-DR staffing in closer proximity 
to the grantee (e.g., our Hawaii-based staff and the CDBG-DR grantees 
of Hawaii, Kauai, American Samoa and the Northern Mariana Islands). The 
recent significant expansion of CDBG-DR staffing has been supported 
largely by CPD's S&E resources and have come at an opportunity cost for 
CPD in addressing the staffing needs of other core programs and 
functions. A permanently authorized CDBG-DR program would create 
additional HUD staffing needs and demands, centered on training 
grantees on new program requirements and engaging high risk communities 
in pre-disaster planning and building resilience.
    Under the National Disaster/Response/Recovery Frameworks, the 
Department has defined its roles and responsibilities pertinent to each 
Framework that guides workforce needs. Based on those roles and 
responsibilities, HUD had developed a volunteer recruitment process as 
well a leadership cadre of volunteers who support this work. This year, 
we have over 400 staff that have volunteered to assist HUD in 
fulfilling our responsibilities under these Frameworks. However, with 
the increasing number of disaster events, the Department is exploring 
other staffing alternatives (e.g. retired staff, surge employees).
    Question. As we consider permanent authorization of a disaster 
recovery fund, what type of staffing levels would you need in order to 
support communities with pre-disaster planning and recovery on an 
ongoing basis?
    Answer. Communities consistently tell the Department that they need 
knowledgeable HUD staff on the ground as early as possible during the 
disaster. Ensuring that HUD's Disaster Recovery and Special Issues 
Division has sufficient staffing, consistent with recent budget 
requests, ensures that HUD is able to support pre-disaster planning, 
including efforts to incorporate resilience. With the potential 
permanent authorization of CDBG-DR as a program, pre-disaster planning 
efforts present an additional opportunity to reach high-risk 
communities and to deploy staff expertise and technical assistance to 
develop the pre-disaster resilience capacity of those communities in 
the Disaster Recovery and Special Issues Division of CPD and in other 
CPD program areas. The Department, in consultation with HUD's Office of 
Disaster Management and National Security (ODMNS) FEMA's Community 
Planning and Capacity Building Recovery Support Function, will develop 
a final recommendation on staffing that allows HUD to identify the gaps 
in staffing when incorporating the pre-disaster planning function. At a 
minimum, CPD would seek resources to secure the current 15 temporary or 
term positions as permanent staff in DRSI, and to add up to an 
additional 15 staff to support pre-disaster planning efforts as part of 
its current long-term recovery mission.

                                 ______
                                 

               Questions Submitted by Senator Joe Manchin
    Question. As it relates to recovery funding, post disaster, FEMA 
and HUD are the primary avenues of this funding and resources. In West 
Virginia, our worst disaster in recent years was the 2016 flooding that 
took the lives of 23 citizens and destroyed thousands of homes. Most 
recently West Virginia received a Presidential Disaster Declaration for 
the winter storms in February opening up federal resources for 
recovery. With that comes questions--your office has heard about how 
confusing it is to explain to individuals what agencies they need to 
contact, when and for what. They would like to see simpler ways of 
proving information and a simpler explanation from the federal agencies 
to individuals on their available options. Immediately following a 
major disaster, many families and individuals are simply trying to 
figure out their next move.
    How can HUD work with other federal agencies like FEMA to best 
serve immediate needs of individuals?
    Answer. In the immediate aftermath of a disaster, HUD leads the 
Housing Recovery Support Function under the National Disaster Recovery 
Framework, working to re-house disaster victims as quickly as possible. 
HUD's CDBG-DR funds, however, which are focused on whole community, 
long term recovery, is not available to communities until Congress 
appropriates those funds for a disaster. A standing source of CDBG-DR 
funds and consistent requirements would allow HUD to be ``on the 
ground'' earlier to provide CDBG-DR assistance and position communities 
to better coordinate its recovery priorities, with FEMA, SBA and the 
Housing Recovery Support Function resources that are more immediately 
available after the disaster.
    Question. During these times of great stress, some of the local 
leaders in my state have expressed how tough it is to explain, in 
simple terms, what resources are available to individuals and families.
    What can HUD and other agencies do to simplify the information on 
available resources to individuals and families post disaster so it is 
easily understood?
    Answer. Through the Recovery Support Function Leadership Group 
(RSFLG) and the Mitigation Framework Leadership Group (MitFLG), HUD and 
FEMA and other federal disaster recovery agencies are also developing 
web portals and other ``one stop'' resources to improve community and 
public access to federal recovery resources.
    Question. What resources would HUD need to work with other federal 
agencies to coordinate such an effort?
    Answer. As part of an effort to make CDBG-DR funding more readily 
available sooner after a disaster, HUD would seek to also move away 
from the disaster-specific staffing resources that have been made 
available by Congress through most recent CDBG-DR supplemental 
appropriations.
    While the additional resources and staffing are needed and welcome, 
they allow HUD to only employ ``term'' or temporary staff who are 
limited to working only on the disaster for which funds were 
appropriated, for a limited time and who are brought ``on-board'' only 
once the supplemental CDBG-DR appropriation is available. Additional 
resources to increase staffing levels for HUD's permanent disaster 
recovery staff would allow HUD to build its capacity and to 
significantly increase its presence alongside FEMA and the U.S. Small 
Business Administration following a disaster to continue to improve 
coordination.

                                 ______
                                 

            Questions Submitted by Senator Susan M. Collins
    Question. CDBG-DR supplemental appropriations over the past five 
years have permitted the use of more than $20 million in funding for 
technical assistance purposes.
    How much of that funding has been used to support the $40 billion 
appropriated since 2016?
    Answer. While not all CDBG-DR supplemental appropriations have 
included funding for technical assistance, since February 9, 2018, 
CDBG-DR supplemental appropriations have made a total of $20 million 
available for the specific purposes of capacity building and technical 
assistance, including assistance on contracting and procurement 
processes, to support States, units of general local government, or 
Indian tribes (and their subrecipients) who have received CDBG-DR and 
CDBG-MIT funding.
    As of August 2, 2021, $7,405,898 has been expended for direct 
technical assistance engagements, needs assessments, capacity building 
tools and products, workshops and training, and technical assistance 
provider administrative and coordination costs for CDBG-DR and CDBG-MIT 
grantees. An additional $4,799,447 of the $20 million has been 
committed to existing technical assistance engagements, and the 
remaining $7,794,654 remains available to address on-going and future 
technical assistance needs. HUD will continue to support CDBG-DR and 
CDBG-MIT grantees with these resources until the current balance of 
assistance funds has been exhausted.
    Question. What exactly have been the results of that investment?
    Answer. While the results of technical assistance can be 
qualitative and anecdotal due to the complexity of measuring the 
effectiveness of capacity building activities, HUD requires technical 
assistance providers to generate work plans to guide their activities 
and intended outcomes. These work plans are categorized based on the 
type of technical assistance engagement and typically include the 
following types for disaster recovery: direct technical assistance 
(TA), needs assessment, product development, and training delivery.
    To further clarify, needs assessment and direct TA engagements 
often involve a technical assistance provider assisting a grantee in 
determining their disaster recovery unmet needs, launching their 
disaster recovery program, and/or addressing specific concerns that a 
grantee may have in implementing their CDBG-DR and CDBG-MIT grants. 
Product development and training delivery engagements are typically for 
multiple or all CDBG-DR and CDBG-MIT grantees and address large-scale 
capacity building needs for disaster recovery.

 
----------------------------------------------------------------------------------------------------------------
                                                                                                Total Technical
            Technical Assistance Products               Number of Work     Percent of  Work   Assistance Funding
                                                             Plans               Plans           Disbursed\1\
----------------------------------------------------------------------------------------------------------------
Training Delivery...................................                  11                 18%       $1,373,101.54
Product Development.................................                   4                  7%          509,999.22
Needs Assessment....................................                   2                  3%          157,301.51
Direct Technical Assistance.........................                  43                 72%        7,789,996.00
    Total...........................................                  60  ..................        9,830,398.27
----------------------------------------------------------------------------------------------------------------
\1\ Amount of appropriated technical assistance funds committed to completed or currently active work plans.

    HUD's analysis of the work plans showed that the most common 
outcome associated with the work plans is ``improved capacity to 
deliver projects, programs or systems that address community needs.'' 
Grantees, particularly smaller jurisdictions with limited capacity 
(e.g., recent CDBG-DR grantees in the Pacific), have only been able to 
undertake DR-funded recovery through HUD funded technical assistance 
efforts.
    Question. Do HUD's chosen providers have the capacity to deliver 
the kind of in-depth assistance that is necessary?
    Answer. Yes, selected technical assistance providers have been 
required to undergo a competitive application process through Notice of 
Funding Availability (NOFA) announcements managed by CPD's Technical 
Assistance Division (TAD) to demonstrate their capacity to meet the 
current and future needs of disaster-affected communities. To do this, 
applicants complete a capacity and interest chart as part of the 
application package. TAD reviews the application package by using HUD's 
Community Compass Rating Guide to evaluate and select the providers. 
The $20 million of technical assistance funds for disaster recovery 
were awarded over the course of three NOFAs, and the chosen providers 
were required to apply each year for the 2017, 2018, and 2019 awards.
    To further clarify, HUD's capacity and interest chart allows 
providers to demonstrate their understanding of the requested technical 
assistance in the NOFA and to highlight their experience and interest 
in providing technical assistance to specific HUD programs, including 
CDBG-DR and CDBG-MIT. The chart gives HUD a preliminary view of the 
providers' abilities, capacity, staffing considerations, and 
challenges. The Community Compass Rating Guide allows HUD to review 
providers' applications using up to three rating factors, a number-
based methodology for scoring each applicant, and key questions that 
the providers are expected to respond to per the guidelines of the 
associated NOFA. HUD rates the providers based on their applications 
and responses to these key questions, which show their understanding of 
grantees' challenges, prior technical assistance engagements, and 
number of past similar engagements. HUD then selects providers if the 
providers' scores are above a certain threshold.
    Question. HUD also considers other factors to determine each 
provider's capacity when awarding technical assistance funds. While 
these factors vary for each NOFA, they can include, but are not limited 
to, expertise conducting specific technical assistance activities, past 
performance, technical assistance priorities for the upcoming year, and 
the range of subject matter expertise.
    How can HUD improve this process to the benefit of disaster-
affected communities?
    Answer. HUD has identified several areas to improve the processes 
associated with delivering effective technical assistance to grantees 
and is currently refining these processes so that grantees can expedite 
disaster recovery and deliver better outcomes to their disaster-
affected communities.
    For instance, some grantees are not fully aware of the capacity 
building opportunities available to them and how to request technical 
assistance for their specific disaster recovery needs. To address this 
concern, HUD will expand training for HUD staff managing CDBG-DR and 
CDBG-MIT. The initial round of training improved communication and has 
led to more accessible and directed technical assistance that better 
meets grantees' needs. Additionally, HUD will be launching a disaster 
recovery repository within the next few months that will give all CDBG-
DR and CDBG-MIT grantees access to previously produced technical 
assistance products. The repository will hold tools and templates that 
were created from the appropriated technical assistance funds and can 
be repurposed to meet the needs of current and future disaster-affected 
communities.
    HUD is also working on improving the tracking of outcomes from 
technical assistance engagements to confirm that grantees' needs are 
being met by the chosen technical assistance providers. To do this, HUD 
will begin implementing surveys in which CDBG-DR and CDBG-MIT grantees 
receiving technical assistance will be asked about the effectiveness of 
the technical assistance and capacity building activities provided 
after their engagements have ended. The results of these surveys will 
demonstrate which chosen providers were most effective at delivering 
technical assistance and how (or if) the technical assistance met the 
needs of the disaster-affected communities, which will ultimately 
improve the future delivery of technical assistance and subsequently 
lead to better disaster recovery outcomes for disaster-affected 
communities.
    Question. When grantees are not performing adequately in the use 
and management of CDBG-DR funding, HUD traditionally waits to act and 
then only reluctantly. Over many years, HUD has indicated that it is 
statutorily constrained from being more aggressive and has limited 
means of recourse, such as cutting off funding access, to address 
problems related to the management of CDBG-DR funds.
    What expanded authorities should be provided to HUD to effectively 
manage the CDBG-DR portfolio?
    Answer. The CDBG-DR program currently lacks permanent authority and 
regulations--unlike other federal disaster programs such as those 
administered by FEMA and SBA. Codifying the CDBG-DR program would 
permit HUD to effectively manage the CDBG-DR portfolio and establish 
permanent regulations to pursue remedies for noncompliance, similar to 
the manner in which the regular CDBG program operates at 24 CFR part 
570. Supplemental CDBG-DR appropriations without permanent authority 
can delay HUD's efforts in publishing the Federal Register notices 
required by each appropriation. Those Federal Register Notices 
establish the waivers and alternative requirements for grantee use of 
the funds for recovery, including the rules and requirements grantees 
must follow. There can also be a lack of consistency between 
appropriations and Federal Register notices that can reduce 
transparency for grantees and increase the risk of fraud, waste, and 
abuse.
    Statutory authority to establish CDBG-DR regulations would 
accomplish the following:

  --Increase HUD's ability to consistently enforce instances of 
        noncompliance and provide grantee with established requirements 
        for performance and compliance;

  --Increase transparency for grantees and the public regarding CDBG-DR 
        requirements;

  --Reduce the time between a disaster and a grantee's access to long-
        term recovery funds; and

  --Reduce the potential for fraud, waste, and abuse, especially for 
        grantees who currently manage multiple grants that operate 
        under different requirements.

    Question. The HUD Inspector General (OIG) issued several audit 
reports questioning both HUD's interpretation of CDBG-DR procurement 
requirements applicable to states as well as many procurements 
conducted consistent with HUD's interpretation (summarized in Audit 
Report # 2017-PH-0002).
    Have the Office of Community Planning and Development and the OIG 
reached an agreement on disposition of all the related audit 
recommendations? If not, when will these recommendations be resolved?
    Answer. The Department and the OIG have not reached an agreement on 
the disposition of all procurement related recommendations. There are 
currently 11 procurement-related recommendations that remain in 
referral from the OIG. The remaining procurement-related 
recommendations remain in referral at this time and will be resolved as 
staff brief HUD's new leadership regarding the open referral and make a 
determination on the disposition of the open recommendations, as 
applicable.
    Question. Earlier this month, GAO issued a report on the fraud 
risks of the CDBG-DR program. This report addressed the fraud risks and 
risk environment of CDBG-DR, as well as the steps HUD has taken to 
assess fraud risk. The report notes that HUD has taken some steps to 
assess fraud risks agency-wide, such as a Front-End Risk Assessment, 
and a redesign last year of its agency-level Fraud Risk Management 
Maturity Model. GAO also noted in its report that HUD neither agreed 
nor disagreed with the recommendations, and instead offered a 
description of mitigating actions.
    Does HUD agree with GAO's recommendations?
    Answer. The Department agrees with the GAO regarding the importance 
of a fraud risk assessment and has taken steps to create a Fraud Risk 
Assessment template, but the effort was delayed due to the Coronavirus 
pandemic. While this effort remains in the HUD CFO's workplan, current 
contracting issues have delayed forward momentum on development of the 
template. In the interim, the Department continues to deploy risk 
management tools and controls designed to mitigate fraud risk. HUD's 
overall approach to managing fraud and fraud risk in the CDBG-DR 
portfolio is focused on oversight, relationship management, and 
building capacity.
    The Department does disagree, however, with the GAO recommendation 
to require CDBG-DR grantees in the risk assessment. As a Federal block 
grant, CDBG-DR places primary responsibility on grantees to ensure 
compliance with federal requirements. These longstanding CDBG 
regulations impose sanctions on the ineligible use of funds, including 
payments made for fraudulent purposes. Instances of fraud can result in 
repayment of funds to the Treasury, made from the grantee's non-federal 
funds. HUD's response to the GAO report outlined a robust set of 
internal controls and processes that are used by HUD to ensure that 
grantees are taking effective action to prevent and detect fraud. These 
processes include requiring grantees to develop and submit policies to 
detect and prevent fraud, waste, and abuse, as part of HUD's financial 
certification review, and monitoring grantees for compliance with those 
policies. These controls also include requiring grantees to have 
dedicated internal auditing staff charged with combating fraud. 
Grantees and subrecipients are also required to attend anti-fraud 
trainings offered by HUD Office of the Inspector General. HUD will also 
seek feedback from grantees on risks that they have identified that can 
be part of a broader training effort for CDBG-DR grantees and staff.

                                 ______
                                 

              Questions Submitted by Senator John Kennedy
    Question. During the hearing, Mr. Jemison committed to following-up 
with our office regarding disaster relief funds.
    What conversations have occurred to date between HUD and the 
appropriate policy councils at the White House regarding additional 
funding?
    Answer. When asked, HUD provides preliminary estimates of remaining 
unmet disaster recovery needs for disasters. HUD looks forward to 
working with Congress to identify and address any disaster-related 
unmet needs.
    Question. What was the outcome of those conversations?
    Answer. As reflected in the Administration's CR anomaly package, 
HUD has provided preliminary estimates of unmet disaster recovery needs 
for 2020 and 2021, pre-Hurricane Ida. Further, the Administration 
remains committed to working with the Congress to ensure an appropriate 
and robust response to Hurricane Ida, as well as other ongoing natural 
disasters and extreme weather events.
    Question. What more needs to be done to ensure a commitment is made 
to the people of Louisiana that help is on the way?
    Answer. HUD has worked to review its internal processes to identify 
any bottlenecks that may be addressed to expedite the availability of 
funds to those grantees. HUD is also taking steps (outlined in our 
response to #2) to streamline the CDBG-DR process for all grantees.
    Question. The lag between a disaster and an appropriation of CDBG-
DR funds is significant.
    What steps will you take to ensuring this process is streamlined so 
that communities in need can rebuild as quickly as possible?
    Question. Absent a permanent statutory authorization of CDBG-DR, 
the steps available to HUD to streamline its CDBG-DR processes is 
determined in part by the provisions of each supplemental CDBG-DR 
appropriation. Prior CDBG-DR appropriations, for instance, allowed 
grantees to use disaster funds for Hurricane Matthew and Florence 
interchangeably to address recovery needs arising from either disaster. 
Other prior appropriations have allowed HUD to use its disaster-
specific administrative funds interchangeably, allowing for more rapid 
on-boarding, deployment, and retention of staff to assist grantees in 
launching their recovery programs. HUD is also developing a Federal 
Register Notice that is intended to be prospectively applicable to 
future CDBG-DR supplemental appropriations as a means of providing 
potential grantees and the public with a clear and consistent 
understanding of CDBG-DR requirements.
    Question. The lag in spending funds once grant agreements have been 
signed can take years.
    What considerations have been made regarding an additional 
extension of CDBG-DR funds beyond September 30, 2023?
    Answer. This question presumably references CDBG-DR funds 
appropriated pursuant to Public Law (P.L.) 113-2 for long term recovery 
from Hurricane Sandy and other disasters occurring in 2011, 2012 and 
2013. P.L. 113-2 established a maximum expenditure period for these 
funds of September 30, 2022. The Consolidated Appropriations Act, 2021 
(P.L. 116-260), enacted on December 27, 2020, provided one additional 
year for the expenditure of all P.L. 113-2 funds to September 30, 2023. 
HUD is working with all P.L. 113-2 grantees to implement the extended 
period provided by Congress. Should Congress enact an additional 
extension of the statutory period for the expenditure of the P.L. 113-2 
appropriation, HUD will continue to assist grantee in the full 
implementation of their remaining recovery activities.
    HUD also recognizes that several of the CDBG-DR grantees who 
received funding under P.L. 113-2 also received disaster assistance in 
the prior year (P.L. 112-55) for the same disasters. The grantees had 
to revise or reset those disaster recovery efforts to match the 
requirements of the new funding from P.L. 113-2.
    Question. What is the unobligated amount of CDBG-CV funding 
provided in the CARES Act? Can these funds be repurposed for the CDBG-
DR? Please explain.
    Answer. As of August 31, 2021, $4,860,951,369 was obligated, or 
97.4% of the appropriated funds, with $129,048,631 remaining to be 
obligated. Please note, however, that grantees have until August 16, 
2021, to apply for the full amount of their allocation and HUD has 45 
days to review and accept grantee submissions and we anticipate the 
majority of the remaining funds will be obligated by the end of the 
review period. After this deadline, HUD will reallocate the remaining 
unobligated amount to existing CDBG-CV recipients based on factors 
identified within the CARES Act, as determined by the Secretary. CDBG-
CV funds may not be repurposed for CDBG-DR as they must be used for the 
statutory purpose as expressed in the CARES Act, however, they may be 
used as a leverage or stand-alone activities that are eligible for 
CDBG-CV and meet the tie-back requirement for these funds.
    Grantees may use CDBG-CV funds only for those activities carried 
out to prevent, prepare for, and respond to coronavirus. By law, use of 
funds for any other purpose is unallowable. To satisfy these purposes, 
grantees may assist activities that respond to direct effects, such as 
the need to rehabilitate a building to add isolation rooms for 
recovering coronavirus patients. HUD is not prohibiting grantees from 
carrying out any particular CDBG eligible activity described in the HCD 
Act and the 24 CFR part 570 regulations, because other CDBG eligible 
activities, such as acquisition, can justifiably be used to fulfill the 
CARES Act purposes depending upon the circumstances.
    Through the CDBG-CV notice, HUD provided a number of suspensions 
and waivers, in addition to those within the CARES Act to allow 
grantees additional flexibility in using CDBG-CV funds to prevent, 
prepare for, and respond to coronavirus. To remain consistent with the 
structure of a block grant program and the flexibility of CDBG to 
provide multiple avenues to achieve the purposes of the CARES Act, HUD 
is implementing the limitation that funds be used for the coronavirus-
related purposes of the CARES Act by requiring grantees to document the 
use of funds to prevent, prepare for, and respond to coronavirus, 
rather than by expressly prohibiting grantees from undertaking any of 
the eligible activities described in the HCD Act. HUD has cautioned 
grantees that the recordkeeping requirements of this notice requires 
clear documentation that all uses of funds satisfy the statutory 
purposes of the CARES Act.

                                 ______
                                 

                 Questions Submitted to John Pendleton
               Questions Submitted by Senator Joe Manchin
    Question. As it relates to recovery funding, post disaster, FEMA 
and HUD are the primary avenues of this funding and resources. In West 
Virginia, our worst disaster in recent years was the 2016 flooding that 
took the lives of 23 citizens and destroyed thousands of homes. Most 
recently West Virginia received a Presidential Disaster Declaration for 
the winter storms in February opening up federal resources for 
recovery. With that comes questions--your office has heard about how 
confusing it is to explain to individuals what agencies they need to 
contact, when and for what. They would like to see simpler ways of 
proving information and a simpler explanation from the federal agencies 
to individuals on their available options. Immediately following a 
major disaster, many families and individuals are simply trying to 
figure out their next move.
    How can HUD work with other federal agencies like FEMA to best 
serve immediate needs of individuals?
    Answer. Better data sharing among HUD, FEMA, and other federal 
agencies and with state, local, territorial, and tribal governments 
could help better serve the immediate needs of disaster survivors. In 
May 2019, we found a lack of timely data from FEMA hampered efforts to 
target assistance.\1\ For example, officials we interviewed from Texas, 
Florida, and Puerto Rico said they experienced difficulty obtaining 
FEMA data that could help them deliver assistance to individuals.
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    \1\ GAO, Disaster Assistance: FEMA Action Needed to Better Support 
Individuals Who are Older or Have Disabilities, GAO-19-318 (Washington, 
D.C.: May 14, 2019).
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    It is important to note that the disaster recovery funding provided 
through the Community Development Block Grant program (CDBG-DR) is 
intended to address the unmet needs of impacted communities rather than 
the immediate needs of individuals. However, our prior work has found 
that coordination among federal agencies is a challenge, and we have 
identified some ways that agencies can collaborate more effectively to 
better serve disaster survivors. For example, we have previously 
reported that joint planning processes across different grant programs 
or establishing focal points with the responsibility and authority to 
oversee integrated risk-reduction processes can enhance 
collaboration.\2\ In addition, we have an ongoing review examining the 
coordination of federal disaster programs, including CDBG-DR.
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    \1\ GAO, Disaster Resilience Framework: Principles for Analyzing 
Federal Efforts to Facilitate and Promote Resilience to Natural 
Disasters, GAO-20-100SP (Washington, D.C.: Oct. 23, 2019).
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    Question. During these times of great stress, some of the local 
leaders in my state have expressed how tough it is to explain, in 
simple terms, what resources are available to individuals and families. 
What can HUD and other agencies do to simplify the information on 
available resources to individuals and families post disaster so it is 
easily understood?
    Answer. It is important for HUD and other federal agencies to 
coordinate their efforts to inform disaster survivors about available 
resources. While GAO has not examined the steps HUD could take to help 
simplify the information on available disaster assistance resources 
available to survivors, our prior work can help inform HUD's 
coordination efforts with other federal agencies. Specifically, we have 
previously found disaster survivors face challenges obtaining and 
understanding disaster assistance and made recommendations for 
improvement.
    For example, under the Individuals and Households Program (IHP), 
FEMA requires that certain survivors first be denied a Small Business 
Administration (SBA) disaster loan before receiving certain types of 
IHP assistance.\3\ In September 2020, we found that FEMA did not fully 
explain the requirement to survivors and its process for the 
requirement may have prevented many survivors from being considered for 
certain types of assistance, including low-income applicants who are 
less likely to qualify for an SBA loan.\4\ We recommended that FEMA (1) 
improve the communication of the SBA loan requirement and (2) assess 
the extent to which this requirement limits or prevents survivors' 
access to IHP assistance, and work with SBA to identify options to 
simplify and streamline the disaster assistance application process for 
survivors. FEMA agreed with these recommendations and has taken steps 
to address them.\5\
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    \3\ For eligible survivors, FEMA's IHP can offer financial 
assistance-including money for personal property losses and repair of 
certain home damages. The IHP may also provide rental assistance or 
direct housing assistance, such as trailers, when justified by the lack 
of available housing resources.
    \4\ GAO, Disaster Assistance: Additional Actions Needed to 
Strengthen FEMA's Individuals and Households Program, GAO-20-503 
(Washington, D.C.: Sept. 30, 2020).
    \5\ Regarding our recommendation to improve the communication of 
the SBA loan requirement, in August 2021, FEMA officials stated that as 
part of the 2020-2021 letter review FEMA coordinated with the SBA to 
update initial letters that survivors receive, which explain the 
requirement for survivors to complete the SBA loan process before they 
may be considered for certain FEMA assistance. FEMA plans to continue 
its review of the letters and implement any revisions by April 2022. 
For the second recommendation, in August 2021, FEMA officials stated 
that FEMA leadership approved a draft options paper developed by a 
FEMA-SBA working group that identifies and addresses the challenges 
related to the implementation of the SBA requirement. FEMA needs to 
take action to simplify the disaster assistance process for survivors 
before we determine that FEMA has addressed the recommendation.
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    In addition, some have suggested that the creation of a single 
application for federal assistance so that disaster survivors apply 
once and can be qualified for all forms of assistance could help 
simplify the application process for disaster assistance.
    Question. What resources would HUD need to work with other federal 
agencies to coordinate such an effort?
    Answer. One reason HUD and other federal agencies may struggle to 
provide clear and consistent information on available resources to 
disaster survivors is their uncertainty about what resources will be 
available to individuals and families and when. Different federal 
disaster response programs are initiated at different times. In a July 
2015 report, we found that the unpredictable timing of the 
appropriation for CDBG-DR challenged grantees' recovery planning.\6\ 
The unpredictability also makes it difficult for federal agencies to 

provide clear and consistent information to disaster survivors 
immediately following a disaster. Unlike CDBG-DR, other federal 
disaster assistance programs, such as those administered by FEMA and 
SBA, are permanently authorized and activated upon a presidential 
disaster declaration. In a March 2019 report, we recommended that 
Congress consider permanently authorizing a disaster assistance program 
that responds to unmet needs in a timely manner.\7\ Doing so would 
increase predictability and facilitate clearer and more consistent 
messaging about the availability of CDBG-DR funding. In response to our 
work and that of others, the Reforming Disaster Recovery Act (S.2471 
and H. R. 4707) was introduced in July 2021 to permanently authorize 
CDBG-DR. The bill includes provisions to improve coordination, such as 
requiring HUD to establish data sharing agreements with relevant 
federal agencies to ensure disaster benefits effectively and 
efficiently reach intended beneficiaries.
---------------------------------------------------------------------------
    \6\ GAO, Hurricane Sandy: An Investment Strategy Could Help the 
Federal Government Enhance National Resilience for Future Disasters, 
GAO-15-515 (Washington, D.C.: July 30, 2015).
    \7\ GAO, Disaster Recovery: Better Monitoring of Block Grant Funds 
Is Needed, GAO-19-232 (Washington, D.C.: Mar. 25, 2019).
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    In addition, it is important that HUD have the necessary staff to 
administer CDBG-DR or a similar program and coordinate with other 
federal agencies. In March 2019, we recommended that HUD conduct 
workforce planning to help ensure that it has sufficient staff with 
appropriate skills and competencies to manage a growing portfolio of 
CDBG-DR grants.\8\ HUD addressed this recommendation by conducting a 
workload analysis in fiscal year 2019, which helped it determine the 
staffing gaps within the program office. However, because concerns 
remain about HUD's capacity, it is important for the agency to continue 
monitoring its workforce needs as the portfolio of CDBG-DR grants grows 
and fill any gaps identified.
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    \8\ GAO-19-232.

                          SUBCOMMITTEE RECESS

    Senator Schatz. This hearing is now adjourned.
    [Whereupon, at 11:10 a.m., Wednesday, May 19, the 
subcommittee was recessed, to reconvene subject to the call of 
the chair.]