[Senate Hearing 117-]
[From the U.S. Government Publishing Office]
RETHINKING DISASTER RECOVERY AND RESILIENCY: PROTECTING COMMUNITIES AND
ACCELERATING ASSISTANCE, PART II
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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.
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\1\ The total amount of CDBG-DR appropriations is in nominal
dollars.
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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.
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\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.
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\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.
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\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.
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\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.]