October 18, 2019

Oversight Hearing Held on HUD's Community Development Block Grant-Disaster Recovery Program

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The U.S. House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Agencies held an oversight hearing on the Community Development Block Grant-Disaster Recovery (CDBG-DR) program. The subcommittee heard from three HUD officials who help administer the program: Irv Dennis, Chief Financial officer; Jeremy Kirkland, Counsel to the inspector General; and David Woll, Principal Deputy Assistant Secretary for Community Planning and Development. 

The hearing primarily focused on the pace at which HUD has been deploying funds to grantees, and the delays that many communities are facing in receiving their appropriated dollars. The example most members focused on was Puerto Rico, which is yet to receive any of the funds appropriated by Congress for mitigation purposes in February of 2018. 

Background

After Congress appropriated and the President signed the bill making mitigation funds available, HUD announced allocations to jurisdictions, including Puerto Rico. The next step in the process with CDBG-DR funds is for HUD to issue a set of governing rules and waivers via Federal Register Notice; without this Notice, jurisdictions cannot access their grants. Secretary Carson promised to publish the Federal Register Notice for the mitigation funding by May 1, 2019. After the Administration missed that mark, Congress included a provision in the June supplemental disaster appropriations bill that required HUD to release a Notice for all grantees by September 4th. 

In response to this action taken by Congress, HUD announced in early August that they it would release disaster mitigation funds in two separate tranches. The first tranche would include funds for Texas, Louisiana, Florida, North Carolina, South Carolina, West Virginia, California, Missouri, and Georgia; and the second tranche would include funds for Puerto Rico and the U.S. Virgin Islands (USVI). According to HUD, the separate tracks were due to alleged “fiscal irregularities and financial mismanagement” in Puerto Rico and “capacity issues” in the USVI. 

On August 23rd, HUD published the Notice for the first group of grantees and followed up on September 4th by releasing a separate Notice to guide the USVI. However, HUD did not meet the September 4th deadline set by Congress to release a Notice for Puerto Rico. 

Subcommittee Hearing

Chairman David Price (D-NC-4) and Ranking Member Diaz-Balart (R-FL-25), along with other subcommittee members, expressed frustration throughout the hearing with HUD’s failure to comply with the deadline Congress provided. Chairman Price characterized it as a “serious mistake on the departments part to not meet the statutory deadline of the issuance of that Notice.” Principal Deputy Assistant Secretary Woll in his testimony said that the choice HUD was faced with was whether “to come before you today to explain why we did not meet the deadline, but hopefully safeguarded the funds, or come before you a year from now to explain why we released billions of dollars that were wasted and never reached the people of Puerto Rico.”

At one point during the hearing Ranking Member Diaz-Balart asked Mr. Woll about the prospect of codifying the CDBG-DR program and whether such a change would help in getting the money out faster. Mr. Woll responded by saying that it “definitely has the potential to increase the speed of program delivery” and that they “could start on second base if we had the codification.” He added to that by saying it could also “probably help with respect to fraud, waste, and abuse because the rules would be very clear to everybody.” 

Next Steps 

There is currently legislation working its way through both chambers of Congress that would address the issue of codification. Led by Representatives Al Green (D-TX-9) and Ann Wagner (R-MO-2) and Senators Brian Schatz (D-HI) and Todd Young (R-IN), the Reforming Disaster Recovery Act of 2019, H.R. 3702 and S. 2301, would permanently authorize the CDBG-DR program, enabling HUD to shorten the time it takes to get funds to people on the ground. 

Enterprise strongly supports the Reforming Disaster Recovery Act of 2019 and will continue to advocate and build support for its passage. We encourage our partners to reach out to members of Congress and urge them to support H.R. 3702 and S. 2301 to make our nation’s disaster recovery framework more efficient, consistent, and fair. 
 

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