In January 2017, HUD awarded the City $141.2 million in Community Development Block Grant National Disaster Resilience grant funding for disaster resilience. HUD designed the grant to give states flexibility in planning program activities and help state and local communities recover from past disasters, while also improving their infrastructure to withstand future extreme events through strategic community investments. The City initially reported to HUD that it would complete its National Disaster Resilience program activities by September 2022.
Using the flexibility provided by the block grant, the City opted to focus its National Disaster Resilience program activities on improving its ability to withstand future extreme events. All 11 of the City’s major infrastructure projects that were planned in 2017 and designed to combat flooding, had been significantly delayed. Only 1 project made progress but had been underway for 5 years, 2 projects were slated for cancellation and the remaining 8 still in the design or planning phase. Thus, after more than 6 years, the City had made little progress toward achieving its goals for the National Disaster Resilience program. In addition, the City had disproportionately spent more of its National Disaster Resilience funds on planning and administration than on the design and construction of its planned projects and program activities. Further, the City’s Retrofit program did not reduce the flood risk in many cases and left some homeowners with more flooding and physical and financial burdens. These problems occurred because the City (1) did not properly plan the implementation of its projects, (2) lacked adequate staff and a staffing plan, (3) did not properly charge costs, and (4) failed to adequately monitor its projects and programs. As a result, (1) the City has been left vulnerable to damage from future rain and flood events, (2) homeowners are more exposed to property damage, and (3) the City may run out of funds needed for program oversight. If the City runs out of funds, it will need to allocate non-Federal funds, which may be limited, to complete monitoring and oversight of the National Disaster Resilience program.
We recommend that HUD require the City to (1) reassess the eight infrastructure projects still in the design or planning phase to determine whether the City can complete the projects or how the remaining funds could be best used within the 6 years remaining for the grant period, (2) support or repay $104,425 for inadequate supporting documentation, (3) work with HUD to amend its action plan to ensure that $14,683,335 in project funds are put to better use, (4) ensure appropriate staff levels, (5) ensure adequate and timely monitoring of its projects and programs, (6) implement a HUD-approved planning and administration budget and staffing plan, (7) identify and correct misallocated costs, (8) develop a plan on how it will fulfill its required program oversight if it runs out of planning and administration funds, (9) determine how the Retrofit program can better serve homeowners, and (10) develop a plan to review the condition of the property updates and determine where repairs are needed. We believe that implementation of the recommendations in this report will improve the effectiveness of the City of New Orleans’ (the City) National Disaster Resilience grant activities in recovering from past disaster events as well as improved the City’s its ability to withstand future extreme events.
Recommendations
Community Planning and Development
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Status2024-FW-1002-001-AOpenClosed
We recommend that HUD require the City to reassess the eight infrastructure projects still in the design or planning phase to determine whether the City can complete the projects or how the remaining funds could be best used within the 6 years remaining for the grant period to ensure that the City is protected from future storm and rain events.
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Status2024-FW-1002-001-BOpenClosed$14,683,335.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
We recommend that HUD require the City to for the $14,683,335 originally budgeted for the Milneburg and Microgrid projects, work with HUD to (1) determine whether its planned action plan amendment would constitute the need to submit a substantial action plan amendment, (2) ensure that any modifications in its action plan amendment would lessen the susceptibility of rain and flood events within the Gentilly area, and (3) require that any activities pursued under the action plan amendment could reasonably be expected to be completed by the September 30, 2029, deadline.
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Status2024-FW-1002-001-COpenClosed
We recommend that HUD require the City to review the number and type of positions for its National Disaster Resilience staff that are responsible for the oversight and completion of infrastructure projects and ensure that it has the appropriate staffing levels to complete adequate monitoring and oversight of the projects.
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Status2024-FW-1002-001-DOpenClosed
We recommend that HUD require the City to revise its risk assessment plan and process to ensure that monitoring is regularly conducted for its infrastructure projects through project completion, including establishing a monitoring schedule to ensure the progression and completion of the infrastructure projects.
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Status2024-FW-1002-001-EOpenClosed
We recommend that HUD require the City to develop and submit to HUD for approval an updated planning and administration budget and staffing plan, after reassessing the infrastructure projects in recommendation 1A, to complete the National Disaster Resilience projects with the funds and within the timeframe remaining.
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Status2024-FW-1002-001-FOpenClosed
We recommend that HUD require the City to analyze the method used to charge planning and administration costs to ensure that all costs are applied to the correct costs category and are valid charges to the National Disaster Resilience grant.
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Status2024-FW-1002-001-GOpenClosed
We recommend that HUD require the City to review misallocated planning and administration funds and reallocate any mistakenly allocated funds to the correct National Disaster Resilience project or grant activity. This measure could make available additional funds for program oversight.
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Status2024-FW-1002-001-HOpenClosed
We recommend that HUD require the City to develop a plan for how the City will continue to fulfill the required monitoring and oversight responsibilities of the National Disaster Resilience programs and projects if it runs out of planning and administration funds before it completes these programs and projects.
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Status2024-FW-1002-002-AOpenClosed
We recommend that HUD require the City to provide monitoring reports and supporting documentation to show that it conducted periodic monitoring of NORA’ s performance and compliance with program rules and regulations and ensured that NORA promptly remedies any findings or concerns. This includes, but is not limited to, ensuring that NORA (1) provides adequate oversight of the contractors providing service under the program and (2) maintains documentation to support eligibility for program participants.
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Status2024-FW-1002-002-BOpenClosed
We recommend that HUD require the City to develop and implement a methodology for NORA to conduct periodic evaluations at appropriate points during the construction process to assess the quality of the work on all new properties and correct any issues identified.
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Status2024-FW-1002-002-COpenClosed
We recommend that HUD require the City to develop and implement a plan for how to review the condition of the property updates and determine where repairs are needed.
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Status2024-FW-1002-002-DOpenClosed
We recommend that HUD require the City to analyze the effectiveness of the Retrofit program and identify what improvements are needed to better benefit program participants and lessen their burden, to include obtaining input from program participants, and implement those improvements.
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Status2024-FW-1002-002-EOpenClosed$5,078.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
We recommend that HUD require the City to support or repay, from nonfederal funds, $5,078 in the square footage overcharge for work not completed, according to the project design and invoice documentation.
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Status2024-FW-1002-002-FOpenClosed$99,347.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
We recommend that HUD require the City to provide supporting documentation for the 4 program participants that did not have adequate income documentation. If the supporting documentation cannot be provided, repay, from nonfederal funds, $99,347.
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Status2024-FW-1002-002-GOpenClosed
We recommend that HUD require the City to since the property updates have been completed for the 24 program participants that did not receive the green infrastructure training, provide documentation that any subsequent program participants completed the green infrastructure training workshop before the grant agreement is signed and construction begins.