We audited the City of Houston’s Hurricane Harvey Community Development Block Grant Disaster Recovery (CDBG-DR) program. We initiated this audit as part of our commitment to helping the U.S. Department of Housing and Urban Development (HUD) address its top management challenges and to support HUD’s strategic objective to support effectiveness and accountability in long-term disaster recovery. Further, Congress has expressed strong interest in HUD’s disaster programs. Our objective was to assess the efficiency and effectiveness of the City of Houston’s Hurricane Harvey CDBG-DR program.
We found that the City of Houston faced challenges in administering its Hurricane Harvey CDBG-DR program efficiently and effectively. Specifically, 3 years after Hurricane Harvey, the City had spent only 1.8 percent of its suballocated grant funds, which substantially delayed assistance to participants. Further, it had assisted only 297 of 8,784 housing program participants, leaving affected Houstonians without the help they needed. This weak performance contributed to HUD’s designating the Texas General Land Office (Texas GLO) as a slow spender. These conditions occurred due to significant disagreements between the City and the Texas GLO over how to implement the City’s programs. Also, the Texas GLO did not provide programmatic benchmarks in its contract to hold the City accountable. As a result, the City’s slow performance risked its missing HUD’s spending deadlines, recapture of the Texas GLO’s grant funds, and potential loss of the City’s $1.275 billion in suballocated Hurricane Harvey grant funds.
We recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to ensure that (1) it includes milestones and appropriate consequences for not meeting them in future subrecipient agreements and (2) processes are in place to assist participants transitioning from the City’s programs to the Texas GLO’s programs. With HUD’s approval of action plan amendment 8, we recommend that the Director require the Texas GLO to also (1) provide its plan to continuously monitor the City’s pace and performance in its remaining program and take appropriate action to ensure that program goals are met, (2) set performance and financial milestones for all programs and activities funded under the City’s subrecipient agreement, and (3) provide its plan to ensure that the City complies with the Texas GLO’s guidelines and requirements. Implementation of these recommendations would include a process for repurposing additional grant funds if necessary.
Recommendations
Community Planning and Development
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Status2022-FW-1001-001-AOpenClosedClosed on April 19, 2022
We recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to include milestones and appropriate consequences for not meeting those milestones in future subrecipient agreements to ensure that expenditure deadlines remain on track. Implementing this recommendation could assist the Texas GLO in avoiding possible future litigation based on the lack of required benchmarks in its contracts.
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Status2022-FW-1001-001-BOpenClosedClosed on September 28, 2023
We recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to ensure that processes are in place to assist those participants transitioning from the City’s programs to the Texas GLO’s programs.
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Status2022-FW-1001-001-COpenClosedClosed on September 29, 2023
With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to continuously monitor the City’s pace and performance in its remaining Hurricane Harvey CDBG-DR program and take appropriate action to ensure that program goals are met. The plan should include a process for repurposing additional grant funds, if necessary, to avoid potential recapture due to the City’s inability to meet the expenditure deadline established under its subrecipient agreement with the Texas GLO and to allow the Texas GLO to meet the expenditure deadline for its grant award.
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Status2022-FW-1001-001-DOpenClosedClosed on September 29, 2023
With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to set performance and financial milestones, including approval of the City’s projects and obligation and expenditure of funds, for all programs and activities funded under the City’s subrecipient agreement through the remainder of the contract and deadlines for the City to achieve those milestones. This requirement would include the Texas GLO’s (1) providing its plan to continually assess whether the City is meeting the established milestones within the prescribed period; (2) taking appropriate action as outlined in the subrecipient agreement for any missed deadlines; and (3) if necessary, determining whether programs need to be combined or eliminated from the subrecipient agreement.
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Status2022-FW-1001-001-EOpenClosedClosed on September 29, 2023
With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to ensure that the City will comply with the Texas GLO’s program guidelines and required onsite technical assistance and supportive services. This plan would include (1) precise instructions and deadlines for submitting or resubmitting program and implementation guidelines, (2) terms for settling technical assistance and supportive services disagreements, and (3) appropriate consequences for noncompliance with the requirements the Texas GLO imposes.