We completed a risk assessment of Community Development Block Grant (CDBG), Office of Public and Indian Housing (PIH), and other funding associated with Katrina Public Housing reconstruction on the Mississippi Gulf Coast. Our objectives were (1) to identify the source, amounts, and disposition of disaster relief funding and (2) to assess the "overlap" risk associated with the multiple funding sources and the extent to which there may be duplication of planned uses for the funds or inappropriate obligations.

We focused our fieldwork and evaluation on the Biloxi Housing Authority and its Katrina recovery activities because of the severity of damage and the multi-million-dollar cost of restoring public housing in the city.

We identified sources and uses of more than $22 million in disaster recovery funds managed by the Biloxi Housing Authority through September 2007. We concluded that the Biloxi Housing Authority had demonstrated sufficient accounting and management control over these resources to minimize the risk of funding overlaps. However, because the state of Mississippi has allocated an additional $41 million in CDBG funding to support the Biloxi Housing Authority's continued recovery, we also recognize that HUD and the Mississippi Development Authority need to exercise close scrutiny of each grant application and the sites selected for redevelopment and carefully monitor the future construction and related expenditure of taxpayer funds.