HUD Inspector General Releases Audit of Houston Hurricane Harvey Recovery Funding

The HUD Office of the Inspector General (OIG) released an audit report detailing issues in distributing HUD Community Development Block Grant–Disaster Recovery (CDBG-DR) funds in Houston as the city continues to recover from 2017 Hurricane Harvey. Only 1.8% of grant funds have been spent, and only 297 out of 8,784 housing program participants have been assisted. HUD had previously designated the Texas General Land Office (GLO), the state agency in charge of distributing funding, as a “slow spender.”

According to the report, the slow pace of recovery funding was the result of significant disagreements between the City of Houston and the GLO over the implementation of recovery programs, capacity issues within Houston city government, and the GLO’s failure to implement benchmarks to measure the pace of funds and increase accountability. As a result, Houston risked missing HUD spending deadlines and potential recapture of the funds, which would have resulted in the city losing access to $1.275 billion in disaster recovery grants. As a result of this disagreement, the GLO sought to take control over all funds being administered in the city, which would have resulted in additional delays. Instead, the city and GLO agreed to new terms providing the city with $835 million in grant funds, with the GLO taking over the remaining $440 million.

To prevent future issues, the OIG recommended that HUD require GLO to include milestones and accountability measures in future contracts between the office and municipalities, ensure that Houston residents whose assistance will now be handled by GLO instead of the city are assisted, and ensure that the City is able to meet future guidelines and requirements. In a separate review of HUD’s role in the situation, the OIG recommended that HUD create stronger reporting requirements and oversight mechanisms to ensure that states and municipalities that are experiencing difficulty spending CDBG-DR funds are flagged and assisted.

One reason that cities and states have difficulty implementing CDBG-DR programs is because of the program’s lack of formal authorization, requiring HUD to issue notices and regulations each time funding is approved by Congress. The ever-shifting nature of the rules and regulations prevent states and cities from creating consistent protocols to handle funds when they arrive.

Senators Brian Schatz (D-HI), Susan Collins (R-ME), Todd Young (R-IN), Patrick Leahy (D-VT), Ron Wyden (D-OR), and Bill Cassidy (R-LA) introduced the “Reforming Disaster Recovery Act” to permanently authorize the program. The bill is supported by NLIHC and its Disaster Housing Recovery Coalition (DHRC) – a group of over 850 local, state, and national, organizations working to ensure that all disaster survivors receive the assistance they need to fully recover. The bipartisan bill contains critical reforms proposed by DHRC members to help ensure the CDBG-DR program better serves disaster survivors with the lowest incomes and their communities.

Read the HUD OIG Audit of Houston Disaster Recovery Spending at:

Read the HUD OIG Report on HUD oversight at:

Learn more about the Reforming Disaster Recovery Act at: