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HomeNewsLocal governmentFederal Auditors Zero In on V.I. Management of Disaster Recovery Funding

Federal Auditors Zero In on V.I. Management of Disaster Recovery Funding


In testimony before a Senate committee, Clendinen said Housing Finance needs to reboot the way it’s managing disaster recovery grants. (Source file photo)

As officials charged with directing programs to help long-term disaster recovery appeared at a recent Senate committee hearing, they took responsibility for several shortcomings. Those admissions came from the official holding the title of chief recovery officer.

Housing Finance Authority Interim Director Dayna Clendinen told members of that committee about the challenges of managing disaster recovery grants. The U.S. Department of Housing and Urban Development has approved special Community Development Block Grants to meet those specific needs.

Clendinen’s agency has been designated as the administrator for specialized block grant funding to help the territory mitigate the impact of Hurricanes Irma and Maria in 2017 and the Covid-19 pandemic starting in 2020. There are five specialized HUD-issued grant programs being managed through Housing Finance including a rental assistance grant, a mitigation and electrical grid grant, and an emergency solutions grant.

In her opening statements at the recent 34th Legislature Committee on Disaster Recovery and Infrastructure hearing, the director said some aspects of managing the grants and related programs were not meeting expectations. Clendinen cited staffing shortages, resignations, and failures in communication with residents and businesses seeking relief.

The disaster recovery committee is chaired by Sen. Janelle Sarauw.

A total of $1.88B was approved for the Virgin Islands through block grant funding to assist ongoing disaster recovery efforts, infrastructure projects and unmet needs, Clendinen said.

Of that amount, $1.07B in funding has been released to the territory, the director said. The director also noted that HUD now has two active audits, probing the agency’s spending patterns. Those audits, she said, were being directed by the agency’s inspector general.

“The CDBG program is currently undergoing an OIG audit and HUD monitoring. The HUD Inspector General has initiated two audits to determine whether the authority is effectively administering its CDBG-DR Match Program,” she said.

Senator Carla Joseph, a member of the committee, pressed Clendinen about specific shortfalls that drew HUD’s attention. Prior to her service as a lawmaker and committee member, Joseph said she had extensive experience with the administration of federal grants. “I know how they operate,” Joseph said.

The St. Thomas-St. John district senator said Clendinen — who also serves as the Virgin Island’s chief disaster recovery officer — told lawmakers about an audit of the disaster block grant program. But it was not until the Oct. 5 hearing that Joseph said she learned about a second HUD probe.

“When (Clendinen) said that she spent 46 percent on administrative costs, that would be a red flag,” Joseph said, adding that on a typical block fund grant administrative costs would account for five percent of total expenditures.

The Housing Finance director told the committee about her agency’s plans to review and revamp its handling of the specialized fund. Clendinen vowed to conduct a “high-level assessment of our disaster recovery progress, and finding effective solutions.”

“Our progress is still not where we want it to be, our team has been uniting in its effort to identify the bottlenecks and the resources we need, establish new systems, and refine our policies and procedures to focus on outcomes instead of effort,” the director said.

Such an assessment can be done and may produce results, but Joseph said it would be a time-consuming process set against HUD’s deadlines for completing projects and spending available funds.

“This is my major issue, and I think they can handle it. You need people who can monitor the implementation of the program,” the lawmaker said.

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