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A compliance-first approach to HUD CDBG-DR disaster recovery

Dec 5, 2019
7 MIN. READ

Natural disaster-impacted communities can make a difficult situation even worse by failing to comply with U.S. Department of Housing and Urban Development (HUD) requirements. ICF disaster recovery expert Deborah Siefert makes the case for a compliance-first approach to program design and implementation.

When it comes to disaster recovery, Deb Siefert is someone you want in your corner. For more than 15 years, she has worked with communities that are scrambling to get back on their feet after a natural disaster, helping them navigate the HUD Community Development Block Grant Disaster Recovery (CDBG-DR) funding process. She has some advice for CDBG-DR grantees that she hopes will save them some heartburn down the road, and we sat down with her to capture her top tips. Transcript below:

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Q. When you look at the disaster lifecycle—from preparation and mitigation to response and recovery—there are so many facets to consider. We’re all familiar with the scenes of rescue boats and first responders, but there’s also a lot that happens behind the scenes, before and after the severe weather event. Can you talk about the work you do and how it supports disaster recovery?

A. Yes, you’re correct. What usually makes the news is the immediate disaster response, and that’s where you see people pulling together as neighbors and communities and doing amazing things. But after the news coverage ends, the real long-term disaster recovery starts. That’s where the HUD CDBG-DR funding comes in. HUD is focused on long-term disaster recovery, and because of that, they want to see quite a bit of planning and thought—as a grantee, you’ll need to show them that you’ve pulled together the data on the disaster impacts, and that you’re creating programs that will actually address the impacted areas.

Q. What does HUD prioritize when they evaluate CDBG-DR Action Plans?

A. HUD always puts the first emphasis on housing, on making sure that persons who are low- and moderate-income are getting the assistance they need. We spend a lot of time working with states, counties, local governments, and even nonprofits—helping them assess what the immediate housing needs are. But then we also look to other areas such as the infrastructure that supports those houses. Did they lose a primary access into their community? Did they lose power, or did they have a wastewater treatment plant get knocked out? Even though our focus is on housing through the HUD funding, we look to the larger community to make sure the infrastructure is there to support it.

Q. In your experience, what are some of the most common pitfalls that disaster-impacted communities face when it comes to HUD/CDBG-DR compliance?

A. One of the biggest heartbreaks in my line of work is that grantees don’t always have the information they need, early enough in the process. Keep in mind they’re making decisions under an intense amount of stress: there has been a disaster, sometimes statewide. People are scrambling to get resources into those communities. And they start by dealing with FEMA for emergency response funds, and then they hear that there are HUD funds that will come along, and that you can use some of these funds to match the FEMA local percentage requirement.

So of course, they want to use the CDBG-DR funds to make those matches. But the problem is that it can take six months to a year before the CDBG-DR money comes into play for those communities. And there are compliance requirements that HUD has that FEMA doesn’t have.

Q. What’s an example of the differing compliance requirements between FEMA and HUD?

A. Let’s say you did work on an infrastructure project. FEMA Public Assistance doesn’t require you to follow the federal wage requirements under Davis-Bacon. But HUD does. So, one of the things that motivates me in this work is being able to get good information into people’s hands early on—especially before the CDBG-DR money is available to them—so that they’re thinking strategically from the start. In the example above, I want them to say, “well, we’re going to start this infrastructure with FEMA, but we don’t have the money to pay this match, and we’re going to use our CDBG-DR, so let’s go ahead and require that Davis-Bacon be used on this project.” And then the CDBG-DR money can match that FEMA money.

Q. Interesting. Other common pitfalls?

A. One mistake that people commonly make is to treat the CDBG disaster funds the same as the regular CDBG funds. They’re very different. Even though there’s a good 60-70% overlap in the requirements, that other 30% is where a lot of communities get in trouble. For example, you can repair, replace, and rebuild housing and infrastructure under the regular CDBG. But when you’re using CDBG-DR funds, you can only do these allowed activities if you can show there was a direct impact from the disaster. But because states are familiar with regular CDBG and FEMA, they may start moving ahead with their projects and plans and implement in those fashions—and then they find out that the CDBG-DR rules are different. Now these projects are not eligible because you didn’t show the tie-back to the disaster. It’s very critical to get true CDBG-DR experts on board, either through direct hires or reaching out to a consulting firm like ICF.

Q. How does the HUD monitoring visit work? Is there just one, or many? When do they happen?

A. Under the regular CDBG, which has been around for a long time, HUD would visit every one to three years and check various programs that you were running with the funds. But under CDBG-DR, they find that the grantees can get very off-track, and they don’t want them going down the wrong road for two or three years. This means that, depending on the funding size, once you get your CDBG-DR fund, HUD is going to make a visit within that first year to see where you are with your program. If it’s a very large allocation—those that are getting into the billions—they’re going to be there within six months. And then they’ll probably be there every six months thereafter.

Q. What happens during these monitoring visits?

A. They do a technical assistance: they’ll come in and look at what you’re doing, they’ll raise questions, give you a chance to raise questions, and point out things they see that are off-track, or potentially non-compliant, or even straight up non-compliant. And then they’ll tell you that they’ll be back in six months to monitor you, so you need to get your issues fixed.

There’s a lot of oversight – that’s the point I want to get across – having been in the disaster world for 15 years – you’re already scrambling to get this assistance to people, to get them back into their homes, get their schools and parks rebuilt, and then you learn that HUD’s coming. So, if you haven’t been preparing from the beginning for HUD to be there, everything you’re doing stops, and everybody must run and find the documentation that HUD will need. From a HUD perspective, if it isn’t documented, it didn’t happen. Spending the time and resources to look for documentation months after you’ve taken an action impacts your program and its performance—you literally need to get ready for HUD to be there on a day-to-day basis, documenting your compliance as you go.

Q. What are the consequences of non-compliance?

A. If HUD sees that you have spent CDBG-DR funds on an ineligible activity, they will require that those funds get paid back to HUD. The repayment must come out of your general funds; you can’t pay it back with another federal source. It can be a huge impact to a community’s general fund if they mismanage a project and it’s found to be non-compliant.

Q. What inspires you to do this work?

A. By the time I enter the scene as the CDBG-DR practitioner, these communities have already gone through so much. They’ve weathered the disaster, they’ve gone through the FEMA assistance process, and they’re exhausted. What stands between the HUD funds that are available to help people and people getting those funds is just the management of it, so we’re there to help carry it over the line. We are the door that opens and closes to get this CDBG-DR money out to the people who need it most, and I’m inspired to help ease the burden on these communities that have been hit so hard.

To learn more about HUD’s monitoring objectives and the compliance documentation required at each CDBG-DR project phase, download the reference sheet.

Learn more about how ICF helps communities manage CDBG-DR program funds to rebuild neighborhoods after disasters occur.

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