We reviewed the Texas General Land Office in accordance with the U.S. Department of Housing and Urban Development, Office of Inspector General’s (HUD OIG) goal to review disaster funding and based on a congressional request for HUD OIG to conduct capacity reviews for Hurricanes Harvey, Irma, and Maria grantees. Our audit objectives were to determine whether the State of Texas had the capacity to follow Federal procurement regulations when procuring contracts with Community Development Block Grant Disaster Recovery (CDBG-DR) funds and to spend its CDBG-DR funds in accordance with applicable requirements.
The Texas General Land Office should strengthen its capacity to follow Federal procurement regulations when procuring contracts with CDBG-DR funds and to spend those funds in accordance with applicable requirements. Specifically, it could strengthen its capacity by (1) reviewing and updating its procurement and expenditure policies and procedures to ensure that they are implemented and working as designed, (2) increasing staffing to ensure that appropriate resources are available to administer the disaster funds, and (3) improving its processes for preventing duplication of benefits. It should also ensure that false statement and false claim warnings are included in all of its contract-related forms. These challenges exist because the agency will have responsibility for administering significantly more disaster grant funding than it has managed in the past. Further, the agency could benefit from a standard set of basic disaster recovery guidelines, established by HUD, to assist it in providing needed relief to affected communities. Strengthening its capacity to administer disaster funds would help ensure that the agency properly spends more than $5 billion in CDBG-DR funding in accordance with applicable requirements.
We recommend that HUD’s Acting Director for the Office of Block Grant Assistance require the Texas General Land Office to (1) ensure that its procurement and expenditure policies and procedures are implemented and working as designed, (2) fill vacancies to ensure that staffing levels remain adequate and its staff is properly trained to administer disaster funds, (3) take steps to mitigate potential duplication of benefit risks, and (4) ensure that false statement and false claim warnings are included in all of its contract-related forms.