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As part of our annual risk and internal planning process, we audited the U.S. Department of Housing and Urban Development (HUD), Office of Block Grant Assistance’s (OBGA) Community Development Block Grant (CDBG) Disaster Recovery program.  Our analysis noted that Congress had historically provided disaster funding through supplemental appropriations, yet OBGA had not created a formal codified program.  Instead, it had issued multiple requirements and waivers for each Disaster Recovery supplemental appropriation in Federal Register notices, many of which were repeated from disaster to disaster.  Our objective was to determine whether OBGA should codify the CDBG Disaster Recovery funding as a program in the Code of Federal Regulations.

Although OBGA had managed billions in Disaster Recovery funds since 2002, it had not codified the CDBG Disaster Recovery program.  It had not codified the program because it believed it did not have the authority under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, and it had not determined whether it had the authority under the Housing and Community Development Act of 1974 as amended.  It also believed a Presidential Executive Order presented a barrier to codification, as it required the Office of Community and Planning Development (CPD) to identify two rules to eliminate in order to create a new codified rule.  We believe OBGA has the authority under the Housing Act of 1974 and it should codify the program.  OBGA’s use of multiple Federal Register notices to operate the Disaster Recovery program presented challenges to the grantees.  For example, 59 grantees with 112 active Disaster Recovery grants, which totaled more than $47.4 billion as of September 2017, had to follow requirements contained in 61 different Federal Register notices to manage the program.  Further, codifying the CDBG Disaster Recovery program would (1) ensure that a permanent framework is in place for future disasters, (2) reduce the existing volume of Federal Register notices, (3) standardize the rules for all grantees, and (4) ensure that grants are closed in a timely manner.

We recommend that the Acting Director of OBGA work with its Office of General Counsel to codify the CDBG Disaster Recovery program.