Texas Agency Spending Some Hurricane Recovery Money

A Texas agency that was questioned for not spending much of the money it received to help 2005 hurricane victims has improved but still has spent only 31 percent of the funds, a state auditor’s report found.

The Department of Housing and Community Affairs and the Office of Rural Community Affairs are administering a total of $517 million for recovery from hurricanes Rita and Katrina of 2005.

The State Auditor’s Office in October 2007 found that the money, coming mostly from federal grants, was being paid out slowly by the housing and community affairs department. At that time only 2 percent of the federal money had been paid to communities and homeowners.

A follow-up report distributed August 7 says the agency has “fully or substantially” implemented 12 recommendations made by the state auditor but that only 31 percent of the $440 million available to the agency has been spent.

Auditors stated that the agency should address the spending delays because it will be responsible for some of the $1.3 billion in federal funds Texas has received for recovery from last year’s Hurricane Ike.

Spending the hurricane recovery money – dollars that in many cases help the poorest of Texans – can get postponed because of federal environmental and historic preservation regulations and by requirements that clear home ownership titles be proven, said Michael Gerber, executive director of the Texas Department of Housing and Community Affairs.

Texas has followed those federal requirements and spent money properly, Gerber said, adding that some of the housing construction projects are complex. He said the agency is committed to accountability and said the audit found no major problems related to administering the recovery money.

“We have none of the abuse, fraud and waste that has gone on in other states” with disaster recovery efforts, Gerber said. “In Texas, we made a different choice. We’re not just giving checks to people. We chose to rebuild the tax base.”

He said the audit two years ago came shortly after the state received the federal money, so spending was barely getting under way.

Gerber said just this week his agency helped open more than 200 apartment rental units on three properties in Beaumont, Orange and Port Arthur, an area slammed by Hurricane Rita.

“We’re pleased that we’ve been able to do as much as we’ve been able to do,” he said. “We’re really hitting, I think, a stride now.”

As for the Office of Rural Community Affairs, the report said it has fully implemented four of five previous auditor recommendations. The department received a total of $77 million in hurricane recovery money and has allocated 95 percent to local organizations and rest to administration.

Fifty-eight percent of that agency’s hurricane recovery money had been spent as of June, the report states. The money is for projects such as debris removal and repairs to drainage systems, water facilities and other infrastructure.

State Auditor’s Office: www.sao.state.tx.us