Sneak Preview: FEMA Urged To Improve Hazard Mitigation Oversight
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Federal Emergency Management Agency (FEMA), through a newly created Hazard Mitigation Grant Program (HMGP) Monitoring and Closeout Team, plans to update the agency’s Strategic Funds Management (SFM) guidance by the end next year to provide better financial oversight of HMGP property acquisition funds, in response to a recent Department of Homeland Security Office of Inspector General (OIG) audit.
Through the HMGP, FEMA provides federal funds to states to purchase properties in communities that have been flooded in the past or are in high-risk flood areas, and to demolish any structures on the properties. As of January 2022, FEMA had 637 active HMGP property acquisition projects underway, with more than $1.01 billion in funds obligated to 42 states and territories.
As part of its financial oversight of HMGP, FEMA in 2012 applied the SFM process to the program. This process is designed to prevent depletions of federal disaster relief funds by obligating project allocations incrementally, as they are needed, instead of obligating the entire amount when the project is approved. States and subrecipients must evaluate all pending and future HMGP projects for which the U.S. government funds at least $1 million in federal share to determine whether the project should implement SFM, unless the state can justify why SFM should not be applied. FEMA reviews these projects to ensure that SFM has been considered and if so, that monthly plans have been developed and obligations scheduled.
However, OIG found that FEMA did not oversee and manage HMGP property acquisition projects efficiently or effectively. The agency regularly granted states more funds than needed to complete projects, did not always deobligate unused funds promptly and did not use SFM when needed. Although agency guidance notes that states generally have eight years to incur management costs from the date the disaster is declared to the property acquisition completion, OIG found that 36 projects with some $12.2 million in obligations remained open longer than the expected eight years, preventing FEMA from using those funds for other mitigation activities.
(The full version of this story has now been made available to all for a limited time here.)
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