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GAO report confirms FEMA’s slow response to P.R.’s recovery funding needs

A report released Thursday by the U.S. Government Accountability Office confirmed that of the $132 billion that Puerto Rico government officials estimated are needed to rebuild after the 2017 hurricanes, it has only received $4 billion.

The Federal Emergency Management Agency —the lead federal agency responsible for assisting Puerto Rico as it recovers — has provided funding mostly for emergency work like debris removal.

The GAO, which refrained from offering recommendations related to its findings, stated that applicants in Puerto Rico have reported encountering challenges in applying for funding of more permanent projects (like repairs to roads) — including unclear guidance on how to properly apply for these funds.”

In its review of the federal government’s recovery efforts related to the 2017 hurricanes, the GAO describes FEMA’s Public Assistance spending in Puerto Rico and oversight efforts of federal recovery funds, and the initial challenges with the recovery process.

Of the funding obligated to Puerto Rico, about $3.63 billion is for emergency work — emergency measures such as debris removal and generators — and about $151 million is for permanent work to repair and replace public infrastructure such as roads.

In response, the local government established the Central Office of Recovery, Reconstruction and Resiliency, known as COR3, which is developing an internal controls plan to help ensure better management and accountability of the funds.

In the interim, FEMA instituted a manual reimbursement process — requiring FEMA to review each reimbursement request before providing Public Assistance funds — to mitigate risk and help
ensure financial accountability. FEMA officials stated that they will remove this manual process once the agency approves Puerto Rico’s internal controls plan.

Officials from FEMA and Puerto Rico’s central recovery office and municipalities that GAO interviewed reported initial challenges with the recovery process, including with Public Assistance alternative procedures.

Unlike in the standard Public Assistance program where FEMA will fund the actual cost of a project, the Public Assistance alternative procedures allow awards for permanent work projects to be made on the basis of fixed cost estimates to provide financial incentives for the timely and cost-effective completion of work.

Challenges identified in the GAO report included concerns about lack of experience and knowledge of the alternative procedures being applied in Puerto Rico; concerns about missing, incomplete, or conflicting guidance on the alternative procedures; and concerns that municipalities have not been fully reimbursed for work already completed in the immediate aftermath of the hurricanes, causing financial hardships in some municipalities.

In the report, FEMA officials stated that the agency is taking actions to address reported recovery challenges, such as leveraging existing expertise to train personnel and developing supplemental guidance on alternative procedures and reducing delays in reimbursements.

“GAO will continue to monitor these issues and plans to report additional findings and recommendations as appropriate later this year,” it stated.

GAO reviewed Public Assistance program documents; analyzed grant funding data; and interviewed officials from Puerto Rico and DHS about the Public Assistance program and recovery efforts, as well as officials from 10 municipalities selected on the basis of population and Public Assistance spending.

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This story was written by our staff based on a press release.

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