Administrative Missteps and Lack of Expertise Led to Delays and $3.7 Million in Unnecessary State Spending for Hurricane Matthew Recovery (May 2019)

Hurricane Matthew delivered significant damage to 50 North Carolina counties in October 2016. In its aftermath, the General Assembly appropriated $300.9 million for disaster recovery across two acts. Additionally, the State received significant federal assistance, which included Community Development Block Grant-Disaster Recovery (CDBG-DR) funds. However, as of December 2018, the State had only spent 1% ($3.4 million) of its total CDBG-DR award ($236.5 million). Several issues delayed distribution of these funds, including non-compliant contracts (which resulted in the State spending approximately $3.7 million unnecessarily), limited institutional knowledge within state government, and program design issues and changes in implementation strategies. CDBG-DR funds can also be used as the non-federal share for various disaster recovery funds that require a state match when states demonstrate a need. However, General Assembly appropriations demonstrated the State could meet this need, thereby preventing it from using CDBG-DR funds to fulfill match requirements. The Program Evaluation Division also found information reported to the General Assembly on disaster recovery efforts is not performance-oriented and does not allow for comparison and identification of areas needing improvement. In response to these findings, the General Assembly should require DPS to establish mechanisms to ensure future CDBG-DR contracts are HUD-compliant, develop standardized performance metrics, and notify various entities when CDBG-DR might be used for matching purposes; consider a core number of DPS staff as permanent employees; and modify DPS’s statutory reporting requirements.

Final Report

Executive Summary



Relevant Legislation:

  • Session Law 2019-250 directs DPS to notify relevant entities of the potential for using CDBG-DR funds to cover the nonfederal share of matching requirements for eligible programs; develop performance metrics and report to various entities; and direct the Office of Recovery and Resiliency to make recommendations regarding staffing levels for CDBG-DR administration and resiliency planning and coordination; and establishes limits on the amounts that can be paid up-front for directed grants for disaster recovery efforts.

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