Good job on the audit front. Now let’s see what we can learn from this.
Controller Chris Hollins
Houston lost at least $8.5 million in potential reimbursements for a federally funded Hurricane Harvey home repair program due to missed deadlines and filing errors, according to a new audit from Controller Chris Hollins.
Program guidelines require the city to submit reimbursement requests to the Texas General Land Office within 90 days of expenditures. Auditors from the controller’s office reviewed a sample of 57 such requests and found that 24 were submitted late, resulting in a loss of $2.5 million. Of the timely submissions, 14 contained errors and were either rejected or withdrawn, leading to another $6 million in lost funds, according to the report.
As the city faces steep financial challenges, Hollins and council members stressed the need to prevent such waste in the future.
“I hate hearing about any loss of funding, and there’s sure to be more disaster money coming our way,” said Council Member Sallie Alcorn, chair of the city’s Budget and Fiscal Affairs Committee. “So I’m sure lots of the recommendations in this report will help us in the future.”
The Housing and Community Development Department, which administered the program, has since improved its reimbursement process by adding target a due date for every expenditure and creating a standard checklist to catch common errors, according to the department’s response to the audit findings. The department also noted some late submissions were withdrawn due to ongoing legal disputes with third-party consultants who sent the invoices.
The latest findings brought back into the spotlight Houston’s Harvey Homeowner Assistance Program, a now-concluded initiative once mired in controversy and political sparring.
Established in 2019, the city program initially aimed to use around $400 million in U.S. Department of Housing and Urban Development funding to provide repairs, rehabilitation and reconstruction of Houston homes battered by the 2017 hurricane.
Following a series of disputes between the Democrat-led city and the Republican-led General Land Office, however, the state office took over the program in early 2021, a transition that confused and frustrated many participating homeowners. The program ended up providing assistance to 731 local families.
Issues with filings and deadlines are not new concerns for the program. In the months leading up to the takeover, officials from the General Land Office criticized Houston’s efforts as “extremely slow and unproductive,” saying the city was not on track to meet its aid distribution deadline.
Former Mayor Sylvester Turner, in turn, said the land office failed to provide clear guidance on required documents and frequently changed the process, forcing the city to redo hundreds of files.
You can find a copy of the audit report here; it’s 27 pages, so not too long to read. A one page executive summary is here, most of which is mentioned in this story.
I’m glad to see this report, and I’m glad to see Controller Hollins getting into the audit business, especially at this time with the city’s financial challenges. We’re not going to come close to cutting or optimizing our way out of the fiscal hole we’re in, but fixing clear problems is always a good idea. I’m sure there will be more to come.
As for the money itself, I try whenever possible to put numbers in context. Like, how does this compare to the past or to our peers? Is it in line with what we might expect or is it an outlier? It’s hard to tell in this case, since Harvey was a unique disaster and one that cities like Dallas and San Antonio didn’t experience, at least not in the same way. Maybe there’s a comparison to be made with Hurricane Ike, which had plenty of its own recovery issues, but the program that’s been audited didn’t exist at that time, and even if all the relevant data is available and usable, there may not have been a comparable program. This is the number we have, we’ll have to do what we can with it.
The question is what the city does in response to this audit. What do they need to change or update or implement or stop doing as a result of what we’ve now learned? It’s encouraging that some changes have already happened – this is how it’s supposed to work in the audit process. This particular audit was about a program that isn’t active anymore, so there won’t be ongoing savings to measure, and I’m sure I speak for all of us when I say that I hope there won’t be any opportunities to apply what we’ve learned anytime soon. The general principles ought to apply to other things, so that should be a positive.
A harder question, one that this audit can’t really address, is about where all the lessons need to be learned. The General Land Office and the city have pointed fingers at each other for years over the challenges this program faced. It would be very nice to know how to apportion the blame, because there’s only so much the city can do to move the needle if the GLO was really jerking them around. If on the other hand the city’s assertions about the state’s behavior is mostly self-serving and in denial of the reality, then the lessons we should learn need to go beyond mere process tweaks. (You know where I have stood on this. I could of course be wrong.) I don’t know if that was outside the scope of this report, but it would be valuable to be able to address that question.
I worked with the City of Houston’s Housing and Community Development Department over the years including post Harvey. They had the treacherous combination of arrogance and incompetence. There was a complete leadership vacuum exacerbated by low pay and an indifferent commitment to the agency’s mission. I’m going to employ another term that’s loaded–they’re lazy.
And who was Mayor when the City Dept failed to do its job accurately and timely ? Oh yeah, the guy running for SJL’s seat.
C. L., it sounds like he worked there in at least Parker and Turner’s administrations given his inclusion of post Harvey.