Members of Congress seek federal probe of state hurricane recovery work in NC

WASHINGTON — With state lawmakers set to question officials overseeing recovery efforts after hurricanes Florence and Matthew, North Carolina’s federal representatives are also calling for accountability.

At the beginning of November, eight Republican members of North Carolina’s congressional delegation — all except for Rep. Patrick McHenry — sent a letter to Rae Oliver Davis, the inspector general of the U.S. Department of Housing and Urban Development, requesting an investigation into the use of federal HUD funds by the state’s Office of Recovery and Resiliency (NCORR).

This follows a request for additional funding by this state agency, which is tasked with rebuilding Eastern North Carolina homes damaged by Matthew in 2016 and Florence in 2018.

NCORR was created in 2018 by the GOP-led legislature and is overseen by Democratic Gov. Roy Cooper. The agency also known as Rebuild NC. It received about $779 million in HUD funding for recovery efforts for both hurricanes, which is spread out among programs, with most going to the program for rebuilding homes.

Meanwhile, on Monday, Laura Hogshead, chief operating officer of NCORR, and Pryor Gibson, deputy legislative counsel to Cooper, who has been assigned to monitor NCORR’s operations, have been called to testify before state lawmakers in a hurricane response and recovery subcommittee.

NCORR said this month it could have to pause aid to Matthew and Florence survivors unless it gets more funding. That comes as the state starts recovering from a new, even more devastating storm. The remnants of Hurricane Helene impacted Western North Carolina in late September, causing historic flooding and devastating damage. Recovery in the region will likely take years. State lawmakers are coming back on Tuesday to Raleigh and may allocate additional funding for Helene recovery efforts.

NCORR has been under fire continuously due to delays in getting people home, but most recently, scrutiny intensified after the agency announced a $175 million shortfall in funding. As of early November, there were 1,523 families accepted into NCORR’s homeowner recovery program but still waiting. Over 2,000 were back home or had received a reimbursement.

State lawmakers, through a bill funding Hurricane Helene recovery efforts, provided an extra $30 million for NCORR.

However, NCORR told The News & Observer in early November that while the $30 million helped, without additional funding the state would have to pause aid for hundreds of Eastern North Carolina hurricane survivors.

It also told The N&O that in 2018, the state requested $1.1 billion from Congress in funding for housing through federal Community Development Block Grants (CDBG) in connection with Hurricane Florence but received only $542 million.

Cooper spokesperson Jordan Monaghan said then that “recovering from natural disasters requires a long-term commitment from state, local, and federal leaders” and that “the long-term need for additional funds has been identified since the program’s inception in 2018.”

North Carolina’s congressional delegation is requesting a “full” inspector general report in light of the $175 million budget deficit, says the letter, which adds that while the office already conducted an audit two years ago, “this latest revelation underscores the need for a comprehensive investigation of NCORR.”

A 2022 audit by HUD’s Office of the Inspector General said it could not provide “reasonable assurance” that nearly half of federal expenditures it reviewed had been spent properly due to lacking documentation. It called on HUD to require the state to provide adequate documentation for more than $2.5 million in questioned spending or repay it.

HUD’s inspector general’s office is an independent organization that conducts and supervises audits related to the department. HUD is the agency responsible for taking action following the report. At the time, Dwrena Allen, a spokesperson for the inspector general’s office, told The N&O that the issues were common.

The letter shared with McClatchy also says that this May, U.S. Sen. Thom Tillis requested that Hogshead provide an update on progress, and that “at no point” in her response did Hogshead “make any indication that the agency she has headed since its establishment in 2018 was in financial peril and on a course to renege on its promise to rebuild or repair thousands of families’ homes.”

In January, Hogshead unsuccessfully attempted to secure $20 million in COVID-19 funds from the North Carolina Pandemic Recovery Office and requested a $5.4 million loan from the State Disaster Relief Fund, says the letter. Inside Climate News reported that NCORR needed that loan because contractors had not been paid in more than a month from homeowner recovery funds. The loan was approved, which Rebuild NC then repaid with HUD funds, according to Inside Climate News.

“State officials only publicly admitted to the pressing budget shortfall after investigative reporting revealed such,” says the letter.

On Tuesday, Congress is holding a hearing with Federal Emergency Management Agency (FEMA) Administrator Deanne Criswell “to examine the agency’s preparedness and response to recent disasters, including Hurricanes Helene and Milton.” Reports have emerged that some FEMA officials may have been told to avoid homes displaying Trump for President campaign signs, which is likely to draw questions from subcommittee members.

At the state level, questions in Monday’s hearing will include how NCORR ended up $175 million in the red, the timeline of when NCORR leadership realized it needed additional funds, progress in home completion, and the coordination between state government entities and NCORR on financial challenges, according to subcommittee documents posted online.

Hogshead and Gibson were told to provide their written testimony to the subcommittee at least five days before the hearing. Only a PowerPoint presentation has been posted, showing updated numbers of people still waiting as of Nov. 13 — with 1,454 people waiting. Mary Moorefield, communications specialist for the House Majority Oversight Staff, said that stands in for Hogshead’s and Gibson’s statements.

The presentation also lists additional funding sources NCORR has explored unsuccessfully and states that NCORR, to curb costs, has reduced staff by 41 positions, cut 13 contractor positions, and made changes to temporary relocation assistance, which is provided to applicants, “to reduce dependence on hotels.”

The subcommittee is part of the General Assembly’s Joint Legislative Commission on Governmental Operations, known as Gov Ops, chaired by Senate leader Phil Berger and House Speaker Tim Moore. Republicans gave Gov Ops more power in 2023, including making it a Class 2 misdemeanor to impede or mislead an investigation.

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