Date: September 2, 2010
To: James E. Rivera, Associate Administrator, Office of Disaster Assistance
From: Debra S. Ritt, Assistant Inspector General for Auditing
Subject: Report on SBA’s Role in Addressing Duplication of Benefits between SBA Disaster Loans and Community Development Block Report No. 10-13
This report consolidates the results of findings from audits of the Small Business Administration’s (SBA) efforts to prevent duplication of benefits between SBA disaster loans and Community Development Block Grants (CDBG) for Iowa, Louisiana, and Mississippi. The objective of these audits was to determine whether SBA’s efforts to prevent duplicate disaster assistance were consistent with Federal Emergency Management (FEMA) guidance implementing the Stafford Act.
In conducting these audits, we reviewed entries in SBA’s Disaster Credit Management System (DCMS), information in the Agency’s Centralized Loan Chron System, and information obtained from state and local government offices or title companies responsible for distributing CDBG funds to disaster victims in the states of Louisiana, Mississippi, and Iowa. We compared the duplicate benefit requirements of the Stafford Act, Small Business Act, FEMA regulations, SBA regulations, and SBA’s standard operating procedures to SBA’s process for managing duplicate benefits. Further, we interviewed officials from SBA’s Office of Disaster Assistance (ODA) located in headquarters and the Fort Worth Processing and Disbursement Center. We also interviewed officials from the Department of Housing and Urban Development’s (HUD) Disaster Program Office. To obtain an understanding of the states’ grant payment processes in Louisiana and Mississippi, we held discussions with officials contracted by these states to administer their CDBG programs. Additionally, we interviewed officials from the Iowa Department of Economic Development, Iowa Finance Authority, and various local organizations responsible for administering the grant programs in Iowa. The audits were conducted between May 2009 and May 2010 in accordance with Government Auditing Standards prescribed by the Comptroller General of the United States and included such tests considered necessary to provide reasonable assurance of detecting abuse or illegal acts. We found that to prevent duplicate benefits, SBA recovered $643.8 million of CDBG funds from the three states (Louisiana, Mississippi, and Iowa) and applied them to pay down 19,449 fully-disbursed SBA disaster loans, reducing SBA loan balances. Additionally, SBA applied $281.8 million of duplicate assistance from CDBG funds to pay down undisbursed loan balances. However, these practices were inconsistent with a FEMA regulation implementing the Stafford Act’s prohibition on duplicate disaster benefits.
Under the FEMA regulation, agencies that are assigned a higher order in the delivery sequence are expected to provide disaster assistance before assistance from lower level agencies. FEMA has also issued guidance indicating that CDBG grants have the lowest priority in the delivery sequence. Therefore, funds that HUD could have used for additional CDBG awards were instead used to pay down SBA loans to victims who had already received assistance and who SBA determined had sufficient resources to repay their loans. This shifted $925.6 million in primary assistance from SBA disaster loans that have to be repaid to CDBG grants, which are not repaid, placing the financial burden on taxpayers. It also reduced available grant money for disaster victims that did not qualify for SBA disaster loans.
We recommended that for future disasters, SBA coordinate with HUD and FEMA to formalize a memorandum of understanding, which defines the functions of each agency so that its disaster assistance procedures are consistent within applicable FEMA guidance. Additionally, SBA should coordinate with HUD to establish better procedures to prevent duplicate benefits, including the development of a duplication of benefits instructional guide to be incorporated into HUD’s Information Toolkit provided to grantees. Lastly, SBA should modify its regulations and the assignment of compensation section of the standard loan authorization and agreement to be consistent with FEMA’s delivery sequence of benefits, and cease using resources to perform duplicate benefit calculations involving CDBG funds. SBA management generally disagreed with the report findings and the OIG’s interpretation of the Small Business Act and Agency regulations, partially agreed with two recommendations, and disagreed with the remaining three recommendations.
The Federal Government provides disaster assistance funding through a variety of agencies and programs. SBA’s Disaster Loan Program, which is administered by ODA, is the primary Federal program for funding long-term recovery for private sector and non-farm disaster victims, including home and business owners. SBA provides physical disaster loans to fund repairs to damaged homes and business facilities. SBA’s regulations provide that there must be reasonable assurance the applicant can repay the loan, and the applicant must possess satisfactory character and credit. Section 7(b) of the Small Business Act authorizes SBA to make such disaster loans provided that the repairs or reconstruction is not compensated by insurance or otherwise.
Section 5155 of the Stafford Act requires Federal agencies providing disaster assistance to ensure that businesses and individuals do not receive disaster assistance for losses for which they have already been compensated. An individual receiving Federal assistance for a major disaster is liable to the United States when the assistance duplicates benefits provided for the same purpose.
FEMA regulation, 44 CFR 206.191, establishes policies and procedural guidance to ensure uniformity in preventing duplication of benefits. The regulation includes a “delivery sequence” of disaster assistance provided by certain Federal agencies and organizations. According to the regulation, the agency or organization that is lower in the delivery sequence should not provide assistance that duplicates assistance provided by a higher level agency or organization.
SBA regulation, 13 CFR 123.101(c), which was reissued after FEMA published its regulation discussed above, states that applicants are not eligible for a home disaster loan if their damaged property can be repaired or replaced with the proceeds of insurance, gifts or other compensation. These amounts must either be deducted from the amount of the claimed losses or, if received after SBA has approved and disbursed a loan, must be paid to SBA as principal payments on their loans.
In response to the Gulf Coast disasters and the Iowa floods, Congress appropriated funding for the CDBG program as Disaster Recovery grants to rebuild the affected areas and provide crucial seed money to start the recovery process. The grants, which were intended to supplement disaster assistance provided by FEMA and SBA, were available to states, units of general local governments, Indian tribes, and insular areas designated by the President of the United States as disaster areas. Guidance provided on HUD’s website instructed that grantees could use the CDBG funds for housing, economic development, infrastructure and the prevention of further damage to affected areas, if such use did not duplicate funding available from FEMA, SBA, and the U.S. Army Corps of Engineers.
To receive CDBG benefits, the affected grantees (in this case the states) were required to submit to HUD an action plan that described how they planned to use the grant funds and the procedures that would be implemented to prevent recipients from receiving duplicate benefits.
In several previous reviews(1) the OIG examined SBA’s efforts to prevent duplication of benefits between the disaster loan program and HUD’s CDBG program. Those reviews accepted SBA’s practice of reducing loan balances as an appropriate control to prevent duplication of benefits and, unlike this report, did not examine whether this practice was consistent with FEMA guidance.
In response to the Gulf Hurricanes of 2005 and the Midwest flooding in 2008, SBA took the lead in working with the states to identify and recover duplicate benefits. Although SBA did so because it thought it was acting in the best interest of the Government to reduce duplicate benefits, these efforts resulted in $643.8 million of CDBG funds being sent to SBA to pay down 19,449 fully-disbursed SBA loans, and the undisbursed balance of 5,675 loans being reduced by $281.8 million. The CDBG funds replaced SBA disaster assistance that had already been approved to borrowers found to have sufficient resources to repay their loans, contrary to FEMA’s duplicate benefit regulation. FEMA’s regulation provides that disaster assistance by an agency that is lower in the delivery sequence, such as HUD in this case, should not be used to duplicate assistance that has already been provided by a higher level agency, such as SBA. As a result, $925.6 million in CDBG funds were used to pay down or reduce SBA disaster loans rather than to provide grants to other disaster victims with unmet needs who may have lacked sufficient financial resources to obtain these loans. This also shifted additional costs to the taxpayers because disaster loans are required to be repaid and CDBG grants are not(2).
FEMA regulation, 44 CFR 206.191, which implements the duplication of benefits section of the Stafford Act, establishes a specific sequence for the delivery of benefits that generally is to be followed when Federal agencies provide disaster assistance. The delivery sequence specifies the following order in which a program should provide assistance and the other resources that must be considered before doing so:
Volunteer agencies’ emergency assistance programs;
Hazard and flood insurance;
FEMA Home Repair and Replacement;
SBA and Department of Agriculture disaster loans;
FEMA Individuals and Households Program; and
Other Federal, state and local government funds.
While HUD CDBG grants are not specifically listed in the regulation, guidance since issued by FEMA considers these grants to be “other Federal … funds” that follow SBA disaster assistance loans in the sequence of disaster benefits(3). SBA’s Standard Operating procedure 50 30 6 reiterates FEMA’s delivery sequence, and specifically states that CDBG funds are lower than SBA disaster loans in the sequence of delivery.
FEMA regulations state that duplicate benefits can occur when any agency provides assistance for a loss, which is the primary responsibility of another agency that is higher in the delivery sequence. Each agency should, in turn, offer and be responsible for delivering its program(s) without concern about duplication with a program later in the sequence. Further, agency programs listed later in the sequence are responsible for preventing duplication from programs listed earlier, and thus are responsible for rectifying any duplication and recovering payments from the disaster relief recipient.
However, 13 CFR 123.101 is inconsistent with FEMA’s delivery sequence guidance concerning CDBG assistance. SBA’s regulation generally requires that homeowners receiving compensation for their damaged properties after SBA has disbursed loans for the same properties must send such compensation to SBA to be used as principal payments on their loans. Additionally, the “assignment of compensation” section of SBA’s Loan Authorization and Agreement requires borrowers to remit duplicate grants or other reimbursement to SBA. These requirements do not make an exception for HUD CDBG funds, which is considered lower than SBA disaster loans in FEMA’s delivery sequence.
SBA believes that this regulation is consistent with the Small Business Act prohibition on duplication of disaster benefits, which authorizes SBA to “make” a disaster loan unless the damage is compensated by insurance or otherwise. Although the Act states that SBA is not authorized to make a disaster loan for damage that is otherwise compensated, the statute is silent on the actions that SBA should take if a potentially duplicate benefit is discovered after an SBA loan is disbursed. The statute does not provide authority for SBA to ignore FEMA’s delivery sequence regulation for disaster assistance and to use CDBG money to reduce disbursed disaster loans.
In appropriation legislation that funded CDBG assistance for victims of the Gulf Hurricanes and Midwest Floods, Congress directed HUD to prevent duplication of benefits. In a series of Federal Register notices issued by HUD in response to these appropriations, HUD emphasized the steps it planned to take to prevent duplicative benefits. However, SBA advised that despite its repeated attempts to coordinate with HUD, HUD and the state agencies in Louisiana, Mississippi and Iowa made it clear that they intended to provide CDBG assistance regardless of whether an SBA loan existed or not. Therefore, SBA believed its only choice was to use these duplicative funds to repay or reduce existing SBA loans, consistent with its regulation and interpretation of the Small Business Act. HUD officials did not agree with SBA’s characterization of their discussion and stated that they did not in any way imply that they intended to provide duplicative assistance.
SBA’s actions appeared to be driven by the approach taken in state recovery plans that were submitted to HUD when applying for CDBG assistance. If the state planned to reduce grant benefits by SBA loan amounts prior to disbursing the grant, SBA’s designated role was to notify the state of the approved loan amounts. However, if states disbursed the grants without first reducing the grant benefits by the amount of the SBA loans, SBA was responsible for calculating and requesting remittance of the duplicate benefits to be recovered from CDBG recipients. Consequently, SBA’s role varied based on the terms of the state recovery plans. For example, SBA did not take the lead in computing duplicate CDBG benefits from Alabama, Texas, and Florida, but did for Mississippi, Louisiana, and Iowa. Therefore, CDBG funds in the former three states were not used to pay down disbursed SBA loans and to reduce the balances of undisbursed loans.
Under FEMA’s duplication of benefits regulation, agencies and organizations that are considered lower in the delivery sequence are responsible for preventing duplicate benefits. Therefore, it is HUD’s responsibility to ensure that state action plans that are submitted in order to receive CDBG funding appropriately assign responsibility for identifying and recovering duplicate benefits to the states, which act as HUD’s agents in administering the CDBG funds. In discussing this issue with HUD officials, they told us that they relied on SBA to determine the amount of duplicate benefits because SBA did a good job of monitoring the duplicate benefits process and the states had little experience in performing the duplicate benefit calculation. However, they agreed there is a need for consistency in how state plans describe SBA’s role, and that the plans should not assign responsibility to SBA for calculating and collecting duplicate benefits. HUD officials suggested that because the states and localities that disburse the grants may not understand how to correctly calculate duplicate benefits, it would be beneficial if SBA were to provide an information package on such calculations to be included in HUD’s instructional guide furnished to grantees.
Although SBA thought it was acting appropriately in pursuing duplicate benefits, its efforts resulted in $925.6 million of CDBG funds being used to pay down debts owed by recipients of SBA disaster loans or to reduce the undisbursed balances of SBA loans. As a result, disaster loans to homeowners that SBA had determined had sufficient repayment ability were reduced through the use of CDBG grant funds that were intended to benefit lower income individuals. This money could have been used to provide grants to other disaster victims with unmet needs and who may have lacked the financial resources to qualify for an SBA disaster loan.
According to HUD officials, after CDBG program funds were depleted, it was necessary to obtain congressional approval of an additional $3 billion supplemental appropriation for Louisiana. The additional appropriation could have been reduced by Louisiana’s share of the $925.6 million had the duplicative grant assistance not been either remitted to SBA to pay down fully disbursed loans or applied by SBA to reduce undisbursed loan balances(4). Going forward, we recommend that SBA coordinate with FEMA and HUD to reach an agreement with HUD about their respective roles to ensure that duplicate CDBG benefits stay within the CDBG program.
Further, by managing the duplicate benefit process for HUD, SBA did not make the most appropriate use of its resources. SBA established a grant team to identify and resolve duplicate benefits associated with CDBG funds. The team obtained grant information from the states, calculated the amount of duplicate benefits, requested remittances of the duplicate benefits, and processed loan modifications to reduce loan eligibility and to pay down the loans. While SBA will always need to devote resources to identify potential duplication of benefits, ODA advised that it could have eliminated seven positions if the states, as HUD’s grantees, were to make the duplicate benefit calculations and if ODA ceased processing state remittances and loan modifications. We estimate that SBA spent over $626,000 in FY 2009 on these activities. This expenditure is not only unnecessary, but constitutes administrative costs for which states administering CDBG benefits are already reimbursed. CDBG appropriations language provides that a percentage of the CDBG funds can be used to reimburse grantees for administrative costs associated with disbursing CDBG funds. By making more appropriate use of these resources on other disaster loan processing activities, we estimate that SBA can save $2.1 million over the next 5 years(5).
Although we are not in a position to make recommendations to HUD or FEMA, we have sent a copy of this report to these agencies and their Inspectors General.
We recommend that the Associate Administrator for the Office of Disaster Assistance:
Coordinate with FEMA and HUD to formalize a memorandum of understanding with HUD, which defines the functions of each agency in a manner that is consistent with FEMA’s duplicate benefits regulation and other applicable regulations.
Coordinate with HUD to develop more appropriate procedures to reduce duplication of benefits, including the development of a duplication of benefits instructional guide to be incorporated into HUD’s Information Toolkit provided to grantees.
Modify SBA’s duplication of benefit regulations to address FEMA’s delivery sequence of disaster benefits.
Modify the “assignment of compensation section” of the Standard Loan Authorization and Agreement to be consistent with FEMA’s delivery of sequence regulation.
Cease using resources to calculate duplication of benefits, pursue remittances, and modify loan balances involving CDBG funds so that the Agency can save salary costs associated with these activities.
Agency Comments and Office of Inspector General Comments
On July 14, 2010, we provided ODA with a draft of the report for comment. On August 13, 2010, ODA and SBA’s General Counsel submitted a formal response, which is contained in its entirety in the Appendix to this report. Management generally disagreed with the report findings and the OIG’s interpretation of the Small Business Act and Agency regulations. Management also partially agreed with recommendations 1 and 2, stating it would work with HUD to improve the delivery of services to disaster victims. However, management did not indicate whether it would identify a role for itself that was consistent with FEMA regulations or develop more appropriate procedures to reduce duplication of benefits. Additionally, management disagreed with recommendations 3, 4, and 5. A summary of management’s comments and our response follows.
Comment 1 - SBA Does Not Concur With the OIG's Interpretation of the Small Business Act or Its Applicable Regulations.
Management advised that it is aware of FEMA’s regulation prescribing a sequence of delivery of disaster assistance, and that agencies later in the delivery sequence are required to ensure the assistance they provide does not duplicate prior Federal assistance. However, management interprets the Small Business Act and its regulations to “require SBA, after a loan is made or approved, to monitor the borrower’s situation and to recover from the borrower all compensation for the borrower’s injury received by the borrower from any source.” Based upon this interpretation, management disagrees with the OIG’s finding in the report that SBA acted inconsistently with the FEMA regulation when it recovered $643.8 million of CDBG funds and applied them to pay down fully-disbursed disaster loans.
OIG disagrees with management’s interpretation of the Small Business Act. The Act provides in subsection 7(b)(1) that SBA is only authorized to “make” a disaster loan if the borrower has not received compensation from another source for the same damage. The statute, however, is silent on what action SBA should take if it discovers duplicate compensation after a loan has been made, and, accordingly, in our view, does not require SBA to use CDBG funds to pay down disbursed disaster loans. SBA’s duplication of benefit regulation (13 C.F.R. § 123.101) also does not “require SBA, after a loan is made … to recover from the borrower all compensation for the borrower’s injury received by the borrower from any source.” In fact, the regulation provides an “exception” for amounts received under the FEMA Individuals and Household Program (IHP), which is lower in FEMA’s sequence of delivery regulation than SBA disaster loans. Therefore, the OIG believes that neither the Small Business Act nor SBA regulation provide authority to ignore the FEMA regulation.
Management takes issue with the OIG’s suggestion that SBA should have “returned” to HUD the CDBG money it received rather than using these funds to pay down disbursed disaster loans. SBA contends that this would be impermissible under the miscellaneous receipts statute, 31 U.S.C. 3302(b). (Note: SBA’s response erroneously refers to 31 U.S.C. § 3302(h), but there is no such provision.)
Without determining whether the proposed action would have violated the miscellaneous receipts statute, the OIG has revised the audit report to remove language suggesting that SBA should have “returned” the CDBG funds.
Comment 2 - SBA Does Not Concur with the OIG's Recommendation that SBA Amend its Applicable Regulation, or with the Policy Underlying that Recommendation.
Management disagrees with the report’s recommendation that SBA should revise its regulation so that it is consistent with FEMA guidance on the sequence of disaster assistance delivery. SBA points out that its regulation requiring that disaster loans be reduced by amounts recovered from compensation a borrower receives from other sources has been in place for over 50 years, and that SBA is entitled to deference in issuing regulations that interpret the Small Business Act. Further, SBA contends that revising its regulations to be consistent with FEMA guidance would promote duplication of benefits.
The OIG agrees that SBA is entitled to deference in issuing regulations that interpret the Small Business Act, but disagrees with management’s comment. As noted above in the OIG’s response to management comment 1, SBA’s duplication of benefit regulation (13 C.F.R. § 123.101) provides an “exception” for amounts received under the FEMA IHP, which is lower in FEMA’s sequence of delivery regulation than SBA disaster loans. It is unclear why SBA’s regulation follows the FEMA delivery sequence for IHP assistance, but not for CDBG assistance. Regardless of the length of time that SBA’s regulation has been in place, however, it is FEMA, and not SBA, that has authority under the Stafford Act to issue regulations establishing government-wide rules to promote “uniformity in preventing duplication of benefits.” Moreover, SBA’s duplication of benefit regulation has a process to prevent a duplication of benefits if the borrower receives IHP assistance, and there is no reason why the regulation could not contain a similar process for CDBG assistance. Finally, the audit report recommends that SBA work with HUD to establish better procedures to prevent duplication of benefits, and with such procedures in place, a revision of SBA’s regulation to conform to FEMA’s guidance would not promote duplicative assistance.
Comment 3 - SBA Does Not Concur With OIG's Conclusion that It Constituted "Waste" of Taxpayer Funds to Use CDBG Funds to Repay or Reduce Prior Disaster Loans.
Management asserts that the OIG inconsistently argues it was improper and wasteful for SBA to consider grants made by HUD and other agencies lower in the FEMA delivery sequence, while at the same time asserting that SBA should have prevented HUD and other agencies lower in the sequence from making grants to SBA borrowers. Management does not believe it has the authority to tell HUD or state agencies what grant decisions they should or should not make. Further, management states that it attempted to coordinate with HUD to reduce duplication of benefits, but had no choice but to use the CDBG money to reduce SBA disaster loans after it became clear that neither HUD nor certain of the state agencies disbursing CDBG grants were going to prevent duplication of benefits.
Management is incorrect in its analogy and portrayal of the OIG’s findings and assertions in this regard. The OIG does not consider it improper and wasteful for SBA to coordinate with HUD to provide it with the necessary information to ensure that CDBG funds do not duplicate assistance provided by SBA’s disaster loans. Indeed, the OIG believes SBA has an obligation to do so under the Stafford Act and the Small Business Act. However, the OIG believes SBA should not have accepted CDBG funds from the state agencies and used those funds to pay down SBA loans, nor should it have reduced SBA loan balances on loans that had not been fully disbursed. These actions resulted in CDBG funds replacing SBA disaster assistance that had already been approved to borrowers found to have sufficient resources to repay these loans, thereby shifting additional costs of assistance to the taxpayers.
Further, the report does not assert that SBA should have prevented HUD and other agencies lower in the sequence from making grants to SBA borrowers, nor do we believe that the Agency has the authority to prevent and dictate which grants HUD can award. As discussed previously, FEMA regulation and other guidance clearly place the responsibility on agencies lower in the sequence to prevent duplication of assistance provided by programs listed earlier, and to rectify any duplication. Further, contrary to SBA’s position, we do not believe that acting responsibly means performing the tasks of another agency lower in the sequence when that agency fails to prevent the duplicate benefit. If HUD was unwilling to prevent the duplication of benefits, SBA should have sought assistance from FEMA and the Office of Management and Budget, instead of attempting to collect the duplicate benefits from HUD’s grantees (the state agencies). As management stated in its response, SBA does not have authority to tell HUD or the state agencies what grant decisions they should or should not make.” For the same reason, SBA does not have authority to direct HUD or its grantees to remit CDBG funds to SBA to offset disaster loans.
Comment 4 – The Draft Report is Inconsistent with Prior OIG Reports and Guidance.
Management expressed its surprise with the report findings and recommendations, which it believes are inconsistent with earlier OIG reports that addressed the recovery of duplicate payments and reduction of SBA loan balances.
The OIG understands SBA’s difficulty in reconciling the findings of the current report with prior OIG findings from preliminary assessments and reviews of data exchanges between SBA and various state agencies. We have added clarifying language to the report acknowledging this. Based upon the limited scope of OIG’s earlier work, no determination was made as to whether SBA’s use of CDBG funds was consistent with FEMA’s regulations and guidance. Having now done so, and having now concluded that SBA’s efforts were not consistent with these regulations and guidance, the OIG believes it has a responsibility to report these findings to management and present recommendations to resolve this discrepancy.
Comment 5 – SBA Does Not Concur With the Finding that Monitoring Duplication of Benefits in this Circumstance Constituted a Misuse of SBA Employee Resources
Management agreed that it allocated significant resources to identifying and recovering duplicate benefits resulting from CDBG funds. However, it disagrees that the resources could have been put to better use. Regardless of its interpretation of the laws and regulations, management believed it needed to use significant resources to address duplication of benefit issues. ODA disagrees with OIG’s assertion that the OIG’s interpretation of the law would require no resources to deal with duplication of benefits issues that will continue to exist under any circumstances.
The OIG continues to believe that SBA could have utilized its resources more appropriately and disagrees with management’s characterization of the OIG’s comments. The report does not assert that SBA needs zero resources to deal with the duplication of benefits issues. Based on information provided by ODA, two employees would still be required to provide the necessary information to HUD to ensure that CDBG funds do not duplicate assistance provided by SBA’s disaster loans. This would represent a reduction from the nine employees that were still assigned to perform grant work at the time of the audit. We have revised the audit report to clarify this point.
Please provide your management decision for each recommendation on the attached SBA Forms 1824, Recommendation Action Sheet, within 30 days from the date of this report. Your decision should identify the specific action(s) taken or planned for each recommendation and the target date(s) for completion.
We appreciate the courtesies and cooperation of the Office of Disaster Assistance during the audit. If you have any questions regarding this report, please contact me at (202) 205-7203 or Craig Hickok, Director, Disaster Assistance Group, at (817) 684-5341.
OIG Report 6-28, Preliminary Assessment of Controls over the Automated Coordination of Disaster Assistance Benefits Distributed by Mississippi Development Authority’s Grant Assistance Program, September 25, 2006; OIG Report 07-25, Duplicate Benefit Adjustments to Disaster Assistance Loans Associated with Housing and Urban Development Grants, May 15, 2007; OIG Report 9-09, Audit of Borrower Eligibility for Gulf Coast Disaster Loan, March 31, 2009.
The OIG did not calculate these additional costs, and notes that a certain percentage of the disaster loans that were paid down or reduced as a result of the CDBG payments would have defaulted.
Disaster Assistance - A Guide to Recovery Programs, FEMA, September 2005 and February 2009; and National Disaster Housing Strategy Annexes, FEMA, January 16, 2009.
We were unable to determine the exact amount of the $925.6 million that was associated with loans to Louisiana residents, but were able to positively identify that at least $443.6 million involved Louisiana residents. This would constitute funds put to better use as defined by the Inspector General Act of 1978,
The savings represent the salary costs of one GS-12, three GS-11s, and three GS-9s at the step 1 level, which were inflated by 2 percent each year for years two through five.