HUD Suspends $1.3B USVI Housing Funds Over Mismanagement

The U.S. Department of Housing and Urban Development (HUD) announced on Monday that it has suspended disaster recovery funding to the U.S. Virgin Islands' housing authority. This action follows an investigation revealing widespread financial mismanagement, inadequate fraud controls, false certifications, and improper payments, which have prevented $1.3 billion in congressionally allocated funds from reaching hurricane survivors. U.S. Housing Secretary Scott Turner stated that nine years after receiving $1.9 billion in disaster recovery funds, the territory has only disbursed $570 million, less than a third of the total amount. HUD's July 20 letter to the housing authority's head detailed these findings, characterizing the authority as an "abysmal steward of taxpayer funds." The U.S. Virgin Islands were devastated by Category 5 Hurricanes Irma and Maria in September 2017, and residents are still struggling with recovery efforts. The investigation found that the housing authority had completed only two of 95 planned single-family rental rehabilitation projects and zero of 329 single and multifamily housing projects. Furthermore, as of May, only 2% of the electrical grid recovery funding had been spent. Secretary Turner accused officials of prioritizing "kickbacks over helping families recover from disasters." The U.S. Virgin Islands' Housing Finance Authority has the right to appeal the funding suspension by requesting a hearing. The authority's director and spokesperson did not immediately respond to requests for comment.