The agency tasked with administering relief funds to victims of Matthew and Florence is hundreds of millions of dollars over budget, and cannot account for where the rebuilding money has gone.
Rep. Brenden Jones and other state lawmakers blasted Rebuild NC chief Laura Hogshead at Monday’s hearing on hurricane relief. Rebuild has asked for an additional $385 million to pay for temporary housing, along with rebuilding or replacing homes of people affected by hurricanes Matthew in 2016, and Florence in 2018. Hogshead was appointed by Gov. Roy Cooper in 2018 to administer Rebuild NC through the N.C. Office of Resilience and Recovery.
Rebuild wants control of the Hurricane Helene funding currently making its way through the legislative process, although legislators are concerned over Rebuild’s admissions of poor bookkeeping and lack of meeting goals and deadlines.
Hogshead said Monday that the deficit exploded because her staff had lost track of how much money was being spent. They will require more than $150 million to maintain the current level of temporary housing and complete projects still waiting since 2018.
Legislators were visibly angry at the request and the lack of accountability.
“Will you turn in your resignation today?” Jones asked Hogshead.
“No sir, I will not,” Hogshead responded.
The demand for her resignation came after Pryor Gibson, the deputy legislative counsel for Cooper, corrected Hogshead’s original estimate of how much is needed to handle the deficit. Gibson told the legislative committee that completing the current required tasks might actually require $221 million, not $150 million.
Eight accountants earning more than $100,000 each in annual salaries are assigned to NC Rebuild.
“We simply were not watching carefully enough,” Hogshead said of her agency’s accounting processes.
“That’s an understatement,” replied Jones, co-chair of the house oversight committee. “If you worked for me, I would fire you. You guys are like a teenager with mama’s credit card. … We’ve given you every opportunity, everything you’ve asked for.”
Gibson told the committee that Rebuild NC needs an additional $40 million per month for the next quarter to pay contractors, provide materials and operate.
A major issue in Rebuild NC’s woes revolve around rebuilding or repairing housing, which was supposed to be the central focus of the program. Contactors have complained of not being paid, while recipients have sued over substandard and unfinished work.
Rebuild NC currently spends $2.1 million a month in payments for temporary housing while homes are being rebuilt. So far, $76.5 million in construction dollar have been spent on temporary housing in hotels, motels and campgrounds. Multiple families have spent six months or more in temporary housing, having moved out for work to begin, only to see their homes sit empty with no work being done. This year, Rebuild NC began offering stipends for rental payments, as opposed to hotel and motel rooms.
Hogshead testified that 10,000 residents applied for assistance after Matthew and Florence. Of those, 4,420 withdrew out of frustration, because they had moved to other states or due to death of the applicant. Out of the remainder, 1,600 properties or applicants were found ineligible.
Rebuild NC came under scrutiny in 2022 when Sen. Danny Britt, who represented Columbus at the time, questioned why some residents were still waiting for new or repaired homes six years after Matthew. Figures supplied by Rebuild NC shows that contractors through the program require 600 to 800 days to complete a modular home that normally takes less than 180 days to finish.
The Republican-led house and senate passed relief measures recently to provide millions in funding for Hurricane Helene survivors in Western North Carolina. Solons are expressing doubts about allowing Hogshead’s organization to manage the funding. Some openly questioned whether Rebuild NC is even capable of handling the funding needed to eliminate its current deficit, much less millions in new funding for the anticipated five to ten years needed to recover from Helene.
Gov. Cooper insists the second relief package of $30 million is insufficient. He had asked for $175 million in state funding for the second relief package.
Cooper this week urged lawmakers to cancel the Opportunity Scholarship program, which provides millions on school vouchers for parents of middle and lower income homes. Cooper instead is pushing for those funds to be turned over to Rebuild NC. Cooper vetoed the Opportunity Scholarship bill in September. That veto is expected to be overridden this week during the special legislative session.
Hogshead told legislators Monday that Rebuild NC could be trusted with future funding if the legislature will provide a way to clear the current deficit.
“The reason to keep NCORR is because simply, we’ve done this recently. To start over with someone else would be to re-learn those hard lessons,” Hogshead said.
(Correspondent Cassie Clark contributed to this report)
