Best practices to accelerate disaster recovery grant disbursement (free checklist included)
Knowing how to design and implement programs that make the most of funding and accelerate disbursements ensures that impacted citizens can move from desperation to determined recovery in the shortest amount of time.
At the state and local level, preparedness in managing funding obligations coupled with a clear understanding of financial capacity allows for accelerated disbursements. Keep reading to learn a few important best practices for accelerating grant disbursement.
1. Use data to inform better decision making
The prudent use of disaster damage data plays a key role in disbursing funds quickly. When calculating potential unmet needs necessary for a funding application, many look to data sources such as the National Flood Insurance Program (NFIP), the U.S. Small Business Administration (SBA), and FEMA’s Individuals and Households Program (IHP). The data gleaned from these sources can be used to inform and design a disbursement program that determines what level of financial capacity is required.
Data-driven insights can also promote more equitable outcomes. Grantees can develop programs that will prioritize serving individuals in vulnerable areas by using data from FEMA’s IHP and conducting a review of protected classes, concentrations of poverty, and racial inequality.
Additionally, tracking relevant real-world data allows for the evaluation of case management and program performance so that intervention is possible, and roadblocks can be removed as needed.
2. Build capacity for effective grant disbursement
Well-trained staff, who are prepared to take action when funding is received, play an important role in accelerating disbursements.
To effectively manage funding responsibilities and implement the required financial systems to meet compliance and reporting obligations, jurisdictions must first develop the necessary capacity, prior to a disaster happening.
Technical Assistance (TA) and training can be used to increase the capacity of existing staff. Training should include:
- Comprehensive on-boarding packages
- User guides
- Documented policies
- Standard operating procedures (update quarterly)
- Reporting requirements and tools
It’s also important to provide clear descriptions of roles and responsibilities.
By reviewing the existing staffing options, applicants can request support for relevant and appropriate roles once funding becomes available.
As an example, in a local jurisdiction with large housing needs, there may be insufficient inspectors available to ensure code enforcement—a situation that would warrant an application to hire more code inspectors.
3. Ensure an adequate financial system is in place
Without an appropriate and adequate financial system, disbursements are significantly slowed, reconciling becomes onerous, audit requirements seem impossible to meet, and the recapture of funds increases.
By identifying and developing appropriate financial policies, accounting, and audit procedures, staff will be able to swiftly manage contracts, accept invoices, and write checks while also meeting all federal expectations.
An appropriate financial system is equipped to track the many different types of statuses that will be required. Ideally, this system will help address the federal system’s requirements, support reconciliation without difficulties, minimize needed capacity, track and deliver reporting requirements, and incorporate compliance measures.
Without the appropriate financial systems in place, disbursements are much slower and less compliant and, since federal allocations typically trigger a number of audit requirements, weak systems can experience a high level of stress that further slows down disbursements.
In addition to providing federal funding, most sources (such as FEMA, HUD, American Rescue Plan, and the CARES Act) have some form of a fraud, waste, and abuse program that addresses projects that didn’t meet national objectives or end result and, therefore, are subject to legal remediation to recapture the funds. Incorporating compliance into the entire disbursement process often results in fewer awards to ineligible grantees and faster closeout of grants.
Anticipating and mitigating the pitfalls of disbursements decreases the likelihood that funds will be recaptured. For example, instead of issuing funds directly to a homeowner, a two-party check system with a housing contractor, as a dual signatory, encourages the recipient to follow through on the intended use of the funding and diminishes any potential recapture. In the state of Louisiana, more than $13 million was saved from potential recapture by using a two-party check system.
The following are important steps to take to ensure your financial system can support your grant management needs:
- Determine process flows and understand the stopgaps that could slow disbursements.
- Develop or acquire a robust software platform for tracking finances and the grant management process. It should include internal tracking (when something was submitted and how long it took to get paid).
- Assess your ability to meet audit requirements.
- Ensure processes remain transparent.
4. Design a program that works
Comprehensive program design is an upfront investment that will save you time and money down the road. Great endings often start with great beginnings, and that certainly applies when developing a program design that will ensure objectives are successfully met. Clarity of outcomes, at the beginning of program design, is key to getting money to the right places as efficiently as possible.
Best practice disaster recovery systems use grant and case management tools and software, such as disasTRAX®, to manage documentation in real time, track the overall health and effectiveness of programs, and provide accurate regular reporting. With this best practice, project closeout can be streamlined by determining how the application process is set-up at the start. Considering closeout and reporting requirements from the earliest stages along with program accountability and low-code/no-code options will result in a design that serves all purposes well.
While it may be tempting to speed through the program design process, it is well worth the effort to spend time paying careful attention to detail. Even a small oversight in your program design can result in major losses. You can set yourself up for success by involving all stakeholders early in the design process. Program staff, consultants, vendors, governing agencies, homeowners/applicants, and local faith-based or other volunteer organizations can provide important insights and ensure potential problems have been addressed.
Accelerated disbursements support accelerated recovery
Disasters can easily overwhelm staff who play an important role in alleviating suffering for those in need.
Between working to secure federal funding, set up programs, issue disbursements, and meet reporting requirements, while trying to recover themselves and deal with the emotional toll of the event, staff may find it difficult to cope with demands and move forward.
Establishing financial capacity helps to mitigate staff being overwhelmed and enables grantees to provide high service levels to those affected. Accelerated disbursements bring hope to citizens and support accelerated recovery.
Download the free checklist to get actionable next steps for accelerating grant disbursement.