Federal Officials Investigate West Virginia Flood Program


A program that helps people rebuild homes that were damaged or destroyed in West Virginia’s 2016 flood has been under federal investigation, a state official told lawmakers.

As a result of the investigation by the U.S. Department of Housing and Urban Development, RISE West Virginia is on a corrective action plan, said Michelle Tharp Penaloza, who is program director for the Community Development Block Grant Disaster Recovery for the West Virginia Development Office.

Penaloza revealed the investigation to the Joint Legislative Committee on Monday in response to questions about the program, the Charleston Gazette-Mail reported.

Senate Minority Leader Stephen Baldwin asked why the program had paused work to demolish damaged properties.

Penaloza said federal officials found a need for corrective action in August due to a lack of a duplication of benefits analysis by the West Virginia National Guard, which has helped administer the program.

“It’s been 100% transparent on everything that we’ve discovered,” she said. “For us to walk away with only one finding, I know that it doesn’t feel like a success story, but it really is.”

Baldwin said he was concerned that the investigation had been ongoing but lawmakers were just learning about it.

“We’ve talked about this program for the last three meetings,” he said. “That has never been mentioned. So that’s the answer to the question, ‘Why has this program been paused?’ It’s been under federal investigation.”

Penaloza said state officials have complied with federal standards.

“We now have a program that meets the requirements for the federal HUD grant,” she said.

The state has received $6.8 million to demolish flood-damaged properties and $3.5 million has been spent on 46 projects, Penaloza said. She estimated that the state has enough funding to demolish a total of 91 properties.

Meanwhile, work continues on flood recovery and reconstruction, said Jennifer Farrell, director of community advancement at the West Virginia Development Office.

RISE had built 350 homes and 42 bridges as of the end of November, spending $82 million in federal funds. Officials hope to complete the construction of 37 more new homes by June 2022.