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Changes complicate Road Home

Section: Business

David Hammer

Dozens of changes in Road Home rules have required 28 upgrades to the program's computer tracking software, which in turn has slowed the progress of homeowner applications and even led to errors in final grant calculations, according to a report provided to the state.

The 79-page report by KPMG, which cost the state $376,142 and was delivered months later than promised, highlights errors and slowdowns that frustrated grant applicants have been complaining about for months, and it offers recommendations for fixing them.

But the report also gives Road Home contractor ICF International credit for improving its processes over the course of the past year and points out disruptive effects from policy and procedural changes ordered by the state.

It found errors that were apparently corrected in the early months of the program, such as improperly recorded applicant identification numbers and mistakes in income calculations that determine the size of additional Road Home grants for lower-income families.

And KPMG found that ICF has managed to streamline the processing of applications that before March 1 could have followed more than 3,300 different paths to completion. Now, the report said, most files follow one of eight different paths.

But the report also points out areas in which ICF still needs significant improvement if it is to efficiently complete the task of funneling about $10.5 billion in rebuilding and buyout grants to 151,000 to 159,000 eligible homeowners. About 77,000 grants totaling $4.8 billion have been awarded so far.

Haste makes waste

ICF and its subcontractors are scrambling to close another 13,000 grants as required by contract within the next 18 days, including Christmas Eve, Christmas and New Year's Eve. The KPMG report says the program's tendency to cram closings into a month's final days to meet a performance requirement leads to errors because certain steps have to be done manually and can't keep up with automated steps.

The Louisiana Office of Community Development, which ordered the report, said it agreed with KPMG's assertion that state-ordered program changes slowed the awarding of Road Home grants.

"In a program of this size and scope, one change must go through many steps for implementation, thus creating a slowdown," said office spokeswoman GeGe Roulaine.

ICF spokeswoman Gentry Brann said the state gave priority early on to speed at the risk of increasing errors, and expectations for faster closings grew even as changes to the program were made.

"Many parts of this program can be compared to changing a tire on a car while driving 100 miles an hour on the Spillway," Brann said.

ICF under fire

But Road Home watchdogs say the procedural changes were meant to streamline a program that had become mired in Kafkaesque red tape, and they mainly blame ICF for that.

Walter Leger, who helped set Road Home policy as a housing task force chairman for the Louisiana Recovery Authority, said blaming poor performance on program changes is a cop-out.

"They complain about all the changes, but if you did it right the first time, we wouldn't have to make all the changes; that's what gets me angry," Leger said.

Frank Silvestri, co-founder of the Citizens Road Home Action Team, took the same view.

"At several key points the LRA made policy decisions that, simply and fairly followed, would have simplified the process, increased fairness and expedited awards," he said. "Instead, it has all the appearance of ICF overcomplicating implementation, adding unnecessary steps and actually negating the benefits that were intended from the policy change."

The advocacy group says a recent policy change is once again tripping up the Road Home.

Last month, the state approved a change that would let anyone who provided a post-storm certified appraisal of their home's pre-storm value get a special review of the appraisal, on the Road Home's dime, if the appraisal the applicant ordered yielded a value more than 20 percent higher than what Road Home officials had estimated.

But the Citizens Road Home Action Team says Road Home advisers working for ICF are not telling applicants about the change.

Hard going for software

Even with the criticism of ICF's performance, it's clear that major program changes often have thrown the Road Home's main applicant-tracking software program, eGrants, into confusion. The report says eGrants has undergone 18 major revisions as a direct result of policy changes.

It says that while eGrants' performance has improved over time, the program still can't clearly tell advisers what step of the grant verification process an applicant is in when he or she calls. The report added that eGrants isn't compatible with the database used by Road Home's resolution advisers to track disputes. And the state has at times informed the public about changes in policy before fully implementing the changes, leading to confusion for advisers, the report said.

"ICF should focus efforts toward communicating a meaningful application status to applicants, prioritizing by date of original application to address the earliest applicants first," the report suggests. "The communication should be by phone and letter. The letter should include as much known information as possible."

Recently, applicants and activists have complained that major program decisions were communicated only verbally.

Calculations questioned

The KPMG report listed various specific grant calculation errors its researchers found, but didn't try to quantify overpayments or underpayments. It found Road Home employees who manually input data into the eGrants grant calculator have mistakenly deducted the value of applicants' entire insurance policy, rather than just the amount of money they received for structural damages. Also, KPMG found that ICF employees with access to eGrants have deducted insurance proceeds beyond those considered a duplication of Road Home benefits.

While the report didn't explore the issue in detail, more than one applicant has complained to The Times-Picayune that the Road Home was deducting insurance proceeds received for damaged contents, instead of just for the structural damage payments, as program rules dictate.

The KPMG report says part of the problem may be a lack of controls over which Road Home employees can change calculations in eGrants. It said more than 140 employees on the Road Home's dispute resolutions team have the authority to override values in the eGrants system, and KPMG recommends tighter controls on how changes can be made.

A summer report by the state legislative auditor identified a smattering of errors in grant payouts, nearly an equal amount too high and too low, but program officials said the program was designed to pay grants quickly and correct mistakes after a grant closing.

Two months ago, KPMG officials asked for more time to give the report to the Louisiana Recovery Authority's housing task force. But Roulaine said the state considers the report "on time," saying it has been done for an undisclosed length of time and was not released to the public while state, program and KPMG officials tried to agree on how to release it.

KPMG spokesman Dan Ginsburg declined to comment on the timing or content of the report, citing a nondisclosure agreement with the state.

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