Share on Social Media

Duplication of benefits (DOB) is one of the most difficult aspects of federal disaster recovery funding for both local stakeholders and citizens to grasp. It is a federal law that applies to all federal disaster assistance, including from FEMA, the Small Business Association (SBA), Department of Housing and Urban Development (HUD), and the National Flood Insurance Program (NFIP), among others. 

Community Development Block Grant Disaster Recovery (CDBG-DR) applicants are more likely to have a DOB because they’ve already received funding from other sources by the time CDBG-DR funding is released. These tips can help CDBG-DR grantees and subgrantees develop a basic understanding of DOB to help work with internal stakeholders and community members to prevent DOBs from occurring.

Have a firm grasp of how a DOB occurs.

• A DOB occurs if an individual, business, or government entity receives assistance for a specific purpose from multiple sources that exceeds the need for that particular purpose.
  • For example, if a homeowner needs $50,000 to repair their home and they receive $5,000 from insurance and $20,000 from FEMA, the maximum amount of money they can receive from another federal source for home repairs is $25,000.
• The funds also must be spent on what they were intended for – a citizen will have a DOB if they buy a new car with money they received to repair their home.
• See HUD’s “CDBG-DR Introduction to Duplication of Benefits” presentation for additional guidance.

Know what funding sources count towards a DOB.

• Develop and make public a list of funding sources that will be considered in a duplication of benefits review.
• The following list of funding sources can serve as a basis for your own list, but be sure to include any other state or local sources relevant to your community or program:
  • Federal Emergency Management Agency (FEMA)
  • National Flood Insurance Program (NFIP)
  • Homeowners Insurance or Private Flood Insurance
  • Small Business Administration (SBA)
  • Private Foundations
  • State Government
  • Local Governments
  • Nonprofit/Charitable Funding (Red Cross, United Way, local church, etc.)
  • Any other funding source that may duplicate assistance

Develop an easy-to-use form for calculating DOB for individuals. 

• A simple, user-friendly form can ensure residents supply all information needed, but also help explain how DOBs can occur and why it’s so important to document disaster funding and spending.
• A basic form should include:
  • A line item for each source of funding received by the applicant
  • Amount received from each source
  • Purpose for each source
  • Status of each source
  • Total amount of all funding received

Have memorandums of understanding (MOUs) in place with other agencies who can provide third-party verification.

• CDBG-DR grantees are required to provide third-party verification of funding that homeowner applicants claim to have received.
• Have MOUs in place for data sharing with agencies such as FEMA, SBA, insurance companies, and the Red Cross, so that you can quickly verify applicants.

Make sure you have all of your legal bases covered in your DOB policy.

• Ask homeowner’s to sign an affidavit stating that they have disclosed all of the disaster recovery funding assistance they’ve received, and that they’ll notify their case manager if they receive more funding.
• Develop a release of consent form for applicants, which gives case managers legal permission to send information out for third-party verification.

Have a clear policy for third-party verification agencies who don’t respond.

• Third-parties have the right to not respond. Have a policy in place for this scenario.
  • A policy could include:

1. Ask for verification within seven days
2. If no response in seven days, reach out again and wait another seven days
3. If no response after two weeks, take homeowner’s word for it

• Be sure to document all communication with third-party agencies to provide HUD with proof that you tried to get verification, and that you followed your policy.

Communicate with your citizens before a disaster hits, or as soon as you know you’ll receive federal assistance.

• They will need to document and save receipts for every dollar of disaster recovery assistance they’ve received and spent from all sources.
• Use flyers, press releases, local news outlets, and social media to get the word out to residents.