CHARLESTON, W.Va. — Federal concern about West Virginia’s state emergency management agency led to the agency being placed under tighter financial restrictions over the past few years.

West Virginia appears to be the only state under such scrutiny by the Federal Emergency Management Agency, aside from Puerto Rico.

What’s more, higher ups in West Virginia’s Department of Military Affairs and Public Safety don’t seem to have been made aware of the heightened federal scrutiny.

The revelation, made Sunday afternoon to lawmakers at legislative interim meetings, raises more questions about how West Virginia handles federal dollars while conducting disaster relief.

Controversy swirled through much of the spring and summer about the state’s delayed responses to housing needs after the devastating floods of 2016.

The current revelation dates to problems that arose years ago, as reflected in documents from FEMA.

“The deficiencies include a failure to implement control activities through policies and procedures as well as remediating identified deficiencies timely,” state auditors wrote.

Mitch Carmichael

Senate President Mitch Carmichael on Sunday noted that the problems date back to at least 2009 without apparent correction.

“That’s astounding,” Carmichael, R-Jackson, commented.

Carmichael continued, “I want to make sure we’re not on the same track of reviewing this in another nine years.”

The period coincides with the term of Jimmy Gianato as director of the Department of Homeland Security and Emergency Management.

Gianato recently lost that title, but remains as homeland security adviser. He did not attend Sunday’s meeting of the Legislature’s Post Audits Committee.

“The federal action is the result of several years of DHSEM’s inability to comply with grant requirements and failure to remedy identified issues,” wrote the state’s Performance Evaluation and Research Division.

In a letter dated Nov. 12, 2015, FEMA notified Gianato that the federal agency was placing West Virginia’s emergency management agency on manual reimbursement.

That means West Virginia would no longer be able to draw down federal emergency relief funds directly but instead would need to make payments with state dollars and then seek reimbursement.

“The manual reimbursement penalty significantly changed the process by which DHSEM received federal funds for those grant awards,” state auditors wrote.

The penalty affected the hazard mitigation grants program, public assistance grants, the community assistance program, cooperating technical partners and emergency management performance grants.

It includes all open grants, including those meant to provide assistance following the 2016 floods.

The manual reimbursement may add up to 90 days of additional time for any reimbursement request exceeding $100,000.

State auditors sought comment from the cabinet secretaries who oversaw Military Affairs and Public Safety during the period in question.

Joe Thornton

Former Secretary Joe Thornton, in a signed letter said Homeland Security and Emergency Management never notified him.

Thornton said he had “no recollection receiving notice from any parties mentioned and I also have no correspondence in my files from November 2015 through January 2017 notifying me of any such corrective actions or restrictions placed on DHSEM.”

Jeff Sandy

The current secretary for Military Affairs and Public Safety, Jeff Sandy, told lawmakers on Sunday that he also had not received notification that West Virginia was under heightened federal oversight.

Sandy said he had checked with the governor’s office and no one there was aware either.

“It’s very disappointing to my staff and the governor’s staff that we were unaware of that letter,” Sandy said.

Sandy said the agency is taking steps toward greater efficiency and accountability. He also said he has been communicating with FEMA.

“I assure you contact with FEMA has been conducted,” Sandy said. “Henceforth, they are to send us notification of all issues to the cabinet secretary’s office.”

The penalties imposed on West Virginia are rare, state and federal officials agree.

“Thus far, PERD has identified only one other FEMA grantee, Puerto Rico, as subject to the manual reimbursement process,” wrote auditors for the Performance Evaluation and Research Division.

West Virginia MetroNews was separately asking the Federal Emergency Management Agency’s Region 3 about the sanctions.

“FEMA cannot speak to the application process across other grant programs and federal agencies, but this is the first instance Region III has put a grant recipient on manual reimbursement,” federal officials wrote.

To comply, West Virginia has to submit a financial monitoring plan and monitoring schedule for review. FEMA has been auditing a random sample of sub-recipients from the monitoring plan.

“Once these items are provided and determined adequate, we will validate implementation of WV’s monitoring program at the next scheduled site visit to WV,” wrote FEMA spokesman William Powell, responding to MetroNews questions.

“Only when FEMA is confident that the sub-recipient financial monitoring program is fully implemented by WV and there are no new findings for WV regarding sub-recipient monitoring will we release manual reimbursement on all open FEMA awards administered by the region.”

West Virginia over the past two years has gone through turbulence with separate flood-relief grants of $150 million administered by the U.S. Department of Housing and Urban Development.

West Virginia had the money, but delays meant no apparent action on helping people with housing two years after the flood.

The state Department of Commerce was handling the HUD flood relief money, causing some observers to wonder why Emergency Management was not.

Emails from 2017 showed Gianato among those steering the federal flood relief dollars to flow through Commerce.

He did not mention that his own agency was under heightened scrutiny from the federal government or that grants flowing through it would need to be paid first by the state before receiving federal reimbursement.

When Gov. Jim Justice got frustrated enough with Commerce’s handling of long-term flood relief earlier this year, he transferred the authority.

Gianato was among those seated alongside Justice for the announcement.

During that press conference, Justice was asked if he has faith in Gianato’s work.

Just a couple of weeks prior to that, a state legislative audit concluded the Homeland Security agency could not locate $254,000 in trailers and other equipment.

The question to Justice specifically referred to Homeland Security’s inability to keep track of equipment.

The governor described Gianato as among those doing great work for the state, although Justice didn’t specifically address Gianato’s track record.

“The best answer, I can possibly give you is just this. There are really good people that have tried in their own way to do what’s right. They’ve tried to keep up with and everything else,” Justice said.

“If they think they’re doing a good job and they’re not, then we discover, and we move forward. We absolutely need to watch every dime.”

Earlier this year, the mayor of Clendenin was among those claiming red tape was suppressing help to repair damage from the 2016 floods.

Mayor Shana Clendenin said she had reached out to Homeland Security with no success.

During a press conference in June, state officials were asked about the mayor’s concerns with grant funding delays.

Governor Justice responded, “I can tell you from 80,000 feet, if the processes are not done absolutely correctly, you could get in a situation where you have to pay the money back.”

Justice then called Gianato to the front to help respond. He addressed questions about delays on FEMA funding.

“We don’t have anything under pause,” Gianato said. “We have a few project worksheets where the sub-applicants have made appeals.”

He added, “There’s nothing held up that I’m aware of with FEMA.”

In late October, state officials confirmed that Gianato was losing his title as homeland security director but that he would remain an emergency services adviser, another role he was already filling.

W.Va. Adjutant General James Hoyer

State Adjutant General James Hoyer told MetroNews at the time that Gianato’s shift actually was meant to provide greater focus on drawing down federal grants.

“Most of Jimmy’s responsibilities will be focused on how do we identify what Congress is going to do with mitigation dollars and how do we in West Virginia get our fair share of that to make sure ‘If we clean out these streams it prevents these hundred houses from flooding the next time,’” Hoyer said.

Gianato’s state compensation was $118,811 last year, according to records.

Jimmy Gianato

Gianato started as director of West Virginia’s Department of Homeland Security and Emergency Management in 2005, early in the Manchin administration.

He stayed on through the Tomblin administration and the early part of the Justice administration, despite being associated with a series of controversies.

In 2012, Gianato was at the center of controversy over the state’s purchase of $24 million in internet routers, outside normal bidding procedures.

The same year, reporters revealed that Gianato’s son was being paid for work out of a $126.3 million federal stimulus grant that Gianato was overseeing.

Hoyer, speaking to lawmakers on Sunday, said steps including the placement of Michael Todorovich as director of Homeland Security and Emergency Management, will be steps in the right direction.

He promised lawmakers that there will be greater steps toward auditing and an emphasis on accountability. He asked to report back in January with progress.

“Give me until the January meeting to come back with an update, and I think you’ll see some significant changes,” Hoyer said.

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