The year 2022 is key to Puerto Rico's reconstruction. So far, for the damages caused by Hurricane María, the Federal Emergency Management Agency (FEMA) has approved 1,540 emergency projects totaling $5.382 billion, of which $4.142 billion has already been reimbursed. For permanent work—the reconstruction that will modernize our infrastructure and provide the resilience to mitigate future disasters—FEMA has approved 7,296 projects totaling $19.496 billion. Added to this is the recent obligation of $554 million for the Public Housing Administration, more than $2.167 billion in CDBG-DR funds for the state match, and millions of dollars from insurers for permanent works. Altogether, we are talking about over $23 billion!

Of the 7,296 projects, 5,617 are municipal and represent $2.175 billion of FEMA’s share or 11% of the total. Seventy-eight percent of FEMA’s funds are distributed among the Puerto Rico Electric Power Authority (PREPA), the Puerto Rico Aqueduct and Sewer Authority (PRASA), and the Department of Education. Another 9% is held by eight central government entities, including the University of Puerto Rico with $456 million and the Puerto Rico Industrial Development Company (PRIDCO) with $211 million.

These historic approvals would not have been possible without the technical assistance and direct support provided by more than 200 Puerto Ricans working at the Central Office for Recovery, Reconstruction and Resilience (COR3). They continuously assist our subrecipients (state agencies, public corporations, municipalities, and nonprofit organizations) so they can repair, restore, or replace their eligible facilities using FEMA funds.

With so much funding approved for reconstruction, questions arise: What has happened? What should we expect (and when)? Who is responsible for carrying out the work? Who disburses the funds? Who ensures compliance with all federal requirements and that FEMA money is used correctly?

First, neither COR3 nor FEMA executes the projects. That responsibility lies with public entities and nonprofit organizations. In this process—from hiring engineers and architects to design plans, to bidding out construction contracts—COR3 plays a fundamental role in ensuring compliance with FEMA, including training, technical assistance, and administrative support.

In October 2021, subrecipients reported to COR3 that they had completed 1,100 emergency projects and 337 permanent works. Much of COR3’s effort in 2021 focused on removing obstacles and streamlining processes so subrecipients could begin design work, obtain permits, and conduct construction bids. By the end of 2021, there were more than 1,700 projects in the design stage, over 100 in the permitting and bidding stage, and 558 under construction, collectively valued at more than $4 billion.

For municipalities specifically, COR3 has a dedicated team to support projects funded by FEMA. As of December 2021, there were 980 permanent projects in the bidding phase and 514 ready to begin initial construction activities, all valued at $1.2 billion.

Second, FEMA programs operate on a reimbursement basis. That means neither FEMA nor COR3 can “release approved funds” or advance 50% of the money. Agencies or municipalities, for example, must finance project development first and then request reimbursement for eligible expenses. For this reason, in 2021 we implemented initiatives (and will continue to do so) to address liquidity issues so subrecipients can advance their projects. To date, $262 million in permanent work funds has been disbursed. As construction advances, so will reimbursement requests, and thus the amount of money disbursed.

From 2017 to March 2019, FEMA handled disbursements. In April 2019, this responsibility transferred to COR3. Due to the political crisis in the summer of 2019, FEMA resumed disbursements from July to October, and then returned the responsibility to COR3 in November 2019, where it remains today. Furthermore, FEMA requires that before COR3 can authorize a reimbursement request, all documentation must be complete and 100% compliant. Failure to meet this requirement risks non-compliance findings and the potential need to return funds to the federal government. Therefore, FEMA conducts periodic audits of disbursements, and COR3 maintains internal controls to prevent fraud and misuse of FEMA funds.

Finally, Governor Pedro Pierluisi has been clear: this is the four-year term of action and delivery. COR3 is committed to ensuring that at least 2,000 FEMA-funded projects are put out to bid or begin construction in 2022, including the first repairs to the electric transmission and distribution system, water and sewer systems, schools, universities, hospitals, roads and bridges, industrial parks, ports, recreational facilities, and sports infrastructure. These 2,000 projects will impact our economy, with the expectation of creating around 40,000 jobs—mostly in the construction sector. To achieve this, COR3 will continue improving efficiencies, addressing challenges effectively, and streamlining the reimbursement process without compromising the internal controls necessary to ensure transparency and full compliance with FEMA and federal requirements.