Updated: 8/28/2009 9:23:58 AM
By Clay Carey, The Tennessean
CASTALIAN SPRINGS - The day after a twister leveled Angela Douglas' house, her insurance was squared away. Friends and family members quickly found clothes for her family and a place for them to stay.
But the process of asking the federal government for help - that literally drove her to tears.
Douglas was one of hundreds of tornado victims in Middle Tennessee who sought low-interest loans last year from the federal government's biggest disaster relief program. Many found themselves mired in bureaucracy.
"It was so time consuming," Douglas said. "Some of the information you were asked for, you had to have the paperwork. Our paperwork was gone."
After a string of natural disasters in 2008, Congress asked the federal Small Business Administration to improve the way it deals with people who need help, like Douglas. But that work has fallen behind schedule, according to a federal accountability office.
Agency officials were supposed to have updated Congress on its improvements by November 2008, but that update has yet to happen. The agency missed other deadlines to put improvements in place, some by several months. As of June, it had met half of the 26 requirements set out in an act passed by Congress in 2008.
According to a U.S. Government Accountability Office report, the agency has not done enough to make information on disaster loans more readily available in local communities.
The same report noted disaster victims have complained that the loan application process was burdensome and overly complicated.
Douglas' house was one of hundreds swept away in February 2008 during a tornado outbreak that produced the deadliest twisters in two decades.
"They could have given us more time. They could have made people available to us to help with the forms," Douglas said.
An executive who oversees the disaster loan program dismissed that argument.
"It is pretty user-friendly, in my opinion," said James Rivera, acting associate administrator of the Small Business Administration's Disaster Assistance program. He said the agency is making progress in getting Congress' recommendations in place.
Criticized in 2005
The Small Business Administration's loan program is the federal government's main disaster relief program. The low-interest loans are available to homeowners and nonprofit groups as well as businesses.
The agency has been reforming its disaster loan program since 2005, when it was widely criticized for the way it performed after hurricanes on the Gulf Coast. Overwhelmed by requests for aid, hundreds of thousands of emergency loans were held up.
Rivera said the administration has made strides toward bettering the process: the agency has increased limits for business loans and hired a specialist to work with disaster victims. It launched an electronic application system last August.
He said the agency is increasing training for employees and is doing more to explain the program to regional groups. "We're going to continue with that very aggressive marketing campaign," he said.
For Jeff Justice, marketing wasn't the problem. He said a federal disaster worker who showed up in his yard told him about the program. Justice had just finished a two-week hospital stay. A Middle Tennessee storm threw him from his Castalian Springs house, badly injuring him and killing his wife.
"We spent at least three hours filling out paperwork" at a federal aid office set up in a Sumner church, he said. His claim was ultimately denied because the federal government doubted he would be able to pay it back. His grant application to the Federal Emergency Management Agency was also rejected.
"It's all repetitive. They ask for the same stuff," he said. "There ought to be less red tape."
Frustrated by process
In all, 431 Tennessee homeowners applied for loans through the Small Business Administration after the tornadoes of 2008. Only about one in three of those were approved, totaling about $7.7 million. About $2.7 million of that went to Macon County, where the storm killed 14.
Many gave up on the process before the federal government had a chance to review their loan claims. Fifty-three homeowners filed applications and later withdrew them. Hundreds more were given applications but never bothered to turn them in.
"I don't know if they felt it was too large of a process, or if they just didn't understand what the process was," but too many people gave up on the loan program too early, said Terry Gillim, president of the Long Term Recovery Committee of Macon County. The group formed after the tornado to help victims who couldn't get aid elsewhere.
The most common reason for claims being denied, SBA officials have said, was because applicants had bad credit or couldn't repay the loan.
Rivera said the Small Business Administration is making changes that should let people who likely won't qualify know that earlier in the process. He said the agency also is trying to work more closely with FEMA on aid.
In affluent communities, loans can flow more freely. For example, after a deadly 2006 tornado in Goodlettsville, Gallatin and other parts of Sumner County, the agency gave out about $2.5 million in loans. Those storm victims were twice as likely to be approved for loans as residents of rural Macon County were last year.
Although she and her husband were working at the time, and they had no debts other than their mortgage, Douglas' aid application was rejected on the grounds that her family couldn't afford to repay it. "I don't know how they came up with that," she said.
She'd spent several days working on the application in her spare time at work.
"You just get so frustrated. I was at work one day filling out that paperwork, and I just went in the office and cried," she said. "It was a breaking point. People were living in limbo. It was heartbreaking."
