Download disaster cost recovery

 Ron Campbell
• University of North Carolina Chapel Hill, Emergency
Management Coordinator
• 24 years of experience in emergency management
including more than a dozen disaster events
including Hurricane Irene at UNC-CH
 Peter Drenan
• Dewberry, Vice President
• 32 years of experience including 10 years with
FEMA’s Public Assistance program and 10+ years as
architect at University of Virginia
 Recent
 What
Experience
is Public Assistance
 Common
 Tools
Challenges
and Tips
 Recovery
Program
 Snow
Storms
 Hurricane
 Tornados
 Floods
Irene
Disaster Resistant Universities
 Pre-disaster
plan focused on mitigation
• Minimize disruptions and closings
• Protect research
• Control insurance rates
• Reduce damage to facilities
4
Phases:
• Phase 1 - Organize Resources
• Phase 2 – Hazard Identification & Risk
Assessment
• Phase 3 – Developing The Mitigation Plan
• Phase 4 – Adoption & Implementation
 Post-disaster
assistance
 What
•
•
•
•
Federal financial
does it cover:
Debris removal
Emergency protective measures
Repair, replacement, or restoration
Mitigation of damaged facilities
 75%
Federal, 25% State/Local
Why YOU Need to Understand the Program
 MONEY
$$$$$
 Benefits:
• Maximum reimbursement
• Expeditious project approval
• Maximize time and resources
 Consequences:
• Minimal reimbursement
• Delays in project approval
• Diminished credibility
• Appeals
• Audits
• De-obligation of funding
A Real Example

Major storm hit a small university

All 43 buildings flooded for weeks
• Classes were closed
• Students sent home



Administration’s stated goal was to open next
semester for all students
Emergency Financing required to develop
temporary teaching and research facilities
What are the issues and considerations for getting
the work done and getting FEMA reimbursements?

Project Accounting

Unsupported Costs

Duplication of Benefits

Excessive Equipment Charges

Unrelated Project Charges

Excessive Labor and Fringe Benefits Charges

Poor Contracting Practices

Unapplied Credits
 Criteria: Federal
regulations (44 CFR 13.20
and 206.205) require each subgrantee to:
• maintain a system that accounts for FEMA funds on a
project-by-project basis.
• The system must disclose the financial results for all
FEMA-funded activities accurately, currently, and
completely.
 Examples:
• Collecting or tracking the information well after the
incident
• Notes were maintained by hand


Criteria: Federal regulations (OMB Circular A-87
and 44 CFR 13.20) require that costs claimed
under federal programs be adequately
supported by source documentation such as
cancelled checks, payrolls, contracts, etc.
Examples:
• Invoices do not provide detailed dates that coincided
with the storm.
• Records for vehicle use does not match up with the
payroll records.
• Records for vehicle use cannot be verified with event
related calls.
• Receipts do not have an employees name associated with
it.
 Criteria: Government
laws and regulations
(Stafford Act and 44 CFR 206.191) prohibit
duplication of benefits.

Examples:
• Insurance claim not submitted for a project
covered by insurance.
• Reimbursement from another source was not
disclosed on the Project Worksheet.


Criteria: According to OMB Circular A-87, grants must
be reduced by credits that offset or reduce expenses
allocable to federal awards.
Examples:
• Jurisdiction received proceeds from the sale of
scrap material related to the FEMA project but
did not apply them.
• Jurisdiction received two credit discounts for
early payments to a contractor that were not
applied.


Criteria: Federal regulations (44 CFR 206.228) require
that subgrantees use the FEMA schedule of equipment
rates or their local rates, whichever are lower.
Example:
• Claiming the FEMA equipment rate rather than
the lesser local rate.
 Criteria: According
to OMB Circular A-87,
charges to federal grants must be necessary
and reasonable to fulfill the objective of the
grant program.

Examples:
• Unrelated charges were included in a claim.
• Funding received was not applied to the correct
project.


Criteria: According to OMB Circular A-87,
allowable costs must be consistent with policies,
regulations, and procedures that apply uniformly to
both federal awards and other activities of the
governmental unit. According to 44 CFR 206.228,
straight or regular-time salaries and benefits of
permanent employees engaged in emergency
service work are not eligible for FEMA assistance.
Example:
• Fringe benefit rates are applied differently to
overtime compared to regular time.
• Regular time is almost always not eligible.
 Criteria. According
to federal regulations (44
CFR 13.36), a subgrantee must comply with
specific procurement standards.

Examples:
• Jurisdiction did not document the basis or
method for the contract selection.
• Jurisdiction entered into a contract which
included an overhead and profit allowance of
25% of actual costs.
Xavier University
of Louisiana
 Xavier
received $75.4 Million for damages
 40 ‘large’ and
 Inspector
 At
57 ‘small’ grant authorizations
General audit done in June 2010
that time, $35 million had been disbursed
 Final
IG Recommendation:
• Disallow $75.4 million
Xavier University
of Louisiana
#1- Disallow $25,648,720 due to unsupported costs
#2 – Disallow $49,409,570 due to ineligible
contract costs
#3 – Disallow $281,430 due to ineligible insurance
costs
#4 – Disallow $12,291 due to ineligible facilities
#5 – Finalize insurance review and allocate
proceeds to repairs
#6 – Implement controls on time restrictions &
extensions
 Standard
Systems
• Documentation
• Checks and balances
• Use it everyday
 Project Worksheet
• How to fill them out
 How
to Think During an Event
Documentation is key!
 Policies
should require departments and
personnel to:
• maintain a system that accounts for university
funds on a project-by-project basis.
• The system must disclose the financial results for
all university-funded activities accurately,
currently, and completely
• Costs being claimed must be adequately
supported by source documentation such as
cancelled checks, payrolls, contracts, etc.
 Duplication
of Benefits
 Excessive
Equipment Charges
 Excessive
Labor and Fringe Benefits
 Poor
Contracting Practices
 Unapplied
Credits
The more you use it the easier it will be!
Basic Project Information
Damage Description and Dimensions
Scope of
Work
Special Considerations
Cost
Describe
the damage description
and dimensions
Describe
the cause of the damage
Describe
the pre-disaster condition
Quantify
damage
the disaster related
Describe
how you fixed the damage,
scope of work
 Necessary
 Justifiable
 Normal
vs. Unnecessary
vs. Unjustifiable
Policies/Process vs. Not Normal
Next
steps:
• Review systems
• Adjust/Develop systems
• Establish/adjust processes and
policies
• Train staff
 Common
Challenges Can be Navigated
 Documentation, Documentation,
Documentation!