Net Small Project Overrun

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1046-DR
ApplicantPlumas County Department of Public Works
Appeal TypeSecond
PA ID#063-00000
PW ID#N/A
Date Signed1999-10-15T04:00:00
Citation FEMA-1046-DR-CA, P.A. 063-00000, Plumas County Department of Public Works, Net Small Projects Overrun

Cross-reference Cost Overrun, Small Project, Time Extension

Summary As a result of winter storms in 1995, the Plumas County Department of Public Works (County) initiated 33 small projects. The small projects were obligated for a total of $219,513. Upon close-out, FEMA de-obligated $8,221 in ineligible costs from DSR 75323 because the approved scope of work was not completed. The net small project overrun was $12,574. The final small project was completed by November 28, 1996. According to 44 CFR 206.204(e), the County had 60 days from the date of the final small project completion to appeal for reimbursement of its net small project cost overrun. FEMA extended this deadline to August 31, 1997. The County's application was closed out on July 28, 1998, without an adjustment to the small project funding because a Net Small Project Overrun request was not received before the deadline. FEMA received the County's first appeal from the Governor's Office of Emergency Services (OES) on December 17, 1998. The State claimed that the County was unaware of the NSPO deadline and was unable to request NSPO because they had not received the P.4 Project Completion and Certification Report. FEMA denied the appeal on January 11, 1999, because FEMA did not receive the net small project overrun request by the deadline. The County submitted its second appeal on January 19, 1999 requesting re-obligation of $8,221 in ineligible costs to offset cost of the NSPO. The County provided no new information to support its appeal.

Issues 1) Is the County's appeal for re-obligation of $8,221 in ineligible costs from DSR 75323 eligible for reimbursement?

Findings 1) No. The eligible scope of work on DSR 75323 was not completed.

Rationale 44 CFR 206.204(e) and  206.205(a)

Appeal Letter

October 15, 1999

D. A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023

Re: Second Appeal - Plumas County Department of Public Works, Net Small Project Overrun, FEMA-1046-DR-CA

Dear Mr. Christian:

This is in response to the above referenced second appeal forwarded to the Federal Emergency Management Agency (FEMA) on March 9, 1999. Following winter storms in 1995, the Plumas County Department of Public Works (County) initiated 33 small projects. The County is asking for reimbursement of $8,221 previously de-obligated from Damage Survey Report (DSR) 75323 to balance out a net small project cost overrun.

A FEMA/State inspection team prepared DSR 75323 for $10,207 to repair a road slip out on Twain Butterfly County Road #417. Heavy rains caused the slip out of an embankment supporting the roadway along a steep slope adjacent to a railway. The eligible scope of work included drilling and blasting the opposite cut slope to restore the pre-disaster function of the roadway. The applicant completed the required drilling; however, due to the vulnerability of the railway below, the applicant was unable to obtain the necessary blasting permits. The County, having spent $1,986, reopened the narrow roadway without completing the work described on the DSR.

By November 28, 1996, the applicant had completed work on all small projects. Thirteen months later, on December 31, 1997, the applicant requested that FEMA prepare a DSR to provide reimbursement for a Net Small Project Overrun (NSPO) of $4,353. FEMA extended the deadline for NSPO submittals to August 31, 1997, for subgrantee's whose small projects were completed by April 30, 1997. On June 29, 1998, FEMA received the County's completed P.4 Project Completion and Certification Report. Upon closeout of the County's application, FEMA de-obligated $8,221 from DSR 75323 on July 28, 1998, because the approved scope of work was not completed. On September 4, 1998, FEMA denied the request for an adjustment to the small project funding because the NSPO request was not submitted by the August 31, 1997 deadline.

FEMA received the County's first appeal from OES on December 17, 1998. In the appeal, the County requested that FEMA prepare a supplemental DSR for $12,574 to cover their NSPO. In a letter forwarding the first appeal, the State claimed that the County was unaware of the NSPO deadline and requested that FEMA consider granting the appeal. On January 11, 1999, the Disaster Recovery Manager denied the first appeal on the grounds that the NSPO was submitted to FEMA well after the deadline.

According to 44 CFR 206.204(e), the procedure governing the submittal of NSPOs is as follows:
"FEMA will not normally review an overrun for an individual small project. The normal procedure for small projects will be that when a subgrantee discovers a significant overrun related to the total final cost for all small projects, the subgrantee may submit an appeal for additional funding . within 60 days following the completion of all its small projects."In a second appeal letter submitted to OES on January 19, 1999, the County requested that FEMA re-obligate $8,221 in ineligible costs from DSR 75323. The applicant proposed that this reimbursement would assuage the costs incurred by small project cost overruns. On March 9, 1999, OES supported the applicant's appeal and recommended that FEMA should reach a compromise by balancing the cost overruns against the ineligible costs from DSR 75323.

The regulations regarding payment of claims on small projects codified in 44 CFR 206.205(a) require that FEMA de-obligate funds when an applicant fails to complete a project. This regulation is reflected on DSR 75323 in the comment: "This DSR is limited to the approved scope of work and.[d]eviation from the approved scope of work.may jeopardize funding." Upon closeout of the application, FEMA de-obligated $8,221 from DSR 75323 because the approved scope of work was not completed.

Although  206.205 allows individual small project cost underruns to balance out cost overruns, FEMA may not balance out cost overruns by approving ineligible costs. Pursuant to 44 CFR 206.204(e), an applicant must submit an appeal requesting an adjustment to the small project funding for any cost overrun with documentation justifying the additional costs incurred. FEMA has obligated the federal share of $211,292 in eligible small project costs, but because the applicant did not complete the scope of work described on DSR 75323, the applicant is not eligible for reimbursement of $8,221 and no net small project adjustment will be made. Accordingly, this appeal is denied.

Please inform the applicant of my decision. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206, which constitutes the final level of appeal in accordance with 44 CFR 206.206(e).

Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
cc: Martha Whetstone
Regional Director
FEMA Region IX
Last updated