Appeal Summary | Appeal Letter | Back
Second Appeal Letter
PA ID# 019-92012; Charleston County School District
DSR ID# N/A; South Carolina, Project Management Costs
February 25, 1998
Mr. Ron Claypool
Governor's Authorized Representative
Office of the Governor
Columbia, South Carolina 29201
Dear Mr. Claypool:
This is in response to the second appeal submitted by the State on behalf of the Charleston County School District (PA ID #019-92012, FEMA-843-DR-SC). The applicant is requesting reimbursement of Project Management Costs (PMCs) reportedly resulting from disaster-related work following Hurricane Hugo in September 1989. The primary issue in the appeal is that the various claims were not reviewed by FEMA using the same criteria as previous claims for PMCs for other applicants.
In August 1994, five years after the disaster event, representatives from the Federal Emergency Management Agency (FEMA) and the State Public Assistance Program (SPAP) met with officials from the Town of Mount Pleasant to discuss the Town's appeal of the Inspector Generals' Audit Report E-11-94. One of the many issues discussed in this meeting was the question of eligibility of administrative costs not originally funded by FEMA. Upon review of pertinent information, FEMA determined that the expenses in question were PMCs and not administrative costs as originally identified. The Town of Mount Pleasant was appropriately reimbursed.
Following this decision, SPAP issued Guidance No. 13-94 dated October 26, 1994, which notified applicant agents that their entities may be entitled to additional funding due to "1. policy reversals; 2. inconsistent application of the federal code of regulations and thus inconsistent treatment of Subgrantees; and 3. improper eligibility decisions." The four areas of potential additional funding SPAP cited were PMCs previously classified as administrative costs, supplies previously classified as equipment, landfill replacement costs due to lost landfill capacity, and damage survey reports (DSRs) considered ineligible because of an estimate below $250.
In response to the SPAP Guidance, the applicant submitted a request through SPAP for additional FEMA funding for costs considered to be associated with project management activities. Although the request was submitted well beyond the allowable deadline for reporting damages, the regional staff accepted the request for consideration of eligibility. The costs were denied based on various program issues.
The applicant filed a first appeal requesting FEMA reconsider the determination of ineligible costs. The State transmitted the applicant's first appeal with a letter dated July 18, 1997. The applicant requested funding of $932,969. The Regional Director denied this appeal for several reasons. First, the Regional Director noted that many of the DSRs were less than the small project threshold. Pursuant to Title 44 of the Code of Federal Regulations (CFR), section 206.204(e)(3) small projects will not be supplemented without performing a small project netting. Second, costs associated with damages covered by the Department of Education (DOE) should have been claimed to DOE as the responsible Federal agency. Additionally, all insurance proceeds would need to be reviewed to determine if the insurance proceeds received exceeded the actual costs for repairs to facilities. Lastly, the Regional Director stated that work to be considered for funding must be directly related to a specific project covered under a DSR, otherwise costs are considered indirect and ineligible for Federal assistance.
The applicant appealed this determination in a letter dated November 5, 1997. The State forwarded this appeal with a transmittal letter dated December 1, 1997. The applicant did not provide additional documentation to substantiate their claims for PMCs. Although the appeal letter addresses specific determinations of ineligibility for individual costs, the primary issue of the appeal is that the claims were not reviewed using the same criteria used for previous claims for other applicants. It is important to recognize that all requests are evaluated for eligibility based on their own merit.
Further, it is noted that the Mount Pleasant case does not represent a policy reversal as asserted by SPAP. Funding granted to Mount Pleasant was provided based on the eligibility of PMCs. This determination was consistent with policy and regulations in place at the time of the disaster, and does not signify new policy.
Based on a review of all documentation submitted with the appeal, we have concluded that the determination of ineligibility made by the Regional Director is consistent with FEMA regulations and policy. The applicant has not provided sufficient documentation to alter the regional staff's initial determination. Additionally, the assertion by SPAP and the applicant that FEMA has funded similar costs to other applicants, thus setting a precedence for funding these costs, is unfounded. Accordingly, I am denying the appeal.
Please inform the applicant of my determination. The applicant may submit a third appeal to the Director of FEMA. The appeal must be submitted through your office and the Regional Director within 60 days of receipt of this determination.
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
cc: John B. Copenhaver
FEMA Region IV