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Second Appeal Analysis
PA ID# 055-99055-00; Monroe County
PW ID# Various Project Worksheets; Cost Overruns
As a result of a severe ice storm during the period April 3-5, 2003, Monroe County (Applicant) performed debris removal from public roads and parks, and installed electric generators to restore temporary power to the countys wastewater treatment plant and pumps stations. The Applicant requested assistance from the Federal Emergency Management Agency (FEMA) for costs associated with this work, as well as other emergency protective measures costs which are not the subject of this appeal.
During the month of August 2003, FEMA prepared and obligated nineteen Project Worksheets (PWs) for $2,147,980.66 of actual and estimated eligible work. All work on these PWs was completed by November 12, 2003.
In a letter date January 28, 2005, the Applicant submitted to the New York State Emergency Management Office (SEMO) Project Completion and Certification Reports (P-4s) on all nineteen PWs, certifying that the work had been completed and that all eligible claims had been paid in full. In that same letter the Applicant requested that SEMO and FEMA consider additional costs that had not been included in the nineteen PWs and not discovered until the Applicants county controller audited the ice storm records in the process of preparing the P-4s. Those additional costs totaled $132,346.36, which included a cost reduction of $9,608.67 for a duplicate claim.
In a letter dated June 8, 2005, FEMA Region II informed SEMO that it had denied the additional costs based on the 60-day deadline required in 44 C.F.R. §206.202. SEMO conveyed FEMAs denial of additional assistance to the Applicant in a letter dated
June 23, 2005.
The Applicant submitted its first appeal in a letter dated July 5, 2005, arguing that the additional costs were directly associated with the work on five of the nineteen PWs which had been approved and obligated and, therefore, were not in violation of the 60-day regulatory deadline. SEMO conveyed the Applicants first appeal letter without recommendation to FEMA Region II on July 18, 2005. FEMA Region II denied the Applicants first appeal in a letter dated August 25, 2005, stating that the five PWs in question had been written as 100% complete at the time they were obligated in August 2003. SEMO informed the Applicant of FEMAs decision in a letter dated November 4, 2005.
The Applicant submitted a second appeal of FEMAs determination to SEMO on October 25, 2005, which was transmitted by SEMO to FEMA in a letter dated November 4, 2005. The Applicant again pointed out that the additional costs had not been discovered until late 2004 when the county controller reconciled disbursement records while preparing the P-4s. The Applicants appeal included detailed information concerning the unreported costs and provided adjustments to the five PWs which are summarized as follows:
Table 1 Cost changes to PWs 926, 816, 914,818, & 756
EOC food service in excess of estimate
Vendor invoices were erroneously posted to County operating account instead of to disaster recovery account
Accounting error resulted in 50% of eligible costs coded to wrong account
Eligible overtime hours for force account labor not claimed
EOC food costs claimed twice
44 CFR §206.204(e) addresses cost overruns, and allows subgrantees to request additional funding when actual project costs exceed approved Project Worksheet estimates. These regulations establish a different treatment of cost overruns on small projects from those on large projects. 44 C.F.R. §206.204(e)(2) requires a subgrantee to apply for a net cost overrun on all its small projects within 60-days following the completion of all its small projects. Since all of the Applicants projects were completed by November 12, 2003, and it did not apply for consideration of cost overruns on its small projects until January 28, 2005, the Applicant is well past the deadline for filing a timely appeal for cost overruns on its small projects. Consequently, FEMA cannot consider cost overruns on the Applicants small projects, PWs #926 and #816. However, the cost overruns on the Applicants two large projects, PWs #914 and #818, are eligible for FEMA funding.
Cost overruns may be considered under the provisions of 44 C.F.R. §206.204(e).
The Applicants deadline for filing an appeal for a net cost overrun on its small projects has passed; consequently, its request for additional funding on its small projects, PWs #926 and #816, is denied.
However, the Applicant is eligible for reimbursement of the cost overruns on its two large projects, PWs #Z818 and #914. The Regional Director will prepare supplements to PWs #818 and #914 for $21,162.25 and $4,824.03, respectively. The Regional Director will also prepare a supplement to PW #756 for ($10,039.92) because EOC food costs were claimed twice in the original PW. The Applicants appeal is partially approved.