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Second Appeal Brief
Citation:FEMA-1603-DR-LA, Housing of New Orleans
PA ID# 071-U8M7N-00; Housing Authority of New Orleans
PW ID# Multiple Project Worksheets; Duplication of Benefits
Summary: The Applicant submitted cost reimbursement for emergency work performed at various facilities for which it responsible. FEMA prepared 39 PWs for these facilities to address the emergency protective measures of mold remediation and pest control. The FEMA insurance specialist determined that the level of federal assistance should be reduced by the amount of anticipated insurance recovery the Applicant would receive from the insurance underwriter. The PWs were obligated for zero dollars due to the anticipated insurance proceeds.
The Applicant submitted its first appeal on February 23, 2007, requesting that FEMA reverse the anticipated insurance proceeds deduction. After reviewing the information provided in the Applicants first appeal, FEMA determined that the interpretation of section 312(a) Duplication of Benefits of the Stafford Act (42 U.S.C. 5155) applies to both emergency work and permanent work. FEMA denied the Applicants first appeal in a letter dated April 19, 2007.
In its second appeal, August 14, 2007, the Applicant again appealed the anticipated insurance proceeds reduction and requested that versions to the 39 PWs be written to restore the amount deducted as anticipated insurance proceeds. No additional documentation was provided. The appeal centers on two arguments:
1. The Applicant asserts that section 312 is applicable only to permanent work. The Applicant has not credited insurance against the emergency work; therefore, there has been no duplication and reductions should not be made.
2. The Applicant claims that FEMAs reductions for anticipated insurance proceeds were arbitrary because the insurance was counted against eligible emergency work rather than permanent work.
Issues: 1. Does section 312 of the Stafford Act only apply to permanent work?
2. Was the allocation basis for the insurance proceeds arbitrary?
Findings: 1. No. It applies to both emergency and permanent work.
2. No. An insurance review of the coverage was performed by FEMAs insurance specialist to determine coverage with respect to the scope of work of each PW.
Rationale: Section 312 of the Stafford Act.