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Second Appeal Analysis
PA ID# 009-99009-00; Brevard County
PW ID# PWs 20, 21, 324, 509, 513, 524 (1300-DR-FL) and 861 and 865 (1306-DR-FL); Small Business Administration Loan
FEMA-1300-DR-FL and FEMA-1306-DR-FLBrevard County, PA IDs 009-03FCA-00 and 009-99009-00Debris Removal, Labor Costs, and Equipment Charges, Multiple Project WorksheetsBACKGROUND
Following Hurricane Floyd, FEMA prepared Project Worksheets (PWs) 20 and 21 for debris removal activities and PWs 324, 509, 513, and 524 for emergency protective measures. Following Hurricane Irene, FEMA prepared PWs 861 and 865 for debris removal activities and emergency protective measures, respectively.
On September 29, 2004, the Department of Homeland Securitys (DHS) Office of the Inspector General (OIG) issued audit reports DA-37-04 and DA-36-04. The audit reports questioned costs related to Brevard Countys (Applicant) debris removal, force account labor, and equipment usage following Hurricanes Floyd and Irene. Specifically, the OIG found that the debris removal PWs included costs for the removal of ineligible residential yard waste and garbage, and the Applicant over charged for labor and equipment. Based on this determination, the OIG recommended that FEMA de-obligate $191,828 from PWs 20 and 21 in FEMA-1300-DR-FL and $159,456 from PW 861 in FEMA-1306-DR-FL. The total amount that the OIG recommended for de-obligation for ineligible debris costs was $351,284.
The OIG also determined that the PWs included costs for straight time for the Applicants regular employees. The OIG recommended that FEMA
de-obligate $206,946 from PWs 324, 509, 513, and 524 in FEMA-1300-DR-FL and $76,498 from PW 865 in FEMA-1306-DR-FL. The total amount that the OIG recommended for de-obligation for ineligible labor expenses was $283,444. Finally, the OIG determined that the PWs included ineligible equipment usage charges of $8,316 for PW 524 in FEMA-1300-DR-FL and $12,628 for PW 865 in FEMA-1306-DR-FL.
Based on the OIG audit reports, FEMA de-obligated $407,090 from FEMA-1300-DR-FL and $248,582 from FEMA-1306-DR-FL.
The FEMAs Region IV office in Atlanta sent the OIG reports to the Director of Floridas Division of Emergency Management (State) on June 29, 2005. The State forwarded the letter and OIG audit reports to the Applicant on September 13, 2005. The Applicant responded to the State in a letter dated October 25, 2005. The Applicant did not challenge the OIG determinations that it removed ineligible debris after the two hurricanes. However, the Applicant suggested that the OIG had incorrectly calculated the amount of the de-obligation from the debris removal PWs. The Applicant did not question the OIGs findings relating to its labor expenses and equipment charges.First Appeal
On June 1, 2006, the Applicant submitted its first appeal to the State. The State sent the appeal to FEMA on July 25, 2006. The Applicant argued that FEMA had incorrectly calculated the amount of the de-obligation to remove ineligible debris. The Applicant proposed an alternative method to calculate the amount to be de-obligated for the ineligible debris. The Applicant estimated that it removed 5,768 tons of ineligible residential yard waste and garbage after Hurricane Floyd and 4,734 tons of ineligible debris after Hurricane Irene. Further, it stated that the ineligible amount should be based on the price it pays for normal residential garbage service instead of the price it paid to remove disaster-related debris. FEMA did not accept this argument.
The Applicant argued that, under its personnel policy, all time worked by essential personnel in an emergency is considered overtime. Further, the Applicant argued that although it had destroyed its payroll records relating to its employees work following the hurricanes, it had provided FEMA with alternate documentation in support of its request for reimbursement. FEMA determined that the Applicant did not submit appropriate information to support this request.
The Applicant disagreed with FEMAs decision to de-obligate excess equipment charges because of a lack of documentation to support the costs. The Applicant argued that FEMA incorrectly calculated the hourly rate of reimbursement for its fire trucks. The Applicant argued that it should receive an additional $3,609 and $8,316 for Hurricanes Floyd and Irene, respectively.
The Regional Director denied the Applicants first appeal in a letter dated November 16, 2006, concluding that the Applicants actual debris removal costs provided a more reasonable way to calculate the amount to be de-obligated than what the Applicant and the State had proposed. The Regional Director also concluded that the Applicant had not provided adequate documentation in support of its request for reimbursement of its labor expenses and that regular time for emergency work is not eligible regardless of the Applicants personnel policy. Finally, the Regional Director concluded that the Applicant had not provided sufficient documentation to support its claim for the total number of hours for use of the Applicants fire trucks. In addition, the hourly rate of reimbursement contained in the PWs for the Applicants fire trucks was appropriate.Second Appeal
The Applicant submitted a second appeal to the State on March 29, 2007. The Applicant argues again in the second appeal that FEMA incorrectly calculated the amount to be de-obligated in the context of its debris removal PWs and that FEMA should not de-obligate funds relating to its labor costs and its fire truck usage expenses.
With respect to the debris removal issue, the Applicant argues that its post-hurricane debris removal costs were higher than its normal garbage collection expenses and that the amount to be de-obligated should be based on its normal garbage collection rate. With respect to the labor cost issue, the Applicant asked FEMA to review its alternate payroll documentation before making a final determination on its request for labor expense reimbursement. Regarding the use of its fire trucks while performing emergency protective measures, the Applicant notes simply that Documentation regarding the types and number of vehicles use (sic) has been provided along with utilization records. Brevard County feels that the vehicles used were rated in the appropriate category.
The State forwarded the Applicants second appeal to FEMA in a letter dated October 12, 2007. The State recommends that FEMA not apply the second appeal deadline due to the over-burdened circumstances of the States Division of Emergency Management in the aftermath of the 2007 wildfires in Florida. The State supports the Applicants second appeal.DiscussionCalculation of Cost to Remove Ineligible Debris
The Applicant does not dispute the fact the FEMA reimbursed it for removing ineligible debris. It disputes how FEMA calculated the cost of removing the ineligible debris. FEMA obligated funds for debris removal on a per-cubic-yard basis. It is appropriate for FEMA to de-obligate costs on the same basis.Labor Expenses
FEMAs regulation at 44 CFR §206.228(a)(4) states that The straight- or regular-time salaries and benefits of a subgrantees permanently employed personnel are not eligible in calculating the cost of eligible work under sections 403 and 407 of the Stafford Act
. The Applicant submitted computerized printouts referring to many employees and the hours they worked during a single pay period. None of the records are attributed to the PWs at issue in this appeal or to the types of work the employees performed. The documents submitted with this appeal do not provide a basis to approve this portion of the appeal. Equipment Charges
Pursuant to 44 CFR §206.228(a)(1), FEMA can provide financial assistorn to support its request for assistance for equipment it uses for emergency work. The Applicant stated that, Documentation regarding the types and number of vehicles use (sic) has been provided along with utilization records. (The Applicant) feels that the vehicles used were rated in the appropriate category. The Applicant did not provide any documentation to establish the use of its fire trucks for all of the hours claimed in the PWs.CONCLUSION
Based on the preceding analysis, the Regional Directors decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, the Applicants second appeal should be denied.