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Second Appeal Letter
PA ID# 109-99109-00; Pearl River County Board of Supervisors
PW ID# 8131, 8733, 8761, 8771 & 9471; Project Management Costs
August 7, 2012
Robert Latham, Jr.
Mississippi Emergency Management Agency
P.O. Box 5644
Pearl, MS 39208
RE: Second Appeal–Pearl River County Board of Supervisors, PA ID 109-99109-00,
Project Management Costs, FEMA-1604-DR-MS, Project Worksheets (PWs) 8131, 8733, 8761, 8771 & 9471
Dear Mr. Latham:
This letter is in response to a letter from your office dated August 10, 2011, which transmitted the referenced second appeal on behalf of the Pearl River County Board of Supervisors (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $10,950 in project management costs.
In the aftermath of Hurricane Katrina, heavy rain and flooding coupled with increased traffic of heavy equipment and vehicles performing debris removal activities damaged roads, culverts and ditches in Pearl River County. The Applicant used force account labor, equipment and materials to repair the roads and culverts. FEMA prepared the above referenced five Project Worksheets (PWs) documenting the damage to the roadways, the eligible scopes of work, and cost estimates.
During the final inspection process, the Applicant provided documentation of incurred expenses of $10,950 for an independent contractor hired to assist with preparing documentation for the repair PWs. At a meeting with the Applicant on March 1, 2010, FEMA requested additional information to document the type and amount of work performed by the independent contractor. The Applicant did not submit the requested information and FEMA denied the requested project management costs for PW 8131 ($962.51), PW 8733 ($1,212.50), PW 8761 ($1,412.50), PW 8771 ($2,412.50), and PW 9471 ($4,950.00).
On July 8, 2010, the Applicant filed its first appeal requesting that FEMA reimburse the total ineligible project management fees of $10,950. In its appeal, the Applicant asserted that the contractor monitored road crews performing construction work, verified that the crews reported for duty, segregated road construction sites to associate the projects with PWs, and prepared paperwork for submission of PWs to the Mississippi Emergency Management Agency (Grantee). The FEMA Region IV Regional Administrator denied the Applicant’s first appeal on March 11, 2011, stating that the activities performed by the Applicant’s contractor were classified as grant administration activities. The Regional Administrator cited FEMA Policy 9525.6 Project Supervision and Management Costs of Subgrantees, dated April 22, 2001, which states that “there are activities that Subgrantee’s may consider to be project specific, but are actually grant administration activities and, therefore, are not eligible as project supervision and management costs…These grant administration activities are covered by the statutory administrative allowance (sliding scale) that is automatically added as a percentage of the total amount of assistance for a subgrantee when the projects are processed.” The Regional Administrator noted that funding for the Applicant’s grant administration activities was obligated to the Grantee via the sliding scale for each PW at the time of PW approval.
The Applicant submitted its second appeal in a letter dated June 17, 2011, which the Grantee forwarded to FEMA on August 10, 2011. The Applicant reiterates its claim that the project management fees incurred should be reimbursed. According to the Grantee, officials representing FEMA and the Grantee advised the Applicant that it should enlist someone with Public Assistance experience to manage the work. The Applicant submitted a letter to the Grantee dated September 3, 2010, stating the contractor worked with road crews to mark and verify that all roads matched the PWs, monitored work being performed, verified workers on the job and the equipment used to perform the work, and prepared paperwork to be submitted to the Grantee. Further, it states the contractor played a vital role in the process of the Applicant tracking all of the PWs and reporting the work correctly. The Grantee recommends that FEMA reimburse $10,950 for project management fees.
While the Applicant’s contract did not provide documentation of the activities to be performed by the contractor, the Applicant’s description of the contractor’s activities of monitoring and documenting the work performed for the purposes of requesting reimbursement are consistent with grant administration activities and not project management. Pursuant to FEMA Policy 9525.6 Project Supervision and Management Costs of Subgrantees, “…administrative activities are those necessary in requesting, obtaining, and administering Federal disaster subgrants. Examples include identifying damage; writing PWs; assessing damage; attending Grantee and FEMA meetings; completing forms to request assistance; establishing files; collecting cost data;
developing cost estimates; and working with the Grantee and FEMA during project monitoring, final inspections and audits.” These grant administration activities are funded by the statutory administrative allowance, which was obligated to the State via the sliding scale for each PW at the time of PW approval. The requested funding is therefore not eligible as project management costs.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, I am denying the second appeal.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Deputy Associate Administrator
Office of Response and Recovery
cc: Major P. May
FEMA Region IV