PA ID# 037-90027; California Institute of Technology
DSR ID# 27782, 27788, 28889, and 27790; Unsupported Project Costs
Citation: FEMA-1008-DR-CA; California Institute of Technology; Supplemental DSRs 27787, 27788, 28889, and 27790
Cross-reference: Unsupported Project Costs
Summary: As a result of damage from the Northridge Earthquake, FEMA prepared over 200 Damage Survey Reports (DSRs) for the facilities at California Institute of Technology (Cal-Tech). Subsequent to closing the project, the Office of Inspector General (OIG) conducted an audit of Cal-Techs application and found ineligible and unsupported projects costs. Concurring with OIG recommendations, the FEMA Regional Office prepared five supplemental deobligation DSRs. Cal-Tech appealed four of the DSRs in January 2002 for unsupported project costs for force account labor charges and repairs to a mass spectrometer. It claimed FEMA failed to consider indirect evidence in lieu of an invoice and applied excessive standards in interpreting OMB cost principles for documenting costs. FEMA in a September 2002, letter upheld its decision. Cal-Tech submitted a second appeal in November 2002. Cal-Tech stated that FEMA standard for documenting allowable costs was inconsistent with applicable Federal regulations and law. No additional enclosures are being provided with this second appeal because the enclosures and arguments set forth in Cal-Techs first appeal were not properly considered. Cal-Tech reiterated its legal argument and provided case law in support of their argument.
Issues: Whether the applicant actually performed labor and expended funds for the work described in the Damage Survey Reports.
Findings: Cal-Tech did not provide proper documentation to support force account labor costs and repairs for the mass spectrometer.
Rationale: OMB administrative requirements and cost principles for grants, 44 CFR §13.20(b)(5), Standards for financial management systems; and 44 CFR §13.42, Retention and access requirements for records.