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Lodging Costs

Appeal Brief Appeal Letter

Appeal Brief

Disaster1604-DR-MS
ApplicantSt. Stanislaus College Preparatory School
Appeal TypeSecond
PA ID#045-02226-00
PW ID#10291, 10332 and 10695
Date Signed2012-03-05T05:00:00

Citation:        FEMA-1604-DR-MS, St. Stanislaus College Preparatory School, Lodging Costs, Project Worksheets (PW) 10291, 10332 and 10695
Cross -
Reference:      Documentation
Summary:          Hurricane Katina caused extensive damage to the St. Stanislaus College Preparatory School’s (Applicant) campus.  FEMA prepared PW 10291 for emergency protective measures, PW 10695 for debris removal work, and PW 10332 for permanent repairs to the Applicant’s baseball stadium.  The Applicant entered into a time and materials contract with Belfor USA (Belfor) to perform the work.  Following an audit by the DHS Office of Inspector General (OIG), the OIG recommended that FEMA conduct a 100 percent review of Belfor’s invoices to determine reasonable costs.  Subsequently, FEMA reviewed PWs 10291, 10695, and 10332.  This resulted in a de-obligation of vendor costs including lodging and meals that were not documented.
          In its first appeal, the Applicant requested that FEMA reimburse a $95 per diem rate ($30 for food and $65 for lodging) as reasonable costs.  The Regional Administrator partially granted the appeal and determined that meal costs did not require documentation per Federal government per diem policy.  FEMA was unable to verify the length of time and the number of employees who utilized lodging in support of the disaster-related work and, consequently, denied the lodging costs.
          In its second appeal, the Applicant reiterates that its request for lodging costs is reasonable.  Applicants must provide source documentation to support accounting records in accordance with 44 CFR §13.20(b)(6) Standards for financial management systems. Source Documentation.  Costs must be documented by records, such as invoices or receipts prepared by the applicant.  The Applicant agreed to a daily rate for lodging costs with Belfor that matched the GSA maximum lodging rate for that location and time period.  Additionally, Belfor has certified that it only charged for lodging per employee if lodging was actually incurred.
Issues:          1.  Did the Applicant provide documentation to support the contractor lodging costs?
                      2.  Are the contractor lodging costs eligible for Public Assistance?
Findings:        1.  Yes.
                       2.  Yes.
Rationale:     44 CFR §13.20(b)(6) Standards for financial management systems. Source documentation

Appeal Letter

March 5, 2012

Robert Latham
Executive Director
Mississippi Emergency Management Agency
P.O. Box 5644
Pearl, MS 39208
RE: Second Appeal–St. Stanislaus College Preparatory School, PA ID 045-02226-00, Lodging Costs, FEMA-1604-DR-MS, Project Worksheets (PW) 10291, 10332 and 10695

Dear Mr. Latham:

This letter is in response to a letter from your office dated November 9, 2010, which transmitted the referenced second appeal on behalf of the St. Stanislaus College Preparatory School (Applicant).  The Applicant is appealing the Department of Homeland Security’s (DHS) Federal Emergency Management Agency’s (FEMA) denial of $220,711 in contractor lodging costs. 

Background

Hurricane Katina caused extensive damage to the Applicant’s campus.  FEMA prepared PW 10291 for emergency protective measures, PW 10332 for permanent repairs to the Applicant’s baseball stadium, and PW 10695 for debris removal work.  The Applicant entered into a time and materials contract with Belfor USA (Belfor) to perform the work.  Following an audit by the DHS Office of Inspector General (OIG), the OIG recommended that FEMA conduct a 100 percent review of Belfor’s invoices to determine reasonable costs.  Subsequently, FEMA reviewed PWs 10291, 10332, and 10695, and de-obligated undocumented vendor costs including lodging and meals.

First Appeal

On November 5, 2009, the Applicant submitted a first appeal requesting that FEMA reimburse a $95 per diem rate ($30 for food and $65 for lodging) as a reasonable cost.  The Applicant asserted that this pre-arranged agreement with its contractor was common industry practice following large-scale events.  The Regional Administrator partially granted the request in a letter dated July 15, 2010.  FEMA determined that meal costs did not require documentation per Federal government per diem policy.  Accordingly, FEMA approved reimbursement for meal costs at the per diem rate of $30 per day.  However, as FEMA was unable to verify the length of time and the number of employees who utilized lodging in support of the disaster-related work, the request for reimbursement of lodging costs was denied.

Second Appeal

On September 17, 2010, the Applicant submitted a second appeal, which was forwarded to FEMA by the State on November 9, 2010.  The Applicant reiterated that the request for lodging costs is reasonable.  The Applicant requested reimbursement for lodging expenses for the same number of contract employees that FEMA has already determined to be reasonable in the first appeal. 


Discussion

The Applicant entered into a time and materials contract with Belfor.  In those limited circumstances when time and material contracts are used, FEMA only reimburses reasonable costs.  Applicants must provide source documentation, such as cancelled checks or paid bills, to support accounting records in accordance with 44 CFR §13.20(b)(6) Standards for financial management systems.

On January 5, 2012, FEMA Public Assistance Headquarters held a conference call with the State and the Applicant.  It was agreed that the Applicant would provide a letter from Belfor certifying that it incurred the cost of $65 per night for lodging for each of the workers for whom it billed the Applicant for meals and that none of the workers were local.  The Applicant has submitted documentation of the lodging costs it incurred.  Additionally, the requested per diem rate of $65 for lodging matches the U.S. General Services Administration’s published lodging per diem rate for Mississippi for FY2005.

Conclusion

I have reviewed the information submitted and have determined that the Applicant has provided sufficient documentation to substantiate the $220,711 in contractor lodging costs.  Accordingly, I am approving the second appeal.  By copy of this letter, I am requesting the Regional Administrator to take appropriate action to implement this determination.
Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

Sincerely,
/s/
Elizabeth A. Zimmerman
Deputy Associate Administrator
Office of Response and Recovery

cc:  Major P. May
 Regional Administrator
 FEMA Region IV