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Second Appeal Summary
PA ID# 037-91146; Los Angeles County Unified School District
DSR ID# 97751; Indirect Support Costs
Citation: FEMA-1008-DR-CA; Los Angeles Unified School District, DSR 97751
Cross Reference: Project Management Costs and Indirect Support Costs
Summary: As a result of the Northridge Earthquake, the Los Angeles Unified School District (subgrantee) sustained damages to over 6,000 facilities throughout the school system. In September 1994, FEMA prepared Category B Damage Survey Report (DSR) 44358 in the amount of $525,372 to cover force account overtime labor, including fringe benefits and mileage, for custodial work for the first week following the earthquake. The subgrantee submitted additional requests for custodial overtime and "direct support" funding, totaling $307,091 and $107,186, respectively. FEMA prepared DSR 97751 in the amount of $307,091 to fund the additional custodial overtime, but found the "direct support" costs to be "indirect" and, therefore, covered under the statutory administrative allowance. The subgrantee submitted a first appeal asserting that the requested costs were directly related to the eligible work and not costs associated with the statutory allowance. Although recorded as "overhead" costs, the subgrantee indicated that these costs "represent direct costs which are charged to jobs via application of a calculated rate based on historical records," suggesting that these costs should be labeled more accurately as Force Account Supervision, Design and Inspection (FASDI) costs. FEMA denied the first appeal, primarily on the basis that sufficient documentation had not been provided to directly relate the labor efforts and materials to specific FEMA projects, such that these costs were not separately eligible for reimbursement. The second appeal again asserts that the requested costs are eligible, direct costs associated with the custodial work, that their method to account for job costs is in accordance with Federal regulations, and that the work performed in not covered under the statutory administrative allowance. The subgrantee did not, however, provide documentation to attribute the work to specific FEMA projects, as was requested in the first appeal response.
Issues: Is the supervisory time that was recorded on time sheets as overhead eligible?
Findings: No. The documentation provided by the subgrantee is not specific enough to directly attribute the work performed to an eligible scope of work, or to accurately estimate the effort associated with any given task.
Rationale: To be eligible for funding of project management or "direct" costs as a separate line item on a DSR, an applicant must provide sufficient documentation to accurately describe the work performed, attribute to a specific time and effort associated with this work, and to demonstrate that the scope of services were directly related to a specific scope of emergency or restoration work.