This page has not been translated into Español. Visit the Español page for resources in that language.
Fire Suppression
Appeal Brief
Appeal Letter
Appeal Analysis
Citation: FEMA-844-DR-NC; North Carolina Department of Environment, Health and Natural Resources
Cross Reference: Fire suppression, FEMA Office of Inspector General
Summary: On September 22, 1989, the high winds of Hurricane Hugo caused extensive tree damage in North Carolina, especially in a seven county area. FEMA approved $2,800,000 in funding to assist in hazard abatement and fire suppression in those seven hardest-hit to September 1990. The subgrantee applied for a $709,000 grant from the U.S. Forestry Service (USFS) for fire hazard abatement in July 1990, with a narrative stating that FEMA funding would terminate after September 1990. The USFS grant was awarded on August 1990. In September 1990, the subgrantee submitted a Hazard Reduction and Mitigation Five-Year Action Plan (Five-Year Plan) to support requests for FEMA funding, with no mention of the funding received from USFS for similar purposes. FEMA provided funding for work described in the Five-Year Plan. FEMA's OIG audited the subgrantee in 1995, and found that FEMA reimbursed fire hazard abatement costs through 1994. FEMA de-obligated $709,000, the amount provided by USFS, as duplicate funding. The subgrantee claimed in its first appeal that a corrected February 1996 Financial Status Report (SF-269) demonstrated that the funds were not duplicative, the USFS grant was used for different counties, and FEMA was aware of the USFS grant when FEMA contributed to the Five-Year Plan. The first appeal was denied because USFS and FEMA funding was duplicative in accordance with Section 312 of the Stafford Act. The second appeal is similar to the first, but adds that Section 312 applies only to individual assistance and is not a basis for denial of public assistance.
Issues:
Appeal Brief
| Desastre | FEMA-844-DR- |
| Applicant | North Carolina Department of Environment, Health and Natural Resources |
| Appeal Type | Second |
| PA ID# | 000-92009 |
| PW ID# | N/A |
| Date Signed | 1998-03-16T05:00:00 |
Cross Reference: Fire suppression, FEMA Office of Inspector General
Summary: On September 22, 1989, the high winds of Hurricane Hugo caused extensive tree damage in North Carolina, especially in a seven county area. FEMA approved $2,800,000 in funding to assist in hazard abatement and fire suppression in those seven hardest-hit to September 1990. The subgrantee applied for a $709,000 grant from the U.S. Forestry Service (USFS) for fire hazard abatement in July 1990, with a narrative stating that FEMA funding would terminate after September 1990. The USFS grant was awarded on August 1990. In September 1990, the subgrantee submitted a Hazard Reduction and Mitigation Five-Year Action Plan (Five-Year Plan) to support requests for FEMA funding, with no mention of the funding received from USFS for similar purposes. FEMA provided funding for work described in the Five-Year Plan. FEMA's OIG audited the subgrantee in 1995, and found that FEMA reimbursed fire hazard abatement costs through 1994. FEMA de-obligated $709,000, the amount provided by USFS, as duplicate funding. The subgrantee claimed in its first appeal that a corrected February 1996 Financial Status Report (SF-269) demonstrated that the funds were not duplicative, the USFS grant was used for different counties, and FEMA was aware of the USFS grant when FEMA contributed to the Five-Year Plan. The first appeal was denied because USFS and FEMA funding was duplicative in accordance with Section 312 of the Stafford Act. The second appeal is similar to the first, but adds that Section 312 applies only to individual assistance and is not a basis for denial of public assistance.
Issues:
- Was there a duplication of funds?
- Was Hugo spending accounted for in the USFS records?
- Does Section 312 preclude duplication of funds for public assistance?
- Yes. The funds were obtained from USFS and FEMA for similar purposes.
- No. Hugo related expenses were not accounted for under USFS programs.
- Yes. General Prohibitions of Section 312 apply to public entities.
- It was incumbent upon the subgrantee to notify FEMA of funding being received for a similar project, to avoid duplicate funding.
- The USFS SF-269s do not reflect Hugo related spending until after the OIG audit, and are inconsistent as well.
- Section 312(a) of the Stafford Act states that duplicated benefits are not to be received by concerns , or other entities."
Appeal Letter
March 16, 1998
Mr. Steven N. Glenn
Infrastructure Support Coordinator
North Carolina Department of Crime Control and Public Safety
Division of Emergency Management
205 West Cabarrus Street
Raleigh, North Carolina 27601
Dear Mr. Glenn:
This letter is in response to your October 16, 1997, submittal of North Carolina Department of Environment, Health and Natural Resources second appeal for fire suppression costs. In the second appeal, the subgrantee makes several claims, including: funding was for different counties than those funded by FEMA, FEMA was aware of the U.S. Forest Service (USFS) funds at the time FEMA funds were authorized, and the prohibition on receiving duplicate funds in Section 312 of the Stafford Act applies only to individual assistance but not to public assistance.
Based on our review of the documentation submitted, a duplication of funding occurred, which FEMA was not aware of at the time of providing funding in 1990. Further, the financial records indicate that FEMA funded all work related to Hugo fire suppression and mitigation, while USFS also provided funding for the same work. The general prohibitions of Section 312(a) apply to all eligible entities, including public entities. Consequently, the appeal is denied. Please refer to the enclosed analysis for more detail.
Please inform the subgrantee of my determination. The applicant may submit a third appeal to the Director of FEMA. The appeal must be submitted through your office and the Regional Director within 60 days of receipt of this determination.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: John B. Copenhaver
Regional Director
FEMA Region IV
Appeal Analysis
BACKGROUND
Due to the high winds resulting from Hurricane Hugo on September 22, 1989, over 75% of the trees were destroyed in seven counties and extensive tree damage occurred on 2.7 million acres in 26 counties in North Carolina. FEMA approved $2,800,000 in funding to the North Carolina Department of Environment, Health and Natural Resources (subgrantee) to assist in hazard abatement and fire suppression in the seven hardest-hit counties for the period ending September 30, 1990.
In July, 1990, the subgrantee applied for a $709,000 grant from the U.S. Forestry Service (USFS) for fire hazard abatement. The narrative supporting the grant application stated that FEMA funding would terminate after September 30, 1990. The USFS grant was awarded on August 23, 1990. The subgrantee then submitted a Hurricane Hugo Wildlife Hazard Reduction and Mitigation Five-Year Extended Action Plan (Five-Year Plan) to FEMA to support requests for FEMA funding. The Five-Year Plan did not mention the funding already received from USFS for similar purposes. FEMA funded work as was described in the Five-Year Plan through various damage survey reports.
FEMA's Office of Inspector General (OIG) audited the subgrantee, and prepared Audit Report No. E-5-96, dated December 11, 1995. The OIG found that all the costs incurred for fire hazard abatement were reimbursed by FEMA in a program FEMA funded through September 1994, which correlates with the Five-Year Plan. As a result of the audit, FEMA de-obligated the $709,000 that was funded by USFS, as well as approximately $100,000 in other ineligible expenses.
First Appeal
On June 25, 1997, the State of North Carolina's Department of Crime Control and Public Safety, Division of Emergency Management (State), forwarded the subgrantee's June 20, 1997, first appeal for fire suppression costs of $709,000. The subgrantee claimed that a corrected Financial
Status Report (SF-269) dated February 4, 1996, demonstrated that the funds were not used in a duplicative manner. The subgrantee also claimed that the $709,000 USFS grant was used for different counties than those covered by the FEMA funding, and that FEMA was aware of the $709,000 USFS grant at the time FEMA contributed to the Five-Year Plan.
On August 14, 1997, the Regional Director denied the first appeal stating that the funds awarded by the USFS and FEMA were duplicative and that duplicate funding is not allowable in accordance with Section 312 of the Stafford Act. Further, the Regional Director stated that the narrative for the USFS grant application indicated that FEMA would discontinue funding on September 30, 1990, while FEMA actually continued funding until September 1994.
Second Appeal
On October 16, 1997, the State forwarded the subgrantee's second appeal letter of October 6, 1997. The subgrantee maintained a similar argument to their first appeal. The State concurred with the subgrantee's second appeal letter, and added that it is their interpretation that Section 312 of the Stafford Act does not pertain to public assistance.
DISCUSSION
Duplication of Benefits
USFS notified the subgrantee on August 23, 1990, that a $709,000 grant was awarded to the subgrantee. The narrative sent with the grant application stated that the grant funds "will be used to continue the employment of personnel being utilized in hazard abatement and fire suppression; and purchase or extend the leases of fire suppression equipment." On September 17, 1990, the State submitted a Five-Year Plan to FEMA and requested funding of $6,700,000 for services similar to those described in the grant application to the USFS. The program needs described in the Five-Year Plan included: hazard mitigation, fire suppression, and information and education. The Five-Year Plan received by FEMA did not mention the USFS grant for $709,000 and the similarity in the work for which the subgrantee was requesting funding.
The subgrantee has suggested that the USFS grant covered different counties than the FEMA funding; however, the subgrantee has not provided any documentation supporting this claim. It is FEMA's understanding that the grant application to the USFS was for the seven most severely hit counties. These same seven counties were also covered in the funding provided by FEMA. Also, subgrantee costs for each program receiving agency funding were accounted for in one program for each agency and there were no separate accounts for particular counties.
At the time the subgrantee sought funds from FEMA, the subgrantee was aware of similar funding being received from USFS. The subgrantee should have notified FEMA at that time that a USFS grant had been received, but did not do so. Until the OIG performed an audit, FEMA was not aware of this duplication. Section 312 of the Stafford Act, Duplication of Benefits, precludes entities suffering losses as a result of a major disaster from receiving FEMA financial assistance when financial assistance has been received for the same losses from another source.
The State claims that Section 312 of the Stafford Act only pertains to individual and family assistance. Further, the State indicates that FEMA's regulations at 44 CFR 206.191(a), which establish the policies for implementing Section 312, pertains to individuals and families. Also, the State claims that there is no concomitant section regarding duplication of benefits under Subpart G (Public Assistance Project Administration) or Subpart H (Public Assistance Eligibility). The State, therefore, concludes that Section 312 should not be used as a means to deny legitimate expenditures of Federal Assistance. It should be noted that the General Prohibition, Section 312 (a) of the Stafford Act states that duplicated benefits are not to be received by "persons, business concerns, or other entities", and applies to public entities.
Use of SF-269s
A secondary part of this analysis is the review of the use of the $709,000 USFS grant. Three SF-269's covering the time period from October 1, 1989 to September 30, 1990, were prepared by the subgrantee for required reporting to USFS. Two of the three SF-269's were prepared on February 4, 1996, while the other SF-269 was prepared on December 31, 1990. In addition, one other SF-269 covering a period that also begins on October 1, 1989, but ends on September 30, 1991, was prepared on December 31, 1991. All four SF-269's report different programs, net outlays by the subgrantee, and Federal share of outlays. For example, the relevant programs include Rural Fire (1), Fire CM-2 (3), and Hugo (2). (The number in the parenthesis after each program name identifies the number of SF-269s out of the four prepared, which identify that program.) The two SF-269's prepared in 1996 appear to be in response to the 1995 OIG report. Several trends are also apparent in the SF-269s. For example, prior to Hugo it appears that USFS was funding the CM-2 (Rural Fire control program with a fairly constant level (FY-89, budgeted prior to Hugo, $294,686; FY-90 - $288,500). However, in one of the 1996 SF-269s, USFS funding is increased to $957,500, which appears to precisely accommodate the prior baseline funding ($288,500) and the approved grant of $709,000. The SF-269s prepared in 1996 are the first such reports which attempt to account for the $709,000 grant. The other SF-269 prepared in 1996 shows the USFS funding in two programs: $288,500 in the Fire CM-2 program and $709,000 in the Hugo program.
These SF-269s demonstrate that the subgrantee has shown many inconsistencies in reporting the use of the USFS grant for Hugo purposes independent of FEMA funded programs. It appears that the reason that all SF-269s prior to those prepared in 1996 do not account for the $709,000 grant iraccount for the Hugo work, nor a subgrantee account that was funded by any Federal agency other than FEMA. "Hugo" did not appear in the USFS SF-269s until after the OIG audit.
CONCLUSION
FEMA funds were obtained for fire suppression/mitigation activities similar to those for which an USFS grant was obtained. FEMA does not provide duplicate funding when such funding is available from another source. A review of both the grant applications and reports on outlays to the USFS confirm that duplication occurred. Accordingly, the appeal to reverse the de-obligation of funds is denied.