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Overhead Costs and Security Wall
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Cross-reference: Grant Acceleration Program
Summary: As a result of the Northridge Earthquake, the City of Los Angeles, Department of Water and Power (LADWP) sustained damage to the Upper San Fernando Lake Dam and six receiving and switching stations: Receiving Station U, Rinaldi Receiving Station, Receiving Station E, Receiving Station J, Olive Switching Station and Sylmar Switching Station. Following acceptance of Grant Acceleration Program (GAP) settlement offers, FEMA approved GAP DSR 92172 in the amount of $1,093,458 for Upper San Fernando Lake Dam. LADWP submitted a Project Completion and Certification Report (P.4) claiming $74,640 for rental equipment and $17,364 for rental equipment overhead costs. FEMA denied the $17,364 claim on the basis that the overhead charges were not substantiated or documented. The actual costs claimed for the rental equipment were approved. FEMA also approved GAP DSRs 33574, 33575, 33576, 33577, 92002 & 98749 for a total amount of $49,271,297 for the site receiving stations. LADWP submitted a Project Completion and Certification Report (P.4) claiming actual costs for the repair work to each of the facilities. LADWP claimed rental equipment costs at the six facilities totaling $901,933, which included a 16% overhead markup. At closeout, FEMA denied the claim for the rental equipment and overhead on the basis that the overhead charges were not sufficiently supported through documentation. The final funding amount resulted in under runs for each project, which totaled $14,729,178. The under run amount was transferred by DSR 12250, approved on April 29, 2002, to various hazard mitigation projects. LADWP also claimed $100,455 in additional costs for the security wall at the Rinaldi Receiving Station.
Issues: (1) Has LADWP provided adequate documentation to support its claim for rental equipment overhead charges?
(2) Has LADWP provided documentation to support its claim for $100,455 in additional costs for the security wall at the Rinaldi Receiving Station?
Findings: (1) No. Actual costs for the rental equipment were approved; however, LADWP has not provided information to establish the direct link between the overhead charges and the eligible rental vehicle invoices. LADWP has not provided documentation to support its claim for rental equipment overhead charges.
(2)
(3) Yes. LADWP has provided supporting documentation for the security wall at the Rinaldi Receiving Station.
Rationale: 44 CFR § 206.203 (c)(1); 44 CFR § 206.228 (b)(2)
Second Appeal Summary
FEMA-1008-DR
PA ID# 037-91079; City of Los Angeles, Dept of Water & Power
DSR ID# 92172, 33574, 33575, 33576, 33577, 92002 & 98749; Overhead Costs and Security Wall
09/27/2005
Citation: FEMA-1008-DR-CA, City of Los Angeles, Department of Water and Power; Project Funding, DSR #s 92172, 33574, 33575, 33576, 33577, 92002 & 98749PA ID# 037-91079; City of Los Angeles, Dept of Water & Power
DSR ID# 92172, 33574, 33575, 33576, 33577, 92002 & 98749; Overhead Costs and Security Wall
09/27/2005
Cross-reference: Grant Acceleration Program
Summary: As a result of the Northridge Earthquake, the City of Los Angeles, Department of Water and Power (LADWP) sustained damage to the Upper San Fernando Lake Dam and six receiving and switching stations: Receiving Station U, Rinaldi Receiving Station, Receiving Station E, Receiving Station J, Olive Switching Station and Sylmar Switching Station. Following acceptance of Grant Acceleration Program (GAP) settlement offers, FEMA approved GAP DSR 92172 in the amount of $1,093,458 for Upper San Fernando Lake Dam. LADWP submitted a Project Completion and Certification Report (P.4) claiming $74,640 for rental equipment and $17,364 for rental equipment overhead costs. FEMA denied the $17,364 claim on the basis that the overhead charges were not substantiated or documented. The actual costs claimed for the rental equipment were approved. FEMA also approved GAP DSRs 33574, 33575, 33576, 33577, 92002 & 98749 for a total amount of $49,271,297 for the site receiving stations. LADWP submitted a Project Completion and Certification Report (P.4) claiming actual costs for the repair work to each of the facilities. LADWP claimed rental equipment costs at the six facilities totaling $901,933, which included a 16% overhead markup. At closeout, FEMA denied the claim for the rental equipment and overhead on the basis that the overhead charges were not sufficiently supported through documentation. The final funding amount resulted in under runs for each project, which totaled $14,729,178. The under run amount was transferred by DSR 12250, approved on April 29, 2002, to various hazard mitigation projects. LADWP also claimed $100,455 in additional costs for the security wall at the Rinaldi Receiving Station.
Issues: (1) Has LADWP provided adequate documentation to support its claim for rental equipment overhead charges?
(2) Has LADWP provided documentation to support its claim for $100,455 in additional costs for the security wall at the Rinaldi Receiving Station?
Findings: (1) No. Actual costs for the rental equipment were approved; however, LADWP has not provided information to establish the direct link between the overhead charges and the eligible rental vehicle invoices. LADWP has not provided documentation to support its claim for rental equipment overhead charges.
(2)
(3) Yes. LADWP has provided supporting documentation for the security wall at the Rinaldi Receiving Station.
Rationale: 44 CFR § 206.203 (c)(1); 44 CFR § 206.228 (b)(2)