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Second Appeal Summary
PA ID# 000-00000; County of Kauai
DSR ID# 88374,89296,95080,95081,95082,95242,9579; Lihue Civic Center
Citation: FEMA-0961-DR-HI; County of Kauai
Cross Reference: Duplication of Benefits, Insurance
Summary: Hurricane Iniki struck Hawaii on September 11, 1992. The complex that was to become the Lihue Civic Center (Civic Center), consisting of three buildings (Buildings A, B, and C), was substantially damaged by the hurricane. Kauai County (subgrantee) purchased this complex in January 1987 for the purpose of renovating it into the Civic Center. Several Damage Survey Reports (DSRs) were prepared to fund both emergency and permanent repairs of the damaged buildings. The repair of the disaster-related damage as a whole was approved by the Grantee as an improved project in July 1994. The OIG conducted an audit of the Lihue Civic Center project. The audit concluded that there was a duplication of benefits, as the repairs to the Civic Center were covered by insurance. As a result of the audit, $1,566,037 was deobligated. On September 22, 1997, the subgrantee appealed the determination to deobligate funds. The first appeal was partially granted, as the deductible ($25,000) and the depreciation ($86,582) were determined eligible. The subgrantee submitted their second appeal to the State Office of Civil Defense (Grantee) on April 15, 1998. The Grantee forwarded the second appeal on April 24, 1998. The subgrantee's second appeal does not introduce any additional support for their position nor does it introduce additional issues to be considered. However, the subgrantee requests that FEMA re-obligate the full amount of the project.
Issues: Did the insurance proceeds received by the subgrantee cover all eligible work associated with the Lihue Civic Center?
Findings: No. A portion of work performed was not covered by insurance and is eligible for FEMA funding. The insurance deductible and depreciation is also eligible. However, the majority of the funding provided by FEMA was duplicated by the insurance proceeds and was rightfully deobligated. The eligible amount, $177,771, will be re-obligated.
Rationale: Section 312 of the Stafford Act, Duplication of Benefits