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Second Appeal Analysis
PA ID# 011-16725-00; City of Deerfield Beach
PW ID# Multiple Project Worksheets ; Support Documentation
As a result of Hurricane Wilma, the City of Deerfield Beach (Applicant) suffered strong winds and flooding from October 23 through November 18, 2005. Consequently, FEMA obligated multiple versions of Project Worksheets (PWs) 2906, 2927, 7588, 7607, 8122, and 8125, providing Public Assistance funding for debris removal, emergency protective measures, and beach restoration. However, on April 12, 2011, the Department of Homeland Security (DHS) Office of Inspector General (OIG) issued a Memorandum to FEMA Region IV’s Regional Administrator (RA), confirming that as a result of an audit, the OIG recommended FEMA deobligate a total of $3,928,753.00 from the above-referenced PWs.
On November 15, 2011, FEMA deobligated a total of $1,109,635.00 in funding from PWs 2906, 2927, 7588, 8122, and 8125. Accordingly, in a November 22, 2011 letter with the heading “Package 650,” the Florida Division of Emergency Management (Grantee) notified the Applicant that FEMA had closed out PWs 2906, 2927, 7588, 8122, and 8125.
The Grantee transmitted a separate letter to the Applicant, dated November 23, 2011, notifying the Applicant of its appeal rights and the appeal procedure requirements regarding Package 650. Subsequently, on January 26, 2012, FEMA deobligated $536,673.84 in funding from PW 7607, which was included in “Package 659.” 
The Grantee transmitted a letter to the Applicant dated February 10, 2012, notifying the Applicant of its appeal rights and the appeal procedure requirements regarding Package 659. Finally, on March 21, 2012, FEMA deobligated an additional $360,294.00 in funding from PW 2927. In total, FEMA deobligated $2,006,602.84 in funding from PWs 2906, 2927, 7588, 7607, 8122, and 8125.
The Applicant submitted a letter to the Grantee dated January 20, 2012, refuting all recommendations by the OIG that resulted in the Applicant being required to repay funding related to PWs 2906, 2927, 7588, 7607, 8122, and 8125.
In a letter dated September 7, 2012, the Grantee recommended FEMA approve the appeal, and reinstate almost all funding that was deobligated as a result of the OIG’s audit.
On September 30, 2015, FEMA transmitted a Final Request for Information (RFI) to the Grantee and the Applicant, seeking documentation that related to the substantive merits of the Applicant’s appeal. For instance, FEMA requested documentation to support the Applicant’s assertion it removed debris and stumps from eligible locations, was correctly charged per its debris contracts, performed eligible beach restoration work, had eligible administrative costs, and claimed an accurate rate on a generator. The Applicant responded with a 34 page letter dated November 30, 2015, outlining arguments for the reinstatement of the deobligated funding from each PW. In addition, it asserted that Section 705(c) of The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act)
prohibited FEMA from deobligating the funding, as: (1) all funding was authorized by an approved agreement specifying the costs, (2) the costs were reasonable, and (3) the purpose of the grant was accomplished.
On October 18, 2017, FEMA Region IV’s RA issued a first appeal decision denying the Applicant’s appeal. First, the RA stated that the Grantee posted the Project Application Summary (P.2) for Package 650, involving PWs 2906, 2927, 7588, 8122, and 8125, to its project management database (database) on November 17, 2011, thus, making them available to the Applicant at that time.
As such, the RA determined the Applicant’s January 10, 2012 appeal did not meet the 60 day timeframe required by Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(1)
for PWs 2906, 2927, 7588, 8122, and 8125.
Second, the RA noted that the Grantee prepared a letter in support of the appeal dated September 7, 2012, six months beyond the regulatory 60 day timeframe of 44 C.F.R. § 206.206(c)(2).
The RA stated that because FEMA did not actually receive the first appeal package until April 23, 2014, after the Grantee emailed it to FEMA,
the RA concluded the Grantee’s transmission of the second appeal was 25 months after the 60 day deadline. Consequently, the RA concluded the Grantee’s first appeal submission was also untimely.
Thus, the RA determined the Applicant had exhausted its first appeal rights and Section 705(c) of the Stafford Act’s prohibition against recovery of funds was therefore not applicable. The RA did not reach a determination on the substantive merits of the appeal.
The Applicant appeals FEMA’s denial in a December 15, 2017 letter, requesting FEMA reinstate $2,006,602.84 in costs. First, it emphasizes that FEMA determined the Applicant submitted its first appeal for PWs 2906, 2927, 7588, 8122 and 8125 beyond the 60 day deadline, based on a finding that the P.2 for those PWs was made available to the Applicant through the Grantee’s database on November 17, 2011. It notes, however, that FEMA did not cite to any documentation that demonstrates the Applicant actually received the P.2 for those PWs on that date. Therefore, it asserts the January 20, 2012 letter was timely, as it was submitted within 60 days of receiving notice of the deobligations via the November 23, 2011 letter.
Second, it points out that the Stafford Act only sets appeal deadlines on the Applicant and FEMA, it does not provide a role or time requirement for the Grantee in the appeal process. Accordingly, it asserts denying the appeal based on an intermediary’s action, only inserted into the process through regulation, is contrary to law. Third, it emphasizes the language in 44 C.F.R. § 206.206(c) – that an applicant “must” appeal within 60 days of receipt, but a grantee “will” forward appeals within 60 days of receipt, to demonstrate a lesser standard should be applied to the Grantee. Fourth, it states the Grantee’s April 2014 email transmitting the appeal package, referenced by FEMA in the first appeal decision, is not in the administrative record. Therefore, even though the Applicant acknowledges there is nothing in the record suggesting when the Grantee’s September 7, 2012 letter or enclosed appeals actually arrived at FEMA, it requests FEMA refrain from denying the appeal as untimely as the delay was not the result of the Applicant. Fifth, it asserts that only since 2017 has FEMA been consistently denying appeals based solely on a grantee’s untimely appeal transmission. It argues this is an unwritten change in policy, thus, it asserts the action violates Section 325 of the Stafford Act as this new policy is being applied retroactively and without public notice and comment.
Sixth, the Applicant argues that FEMA’s failure to raise timeliness as an issue in the Final RFI prejudiced the Applicant as it had no opportunity to, or reason to suspect it should, provide FEMA with information concerning the timeliness of its first appeal submission or documentation regarding the timeliness of Grantee’s transmittal. Moreover, it argued FEMA’s error in not identifying timeliness as an issue in the Final RFI violated FEMA’s written procedure for appeals processing, as outlined in the Recovery Directorate Manual, Public Assistance Program Appeal Procedures
Accordingly, it requests that FEMA reopen the administrative record to allow the Applicant to attach documentation relating to timeliness. Lastly, it argues Section 705(c) of the Stafford Act is unrelated to the appeal procedures outlined in Stafford Act § 423.
It states they are two separate sections within the Act that are independent of one another, and thus, Section 705(c) is not rendered inapplicable by an untimely appeal.
The Grantee forwarded the appeal to FEMA by way of a letter dated December 22, 2017, recommending FEMA approve the appeal. It states that it sent multiple letters to the Applicant between November 2011 and February 2012, notifying the Applicant of the deobligations and its right to appeal, but states there is no evidence that definitively shows the date the Applicant actually received the letters. It then acknowledges that it prepared a letter of recommendation dated September 7, 2012, but concedes “there is no evidence that definitively shows the date that the [Grantee] forwarded the appeal to FEMA.”
Finally, it argues that Section 705(c) is a statutory bar, not an affirmative defense, which means that FEMA has the burden of demonstrating the requirements of Section 705(c) have not been met. Therefore, regardless of any timeliness determination, the Grantee asserts the Applicant has not exhausted its administrative right to a first appeal as FEMA has yet to demonstrate the required Section 705(c) analysis.
When a RA is considering denying a first appeal in whole or in part, the RA must issue to the applicant a Final RFI, noting all information in the administrative record the RA is considering in deciding the appeal, and requesting that the applicant provide any additional information to support its appeal.
The administrative record contains all documents and materials directly considered by FEMA in making its first appeal decision.
The administrative record closes after issuance of the first appeal decision, precluding the applicant from providing additional information on second appeal.
Here, FEMA issued a Final RFI, but did not note two key pieces of information that FEMA was considering as a basis for denying the appeal as untimely—the April 22, 2014 email and the Grantee’s posting of the P.2 for Package 650 on its database. In the first appeal decision, FEMA stated it did not receive the first appeal until April 23, 2014, relying on the April 22, 2014 email from the Grantee as support, but this email is not in the administrative record. Nor does the administrative record contain any documentation demonstrating that the P.2 for Package 650 was posted on the Grantee’s database on November 17, 2011, or that the Applicant actually received the notice on that date. Because the Recovery Directorate Manual, Public Assistance Program Appeal Procedures, requires FEMA to advise the Applicant of all information it may consider in deciding the appeal, FEMA erred by not including these documents in the administrative record, and not providing the Applicant an opportunity to address these documents or the timeliness issues before issuance of the first appeal decision.
Based on FEMA’s procedural error, this appeal is remanded for issuance of a new Final RFI that addresses any timeliness issues that may be a basis for denial. Accordingly, the administrative record will be reopened to allow for additional documentation concerning this matter. After this, a new first appeal decision will be issued taking responses into consideration, at which point the administrative record will close.
Based on the above discussion, this appeal is remanded to Region IV and the RA is instructed to issue a new Final RFI identifying the timeliness issues that will be subsequently addressed in the new first appeal decision.
Memorandum from Dir., DHS Eastern Reg’l Office, to RA, FEMA Region IV, at 2-6 (Apr. 12, 2011) [hereinafter OIG Memorandum
] (recommending the deobligation due to (1) duplication of contract charges, (2) removal of debris from non-approved areas, (3) ineligible restoration of a natural, unimproved beach, (4) unauthorized contract charges, (5) unreasonable overtime force account labor costs, (6) questionable administrative charges, and (7) excessive equipment charges).
 See generally
FEMA Project Applicant Summary (P.2), Package 650 (Nov. 17, 2011) (summarizing FEMA’s determinations concerning PWs 2906 (Version 2), 2927 (Version 5), 7588 (Version 5), 8122 (Version 5), and 8125 (Version 2)).
 See generally
P.2, Package 659 (Jan. 30, 2012) (summarizing FEMA’s determinations concerning PW 7607 (Version 5)).
While the Applicant’s first appeal letter is dated before all the deobligations occurred, FEMA has interpreted it to apply to all the deobligations as they were all executed as a result of the OIG audit.
Letter from Governor’s Authorized Rep., Fla. Div. of Emergency Mgmt. (FDEM), to Reg’l Adm’r, FEMA Region IV, at 3 (Sept. 7, 2012) (requesting all funding be returned to the project with the exception of the funding deobligated under “Finding D” of the OIG’s Memorandum, as the Applicant concurred with that finding); see generally OIG Memorandum
, at 3, Finding D (stating that part of the Applicant’s claim under PW 7606 contained $119,974.00 in ineligible charges, and noting that the Applicant’s officials concurred with the finding).
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988, Pub. L. No. 93-288, § 705(c), 42 U.S.C. § 5205 (2005).
FEMA First Appeal Analysis, City of Deerfield Beach
, FEMA-1609-DR-FL, at 6 (Oct. 18, 2017) [hereinafter First Appeal Analysis
] (citing Fl. Pub. Assistance, http://www.floridaPA.org
(Nov. 18, 2011), which is the Grantee’s project management database, a web-based system used by the State of Florida and its municipalities to manage and track all aspects of the Public Assistance grants process including appeals); see generally
FEMA Second Appeal Analysis, City of Pensacola,
FEMA-1551-DR-FL, at 5 (Mar. 22, 2017) (“Applicants have access through individual accounts. The system provides a mechanism to submit documentation for appeals, enables the exchange of communication between the Grantee and Applicant, and automatically records the dates of all actions performed by those using the system.”).
Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(1) (2005) (requiring applicants to submit appeals within 60 days of receipt of the notice of the action that is being appealed).
Conversely, the RA determined the Applicant’s first appeal for PW 7607 was timely submitted.
 First Appeal Analysis
, at 6 (citing 44 C.F.R. § 206.206(c)(2), which requires a grantee to review and forward an applicant’s appeal, together with a written recommendation, to the FEMA RA within 60 days of receipt).
. at 2 (citing Email from Rep, FDEM, to FEMA Region IV PA Action Items (Apr. 22, 2014, 1614 EST)).
Letter from City Mgr., and Special Counsel, City of Deerfield Beach, to Assistant Adm’r Recovery, FEMA, at 12 (Dec. 15, 2017) (citing Recovery Directorate Manual, Public Assistance Program Appeal Procedures
, Version 4, at 13, 15 (Mar. 29, 2016)); but see
Recovery Directorate Manual, Public Assistance Program Appeal Procedures
, Version 3 (Apr. 7, 2014) (in effect at the time FEMA issued the Final RFI).
Stafford Act § 423(a) provides that “[a]ny decision regarding eligibility for, from, or amount of assistance under this title may be appealed within 60 days after the date on which the applicant for such assistance is notified of the award or denial of award of such assistance.”
Letter from Interim Dir., FDEM, to Assistant Adm’r Recovery, FEMA, at 2 (Dec. 22, 2017).
 Public Assistance Program Appeal Procedures
, Version 3, at 14; see Public Assistance Program Appeal Procedures
, Version 3, App. E (a Final RFI template that includes identification of key issues).
FEMA will issue the Final RFI consistent with the procedures outlined in Version 4 of the Public Assistance Program Appeal Procedures.