705(c), Appeal Timeliness

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	FEMA-1609
Applicant	Palm Beach County
Appeal Type	Second
PA ID#	099-99099-00
PW ID#	PW) 8478
Date Signed	2018-05-15T00:00:00

Conclusion: Palm Beach County’s (Applicant) first appeal was untimely. Therefore, the Applicant’s appeal rights lapsed, and FEMA’s determination under Project Worksheet (PW) 8478, Version 4 was the final administrative action concerning the issues raised in this appeal. Consequently, section 705(c) of the Stafford Act is not applicable.

Summary Paragraph

From October 23 to November 18, 2005, Hurricane Wilma caused water damage to office facilities owned by the Applicant. FEMA prepared PW 8478 for emergency protective measures taken to assess and remediate water and mold damage at each facility. FEMA obligated Public Assistance (PA) funding in PW 8478 for estimated costs totaling $999,900.07. In Version 4 of PW 8478, FEMA deobligated $128,691.97 for actual and anticipated insurance proceeds and an actual cost underrun. The Florida Division of Emergency Management (Grantee) notified the Applicant of the deobligation in a letter dated February 28, 2017, which also advised the Applicant of its right to appeal. The Applicant submitted its first appeal on March 16, 2017, arguing there were no additional insurance proceeds forthcoming, and requested consideration of the appeal under section 705(c) of the Stafford Act. The Grantee forwarded the appeal on June 20, 2017. In a Final Request for Information, FEMA expressed concern that the administrative record did not demonstrate the Grantee had forwarded the appeal within the 60-day regulatory timeframe. In its response, the Grantee asserted the appeal was timely submitted. The FEMA Region IV Regional Administrator denied the appeal on November 28, 2017, determining the Grantee’s transmittal was untimely. In a second appeal dated January 18, 2018, the Applicant argues its first appeal should be considered timely, and the section 705(c) protection is applicable. In a March 12, 2018 transmittal, the Grantee asserts timeliness of the appeal is not relevant because FEMA failed to demonstrate the criteria under section 705(c) had not been met.

Authorities and Second Appeals

Stafford Act §§ 423(a), 705(c).
44 C.F.R. § 206.206(c)(2).
FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 2, 4.
Fla. Dep’t of Transp., FEMA-4068-DR-FL, at 3-4.
Town of Windermere, FEMA-1609-DR-FL, at 4.
Broward Cty. Sch. Bd. of Fla., FEMA-1609-DR-FL, at 3.
Port of Galveston, FEMA-1791-DR-TX, at 7

Headnotes

Per 44 C.F.R. § 206.206(c)(2), a grantee must review and forward an applicant’s appeal to FEMA within 60 days of receipt.
- The Grantee submitted the Applicant’s first appeal 96 days after receiving it.
- Therefore, the appeal is untimely.
Section 705(c) of the Stafford Act bars FEMA from deobligating previously awarded PA from a State or local government when certain criteria are met. However, FP 205-081-2 provides that the section 705(c) prohibition does not apply where an applicant’s appeal rights are exhausted and FEMA has made a final administrative decision.
- Because the first appeal was untimely, the Applicant’s appeal rights lapsed.
- FEMA’s determination under Version 4 of PW 8478 was the final administrative action concerning the appealed issues.
- Therefore, per FP 205-081-2, section 705(c) does not apply.

Appeal Letter

Wesley Maul

Director

Florida Division of Emergency Management

2555 Shumard Oak Boulevard

Tallahassee, FL 32399-2100

Re: Second Appeal – Palm Beach County, PA ID 099-99099-00, FEMA-1609-DR-FL, Project Worksheet (PW) 8478 – 705(c), Appeal Timeliness

Dear Mr. Maul:

This is in response to a letter from your office dated March 12, 2018, which transmitted the referenced second appeal on behalf of Palm Beach County, Florida (Applicant). The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) decision to uphold the deobligation of $128,691.97 in Public Assistance funding.

As explained in the enclosed analysis, I have determined that the first appeal was untimely and as such, the Applicant’s appeal rights lapsed. Consequently, the protections of Stafford Act section 705(c) do not apply. Accordingly, I am denying the appeal.

Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

Sincerely,

/S/

Jonathan Hoyes

Director

Public Assistance Division

Enclosure

cc: Gracia Szczech

Regional Administrator

FEMA Region IV

Appeal Analysis

Background

From October 23 to November 18, 2005, heavy winds and rain from Hurricane Wilma caused various amounts of water intrusion damage to 29 office facilities owned by Palm Beach County, Florida (Applicant). FEMA prepared Project Worksheet (PW) 8478 to document Category B (emergency protective measures) work outside the 72-hour period designated for full Federal funding. The approved scope of work included contracted damage assessments, planning, project management, and water and mold remediation at each office facility. FEMA obligated Public Assistance (PA) funding in PW 8478 for estimated costs totaling $999,900.07.[1]

In a letter dated February 1, 2010, the Florida Division of Emergency Management (Grantee) submitted a large project closeout request, reflecting a cost underrun due to actual costs totaling $995,838.06.[2] On February 10, 2017, FEMA deobligated $128,691.97 in PW 8478, Version 4, due to the project underrun as well as actual and anticipated insurance proceeds.[3] In a letter dated February 28, 2017, the Grantee forwarded the Project Application Grant Report (P.2) to the Applicant, informing it of the deobligation.[4] The Grantee also advised the Applicant of its appeal rights and appeal procedural requirements pertaining to FEMA’s determination.

First Appeal

The Applicant appealed the deobligation in a letter dated March 16, 2017, and requested reinstatement of $128,691.97 in PA funding.[5] The Applicant stated FEMA provided no explanation for the deobligation, which came several years after project closeout. The Applicant noted there were no additional insurance proceeds forthcoming, and requested consideration of the appeal under section 705(c) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988.[6] In a transmittal dated June 20, 2017, the Grantee expressed support for the appeal.[7] The Grantee argued: (1) the Applicant’s insurance settlement was commercially reasonable; (2) no further insurance proceeds were available; and (3) FEMA’s decision would compel the Applicant to pursue reckless and/or costly litigation in order to recover additional insurance proceeds. The Grantee asserted FEMA’s decision was therefore counter to the established interpretation of the statutory requirement in such cases.[8] Finally, the Grantee argued section 705(c) of the Stafford Act serves as a statutory bar to deobligation if the three criteria listed therein are met; in this case, the Applicant’s project met the three criteria, and it was therefore improper for FEMA to deobligate PA grant funding.

FEMA issued a Final Request for Information (RFI)[9] that expressed concern the documentation in the administrative record did not demonstrate the first appeal had been submitted within the timeframe allowed by Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c).[10] Specifically, FEMA noted the Applicant’s first appeal letter was dated March 16, 2017, but the Grantee’s transmittal was date-stamped and received by FEMA on June 20, 2017, more than 60 days later. Therefore, FEMA requested documentation demonstrating the Grantee submitted the appeal within the regulatory timeframe.

In a response to the Final RFI,[11] the Grantee asserted that although the Applicant dated the first appeal letter March 16, 2017, it (the Applicant) did not submit the appeal until April 21, 2017; therefore, both the Applicant’s and the Grantee’s appeal letters were timely submitted.[12] The Grantee attached a printout from its PA grants management website, which it asserted showed the Applicant had uploaded the first appeal on April 21, 2017.[13] Moreover, the Grantee stated that demonstrating the timeliness of the first appeal was not necessary, as FEMA had not established the legal authority to deobligate funds, and it (the Grantee) should not be required to provide any information regarding the appeal. The Grantee reiterated its earlier argument regarding the applicability of section 705(c), and stated FEMA should provide an analysis showing the deobligation was permitted.

On November 28, 2017, the FEMA Region IV Regional Administrator (RA) denied the appeal.[14] The RA stated the Applicant received the P.2 for PW 8478, Version 4, via letter dated February 28, 2017, and timely submitted its first appeal to the Grantee on March 16, 2017.[15] However, the RA determined the Grantee did not transmit the first appeal to FEMA until June 20, 2017, which was 36 days beyond the 60-day timeframe established by 44 C.F.R. § 206.206(c)(2). The first appeal was therefore untimely, and as such, the RA noted any substantive issues were not eligible for consideration. Finally, the RA determined that because the appeal was untimely, the Applicant’s appeal rights were exhausted. Consequently, per FEMA policy,[16] the section 705(c) prohibition against the recoupment of funds did not apply.

Second Appeal

The Applicant appeals the RA’s determination in a letter dated January 18, 2018, and requests reinstatement of $128,691.97 in PA funding.[17] The Applicant states it submitted the first appeal to the Grantee on March 16, 2017, and acknowledges the Grantee’s appeal transmittal occurred on June 20, 2017. However, the Applicant asserts the Grantee’s untimely submission represented extenuating circumstances beyond its (the Applicant’s) control, and requests FEMA consider the first appeal to be timely submitted. The Applicant reiterates its first appeal arguments regarding its insurance settlement and the applicability of section 705(c).

In a transmittal dated March 12, 2018, the Grantee expresses support for the Applicant’s second appeal.[18] The Grantee acknowledges it received the first appeal via email on March 16, 2017, but did not forward the appeal until 96 days later, on June 20, 2017. The Grantee reiterates its earlier arguments regarding the applicability of section 705(c) to the project, and asserts timeliness of the appeal is not relevant because FEMA failed to demonstrate the criteria under section 705(c) had not been met. Furthermore, the Grantee states the Applicant has not exhausted its appeal rights.

Discussion

Appeal Timeliness

Section 423(a) of the Stafford Act provides that “any decision regarding eligibility for … 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.” Within 60 days of receiving an applicant’s appeal, a grantee will review and forward the appeal to FEMA with a written recommendation.[19] If either the applicant or the grantee fails to meet these deadlines, the appeal is untimely and the applicant’s appeal rights lapse.[20] Neither the Stafford Act nor Title 44 of the Code of Federal Regulations authorizes FEMA to grant time extensions for filing appeals.[21]

Both the Applicant and the Grantee acknowledge that the Grantee transmitted the Applicant’s first appeal letter outside the 60-day deadline.[22] While the Applicant states the late transmittal constitutes extenuating circumstances beyond its control,[23] the Stafford Act and 44 C.F.R. do not provide authority for granting time extensions. Thus, the appeal is untimely.[24]

Stafford Act Section 705(c)

Section 705(c) of the Stafford Act bars FEMA from deobligating funding from a state or local government if: (1) the payment was authorized in an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished. FEMA issued Recovery Policy FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures to establish the criteria necessary to implement section 705.[25] If all of the section 705(c) criteria are met, FEMA is prohibited from recouping grant funds, even if it later determines that it made an error in determining eligibility.[26]

However, section 705 must be read in context with all sections of the Stafford Act, including section 423 as described in the previous section.[27] After the 60-day timeframe allowed by section 423 ends, an applicant’s right to appeal FEMA’s eligibility determination is exhausted, the opportunity to seek remedy through the administrative PA appeal process lapses, and FEMA’s decision becomes final.[28] An applicant’s appeal rights are similarly exhausted, and FEMA’s decision is similarly final, if a grantee fails to forward an appeal in the 60-day period allowed by regulation.[29] Consistent with this element of finality, FP 205-081-2 provides that the section 705(c) prohibition against recoupment of funds does not apply to PWs where the applicant’s appeal rights have lapsed and FEMA has made a final administrative decision.[30]

As discussed above, the Applicant’s first appeal was untimely. Accordingly, its appeal rights concerning the PW 8478 Version 4 deobligation action lapsed, resulting in that determination becoming the final administrative decision with regard to the issue(s) raised in the appeal. Therefore, per FP 205-081-2, and as the RA noted in the first appeal determination, the section 705(c) prohibition against recoupment of funds is not applicable. Consequently, FEMA is not precluded from recouping PA associated with the deobligation under Version 4 of PW 8478.[31]

Conclusion

The Grantee did not transmit the first appeal within the timeframe allowed by 44 C.F.R. § 206.206(c)(2). The Applicant’s appeal rights lapsed, and FEMA’s determination in PW 8478, Version 4, became the final administrative decision concerning the issues raised in this appeal. Consequently, per FP 205-081-2, the Stafford Act section 705(c) prohibition against recoupment of funds is inapplicable. Accordingly, the second appeal is denied.

[1] Project Worksheet 8478, Palm Beach Cty., Version 0 (June 23, 2006).

[2] Letter from Lead Dep. Pub. Assistance Officer, Fla. Div. of Emergency Mgmt. (FDEM), to Dir., Infrastructure Branch, FEMA Region IV (Feb. 1, 2010).

[3] Project Worksheet 8478, Palm Beach Cty., Version 4 (Feb. 10, 2017). FEMA deobligated $4,062.01 due to the cost underrun, $58,269.21 for actual insurance proceeds, and $66,360.75 for anticipated insurance proceeds.

[4] Letter from State Pub. Assistance Officer, FDEM, to Special Projects Coordinator, Palm Beach Cty. (Feb. 28, 2017).

[5] Letter from Fiscal Mgr. II, Facilities Dev. Operations, Palm Beach Cty., to Appeals Officer, FDEM (Mar. 16, 2017).

[6] The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988 § 705(c), 42 U.S.C. 5205(c) (2000) (prohibiting FEMA from deobligating previously awarded funding from a State or local government if: (1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished).

[7] Letter from Dir., FDEM, to Reg’l Adm’r, FEMA Region IV (June 20, 2017). The Grantee’s first appeal transmittal letter reflected both the date of signature (June 19, 2017) and the date the letter was submitted (June 20, 2017, per a date stamp on the first page). This analysis uses the latter date to establish the date of the letter.

[8] Id. at 2 (citing State of Hawaii v. FEMA, 294 F.3d 1152 (9^th Cir. 2002).

[9] Letter from Dir., Recovery Div., FEMA Region IV, to Dir., FDEM and Fiscal Mgr. II, Facilities Dev. and Operations Dep’t, Palm Beach Cty. (Aug. 31, 2017).

[10] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(2) (2005) (requiring the grantee to review and forward an applicant’s appeal, together with a written recommendation, to the FEMA Regional Administrator within 60 days of receipt).

[11] Letter from Dir., FDEM, to Dir., Recovery Div., FEMA Region IV (Sept. 26, 2017) [hereinafter Grantee Final RFI Response]. The Grantee’s Final RFI response letter reflected both the date of signature (Sept. 26, 2017) and the date the letter was submitted (Sept. 27, 2017, per a date stamp on the first page). This analysis uses the latter date to establish the date of the letter.

[12] In the Final RFI and the subsequent response, both FEMA and the Grantee stated the Applicant received notification of the Version 4 deobligation on Feb. 20, 2017. As noted above, documentation in the administrative record establishes this date was in fact February 28, 2017. In the Final RFI and the subsequent response, both parties used the former date to calculate the timeframe for the Applicant’s appeal submission. However, FEMA used February 28, 2017 as the notification date for the Version 4 determination in the first appeal decision.

[13] Grantee Final RFI Response, at Attachment 1.

[14] Letter from Reg’l Adm’r, FEMA Region IV, to Interim Dir., FDEM and Fiscal Mgr. II, Facilities Dev. and Operations Dep’t, Palm Beach Cty. (Nov. 28, 2017).

[15] In support, the RA noted an activity log extracted from the Grantee’s PA grants management website, which, contrary to the Grantee’s statement in its response to the Final RFI, demonstrated the Applicant had submitted the first appeal via email on March 16, 2017. The activity log was depicted on the printout the Grantee provided with its response to the Final RFI and was therefore part of the administrative record.

[16] Recovery Policy FP 205-081-2, Stafford Act Section 705, Disaster Closeout Procedures, at 2 (Mar. 31, 2016).

[17] Letter from Fiscal Mgr. II, Facilities Dev. Operations, Palm Beach Cty., to Interim Dir., FDEM (Jan. 18, 2018) [hereinafter Applicant Second Appeal Letter].

[18] Letter from Dir., FDEM, to Assistance Adm’r, Recovery, FEMA Headquarters (Mar. 12, 2018) [hereinafter Grantee Second Appeal Letter].

[19] 44 C.F.R. § 206.206(c)(2).

[20] FEMA Second Appeal Analysis, Fla. Dep’t of Transp., FEMA-4068-DR-FL, at 3-4 (Aug. 5, 2016).

[21] Id. at 3.

[22] Applicant Second Appeal Letter, at 1; Grantee Second Appeal Letter, at 1.

[23] Applicant Second Appeal Letter, at 1.

[24] See e.g., FEMA Second Appeal Analysis, Town of Windermere, FEMA-1561-DR-FL, at 4 (Apr. 2, 2018) (determining the Applicant’s first appeal was rendered untimely by the Grantee’s actions).

[25] FEMA Second Appeal Analysis, Broward Cty. Sch. Bd. of Fla., FEMA-1609-DR-FL, at 3 (Aug. 22, 2016).

[26] Recovery Policy FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 4 (Mar. 31, 2016).

[27] FEMA Second Appeal Analysis, Port of Galveston, FEMA-1791-DR-TX, at 7 (Jan. 19, 2017).

[28] Broward Cty. Sch. Bd. of Fla., FEMA-1609-DR-FL, at 3.

[29] See Port of Galveston, FEMA-1791-DR-TX, at 7.

[30] FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 2; Port of Galveston, FEMA-1791-DR-TX, at 7.

[31] See e.g., FEMA Second Appeal Analysis, East Ridge Retirement Village, at 6 (Apr. 25, 2018) (determining the section 705(c) prohibition against recoupment of funds was not applicable as the Applicant’s appeal rights had lapsed due to the Grantee’s untimely submission of the first appeal).

Last updated April 25, 2023

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