Support Documentation, 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) 2622
Date Signed	2018-05-10T00:00:00

Conclusion: FEMA afforded Palm Beach County (Applicant) the opportunity to submit pertinent documentation in accordance with FEMA policy.  The first appeal was submitted beyond the timeframe allowed by Federal regulation, and the Applicant’s appeal rights were therefore exhausted.  Consequently, the Stafford Act § 705(c) prohibition against recoupment of funds does not apply.

 

Summary Paragraph

From October 23 to November 18, 2005, Hurricane Wilma threatened the Applicant’s Water Utility.  FEMA prepared Project Worksheet (PW) 2622 to document emergency protective measures required to maintain water service; among other items, the scope of work approved force account (FA) labor and equipment costs totaling $2,180,751.54.  A subsequent audit of the Applicant’s projects recommended FEMA recover the FA costs, as the Applicant failed to retain supporting documentation.  FEMA deobligated $2,180,751.54 in Public Assistance (PA) under Version 5 of the PW.  The Applicant received notice of the deobligation on October 24, 2014.  The Applicant submitted a “Notice of Appeal” letter to the Florida Division of Emergency Management (Grantee) dated December 23, 2014, and an “Amended Notice of Appeal” letter dated March 24, 2015.  The Applicant requested FEMA reinstate funding and argued the Stafford Act § 705(c) prohibited the deobligation of funding.  The Grantee transmitted the March 24, 2015 appeal to FEMA in a letter dated April 16, 2015.  FEMA issued a Final Request for Information (RFI) but did not receive a response prior to closing the administrative record.  The FEMA Region IV Regional Administrator (RA) denied the appeal as untimely on October 26, 2017.  In the second appeal, the Applicant states it was deprived of the opportunity to submit pertinent documentation, as it never received the Final RFI.  The Applicant asserts its December 23, 2014 “Notice of Appeal” letter, which was not in the record, demonstrates the first appeal was timely submitted, and reiterates its arguments regarding § 705(c).

 

Authorities and Second Appeals

• Stafford Act §§ 423(a), 705(c).
• 44 C.F.R. § 206.206(c).
• FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 4.
• Public Assistance Program Appeal Procedures, Version 4, at 13-14.
• Nobles Cooperative Electric, FEMA-4112-DR-MN, at 2-3.
• Roman Catholic Archdiocese of Miami, FEMA-1602-DR-FL, at 1, 3.
• City of Pensacola, FEMA-1551-DR-FL, at 5.
• Broward Cty., 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 6-7.
   
  Headnotes

• The Recovery Directorate Manual, Public Assistance Program Appeal Procedures, provides that when FEMA is considering denying a first appeal, the RA must issue a Final RFI.
  • Information in the record demonstrates the Applicant received the Final RFI.
  • FEMA afforded the Applicant the opportunity to submit pertinent documentation in accordance with policy.
• Stafford Act § 423(a) allows an applicant to appeal any PA determination within 60 days of receiving notice of the appealable action.  Similar time constraints apply to the Grantee.
  18. 2. on the administrative record, the RA properly determined the Applicant submitted the first appeal beyond the 60-day timeframe.  Moreover, had the Applicant submitted a timely first appeal, as it asserts, the second appeal would still be denied, as the Grantee’s first appeal transmittal was then untimely.
      3. Applicant’s appeal rights lapsed.
  19. Act § 705(c) bars FEMA from deobligating PA when certain criteria are met.  However, FP 205-081-2 provides that the § 705(c) prohibition does not apply where appeal rights are exhausted and FEMA had made a final administrative decision.
      20. Applicant’s appeal rights lapsed, which resulted in the Version 5 deobligation becoming the final administrative decision.

Stafford Act § 705(c) is not applicable.

Appeal Letter

Appeal Analysis

Background

 

From October 23 to November 18, 2005, Hurricane Wilma threatened critical services performed by the Palm Beach County (Applicant), Florida Water Utility.  The Applicant implemented emergency protective measures in accordance with a standing emergency operations plan before, during, and after the disaster, in order to maintain critical services to the local community.  FEMA prepared Project Worksheet (PW) 2622 to document associated Category B (emergency protective measures) work, and obligated $2,611,494.21 in Public Assistance (PA) under Version 4 of the PW.  The approved scope of work included, among other items, the use of force account (FA) labor and equipment to maintain critical services, with associated costs for those items totaling $2,180,751.54.

 

On July 10, 2013, the Department of Homeland Security Office of Inspector General (OIG) issued audit report DA-13-23, recommending, in part, that FEMA recover the FA labor and equipment costs approved under PW 2622.[1]  The OIG determined the Applicant failed to retain documentation substantiating such costs for the length of time required by Federal regulations.  As a result, the OIG could not validate the eligibility of the FA costs.  FEMA concurred with the OIG’s recommendation, and on September 12, 2014, deobligated $2,180,751.54 in Version 5 of PW 2622.[2]

 

In a letter dated October 24, 2014, the State of Florida Division of Emergency Management (Grantee) forwarded FEMA’s Project Application Summary (P.2), notifying the Applicant of the deobligation decision.[3]  The Grantee advised the Applicant of its right to appeal within 60 days.

 

First Appeal

 

The Applicant submitted a letter to the Grantee dated December 23, 2014.  The Applicant referred to the letter as a “Notice of Appeal” related to the deobligation of funding for PW 2622.[4] 

 

The Applicant later submitted an “Amended Notice of Appeal” letter to the Grantee, dated March 24, 2015, in which it stated the OIG’s audit recommendation amounted to a “technicality several years after-the-fact,” and requested FEMA reinstate funding in the amount of $2,180,751.54.[5]  The Applicant stated it was unable to provide the FA records at issue in the OIG audit report, but noted it provided such records to FEMA on two earlier occasions, and FEMA determined the costs to be eligible.  In lieu of the records, the Applicant asserted it was able to demonstrate the costs claimed were actually incurred and reasonable.  The Applicant applied the three criteria found in Section 705(c) of the Stafford Act[6] to the costs claimed and asserted all three criteria were met.  Finally, the Applicant attached documentation to the appeal, including extensive call logs and FA work order lists dated to the incident period.  The Applicant asserted such lists depicted the scale of the work its employees performed during the disaster, thereby demonstrating the associated costs on appeal were reasonable.

 

The Grantee transmitted the “Amended Notice of Appeal” to the FEMA Regional Administrator (RA), in a letter dated April 16, 2015,[7] in which the Grantee expressed support for the appeal.  The Grantee stated the first appeal was timely, referred FEMA to the Applicant’s appeal arguments, and asserted Section 705(c) of the Stafford Act barred FEMA from seeking reimbursement in this case.  FEMA received the Grantee’s transmittal on April 28, 2015.

 

On June 27, 2017, FEMA issued a Final Request for Information (RFI) to both the Grantee and Applicant.[8]  FEMA noted the administrative record did not appear to establish that the first appeal had been submitted within 60 days of notification of the initial eligibility determination, as the Applicant received notice via the October 24, 2014 letter, but did not submit the appeal until March 24, 2015.  FEMA requested documentation demonstrating the appeal had been timely submitted.  The Grantee issued a letter dated June 27, 2017, transmitting the Final RFI to the Applicant and requesting a response within 30 days.[9]  The administrative record does not contain a response to the Final RFI.

 

The FEMA Region IV RA denied the appeal in a letter dated October 26, 2017.[10]  The RA noted the Applicant received written notice of the deobligation via the Grantee’s letter of October 24, 2014.  Therefore, the RA determined that the Applicant’s March 24, 2015 “Amended Notice of Appeal” letter was submitted beyond the 60-day timeframe allowed by regulations, and the Applicant’s appeal rights were exhausted.  Accordingly, per FEMA policy, the RA determined Section 705(c) prohibitions against recoupment of PA were inapplicable.

 

Second Appeal

 

The Applicant submitted its second appeal in a letter dated December 21, 2017.[11]  The Applicant references its “Notice of Appeal” letter dated December 23, 2014,[12] to argue it submitted its first appeal within the timeframe allowed by regulations (i.e. within 60 days of receiving notice of the deobligation), and requests FEMA either remand the appeal to Region IV for adjudication of the substantive issues, or reinstate PA in the amount of $2,180,751.54.  Furthermore, the Applicant argues: (1) it never received the Final RFI, as the Grantee’s transmittal was directed to the wrong office and addressed to a former employee; (2) had it received the Final RFI, it would have provided the December 23, 2014 “Notice of Appeal” letter with its response; (3) accordingly, its first appeal was timely submitted to the Grantee on December 23, 2014; (4) the Grantee’s transmittal of the first appeal was untimely; and (5) it should not be held responsible for the Grantee’s error.  Finally, the Applicant reiterates its first appeal arguments regarding the applicability of Section 705(c), and asserts the timeliness issue is irrelevant and its appeal right is not exhausted, as “FEMA failed to overcome the 705(c) statutory bar for deobligation.”[13]

 

The Grantee’s transmittal, dated January 9, 2018, expresses support for the appeal.[14]  The Grantee states: (1) the first appeal was timely submitted by the Applicant; (2) it (the Grantee) was responsible for forwarding the appeal beyond the 60-day statutory timeframe; (3) since FEMA failed to issue the first appeal determination within 90 days, as required, the purpose of such time constraints was “defeated;”[15] (4) there is no indication the Applicant received the Final RFI; and (5) the prohibition against recoupment of PA under Section 705(c) applies, and is not affected by the timeliness of the appeal.

 

Discussion

 

Support Documentation

 

When FEMA is considering denying a first appeal in whole or in part, the RA must issue the applicant a Final RFI with an attached administrative record index.[16]  The Final RFI must explain the basis for the likely partial or complete denial of the appeal, request that the applicant provide any additional information to support its appeal, and state that the administrative record will close after the RA issues the first appeal decision.[17]

 

The Applicant states it never received the Final RFI, as the Grantee “directed [the transmittal letter] to the wrong office and to an employee that was no longer employed.”[18]  The Applicant asserts it was thus deprived of the opportunity to submit documentation pertinent to the timeliness issue, specifically the December 23, 2014 “Notice of Appeal” letter.  However, information in the administrative record demonstrates the Applicant received the Final RFI.  A United Parcel Service delivery receipt dated June 28, 2017[19] demonstrates FEMA’s transmittal of the Final RFI was received at the Applicant’s address.[20]  Therefore, the Applicant’s assertion lacks support.  FEMA afforded the Applicant the opportunity to submit pertinent documentation, in accordance with Federal regulation and FEMA policy.

 

Appeal Timeliness

 

Section 423 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988,[21] as implemented by Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206,[22] allows an eligible applicant to appeal any PA eligibility decision within 60 days of receiving notice of the appealable action.  On receipt of an applicant’s appeal, a grantee has 60 days to forward it, with a written recommendation, to the FEMA RA.[23]  Both time periods must be met in order for an appeal to be timely.[24]  FEMA does not possess the authority to grant time extensions for filing appeals.[25]

 

The Applicant received notice of the initial eligibility determination on October 24, 2014, via the P.2 and the Grantee’s notification letter.[26]  Based on the information available in the administrative record, the RA properly determined the Applicant’s March 24, 2015 “Amended Notice of Appeal” letter was untimely.  Moreover, even if the Applicant had submitted a first appeal letter within the 60-day timeframe allowed by regulation, as it asserts on second appeal, the first appeal was still untimely submitted.[27]

 

Ultimately, both the Applicant and the Grantee acknowledge the appeal was untimely.  Federal regulations provide similar submission timeframes for both parties, and FEMA does not grant time extensions for appeal submissions.  In either scenario above, the first appeal was untimely; therefore, the Applicant’s appeal rights lapsed when the time to appeal expired.[28]  

 

Stafford Act Section 705(c) Applicability

 

Section 705(c) of the Stafford Act provides that a state or local government is not liable for reimbursement or any other penalty for any payment made pursuant to the Stafford Act if the payment was authorized in an approved agreement specifying the costs, the costs were reasonable, and 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.[29]  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.[30]

 

However, Section 705 must be read in context with all sections of the Stafford Act,  including Section 423 as described above in the previous section.[31]  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.[32]  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.[33]  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.[34]

 

Here, FEMA deobligated PA funding for the Applicant’s FA labor and equipment costs in Version 5 of PW 2622, after concurring with the OIG’s audit report recommendation.  Because the Applicant’s request for relief was not pursued in a timely manner, its appeal rights lapsed.  FEMA’s deobligation in Version 5 of the PW was the final administrative decision regarding funding for the FA labor and equipment costs on 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 associated PA funds.

 

Conclusion

 

FEMA afforded the Applicant the opportunity to submit pertinent documentation, in accordance with policy.  The first appeal was submitted beyond the timeframe allowed by Federal regulation.  The Applicant’s appeal rights therefore lapsed.  Consequently, Stafford Act § 705(c) does not apply.  Accordingly, the appeal is denied.

 

[1] U.S. Dep’t of Homeland Sec. Office of Inspector Gen. (OIG), DA-13-23, FEMA Should Recover $4.9 Million of Public Assistance Grant Funds Awarded to Palm Beach County, Florida – Hurricane Wilma, at  8 (July 10, 2013).

[2] Project Worksheet 2622, Palm Beach Cty., Version 5 (Sept. 12, 2014).

[3] Letter from State Public Assistance Officer, Fla. Div. of Emergency Mgmt. (FDEM), to Chief Fin. Officer, Palm Beach Cty. (Oct. 24, 2014).  On appeal, all parties agree that on Oct. 24, 2014 the Applicant received notice of FEMA’s eligibility determination.

[4] Letter from Senior Assistant Cty. Attorney, Palm Beach Cty. Attorney’s Office, to Dir., FDEM, at 1 (Dec. 23, 2014).  The Dec. 23, 2014 “Notice of Appeal” letter is not in the administrative record.  FEMA received it for the first time when the Applicant submitted a copy of it with the second appeal, after the administrative record was properly closed. 

[5] Letter from Senior Assistant Cty. Attorney, Palm Beach Cty. Attorney’s Office, to Dir., FDEM, at 7 (Mar. 24, 2015) [hereinafter Applicant “Amended Notice of Appeal” Letter].

[6] 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(c) (2005) (prohibiting FEMA from deobligating funding 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 (Apr. 16, 2015).

[8] Letter from Dir., Recovery Div., FEMA Region IV, to Dir., FDEM and Senior Assistant Cty. Attorney, Palm Beach Cty. Attorney’s Office (June 27, 2017) [hereinafter Final RFI]; see generally Email from United Parcel Service to Appeals Coordinator, FEMA Region IV (June 28, 2017, 0918 EDT) [hereinafter Final RFI Delivery Receipt – Applicant] (demonstrating delivery of the Final RFI to the Applicant); Email from United Parcel Service to Appeals Coordinator, FEMA Region IV (June 28, 2017, 0958 EDT) (demonstrating delivery of the Final RFI to the Grantee); and Email from Appeals Coordinator, FEMA Region IV to FDEM (June 27, 2017, 1059 EDT) (demonstrating the electronic mail transmittal of the Final RFI from FEMA Region IV to the Grantee).

[9] Letter from Appeals Officer, FDEM, to Cty. Attorney, Palm Beach Cty. (June 27, 2017).

[10] Letter from Reg’l Adm’r, FEMA Region IV, to Interim Dir., FDEM and Fiscal Mgr. II, Palm Beach Cty. (Oct. 26, 2017).

[11] Letter from Senior Assistant Cty. Attorney, Palm Beach Cty., to Acting Assistant Adm’r, Recovery, FEMA Headquarters (Dec. 21, 2017) [hereinafter Applicant Second Appeal Letter]. 

[12] This letter is not part of the administrative record, supra note 4.  See FEMA Second Appeal Analysis, Nobles Cooperative Electric, FEMA-4112-DR-MN, at 2-3 (July 23, 2015) (explaining that once the administrative record is closed, FEMA will not consider any new information submitted with a second appeal.)  See also, Final RFI, supra note 8 (advising the Applicant the administrative record would close upon issuance of the first appeal determination.).   

[13] Id. at 4.

[14] Letter from Interim Dir., FDEM, to Assistant Adm’r, Recovery, FEMA Headquarters (Jan. 9, 2018).

[15] Id. at 5.

[16] Recovery Directorate Manual, Public Assistance Program Appeal Procedures, Version 4, at 13 (Mar. 29, 2016).

[17] Id.

[18] Applicant Second Appeal Letter, at 2.

[19] Final RFI Delivery Receipt – Applicant, at 1.

[20] Id. (listing “300 North Dixie Highway, Room 359, West Palm Beach, Fla., 33401” as the delivery address for FEMA’s transmittal of the Final RFI).  The same address appears on the Applicant’s first appeal letterhead, and was still in use by the Applicant on Mar. 19, 2018; see Palm Beach Cty. Attorney’s Office, Telephone Directory, http://‌discover.‌pbcgov.org/‌PDF/‌Phone‌Directory/Attorney.pdf (last visited Mar. 19, 2018).

[21] Stafford Act § 423(a).

[22] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(1) (2005).

[23] Id. § 206.206(c)(2).

[24] FEMA Second Appeal Analysis, City of Pensacola, FEMA-1551-DR-FL, at 5 (Mar. 22, 2017).

[25] FEMA Second Appeal Analysis, Broward Cty., FEMA-1609-DR-FL, at 4 (Feb. 23, 2018).

[26] Supra, note 5; see also FEMA Second Appeal Analysis, Roman Catholic Archdiocese of Miami, FEMA-1602-DR-FL, at 1, 3 (Jan. 3, 2018) (considering the Grantee’s letter informing the applicant of its appeal rights and transmitting FEMA’s Project Application Summary (P.2), which was also posted to its online grants management database, the official notification of the eligibility decision).

[27] The Applicant’s 60-day timeframe to submit a first appeal lapsed on Dec. 23, 2014.  Had it submitted the first appeal on or before that day, as the Applicant asserts, the submission would have been timely.  However, assuming the Grantee received the appeal no later than Dec. 23, 2014, the Grantee’s timeframe to submit the first appeal to FEMA would have lapsed, at the latest, on Feb. 21, 2015.  Thus, even if the Applicant’s first appeal was timely, the Grantee’s April 16, 2015 transmittal to FEMA Region IV would have exceeded the 60-day timeframe provided by 44 C.F.R. § 206.206(c)(2).  Therefore, the appeal was still untimely.

[28] Contra, e.g., FEMA Second Appeal Analysis, Palm Beach Cty. (PW 8283), FEMA-1545-DR-FL (Feb. 9, 2018) (finding the region did not issue a Final RFI to afford the applicant with an opportunity to respond to the procedural issue), and FEMA Second Appeal Analysis, City of Pompano Beach, FEMA-1609-DR-FL (Feb. 27, 2018) (remanding based on the finding the applicant did not receive the Final RFI).

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

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

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

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

[33] Port of Galveston, FEMA-1791-DR-TX, at 6-7.

[34] FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 2; Port of Galveston, FEMA-1791-DR-TX, at 6-7.