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Second Appeal Brief
PA ID# 000-U6965-00; Florida Division of Emergency Management
PW ID# Multiple; Appeal Timeliness – Appeal Procedures – Support Documentation – Direct Administrative Costs – Reasonable Costs
Florida experienced numerous disaster events from August 2008 through August 2013. Under five disasters, the Florida Division of Emergency Management (Grantee) submitted 325 Category Z Project Worksheets (PWs) for direct administrative costs (DAC) related to Public Assistance grant management activities, including work performed by its contractor. FEMA disallowed/deducted a portion of claimed costs when the Grantee could not substantiate they were reasonable or otherwise eligible. The Grantee submitted 129 first appeals of 129 PWs, requesting that FEMA reinstate the disallowed/deducted DAC. The Grantee’s aggregate amount in dispute totaled $1,713,445.06. In general, the Grantee stated that FEMA’s disallowances were unfair, arbitrary and capricious, and based on undefined standards for reasonableness. FEMA Region IV issued Requests for Information (RFIs) on March 6, 2017 and July 21, 2017, seeking: supporting documentation; explanations clarifying the documentation submitted; and, information to substantiate that each appeal was timely submitted. The Grantee was unable to provide the information requested and asked for more time to comply with the requests. On February 26, 2018, after not receiving any further response, the Regional Administrator (RA) for FEMA Region IV denied the first appeals, finding that 89 of the appeals were untimely, 28 were premature, and all appeals, including the 12 that were considered on their substantive merits, lacked supporting documentation to substantiate the amounts in dispute or the reasonableness of the disputed costs. The Grantee submitted its second appeal on April 27, 2018, challenging FEMA’s interpretation of its timeliness regulations, disputing that appeals were premature, and noting that the Grantee had already submitted all supporting documentation prior to its first appeals. FEMA issued a Final RFI because it still could not determine, by reference to the Grantee’s supporting documentation, the relevance of the information provided, how it applies to the eligibility of each appeal, and how the Grantee calculated its amounts in dispute. The Grantee responded on July 19, 2019, with updated spreadsheets and additional invoices.
Authorities and Second Appeals
- Stafford Act § 423(a).
- 44 C.F.R. § 206.206(a); 2 C.F.R. pt. 225.
- DAP9525.9, Section 324 Management Costs and Direct Administrative Costs, at 3; PA Guide, at 40.
- Dep’t of Transp., FEMA-4068-DR-FL, at 5; City of Sweetwater, FEMA-1345-DR-FL, at 3, City of Atlanta, FEMA-4165-DR-GA, at 6, 9-10.
- The Stafford Act § 423 and 44 C.F.R. § 206.206 require appeals to be submitted within 60 days of a determination previously made after notification of the award or denial of award of assistance.
- A number of the Grantee’s appeals were submitted more than 60 days after notice of a determination previously made, or alternatively prior to the award or denial of award of assistance.
- With respect to the format and content of appeals, FEMA’s regulations require that an appeal specify the monetary figure in dispute and contain documented justification supporting the applicant’s position.
- The Grantee has not identified, with specificity, the source of the amounts in dispute.
- Under DAP 9525.9, FEMA may reimburse reasonable and properly documented DAC if applicants provide information about each activity in sufficient detail so as to allow FEMA to assess employee skill level, the suitability of that skill level to the activity in question, and the level of effort required to complete the activity.
- The Grantee has not provided documentation explaining why it exceeded agreed upon timeframes for DAC activities or demonstrating that all DAC was directly tied to eligible work. However, the Grantee has provided documentation allowing FEMA to partially reimburse reasonable DAC based on a review of the suitability of employees’ skill levels to the activities performed.
A number of the Grantee’s first appeals were untimely or premature. For many PWs, the Grantee has not substantiated its amounts in dispute or demonstrated through supporting documentation that claimed DAC was reasonable and directly related to eligible work. However, FEMA will reimburse some reasonable and properly documented DAC based on a review of suitability of employees’ skill levels to the activities performed. Therefore, the second appeal is partially granted in the amount of $85,204.50.