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Direct Administrative Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1810-DR-CA
ApplicantLos Angeles County
Appeal TypeSecond
PA ID#037-99037-00
PW ID#268
Date Signed2014-03-19T00:00:00

Conclusion: The Applicant did not provide sufficiently detailed and descriptive documentation to demonstrate that the direct administrative costs (DAC) were directly related to the performance of eligible tasks.

Summary Paragraph

Wildfires between November 13 and November 28, 2008 were a threat to public safety, resulting in evacuations and widespread damage.  Los Angeles County performed emergency protective measures at nine sites.  At project closeout, FEMA determined that the Applicant did not identify specific direct administrative tasks performed on a given date, by a specific employee.  The Applicant submitted its first appeal requesting reimbursement of $52,979.07 for DAC, providing time cards for each employee and an explanation of the codes defining the task each employee performed. The Region IX Regional Administrator (RA) partially approved the first appeal for $1,963.94  The RA determined the remaining balance was ineligible as the documentation was insufficient to demonstrate that the costs claimed were directly related to eligible administrative tasks in support of PW 268.

Authorities and Previous Appeal Decisions Discussed

  • Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs dated March 12, 2008. 
  • FEMA’s Second Appeal Decision, Cedar Rapids Community School District, FEMA-DR-IA PW 649 dated April 22, 2013.

Headnotes

  • Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs, Section VII(D)(1).
  • DAC include costs that can be tracked, charged and accounted for directly to a specific project, such as staff time to complete field inspection and preparation of a PW.
  • Direct costs are limited to actual reasonable costs incurred for a specific project.  Such costs will be considered project costs.

FEMA’s Second Appeal Decision, Cedar Rapids Community School District, FEMA-DR-IA PW 649

  • FEMA noted that terms such as “Project Formulation”, “Project Administration”, Project Management” and “Documentation Development” are too broad and fail to describe specific administrative tasks as required by

Appeal Letter

March 19, 2014

Mark S. Ghilarducci
Secretary
California Emergency Management Agency
3650 Schriever Avenue
Mather, California 95655

Re: Second Appeal – Los Angeles County, PA ID 037-99037-00, Direct Administrative Costs, FEMA-1810-DR-CA, Project Worksheet (PW) 268

Dear Mr. Ghilarducci:

This is in response to the letter from your office dated September 11, 2013, which transmitted the referenced second appeal on behalf of Los Angeles County (Applicant).  The Applicant is appealing the Department of Homeland Security's Federal Emergency Management Agency (FEMA) denial of  $51,015.13 in direct administrative costs.

As explained in the enclosed analysis, I have determined that the documentation provided by the Applicant on direct administrative costs failed to demonstrate that the performed activities were directly related to PW 268.  Therefore, I am denying this appeal.

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

Sincerely,

/s/

Brad Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: Karen Armes
     Acting Regional Administrator
     FEMA Region IX

 

Appeal Analysis

Background

Wildfires occurred in California from November 13 through November 28, 2008, resulting in evacuations and widespread damage in Los Angeles County.  On April 9, 2009, FEMA prepared Project Worksheet (PW) 268 for the cost of emergency protective measures at nine sites in Los Angeles County (Applicant) for a total of $600,243.98.  FEMA prepared the PW based on estimated costs and noted that the Applicant would subsequently provide documentation supporting actual costs.

On September 6, 2012, FEMA approved a version of PW 268 for $944,861.24 for the cost of emergency protective measures, but denied $52,889.98 in direct administrative costs (DAC). The FEMA Region IX Regional Administrator informed the California Governor’s Office of Emergency Services Management Agency (Grantee) that the documentation provided in support of the DAC did not identify specific tasks performed on a given date by a specific employee as required by FEMA Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs.  

First Appeal

On November 7, 2012, the Applicant submitted its first appeal requesting reimbursement of $52,979.07 for DAC.  The Applicant included time cards for each employee and an explanation of the codes defining the task each employee performed after May 16, 2010.  The Applicant did not provide descriptions of the work performed before the May 16, 2010.  The following codes were used to define the tasks:

20.01- Financial Compliance Review

20.02- Other Funding Anticipation

20.08- Project Cost Estimation & Documentation

20.11- Additional FEMA/Grantee Documentation Requests

20.12- Other Program Administration

On May 10, 2013, the Regional Administrator partially approved the first appeal for $1,963.94.  The Regional Administrator determined that the descriptions of codes 20.01, 20.02 and 20.12 were too broad to determine if the work was directly related to eligible direct administrative activities in support of PW 268.  According to the first appeal response, the work designated with codes 20.08 and 20.11 was typical for the administrative process in direct support of PW 268.  The costs associated with codes 20.08 and 20.11 totaled $1,963.94. The Regional Administrator found the remaining amount ineligible because the documentation failed to demonstrate the costs claimed were eligible direct administrative activities for the project.

Second Appeal

The Applicant submitted its second appeal on July 19, 2013, and maintains that the information contained in the time cards provided to FEMA with its first appeal followed FEMA’s task definitions, guidelines and policies, and that the direct administrative activities were properly documented and directly related to PW 268.  The Applicant requests approval of its remaining claimed DAC in the amount of $51,015.13.  The Applicant did not provide additional documentation with its second appeal.                                                                                                                                                                                                                                                                                                                                                                      

Discussion

Pursuant to FEMA Disaster Assistance Policy (DAP) 9525.9 Section 324 Management Costs and Direct Administrative Costs, FEMA may reimburse DAC incurred by grantees and subgrantees that are properly documented and directly chargeable on a PW for a specific project.  DAC include costs that can be tracked, charged and accounted for directly to a specific project.[1]  In FEMA’s response to the second appeal for Cedar Rapids Community School District, FEMA-1763-DR-IA, PW 649,[2] it noted that terms such as “Project Formulation,” “Project Administration,” “Project Management,” and “Documentation Development” are too broad and fail to describe a specific administrative task as required by DAP 9525.9.

Here, although “Project Cost Estimation and Documentation” and “Additional FEMA/Grantee Documentation Requests” may seem broad, the Regional Administrator had sufficient information to substantiate that the administrative  tasks were directly related to PW 268.  This project required a significant amount of administrative support because the PW included nine sites, each pertaining to emergency protective measures performed by a different county department.  The reconciliation of estimated costs with the actual force account labor costs was labor intensive and required two time extensions to complete.  Given the nature of this project and FEMA’s additional knowledge of underlying activities associated with those tasks, the descriptions of those administrative tasks was specific enough to warrant reimbursement.  The remaining three category descriptions – “Financial Compliance Review,” “Other Funding Anticipation” and “Other Program Administration” – do not provide enough information to enable FEMA to determine if the work constituted administrative activities in direct support of PW 268.      

Conclusion

The documentation provided by the Applicant is not sufficiently detailed and descriptive to demonstrate that the remaining DAC is related to the performance of eligible direct administrative tasks associated with PW 268.  As such, the remaining DAC is not eligible for Public Assistance funding.


[1] DAP 9525.9 Section 324 Management Costs and Direct Administrative Costs, March 12, 2008.

[2] FEMA’s Second Appeal Decision, Cedar Rapids Community School District, FEMA-DR-IA PW 649, April 22, 2013.

 

 

Last updated May 28, 2020