Force Account Labor & Equipment Costs

Appeal Brief

Summary Paragraph

From September 4 to October 18, 2017, Hurricane Irma impacted areas in Florida. The Florida Department of Veterans Affairs (Applicant) requested Public Assistance (PA) funding for force account labor, force account equipment, and materials costs associated with evacuation and sheltering activities at veterans nursing home facilities. FEMA created Grants Manager Project 18313 to document the Applicant’s claim. On March 12, 2019, FEMA awarded $1,170,922.71 for labor, among other costs. The Florida Division of Emergency Management (Recipient) subsequently identified a project underrun of $527,701.46, with eligible labor costs of $643,221.25. The Recipient drew down funding on July 17, 2019. However, in a review of the project, FEMA determined that the labor costs could not be validated. In a Determination Memorandum dated February 15, 2023, FEMA denied $643,221.25 in labor costs. FEMA found that the Applicant had not submitted documentation (for example, employee timesheets) that supported its labor claim. The Applicant appealed, stating that by the time FEMA notified it that the timesheets were required, they were no longer available. The Applicant stated that it provided other documentation in lieu of timesheets. The FEMA Region 4 Regional Administrator denied the appeal. FEMA found that the Applicant had not retained supporting documentation as required, and had not provided documentation demonstrating the type of work the employees performed. The Applicant submits a second appeal, requesting FEMA approve $643,221.25 and reiterating its earlier appeal positions.

Authorities

• Stafford Act § 403(a)(3).
• 2 C.F.R. § 200.403(g).
• 44 C.F.R. §§ 206.206(a), 206.223(a)(1), 206.225(a)(1), (a)(3)(i).
• PAPPG, at 19, 21, 42, 60-61, and 133.
• City of New York-Mgmt. and Budget, FEMA-4567-DR-NY, at 2-3.

Headnotes

• For costs to be eligible, they must be directly tied to the performance of eligible work and adequately documented. It is the applicant’s responsibility to substantiate its claim as eligible; if the applicant does not provide documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.
  • The payroll information provided by the Applicant does not note which employee(s) performed specific items of work. Consequently, FEMA cannot distinguish between eligible and ineligible labor costs.

Conclusion

The Applicant has not demonstrated the claimed labor costs are directly tied to the performance of eligible emergency protective measures. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 4 to October 18, 2017, Hurricane Irma impacted areas in Florida.[1] The Florida Department of Veterans Affairs (Applicant) requested Public Assistance (PA) funding for force account labor, force account equipment, and materials costs associated with evacuation and sheltering activities at veterans nursing home facilities located throughout the state. Pertinent to this appeal, the Applicant’s labor claim comprised: (1) straight time costs incurred by “Selective Exempt Service” (SES) employees; (2) straight and overtime costs incurred by temporary employees hired for disaster response; and (3) overtime costs incurred by temporarily reassigned employees.[2] The claimed labor occurred from September 4-15, 2017.

FEMA created Grants Manager Project 18313 to document the Applicant’s claim and obligated $1,318,693.85 on March 12, 2019. This included $1,170,922.71 for labor.[3] On June 25, 2019, the Florida Division of Emergency Management (Recipient) submitted a cost validation review identifying $527,701.71 in ineligible straight time labor costs incurred by the SES employees. The Recipient validated the remaining labor costs totaling $643,221.25,[4] and on July 17, 2019, drew down $643,221.25 in PA funding.[5]

FEMA reviewed the project under the Validate As You Go (VAYGo) initiative.[6] On December 7, 2020, FEMA issued a request for information regarding the $643,221.25 in PA funding awarded for labor. FEMA noted that information (dates and daily hours worked, proof of payment) was missing from the supporting documentation, and the provided fringe benefit rates did not match the claimed amount. In response, the Applicant stated that payroll spreadsheets uploaded to Grants Portal contained the requested information. FEMA determined that $643,221.25 were “improper costs” and could not be validated, as: (1) labor summaries did not indicate which employee’s cost information was applied to the funding draw down; (2) proof of payment information was not “reasonably transparent;” and (3) the calculated fringe benefit rates did not comport with the rates provided in labor summaries.[7]

On November 19, 2021, the Recipient submitted a large project closeout request with a final inspection report, noting a project underrun of $527,701.71 but recommending $643,221.25 as eligible labor costs. However, in a Determination Memorandum dated February 15, 2023, FEMA denied $643,221.25 in labor costs. FEMA found that the Applicant had not submitted documentation (employee timesheets, payroll, and fringe benefit documents) during the VAYGo review to support its labor claim.

First Appeal

The Applicant submitted a first appeal dated February 27, 2023, requesting FEMA approve $643,221.25.[8] The Applicant stated that employee timesheets only remain on its personnel website for 18 months, and that by the time FEMA notified it that additional documentation was required, the timesheets were no longer available. The Applicant stated that it provided other documentation in lieu of timesheets, including timesheet information report spreadsheets and payroll registers, both of which recorded the hours each employee worked. In a transmittal letter dated May 1, 2023, the Recipient expressed support for the appeal.

On December 9, 2024, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found that the Applicant had not retained documentation supporting its claim, as required, and had not provided any additional documentation (for example, work or activity logs) demonstrating the type of work each employee performed.[9] Therefore, FEMA stated that it could not verify the eligibility of the claimed work or the associated labor costs.

Second Appeal

The Applicant submitted a second appeal dated January 24, 2025, requesting FEMA approve $643,221.25 and reiterating its previous positions. The Applicant also asserts that the timesheet information reports it provided previously were downloaded from the state payroll system and contain the same information as the actual timesheets. Further, it states that FEMA’s representatives advised that these reports would be sufficient to demonstrate eligibility and, accordingly, the project was approved in June 2019. Finally, the Applicant states that it followed state-directed document retention policies, and that it was not possible to resurrect employee timesheets from 2017. In a transmittal letter dated March 12, 2025, the Recipient expressed support for the appeal.

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives and to protect public health and safety.[10] For emergency protective measures to be eligible, an applicant is responsible for showing that work is required due to an immediate threat resulting from the declared incident.[11] For costs to be eligible, they must be directly tied to the performance of eligible work and adequately documented.[12] Documentation should provide the “who, what, when, where, why, and how much” for each item claimed.[13] It is the applicant’s responsibility to substantiate its claim as eligible; if the applicant does not provide documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[14]

The Applicant requests $643,221.25 in straight time and overtime labor costs it claims are associated with the evacuation and sheltering of its residents during the disaster. In support, it provides payroll information (employee names, job titles, pay rates, hours worked, etc.) for the dates in question. A description of the evacuation and sheltering work, available in the project record, includes: (1) using generators for emergency power; (2) pre-positioning resources; (3) purchasing supplies, such as tarps, sandbags, and extension cords; (4) providing communal feeding for residents; (5) sheltering residents in place; (6) additional medical care; and (7) securing facilities and residents.[15]

Per the Public Assistance Program and Policy Guide, some of the items of work described (for example, operating emergency generators) are potentially eligible, while others (communal feeding, medical care) are potentially ineligible increased operating costs.[16] However, the payroll information provided by the Applicant does not note which employee(s) performed specific items of work. Consequently, FEMA cannot distinguish between eligible and ineligible labor costs. FEMA noted the lack of verifying documentation as a basis for denial in the DM and on first appeal;[17] nevertheless, the Applicant did not provide any additional explanation or documentation (for example, daily logs or activity reports) with its second appeal. Therefore, the Applicant has not demonstrated the claimed labor costs are directly tied to the performance of eligible emergency protective measures.[18]

Conclusion

The Applicant has not demonstrated the claimed labor costs are directly tied to the performance of eligible emergency protective measures. Therefore, this appeal is denied.