Force Account Labor & Equipment Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4464
Applicant	Charleston
Appeal Type	Second
PA ID#	019-13330-00
PW ID#	PW 278
Date Signed	2023-01-12T17:00:00

Summary Paragraph

During the incident period August 31-September 6, 2019, Hurricane Dorian caused severe storms and flooding in South Carolina.  The City of Charleston (Applicant) utilized force account labor (FAL), force account equipment (FAE), and materials to respond to the disaster.  The Applicant claimed 40,038 overtime (OT) hours for employees at a total cost of $1,518,433.78.  FEMA found the total eligible OT FAL hours were 7,349.75 hours at a cost of $218,586.34, supported in the submitted documentation meeting the eligibility requirements for reimbursement.  The Applicant submitted a first appeal, disputing FEMA’s findings and providing a summary spreadsheet that it asserted highlighted the discrepancies and errors in FEMA’s validation of costs.  FEMA sent the Applicant a Request for Information (RFI) asking for clarification and supporting documentation regarding the FAL costs and how they were tabulated and emergency protective measure activity reports.  In the response, the Applicant states that its corrected validation summary spreadsheet shows the time and a half (OT2 pay rate) costs were $411,816.79.  FEMA denied the appeal, finding that elements of the Applicant’s emergency pay policy were discretionary, and that additional overtime pay, and force account equipment was not sufficiently documented.  FEMA also determined that the supporting documentation did not provide enough information to support that the FAL work claimed was associated with activities or tasks essential to meet immediate threats to life and property.  The Applicant submitted a second appeal claiming that while FEMA calculated the OT2 costs at $162,033.78, the correct total should be $411,816.79.

Authorities and Second Appeals

• Stafford Act §403(a)(3).
• 2 C.F.R. § 200.403(g).
• 44 C.F.R. §§ 206.206(a), 206.225(a)(3)(i), 206.228(a)(2)(iii).
• PAPPG, at 21, 23-24, 42, 57, 133.
• West Turin (Town of), FEMA-4472-DR-NY, at 3.

Headnotes

• To be eligible for reimbursement, costs must be directly tied to the performance of eligible work and be adequately documented.  It is the applicant’s responsibility to substantiate its claim as eligible.
  • Here the Applicant has not substantiated through documentation, that the costs claimed are tied to the performance of eligible work.

Conclusion

FEMA finds the Applicant has not substantiated through documentation that the costs claimed are tied to the performance of eligible work. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

During the incident period of August 31-September 6, 2019, Hurricane Dorian caused severe storms and flooding in South Carolina, including in the City of Charleston (Applicant).[1]  The Applicant sought reimbursement under the Public Assistance (PA) program for force account labor (FAL), force account equipment (FAE), material purchases, rental equipment, and contracts to respond to the disaster.  This included, but was not limited to, operating an emergency operations center (EOC); purchasing provisions for first responders and EOC staff; placing barricades for road closures due to flooding; and security patrols for police.  The Applicant claimed costs totaling $1,762,134.68.  As part of this amount, the Applicant claimed that 269 employees expended 40,038 overtime (OT) hours at a total cost of $1,518,433.78.[2]  FEMA prepared Grants Manager Project (GMP) 120124 to document the work and associated costs associated.

On July 17, 2020, FEMA emailed the Applicant asking for clarification on discrepancies between the FAL summaries for various city departments and the Applicant’s timesheets.  FEMA noted that various OT pay rates were recorded on handwritten employee timesheets but not recorded in the FAL summary for each employee.  On July 20, 2020, FEMA issued a Request for Information (RFI) to the Applicant, requesting, among other items, an explanation of the Applicant’s Emergency/Extraordinary Pay Policy (EEPP), including its sleep time policy, and an explanation of the cost codes used to track FAL hours related to disaster expenses.  The Applicant responded on August 3, 2020, transmitting its employee handbook, which contained its general pay policy and its EEPP.

In a letter dated July 24, 2020, the Applicant stated that it disagreed with FEMA’s assessment of the summaries and timesheets.  The Applicant clarified that the payroll departments would correct the time accounted for in the summaries without revising the handwritten timesheets.  The Applicant requested a meeting to compare documentation with FEMA to address discrepancies.

In a Determination Memorandum (DM) dated November 6, 2020, FEMA denied $1,310,995.27 of the requested $1,762,134.68.  FEMA determined that the Applicant’s EEPP was discretionary, as it states that in times of “inclement weather, natural disasters, or other emergency situations…the Office of the Mayor may declare the implementation of Emergency/Extraordinary Pay Status.”[3]   Therefore, FEMA limited eligible FAL costs to the Applicant’s non-discretionary, uniformly applied pay rates. [4]  FEMA awarded GMP 120124 Version 0 for $451,139.41.

First Appeal

On January 5, 2021, the Applicant appealed FEMA’s decision.  The Applicant maintained that only $14,170.47 should be disallowed due to errors in the validation spreadsheets and therefore requested $1,296,824.80 of the previously denied costs.  In a letter dated March 3, 2021, the South Carolina Emergency Management Division (Recipient) forwarded the Applicant’s first appeal letter with support.  The Recipient recommended that FEMA review and correct the validation summary and favorably consider the Applicant’s request.

On August 3, 2021, FEMA issued an RFI to the Applicant noting that the documentation in the administrative record appeared insufficient to support the Applicant’s claim.  FEMA requested additional documentation and clarification, including applicable, legible employee timesheets, emergency protective measure activity reports, and documentation supporting the EEPP was not a discretionary policy.  On October 1, 2021, the Applicant responded to FEMA’s RFI stating the EEPP was not discretionary and providing a spreadsheet of certain OT employee hours and supporting timesheets. 

On March 24, 2022, the FEMA Region IV Regional Administrator denied the appeal.  FEMA found the pay rates established in the Applicant’s EEPP were discretionary and, therefore, claims for sleep pay, emergency exempt pay, and emergency accrued leave pay were not eligible for PA.  Additionally, FEMA found the Applicant’s validation spreadsheet did not substantiate or demonstrate the specific tasks performed by police employees.  Therefore, the costs and the additional FAE on appeal were ineligible. 

Second Appeal

On May 23, 2022, the Applicant submitted its second appeal.  The Applicant states that it is appealing the amount of $411,816.79 for some of its OT (referred to by the Applicant as OT2) FAL.[5]  In a letter dated July 14, 2022, the Recipient forwarded the Applicant’s second appeal letter.  The Recipient recommended that FEMA review and favorably consider the Applicant’s request.

 

Discussion

FEMA is authorized to provide PA reimbursement for eligible emergency protective measures to save lives, protect public health and safety, and protect improved property.[6]  To be eligible, costs must be directly tied to the performance of eligible work and be adequately documented.[7]  For emergency work, only OT labor is eligible for budgeted employees.[8]  It is the applicant’s responsibility to substantiate its claim as eligible.[9]  If the Applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[10]  Documentation should provide the “who, what, when, where, why, and how much” for each item claimed.[11]  The burden to fully substantiate an appeal with documented justification falls exclusively on the applicant and hinges on the applicant’s ability not only to produce its own records, but to clearly explain how those records support the appeal.[12]    

Here, the Applicant has not provided documentation to substantiate that the FAL costs claimed on second appeal are tied to the performance of eligible work.  While the Applicant has provided documentation, via the Incident Action Plan, that identifies a group of planned emergency response activities conducted through the incident period, including but not limited to flood fighting, EOC operations, sandbagging, etc., this does not identify the who, what, when, where, why, and how much for each claimed activity.  Similarly, although the Applicant provided validation summary spreadsheets and timesheets which show the hours claimed by each employee as OT during the incident period, the documentation does not provide detail or specificity regarding what the employees were doing during those hours.  It simply contains general descriptions, such as pre-storm prep and storm response.  Additionally, the Applicant has not provided activity logs or other documentation which tie OT hours claimed to eligible emergency protective measures.  Therefore, the claimed costs on appeal cannot be tied to the performance of eligible work.

    

Conclusion

The Applicant has not substantiated through documentation that the costs claimed are tied to the performance of eligible work. Therefore, this appeal is denied.

 

[1] The President issued a major disaster declaration on September 30, 2019.

[2] The Applicant claimed 40,038 force account labor (FAL) hours of overtime (OT), of which 26,519.39 hours are for the following: 5,078.75 hours for sleep; 3,692.42 hours for OT1 paid at a straight time pay rate; and 17,748.22 hours for Accrued Leave earned at 1.5 hours per 1 hour worked of OT hours [either at OT1 (paid at straight time) or OT2 (paid at 1.5 times base rate)].

[3] Letter from Infrastructure Branch Dir., FEMA, to Chief Fin. Officer (CFO), City of Charleston, at 4 (Nov. 11, 2020) [quoting Appendix G (Emergency/Extraordinary Pay Policy (EEPP)) of the Applicant’s Employee Handbook].

[4] See Public Assistance Program and Policy Guide, FP 104-009-2, at 23 (Apr. 1, 2018) [hereinafter PAPPG].

[5] See Letter from CFO, City of Charleston, to S.C. Emergency Mgmt. Div., at 1-2 (May 23, 2022).  The Applicant disagrees with the determinations regarding the discretionary nature of the EEPP, as well as the OT1 and FAE costs denied, but states it will not dispute these further on second appeal; therefore, these determinations are not discussed herein.

[6] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403(a)(3), Title 42, United States Code § 5170b(a)(3) (2018); Title 44 Code of Federal Regulations (C.F.R.) § 206.225(a)(1) (2018); Public Assistance Program and Policy Guide, FP 104-009-2, at 42-43, 57 (Apr. 2018) [hereinafter PAPPG].

[7] PAPPG, at 21.

[8] 44 C.F.R. § 206.228(a)(2)(iii); PAPPG, at 24.

[9] PAPPG, at 133.

[10] Id.

[11] Id.

[12] 44 C.F.R. § 206.206(a); FEMA Second Appeal Analysis, West Turin (Town of), FEMA-4472-DR-NY, at 3 (Oct. 14, 2022).