Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4483
Applicant	Simpson College
Appeal Type	Second
PA ID#	181-00019-00
PW ID#	548554, 549728
Date Signed	2023-04-21T16:00:00

Summary Paragraph

On March 23, 2020, the President issued a major disaster declaration for Iowa for the coronavirus (COVID-19) pandemic. FEMA prepared Grants Manager Projects 548554 and 549728 to document work performed between September 15, 2020 and December 31, 2021. Simpson College (Applicant), a Private Nonprofit, requested Public Assistance (PA) funding for work performed by its Director of Health Services, a part-time, 10-month position budgeted to work 20 hours per week during the academic year. FEMA denied the Applicant’s request for in-season hours worked exceeding 20 hours but below 40 hours per week, finding the work ineligible as straight-time labor costs for a permanently budgeted employee. The Applicant appealed, arguing these claimed force account labor (FAL) costs should be considered eligible, contending FEMA clarified eligibility of overtime labor hours when it updated the description of budgeted employees in the Public Assistance Program and Policy Guide (PAPPG) from “seasonal employee working during normal season of employment” in Version 3.1 to “part-time or seasonal employee working during normal hours or season of employment” in Version 4. FEMA denied the appeals, finding the FAL performed by the budgeted employee and documented as straight-time labor costs ineligible for PA funding. The Applicant submits its second appeals, reiterating prior arguments.

Authorities and Second Appeals

• Stafford Act § 403.
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a), 206.228(a)(2)(iii).
• PAPPG, at 19, 23-24, 57, 60-61, 133.
• FP 104-009-19, at 3-5; FP 104-21-0004, at 3-4; FP 104-21-0003, at 5-6.
• Fact Sheet: Private Nonprofit Organizations, at 1-2
• Sonoma Cnty., FEMA-4344-DR-CA, at 3.

Headnotes

• For emergency work, unbudgeted employees are eligible for both overtime and straight-time labor. FEMA clarified in PAPPG Version 4 that unbudgeted employee hours for time worked beyond an employee’s scheduled working hours, as defined by the Applicant’s predisaster pay policy, may be eligible at a straight-time rate.
  • Because the Director’s budgeted working hours were 20 per week, the weekly hours worked in excess of that amount may be considered unbudgeted labor.
• If the applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for this work.
  • The Applicant does not demonstrate the claimed FAL hours at issue on appeal are directly tied to the performance of eligible emergency protective measures.

Conclusion

Although claimed FAL hours for time worked beyond the Applicant’s employee’s normal working hours may constitute unbudgeted labor, the Applicant has not demonstrated that the claimed FAL hours at issue on appeal are directly tied to the performance of eligible emergency protective measures. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

On March 23, 2020, the President issued a major disaster declaration for the state of Iowa as a result of the coronavirus (COVID-19) pandemic, with an incident period of January 20, 2020 to May 11, 2023. In response to the event, Simpson College (Applicant), a Private Nonprofit (PNP) organization, provided its students, staff, and faculty with training videos and webinars regarding COVID-19 safety; testing, monitoring, and tracking services; dissemination of information; and medical services and expertise. FEMA prepared Grants Manager Projects 548554 and 549728 to document work performed between September 15, 2020 and December 31, 2021. As part of these projects, the Applicant requested Public Assistance (PA) funding for force account labor (FAL) costs associated with work performed by its Director of Health Services (Director). The Applicant’s Director is a part-time, non-exempt, 10-month position budgeted to work 20 hours per week during the academic year, with two months off in the summertime. The Applicant stated the Director attended trainings to learn new medical strategies; participated in teaching videos and townhall meetings; and assisted with COVID-19 testing, ongoing campus planning, monitoring of quarantined students and employees, and tracking of positive COVID-19 cases.

In Determination Memoranda, FEMA denied the Applicant’s request for $13,096.14 associated with 449.73 hours worked by the Director. FEMA found that the claimed FAL costs for in-season hourly time exceeding 20 hours but falling below 40 hours per week were ineligible because they were straight-time labor costs for a permanently budgeted employee.[1]

First Appeal

The Applicant submitted its first appeals to the Iowa Department of Homeland Security and Emergency Management (Recipient) in April 2022, stating the claimed FAL costs for any hours worked over 20 hours in a given week during the academic year should be considered eligible as overtime labor costs because those unbudgeted hours were not straight- or regular-time. The Applicant explained that the Director’s weekly hours, when over 20 hours but not exceeding 40, were still paid at the straight-time rate. The Applicant stated only hours worked in excess of 40 hours per week were compensated at 1.5 times straight-pay in accordance with the Fair Labor Standards Act and section 403(d)(1)-(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Applicant contended FEMA clarified eligibility of overtime labor hours when it updated the description for budgeted employees in the Public Assistance Program and Policy Guide (PAPPG) from “seasonal employee working during normal season of employment” in Version 3.1 to “part-time or seasonal employee working during normal hours or season of employment” in Version 4, thereby arguing the hours above the contracted 20 hours were unbudgeted and eligible for PA funding.[2]

In two letters, both dated May 26, 2022, the Recipient transmitted the Applicant’s appeals and recommended FEMA reconsider the of eligibility for the FAL costs in question totaling $13,096.14. The Recipient restated the Applicant’s arguments and emphasized the use of the phrase “straight- or regular-time salaries” in Title 44 Code of Federal Regulations § 206.228(a)(2).[3] The Recipient stated the claimed hours beyond what the Applicant’s payroll policy has defined as regular-time for the Director (i.e., all hours worked in excess of 20 hours per week during the academic year) are not straight- or regular-time, as they exceed the number of hours stated in the employee’s employment agreement. Accordingly, the Recipient contended the claimed hours should be considered overtime, regardless of the pay rate and whether they exceed 40 hours per week, because they were unbudgeted costs that were not regular-time.

The FEMA Region 7 Regional Administrator denied the appeals in August 2022, finding the FAL associated with the Director was performed by a budgeted employee and documented as straight-time labor costs, not overtime labor costs. FEMA applied Version 3.1 of the PAPPG, the policy applicable to this disaster. FEMA noted that the Applicant’s employee handbook described overtime compensation for non-exempt employees as only occurring after an employee has worked 40 hours in a given week, and the Director’s employment agreement letter from human resources confirmed hours worked beyond 20 hours but less than 40 hours per week would be compensated as straight-time, not overtime. FEMA also noted that, even if the claimed hours were considered overtime rather than straight time, the Applicant had not provided work logs, activity reports, or other such documentation that demonstrated the claimed hours were tied to the performance of eligible emergency work.

Second Appeal

The Applicant submitted its second appeals to the Recipient on August 30, 2022, reiterating its first appeal arguments and maintaining that its claimed FAL costs should be considered eligible as overtime. In support of its appeals, the Applicant states FEMA: (1) previously advised it that the hours over 20 hours per week would be eligible, so it did not provide activity reports because they are not normal practice; and (2) considered similar costs to be eligible as overtime in another project for the same seasonal employee when the Director was required to work full-time and off-season to perform emergency work. By letters dated October 14, 2022, the Recipient transmitted its support for the Applicant’s second appeals. The Recipient reiterates its argument that the claimed FAL costs should be considered overtime because hours worked in excess of 20 hours per week were not straight- or regular-time, and notes that the FAL summary forms for these projects listed hours worked over 20 in the “O.T.” row. The Recipient also contends that FEMA raised any potential issue of eligible work or documentation for the first time in the first appeal decision, and any basis of denial under that issue would prevent the Applicant from having two levels of appeal for that issue.

 

Discussion

Force Account Labor and Equipment Costs

FEMA is authorized to provide funding for emergency protective measures to save lives and protect public health and safety.[4] For emergency work, budgeted employees are only eligible for overtime labor except in limited circumstances.[5] For unbudgeted employees performing emergency work, both overtime and straight-time labor may be eligible.[6] An applicant’s permanent employees or seasonal employees working during the normal season of employment are considered to be budgeted employees, while seasonal employees working outside the normal season of employment are considered unbudgeted.[7] FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy, provided the policy meets certain requirements.[8]

The Director is a part-time, non-exempt, employee who is budgeted to work 20 hours per week during the academic year per the Director’s employment agreement. Although the Director was paid at a straight-time rate for weekly hours worked in excess of 20 but not exceeding 40, the Applicant states the FAL is nonetheless eligible. While PAPPG Version 3.1 applies to COVID-19 declarations, PAPPG Version 4 clarifies that reimbursing hours beyond budgeted hours may be eligible at a straight-time rate.[9] Based on the clarification of FEMA’s policy, the weekly hours worked in excess of the Director’s 20 budgeted working hours per week may be considered unbudgeted labor.

Immediate Threat

FEMA may provide assistance to all eligible PA applicants, including eligible PNPs, for measures implemented to facilitate the safe opening and operation of all eligible facilities in response to COVID-19, which includes COVID-19 diagnostic testing.[10] Work related to disseminating information about COVID-19 health and safety measures and warnings of risks and hazards may also be eligible.[11] In addition, FEMA may provide assistance to support the  provision of eligible COVID-19 medical care work.[12] FEMA may also provide PA for training and technical assistance when necessary to perform otherwise eligible COVID-19-related emergency work specified in FEMA policies.[13] To be eligible, costs must be directly tied to the performance of eligible work and adequately documented.[14] If the applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for this work.[15]

The documentation provided by the Applicant does not establish that all claimed FAL costs at issue on appeal are directly tied to the performance of eligible work. The FAL labor summaries provided by the Applicant for the work at issue on appeal contain an indistinguishable mix of ineligible and potentially eligible work activities. For example, time spent attending subcommittee meetings and implementing National Collegiate Athletic Association guidelines do not meet any eligibility criteria outlined in FEMA’s COVID-19 policies. Conversely, COVID-19 diagnostic testing may be an eligible emergency protective measure when necessary for the safe opening and operation of a PA-eligible facility,[16] but the Applicant does not demonstrate how many of its claimed hours are tied to this work. Similarly, training videos and townhall meetings may be eligible as communications to disseminate public information regarding health and safety measures and provide warnings about risks and hazards, if the Applicant was legally responsible for providing those services and if they benefited the public-at-large, but the Applicant does not demonstrate how many hours, if any, of the work at issue on appeal meet eligibility requirements. Next, the Applicant states the Director engaged in monitoring of COVID-19 patients, but the Applicant does not demonstrate how many hours, if any, of the work at issue on appeal were associated with eligible medical treatment of COVID-19 patients.[17] Finally, training and technical assistance may be eligible if it is necessary to perform specific items of work in accordance with FEMA policy,[18] but the Applicant has not provided information tying its request to any listed item of work.[19] As the Applicant has not provided documentation tying FAL hours at issue on appeal to specific work performed, it has not demonstrated  the requested FAL hours are directly tied to the performance of eligible emergency protective measures. Therefore, the Applicant’s claimed FAL costs at issue on appeal are ineligible for PA funding.