Ineligible Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4394
Applicant	Georgetown County Board of Disabilities and Special Needs
Appeal Type	Second
PA ID#	043-UC3R3-00
PW ID#	PW 38
Date Signed	2021-05-19T16:00:00

Summary Paragraph

From September 8 through October 8, 2018, Hurricane Florence created an immediate threat to the health and safety of the public requiring emergency response and protective measures, including in Georgetown County, South Carolina, where the Georgetown County Board of Disabilities and Special Needs (Applicant) is located.  In response to a mandatory evacuation order from the Governor, from September 11 to September 16, 2018, the Applicant evacuated its disabled residents, who required specialized care, from the Applicant’s residential custodial care homes to alternate facilities.  The Applicant requested reimbursement for costs to operate a generator at one of the facilities, evacuation costs, and force account labor overtime to care for the disabled residents once they were at the alternate facilities in the amount of $33,868.47.  FEMA denied $28,224.67 in Public Assistance (PA) funding, finding the post-evacuation costs associated with force account labor were ineligible increased operating costs.  FEMA, however, approved $5,643.80 for costs associated with resident evacuation and return, and generator operation.  The Applicant appealed the determination, stating that, given the specialized care required for the evacuated residents, the claimed costs for providing care at the temporary alternate facilities were necessary due to the emergency.  FEMA Region IV denied the Applicant’s first appeal as the costs incurred for providing care at the temporary alternate facilities are ineligible increased operating expenses.  The Applicant filed a second appeal reiterating extraordinary circumstances tied to the costs. 

Authorities and Second Appeals

• Stafford Act § 403.
• 44 C.F.R. § 206.226(a)(3)(i)-(ii).
• PAPPG, at 42, 61, 66-69.
• Mem’l Hosp. at Gulfport, FEMA-4081-DR-MS at 2-3; S.C. Dep’t of Disabilities & Special Needs, FEMA-4241-DR-SC; La. Dep’t of Pub. Safety & Corrections, FEMA-4277-DR-LA, at 3; York (Town of), FEMA-4367-DR-ME; Georgetown Hosp. Sys., FEMA-4394-DR-SC, at 4.

Headnotes

• Increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.  For all applicants, ineligible operating costs include, but are not limited to, costs for: patient care (with limited exceptions); administrative activities; provision of food (with limited exceptions); and obtaining electrical power or water from an alternate source.
  • Here the Applicant incurred costs to care for residents who were evacuated to alternate facilities, incurring overtime for staff providing care.  These costs are considered increased operating costs related to operating a facility which are not eligible for PA funding.

Conclusion

The costs the Applicant claims, outside of the costs to operate the generator and the evacuation and return of the residents, are increased operating costs and are not eligible for PA funding.  This appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 8 to October 8, 2018, Hurricane Florence created an immediate threat to the health and safety of the public in Georgetown County, South Carolina.[1]  On September 10, 2018, by South Carolina Executive Order 2018-29, the Governor ordered a mandatory evacuation.  The Georgetown County Board of Disabilities and Special Needs (Applicant) is a state incorporated non-profit organization that provides medical and social services to individuals with severe, lifelong disabilities.[2]  The Applicant operates two eight-bed homes and at least five four-bed homes that provide medical and social care to individuals with severe lifelong disabilities.  On September 11, 2018, per a Memorandum of Agreement (MOA)[3] between the Applicant and the Florence County Disabilities and Special Needs Board (FCDSNB), the Applicant evacuated 42 individuals receiving custodial care services and 23 staff members to the FCDSNB’s workshop facility in Florence, South Carolina.  On September 15, 2018, the residents were relocated to the Cooper Center, the Applicant’s emergency evacuation center backup facility.  Generators were used at the Cooper Center, as needed.  The residents and staff stayed at the Cooper Center until September 16, 2018, when the evacuation order was lifted and the disabled residents were allowed to return to their respective residential facilities. 

FEMA prepared Project Worksheet (PW) 38[4] to document the Applicant’s claimed costs including evacuation costs, costs incurred to run a generator at the Cooper Center, and labor costs associated with staff caring for residents at the alternate facilities.

On August 22, 2019, FEMA issued a Determination Memorandum (DM) denying $28,224.67 in Public Assistance (PA) funding.  FEMA explained that while the costs to operate the generator and the evacuation costs and costs to return were eligible emergency protective measure expenses, the costs incurred at the alternate facilities where the residents and staff were relocated are increased operating costs that are ineligible for PA funding.[5]

 

First Appeal

The Applicant appealed in a letter dated October 21, 2019, disputing the reasons FEMA gave for denying reimbursement.  It stated that due to the unique needs and continuity of care necessary for the residents, the staff was required to provide constant care during the evacuation and during the relocations.  In addition, the Applicant stated that relocation of the residents created increased safety concerns for the residents and others they encounter because of behavioral changes when residents are removed from familiar surroundings.  Therefore, according to the Applicant, the claimed additional costs to care for the residents at the alternate facilities post-evacuation were necessary to eliminate or lessen the immediate threat to the residents’ health and safety.  The Applicant also stated that FEMA reimbursed similar costs in the PA program in prior disasters.[6]  The South Carolina Emergency Management Division (Grantee) supported the appeal in a letter dated December 20, 2019.

In the first appeal determination dated November 23, 2020, the FEMA Region IV Regional Administrator denied the costs for force account labor at the temporary alternate facilities where the residents were relocated as ineligible increased operating expenses.  FEMA concluded the additional costs incurred to provide care for the residents at the alternate facilities are normal operating costs for disability and special needs boards providing residential custodial care to disabled residents.  Accordingly, such costs are not an emergency measure necessary to eliminate or lessen an immediate threat.

 

Second Appeal

The Applicant filed a second appeal in a letter dated January 22, 2021 reiterating first appeal arguments about the extraordinary circumstances tied to the costs.  Additionally, the Applicant claims its costs are eligible pursuant to PA policy for emergency congregate sheltering as well as associated costs for care of survivors with disabilities or functional needs.[7]

The Grantee forwarded the appeal, in a letter dated March 19, 2021, in support of the Applicant’s position and reiterating prior first appeal arguments. 

 

Discussion

Eligible emergency work includes emergency protective measures that are necessary to save lives and protect property or public health and safety.[8]  Work to implement such emergency protective measures may be eligible if it eliminates or lessens immediate threats to life, public health or safety, or improved property.[9]  Increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.[10]  For all applicants, ineligible operating costs include, but are not limited to, costs for: patient care (with limited exceptions); administrative activities; provision of food (with limited exceptions); and obtaining electrical power or water from an alternate source.[11]

Here the Applicant responded to an evacuation order by relocating its staff and residents to a pre-identified facility under a mutual agreement.  The evacuation and return costs and the costs of operating the generator were eligible expenses incurred to respond to an immediate threat to the health and safety of the residents and staff in accordance with FEMA policy.[12]  In its appeal, the Applicant requests reimbursement for force account labor costs incurred to provide care for the residents at the alternate facilities where the residents were relocated.  The Applicant and the Grantee claim those costs are tied to emergency actions taken to save lives or protect public health and safety.[13]

However, once residents and staff were evacuated to the alternate facilities, the costs to care for the evacuees were increased operating expenses related to providing custodial care to the residents.  Therefore, the force account labor costs are not eligible as emergency measures necessary to eliminate or lessen an immediate threat.[14]

 

Conclusion

The costs the Applicant claims, outside of the costs to operate the generator and the evacuation and return of the residents, are increased operating costs and are not eligible for PA funding.  Therefore, this appeal is denied.

 

 

[1] The President declared a major disaster for the state on September 16, 2018 under FEMA-4394-DR-SC.

[2] The Applicant provides specialized services to individuals with severe intellectual and cognitive disabilities, brain and spinal cord injuries, cerebral palsy, autism, epilepsy, and other disabilities. See Letter from Georgetown Cty. Bd. of Disabilities and Special Needs, to Dir., S.C. Emergency Mgmt. Div. (SCEMD), at 2 (Oct. 21, 2019).

[3] The Applicant and the Florence County Disabilities and Special Needs Board executed a Memorandum of Agreement on June 6, 2018.

[4] Grants Manager Project (GMP) 66155.

[5] The DM also noted that the Applicant is an instrumentality of a local government.  Although the Applicant did not raise this issue on appeal, FEMA addressed the issue of the Applicant’s status as government entity

in its first appeal response.  FEMA concluded the Applicant met FEMA’s requirements for a local public authority or instrumentality of a local government and should be treated as a government entity for funding purposes. See FEMA First Appeal Analysis, Georgetown Cty. Bd. of Disabilities and Special Needs, FEMA-4394-DR-SC, at 3 (Nov. 23, 2020). 

[6] In its appeal, the Applicant cites to FEMA Disaster Assistance Policy (DAP) 9523.15, Eligible Costs Related to Evacuations and Sheltering (Apr. 6, 2007).  However, the Public Assistance Program and Policy Guide, FP 104-009-2 [hereinafter PAPPG] superseded DAP 9523.15 on January 1, 2016.

[7] See PAPPG, at 66-69 (Apr. 2018).

[8] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403, Title 42, United States Code (42 U.S.C.) § 5170b (2018); PAPPG, at 42-43.

[9] Title 44 Code of Federal Regulations § 206.225(a)(3)(i)-(ii) (2017).

[10] PAPPG, at 42; see also FEMA Second Appeal Analysis, Mem’l Hosp. at Gulfport, FEMA-4081-DR-MS, at 2-3 (May 11, 2015) (finding that costs associated with overtime and meals for employees were increased operating expenses even though there was an imposed curfew).

[11] PAPPG, at 61.

[12] PAPPG, at 65-66.

[13] The Applicant and the Grantee assert that, in prior disasters, FEMA reimbursed similar costs.  On this matter, FEMA notes that each project is evaluated on a case-by-case basis.  Eligibility decisions under separate declarations, if made in error, have no impact on the eligibility of funding discussed in the present appeal.  See FEMA Second Appeal Analysis, York (Town of), FEMA-4367-DR-ME, at 3, n.12 (Aug. 18, 2020).

[14] See FEMA Second Appeal Analysis, S.C. Dep’t of Disabilities & Special Needs, FEMA-4241-DR-SC, at 2 (Jan. 11, 2018).