Ineligible Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4337
ApplicantMount Sinai Medical Center
Appeal TypeSecond
PA ID#086-U7KTQ-00
PW ID#PW 8487/GMP 38622
Date Signed2021-11-24T17:00:00

Summary Paragraph

From September 4 to October 18, 2017, Hurricane Irma impacted the State of Florida.  Mount Sinai Medical Center (Applicant/Facility), a Private Nonprofit, used FAL, equipment and materials to implement emergency protective measures (sheltering, supplies, temporary staff, generator, and other costs associated with patient care).  FEMA generated a request for information requesting documentation supporting two labor invoices, including timecards and workforce documents.  The Applicant submitted additional documentation describing the work that had been invoiced.  FEMA denied the FAL costs for lack of supporting documentation.  The Applicant appealed for $389,135.00, and provided documentation describing the employees’ duties, hours worked, and overtime pay rates.  The FEMA Region IV Regional Administrator determined $8,317.65 in FAL overtime eligible, but found the remainder was increased operating costs.  In its second appeal, the Applicant claims that the first appeal denial was moot because FEMA responded after the 90-day response deadline.  The Applicant states that FEMA did not address the issues raised in the first appeal but instead responded with new ineligibility issues.  The Applicant argues its damage inventory description is an apt synopsis of eligible work. 

Authorities and Second Appeals

  • Stafford Act § 403(a)(3).
  • 44 C.F.R. §§206.223(a)(1); 206.225(a)
  • PAPPG at 42, 60, 61, 63-64.

Headnotes

  • Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.
  • The Applicant’s FAL costs associated with general patient care and routine tasks are ineligible increased operating costs.

Conclusion

The Applicant’s FAL costs associated with general patient care and routine tasks are ineligible increased operating costs.  Therefore, this appeal is denied.

Appeal Letter

Kevin Guthrie            

Director                                                                      

Florida Division of Emergency Management           

2555 Shumard Oak Boulevard                                              

Tallahassee, Florida 32399

 

Re:  Second Appeal Mount Sinai Medical Center, PA ID: 086-U7KTQ-00, FEMA-4337-DR-FL, Project Worksheet 8487/Grants Manager Project 38622 – Ineligible Costs

 

Dear Mr. Guthrie:

This is in response to a letter from your office dated August 25, 2021, which transmitted the referenced second appeal on behalf of Mount Sinai Medical Center (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s denial of funding in the amount of $380,817.35 for force account labor (FAL) costs.  

I have determined that the Applicant’s FAL costs associated with general patient care and routine tasks are ineligible increased operating costs.  Therefore, this appeal is denied.

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

 

                                                                      Sincerely,

                                                                          /S/

                                                                      Ana Montero

                                                                     Division Director

                                                                     Public Assistance Division

 

Enclosure

cc:  Gracia Szczech

Regional Administrator

FEMA Region IV

 

Appeal Analysis

Background

From September 4 – October 18, 2017, Hurricane Irma caused strong winds, torrential rain, and tidal surge, which caused damages throughout Florida.  FEMA created Grants Manager Project (GMP) 38622 to document claimed emergency protective measures undertaken by Mount Sinai Medical Center (Applicant/Facility), a Private Nonprofit (PNP) medical care facility.  FEMA summarized the claimed force account labor (FAL), equipment, and materials in the damage inventory description as:

The provision of temporary necessary emergency medical sheltering, services, supplies, and equipment by Mount Sinai FEMA Critical Facility for over 400 acutely and intensively ill people whose ailment displaces them from a safe, continuous, and coordinated healthcare location.  Includes contract oversight for emergency generator system, temporary staff and increased Force Account Labor costs for patient care and Emergency Management staff to monitor the storm at EOC.[1]

FEMA issued a request for information (RFI) on February 18, 2020, requesting documentation supporting two labor invoices, including timecards, and workforce documents.  The Applicant submitted additional documentation describing the work that had been invoiced.  FEMA issued a Determination Memorandum (DM) on August 3, 2020, granting some costs associated with emergency protective measures, but denying funding for the remaining FAL overtime.  FEMA found the Applicant did not provide documentation that allowed FEMA to validate FAL overtime was tied to eligible disaster-related emergency work activities. 

First Appeal

On September 25, 2020, the Applicant submitted its appeal for $389,135.00 in FAL costs.  The Applicant stated its claim is for 10,965 overtime hours associated with 31,591 straight time hours.[2]  The Applicant claimed the DM contained errors and misrepresentations as the DM cited regulations and policies not related to FAL, while other policies cited in the DM actually supported the Applicant’s claim.  The Applicant summarized its claim related to the implementation of its hurricane plan, which encompasses two teams alternating shifts to provide continuity of emergency medical care before, during, and after the event.  The Applicant said these were extraordinary costs related to its hurricane plan.  With its first appeal, the Applicant provided an updated P1 Work Force Data spreadsheet (P1 Report) dated April 30, 2020.[3]  The P1 Report identified the employee’s name, job title, “Activity Log,” regular and overtime pay (including benefits), date worked, and the claimed overtime hours.  The Applicant also submitted its P2 Work Force Data spreadsheet dated January 23, 2020, which included the employee name and the date/time the employee clocked in and out.  The Florida Division of Emergency Management (Grantee) supported the Applicant’s appeal in a letter dated November 17, 2020, and recommended that FEMA approve the requested $389,135.00.

In a first appeal response dated May 4, 2021, the Region IV Regional Administrator (RA) found that certain FAL costs (e.g., those associated with resolving issues with water infiltration, plugging and patching holes, organizing sandbags and water pumps, and maintaining continued generator operations) were supported as eligible emergency protective measures, and FEMA partially granted the appeal in the amount of $8,317.65.[4]  FEMA determined the remaining FAL overtime costs were associated with general patient care and a function of the Facility’s daily operation which are considered ineligible increased operating expenses.

Second Appeal

The Applicant’s second appeal states that FEMA’s first appeal denial was moot because FEMA responded to the first appeal after the 90-day response deadline set forth in Title 44 Code of Federal Regulations § 206.206(c)(3).  The Applicant states that FEMA did not address the issues raised on first appeal but instead, responded with new ineligibility determinations, and inconsistently applied policy to support its position.  The Applicant asserts that the damage inventory description found in Grants Portal is an apt synopsis of its efforts which fall within FEMA’s policy and precedents to be found eligible.  The Grantee supports the Applicant’s appeal through an August 25, 2021 letter.

 

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives, protect public health and safety, or protect improved property.[5]  For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[6]  For PNPs, eligible emergency protective measures are generally limited to activities associated with preventing damage to an eligible facility and its contents.[7]  In addition, increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.[8]  Additional costs related to operating a facility are only eligible if the services are specifically related to eligible emergency actions to save lives or protect public health and safety or improved property.[9]  For all applicants, ineligible operating costs include, but are not limited to, costs for: patient care; administrative activities; provision of food; and obtaining electrical power or water from an alternate source.[10]

The Applicant’s P1 report identifies costs associated with patient care (related to the employee job descriptions) including but not limited to, distribution of medication, cleaning and sanitizing rooms and equipment, food preparation and distribution, as well as other secretarial and administrative duties.[11]  These costs are tasks that are not emergency measures due to an immediate threat resulting from the declared incident, but routine tasks, albeit increased due to the disaster.  Accordingly, these tasks are not considered emergency protective measures, but rather are increased operating costs.

 

Conclusion

FEMA finds the Applicant’s FAL costs associated with general patient care and routine tasks are ineligible increased operating costs.  Therefore, this appeal is denied.

 

[1] DR-4337, Grants Manager, Project 38622, Damage Inventory 222372.

[2] On first appeal the Applicant reduced the overtime hours from 11,169 to 10,965.  The Applicant’s claimed amounts reduced accordingly from $392,330.64 (those denied in FEMA’s Determination Memorandum) to $389,135.00.

[3] Letter from Pres., Mount Sinai Medical Center, to Dir. Fl. Div. of Emergency Mgmt. (Sept. 25, 2020)., Attachment: Workforce Data P1 1.23.20 Totaled. [hereinafter P1 Report].

[4] FEMA has reviewed this finding and affirms the grant of these costs.

[5] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403(a)(3), Title 42, United States Code § 5170b(a)(3) (2012); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.225(a) (2016).

[6] 44 C.F.R. § 206.223(a)(1); Public Assistance Program and Policy Guide, FP 104-009-2, at 19 (Apr. 1, 2018) [hereinafter PAPPG].

[7] PAPPG, at 60.

[8] Id.

[9] Id. at 60-61.

[10] PAPPG, at 61.  Cf. PAPPG, at 63-64 (stating that when the emergency medical delivery system within a declared area is destroyed, severely compromised or overwhelmed, FEMA may fund extraordinary costs associated with operating emergency rooms and with providing temporary facilities for emergency medical care of survivors. Costs associated with emergency medical care should be customary for the emergency medical services provided.).

[11] See P1 Report.

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