Section 262 of the Continued Assistance for Unemployed Workers Act of 2020 provides that states, territories, and the District of Columbia may waive overpayments under the LWA program when the individual is not at fault for the payment, and repayment would be contrary to equity and good conscience. Such waivers only apply to LWA and apply to both the requirement for repayment by individuals (to the states, territories, and the District of Columbia) and the requirement for repayment by states, territories, and District of Columbia (to FEMA). States, territories, and the District of Columbia are responsible for recovering overpayments not waived under the authority of Section 262 and returning the funds to FEMA. (44 C.F.R. 206.120(f) (4 and 5)). Adjustments to expenditures will be made as funding is recovered (reimbursed to FEMA), and reported quarterly on the SF-425, Federal Financial Report. ((See 44 C.F.R. § 206.120.(f)(5)(i); see also Section III.E. of the State Administrative Plan template which provides additional guidance on the Recovery of Funds procedures and FEMA’s Lost Wages Assistance Grant Close Out guidance.) States, territories, and the District of Columbia have a responsibility to reimburse FEMA for improper payments regardless of when they are identified, even if the Period of Performance has expired or the grant has closed.
Only administrative expenses incurred during an open Period of Performance for overpayment recovery may be eligible for reimbursement.