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Eligible Costs

Appeal Brief Appeal Letter

Appeal Brief

DesastreFEMA-1155-DR
ApplicantElk County Water District
Appeal TypeSecond
PA ID#045-91000
PW ID#38415, 40160, 40189 & 94570
Date Signed2005-09-29T04:00:00
Citation: FEMA-1511-DR-CA; Elk County Water District
Cross-reference: Force Account Labor, Rental Costs

Summary: The District is appealing FEMA’s denial of $5,716 for force account labor and rental costs related to the District’s drinking water well stabilization work stemming from severe flood related erosion that occurred in January 1997. FEMA initially denied $82,971 of $90,071 in cost overruns during the closeout of the grant. FEMA partially approved the Districts first appeal, finding that $75,164 was eligible for additional engineering design and construction costs necessary for permit compliance. The remaining $7,807 in costs for administrative force account labor, unsubstantiated rental equipment, and costs that pre-dated the disaster, were denied. In a letter dated October 4, 2004, the District appealed the remaining cost of force account labor of the district manager $4,201, and the costs of rental equipment $1,515.
Issues: Are the force account labor and rental truck costs eligible?

Findings: Yes. The appealed costs are eligible. The applicant provided documentation supporting the additional truck rental costs and that the force account labor was not supervisory in nature but was specific time spent on eligible permanent projects.
Rationale: 44 CFR § 13.20 (a)(6) Source Documentation, and
FEMA Response and Recovery Policy 9525.6 (7)(a), Project Supervision and Management Costs of Subgrantees.

Appeal Letter

September 29, 2005

Paul Jacks
Governor’s Authorized Representative
Office of the Director
Governor’s Office of Emergency Services
P.O. Box 419047
Rancho Cordova, California 95741-9047

Re: Second Appeal, Elk County Water District, PA ID 045-91000,
Eligible Costs, FEMA-1155-DR-CA, Disaster Survey Reports (DSRs) 38415, 40160, 40189, and 94570

Dear Mr. Jacks,

This letter is in response to your December 10, 2004 letter forwarding the referenced second appeal on behalf of the Elk County Water District (District). The District disputes the Federal Emergency Management Agency’s (FEMA) denial of $5,716 for force account labor and rental costs.

Severe storms and flooding occurred during the month of January 1997 causing severe erosion that threatened the District’s drinking water wells. Public Assistance (PA) Program funding was provided to stabilize and protect the wells. On July 28, 2003, after a review of the State’s Final Inspection Report, FEMA identified $90,071 in cost overruns, approved $7,100 in additional costs, and denied the remaining $82,971.

On October 17, 2003, the District submitted a first appeal on the closeout determination, which the State forwarded to FEMA on January 5, 2005. FEMA partially approved the first appeal in a response dated August 5, 2004, which found that the additional engineering design and construction costs submitted with the appeal were necessary in order to comply with the various permitting requirements. The amount approved was $75,164. The remaining $7,807 in costs for administrative force account labor, unsubstantiated rental equipment, and costs that pre-dated the disaster were denied.

In a letter dated October 4, 2004, the District appealed the denial of the force account labor costs of the District Manager in the amount of $4,201, and the costs of rental equipment in the amount of $1,515. The District asserted that the additional labor costs were eligible per 44 CFR § 206.228 (a)(4), and OMB Circular A-87, Attachment A, (E)(1)(a). The District also asserted that the costs of the rental truck was allowable under OMB Circular A-87, Attachment A, (E)(1)(b).

FEMA Response and Recovery Policy 9525.6 (7)(A), entitled Project Supervision and Management Costs of Subgrantees, states, “Labor costs of second level supervisors (and above) are ineligible unless the subgrantee can account for specific time spent on eligible permanent projects.” Although the District Manager may serve as a second level supervisor, the District has submitted adequate documentation that demonstrates that the force account labor costs under appeal was for work that directly related to eligible PA project management activities.

While the cost of the rental equipment is an eligible cost, it must be supported by adequate documentation. 44 CFR § 13.20 (a)(6), Source Documentation, states that subgrantee “accounting records must be supported by such source documentation as cancelled checks, paid bills…” Upon review of the second appeal and its supporting documentation, the District has submitted records supporting the additional truck rental rate and costs.

I have determined that the Elk County Water District has demonstrated that the appealed force account labor costs, and rental equipment costs are eligible for reimbursement in the amount of $5,716. The Acting Regional Director will prepare a Damage Survey Report funding the associated scope of work. The District’s appeal is granted.

Please inform the District of my decision. My determination constitutes the final decision on this matter pursuant to 44 CFR § 206.206.

Sincerely,
/S/
Daniel A. Craig
Director
Recovery Division
Emergency Preparedness and Response

cc: Karen Armes
Acting Regional Director
Region IX