While FEMA Region V had originally determined that the proposed safe room was eligible for HMGP funding, and submitted on January 26, 2010 a Large Project Notification for the project to FEMA Headquarters for Congressional notificatoin, construction of the safe room began in early February 2010, prior to final project approval.
Project approval, and a first appeal, were denied.
The 2nd appeal denial letter provides an analsis:
The Code of Federal Regulations, Title 44, Part 206.434(d)(2), (44 CFR 206.434(d)(2)) Eligibility, states in part " ... Activities for which implementation has already been initiated or completed are not eligible for funding." 44 CFR 206.439(c), Allowable Costs, states in part "Costs associated with implementation of the activity but incurred prior to grant award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed." There is no dispute that Leavenworth USD initiated construction of the safe room before FEMA awarded the grant. The issue is whether FEMA has discretion to fund the project when the project does not comply with program regulations. Regulations have the force of law. FEMA does not have discretion to waive the regulations.