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Hazard Mitigation Grant Program Frequently Asked Questions

This page identifies some Frequently Asked Questions (FAQ) for the Hazard Mitigation Grant Program (HMGP).

The following FAQs address questions received from stakeholder engagements about the implementation of the Hazard Mitigation Grant Program Management Costs (Interim) Policy #104-11-1 (Interim Policy). This policy was released on November 14, 2018.

Background

On October 5, 2018, the President signed the Disaster Recovery Reform Act (DRRA) of 2018 into law. Section 1215 of the DRRA amended Section 324 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). Section 324 of the Stafford Act defines and outlines management costs with regard to an expense associated with specific projects under a major disaster, emergency, or disaster preparedness or mitigation activity or measure. As a result of the amendment to Section 324, 44 Code of Federal Regulations (CFR) Part 207 is no longer effective.

In addition, as amended, Section 324 requires FEMA to provide funding for management costs for HMGP projects at certain percentage rates. Specifically, a recipient who receives HMGP may be reimbursed “not more than 15 percent of the total amount of the grant award” of which “not more than 10 percent may be used by the recipient and 5 percent by the subrecipient.”

FEMA issued an interim policy implementing this amendment HMGP Management Costs (Interim) Policy #104-11-1, (Interim Policy). FEMA received several questions from stakeholders regarding the implementation of the Interim Policy and these common FAQs help address those questions.

This content is current as of October 8, 2019.

A. General Information

Q1. Does this policy apply to HMGP Post Fire grants?

Declarations prior to October 5, 2018

No. HMGP Post Fire grants resulting from Fire Management Assistance Grant (FMAG) declarations that were issued prior to October 5, 2018, are not included in this Interim Policy. They will continue to be calculated at 4.89 percent.

Declarations on or after October 5, 2018

Yes. FEMA will provide management costs for HMGP Post Fire grants resulting from FMAG declarations issued on or after October 5, 2018, at 15 percent (10 percent for the recipient and 5 percent for the subrecipient). Refer to section D of the HMGP Post Fire Policy #207-88-2 and the HMGP Post Fire Policy Fact Sheet for additional information about management costs.

Q2. Is a recipient required to offer management costs to subrecipients?

Yes. The recipient is required to provide an opportunity for subrecipients to apply for management costs.

The procedures for a subrecipient’s management costs application must be explained in the recipient’s Administrative Plan. These actions can be incorporated into existing processes, such as a pre-recipient briefing, and by adding a new section to the project application to collect management costs information. FEMA encourages the use of existing processes to manage and document management costs. Recipients must maintain records to document (e.g., briefing materials, application forms) that funding was made available to subrecipients.

Q3. What will happen if a recipient does not offer management costs to subrecipients?

Recipients are encouraged to work with their FEMA Region if they need additional assistance updating their Administrative Plan or need additional instruction on how to incorporate management costs into the Hazard Mitigation Grant Program.

The information below pertains to awards for which an Administrative Plan has already been approved under 44 CFR Part 207 regulations: 

  • FEMA will continue to provide no more than 4.89 percent of management costs for previously approved applications until November 15, 2019.
  • If an Administrative Plan is not approved by November 15, 2019, FEMA will consider the recipient non-compliant and may take remedies for non-compliance found in 2 CFR Section 200.338 until the Administrative Plan is approved by FEMA. Remedies for noncompliance include temporarily withholding cash payments and suspending the award.

FEMA will not approve an Administrative Plan that does not include procedures to offer management costs to subrecipients. Recipients may not receive HMGP without a FEMA-approved Administrative Plan.

B. Management Cost Eligibility

Q1. What administrative costs are eligible under management costs?

Administrative costs are expenses incurred by a recipient or a subrecipient in managing and administering the federal award to ensure that federal, state or tribal requirements are met including:

  • solicitation, development, review, and processing of subapplications;
  • delivery of technical assistance;
  • quarterly progress and fiscal reporting;
  • project monitoring;
  • technical monitoring;
  • compliance activities associated with federal procurement requirements;
  • documentation of quality of work verification for quarterly reports and closeout;
  • payment of claims;  
  • closeout review and liquidation; and
  • records retention.

Costs incurred for overhead expenses are typically covered via indirect costs rates.

Q2. What activities cannot be included under management costs?

Any activities that are directly related to a project are not eligible under management costs. For example, architectural, engineering, and design services are project costs and cannot be included under management costs.  

Similarly, construction management activities that manage, coordinate, and supervise the construction process from project scoping to project completion are project costs. These activities cannot be included under management costs.

Q3. Is staff time eligible for management costs?

Yes. Staff time can be eligible for management costs if the staff is undertaking activities related to the receipt and administration of HMGP funding. Staff salary costs may also be eligible for reimbursement under specific projects if the staff is undertaking activities related to project management and design activities as part of the project.

C. Application Process - Disasters Declared after October 5, 2018

Recipient Application Process

Q1. How does a recipient apply for management costs?

The process for recipients to apply for management costs has not changed. Recipients should continue to follow Hazard Mitigation Assistance Guidance (2015) and 2 CFR 200 requirements.

Q2. When can recipients apply for management costs?

A request for initial management costs must be submitted by recipients before the HMGP application deadline. Additional funds cannot be applied for after the HMGP application deadline.

Subrecipient Application Process

Q3. Is a subrecipient required to apply for management costs?

No. Subrecipients are not required to apply for management costs. The Hazard Mitigation Officer should have procedures to document a subrecipient’s decision not to apply for management costs. Subrecipients will not be able to apply for management costs after the application period is closed.

Q4. How does a subrecipient apply for management costs?

Management costs are not automatically provided or calculated for HMGP. Recipients establish the procedures which subrecipients must use to apply for management costs. Subrecipients must meet all application and 2 CFR 200 requirements and may apply for no more than 5 percent of their total subaward amount for management costs.

As part of the application process, subrecipients must provide a budget and narrative describing their anticipated management costs activities and expenses. On behalf of subrecipients, recipients apply for management costs to FEMA. For more information, subrecipients should contact their respective Hazard Mitigation Officer.

Q5. What should the subrecipient include in the management cost estimate?

The Hazard Mitigation Officer can provide the procedures and requirements for management costs to subrecipients. In general, a Hazard Mitigation Officer will request a budget and a narrative.

Typically, a non-construction budget for management costs will include the following cost categories: personnel, fringe benefits, travel, equipment, supplies, contractual, and indirect costs. A brief narrative may be required to identify what the funds will be spent on. These are required fields in the Application for Federal Assistance form (SF-424A).

For more information, please refer to the HMA Guidance (2015) Part IV.H.

Q6. Can previously approved budgets be amended to move administrative activities and application development expenses to management costs?

Yes. In order to amend a previously approved subaward, include either a scope of work or budget amendment.

Prior approval from FEMA is needed to amend a subaward and move project costs to management costs. A change request is permitted if it is consistent with the program guidelines and regulations. All requests to move administrative activities and/or application development must be made in writing. For more information about the procedures, subrecipients should consult with their Hazard Mitigation Officers.

It is important to submit a request for a change prior to the end of the application period or retroactive deadline for qualifying disasters.

  • If a recipient or subrecipient does not apply for management costs by the application deadline, management costs will no longer be available for the remainder of the project.
  • If management costs were approved prior to the end of the application period, they can be amended as needed, using the budget and scope of work amendment procedures.
  • If the subrecipient reduces or moves funds from a project budget to a management costs budget, the amount of funds available for management costs will also be reduced.

The subrecipient cannot request more than 5 percent of the total amount of the grant subaward.

If there is a cost underrun because of scope, schedule, or budget changes, approval from FEMA will be required to re-direct underrun funds within the same subaward.

Q7. Can subrecipients still apply for management costs if they have already submitted a project subapplication but the application period is still open?

A Hazard Mitigation Officer can work with subrecipients to amend submitted project subapplications. Eligible costs included in the initial subapplication can be re-categorized as management costs and submitted under a separate budget line item.

If subrecipients choose to re-categorize costs, this will reduce the total subapplication award that serves as the basis for the management costs estimate. The subrecipient can request no more than 5 percent of the total amount of the subapplication award for management costs.

D. Application Process - Disasters Declared Between August 1, 2017 and October 5, 2018

Recipient Application Process

Q1. If the initial application has been submitted, what is the management costs process for awards with an open application period?

Prior to the end of the application period, recipients must use the budget and scope of work amendment process to modify previous applications.

If additional time is needed, recipients should request an extension to the application period following the process found in HMA Guidance (2015) Part VIII.A.7.

Q2. What is the management costs process for awards with a closed application period?

Recipients must submit budget and scope of work amendment requests by March 2, 2020. If additional time is needed, recipients should submit a written request with justification to their FEMA region following the process found in HMA Guidance (2015) Part VIII.A.7. FEMA may extend the submission deadline in 30 to 90-day increments.

Subrecipient Application Process

Q3. Is a subrecipient required to apply for management costs?

No. Subrecipients are not required to apply for management costs. The Hazard Mitigation Officer should have procedures to document a subrecipient’s decision not to apply for management costs. Subrecipients will not be able to apply for management costs after the application period is closed. 

Q4. What is the management costs application process for approved subawards?

Subrecipients who think they are eligible for management costs are encouraged to work with their Hazard Mitigation Officer to amend a previously submitted subapplication including the budget and scope of work. Subrecipients should follow procedures provided by their Hazard Mitigation Officer. Since the recipient must submit budget amendments prior to March 2, 2020, they may set an earlier submission deadline to leave time to review and submit the request.

Please refer to the budget change procedures in the HMA Guidance (2015) Part VI.D.3 for information on how to amend subawards. Subrecipients are not required to request management costs for previously submitted subapplications. The Hazard Mitigation Officer should have procedures to document a subrecipient’s decision not to apply for management costs.

Q5. What is the management costs application process for closed subawards?

For this type of request, recipients should discuss this with the appropriate FEMA Region. This type of request will be evaluated on a case by case basis.

Q6. Can previously approved budgets be amended to move administrative activities and application development expenses to management costs?

Refer to Section C, question 6 for this answer.

Q7. Can subrecipients still apply for management costs if they have already submitted a project subapplication but the application period is still open?

Refer to Section C, question 7 for this answer.

E. Monitoring Requirements

Q1. What is “quarterly reconciliation” and what does it mean in the context of management costs?

The Interim Policy Section D.2 requires that recipient and subrecipient management costs be reconciled on a quarterly basis. Quarterly reconciliation is part of the quarterly financial and performance reports required in HMA Guidance (2015) Part VI.E.

Quarterly financial reporting and data analysis is the process of receiving and analyzing financial information reported by the recipient and subrecipient to gauge progress and compliance with award requirements and to gain reasonable assurance that funds do not exceed allowable or approved amounts. FEMA analyzes the data for the recipient. The recipient analyzes data for the subrecipient.

Last Updated: 
10/25/2019 - 10:49