Appeal Procedures, Appeal Timeliness

Appeal Brief

Appeal Letter

Appeal Analysis

Background

From September 3 to October 8, 2004, heavy winds and rainfall from Hurricane Frances (DR-1545) caused widespread damage throughout Florida.  The Hurricane deposited an estimated 3,000,000 cubic yards (CY) of debris on roadways and public property in Palm Beach County (Applicant).  FEMA prepared Project Worksheet (PW) 7907 for contracted debris removal monitoring, and awarded $1,193,953.76 in actual costs for the project.  FEMA also prepared PW 8107 to document contract labor for tree stump removal on public rights-of-way, and awarded $1,062,995.00 in actual costs for the project.  Subsequently, from September 24 to November 7, 2004, Hurricane Jeanne (DR-1561) caused further damage, depositing an additional 3,000,000 CY of debris onto public property owned by the Applicant.  FEMA prepared PW 5296 for debris removal monitoring, and awarded $4,529,860 for the project.

The Department of Homeland Security Office of Inspector General (OIG) audited the Applicant’s projects for both disasters.  In audit reports dated July 10, 2013,[1] the OIG recommended FEMA recover previously awarded Public Assistance (PA) funding.[2]  OIG representatives met with the Applicant to review the audit report recommendations.[3]

First Appeal

In a letter to the Florida Division of Emergency Management (Grantee) dated September 9, 2013, the Applicant submitted an appeal of the OIG’s audit report recommendations for PWs 7907, 8107, and 5296.[4]  The Applicant disputed each of the recommendations, and included information and supporting documentation that it stated demonstrated eligibility of the costs at issue.

FEMA Region IV concurred with the OIG’s recommendations, and in August and September 2014 deobligated a total of $622,654.00 in PA funding across the three PWs.[5]  The Grantee notified the Applicant of the deobligations in November and December 2014, forwarding the Project Application Summaries (P.2) for each PW.[6]  Subsequently, the Applicant requested an update from the Grantee as to the status of its September 9, 2013 appeal.  In an email exchange on January 14, 2015, the Grantee stated it was unaware the appeal had been filed, but requested additional information and recommended the Applicant submit a new appeal letter.[7]  The Applicant resubmitted the September 9, 2013 appeal documentation.[8]  On February 5, 2015,[9] the Grantee forwarded the appeal to FEMA, expressing support and asserting the deobligations were improper, as each project met the criteria in section 705(c) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988.[10]

FEMA issued a Final Request for Information (RFI)[11] that expressed concern the documentation in the administrative record did not demonstrate the first appeal had been filed within the 60-day timeframe allowed by Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.206(c).[12]  Specifically, FEMA noted the Applicant’s first appeal was dated September 9, 2013, but the Grantee’s transmittal was dated more than 60 days later.  FEMA requested documentation demonstrating the Grantee submitted the appeal within the regulatory timeframe.  In its response to the Final RFI, the Grantee stated it did not have additional documentation that would support a timely filing, and reiterated its earlier argument regarding the applicability of section 705(c).[13]

On December 5, 2017, FEMA denied the appeal.[14]  FEMA determined the Applicant’s first appeal had been submitted to the Grantee in late 2013.[15]  Thus, the Grantee’s February 2015 transmittal was outside the 60-day regulatory timeframe, and the first appeal was untimely.  Additionally, FEMA determined the Applicant submitted the appeal in response to the OIG’s audit report recommendations, and noted deficiencies in the content of the appeal letter.[16]  Therefore, FEMA concluded the Applicant had not responded to an appealable decision, as required by section 423(a) of the Stafford Act,[17] and failed to follow the appeal content requirements in 44 C.F.R. § 206.206(a).[18]  Finally, FEMA determined that because the appeal was untimely, the Applicant’s appeal rights lapsed, and per FEMA policy[19] the section 705(c) prohibitions did not apply.

Second Appeal

In a letter dated February 2, 2018, the Applicant appeals the first appeal determination, and requests FEMA either remand the appeal for consideration of the substantive issues, or reinstate $622,654.00 in PA funding under PWs 7907, 8107, and 5296.[20]  The Applicant acknowledges it originally filed the appeal in response to the OIG’s audit report recommendations, but states it resubmitted the appeal on January 14, 2015 after receiving notice of FEMA’s deobligations.  The Applicant asserts its appeal was therefore timely.[21]  Finally, the Applicant reiterates the Grantee’s argument regarding the applicability of section 705(c) of the Stafford Act to its projects.

In a transmittal dated March 20, 2018, the Grantee expresses its support for the second appeal.[22]  The Grantee asserts the first appeal was submitted in a timely manner, as the Applicant intended the original submission of the September 9, 2013 letter to be a rebuttal of the OIG’s audit report recommendations, not as an administrative appeal.  Moreover, even if the letter were viewed as a first appeal request when originally filed, the Grantee maintains that the attempt was “futile” as the PW deobligations had not yet occurred, and FEMA’s eligibility determinations were not ripe for appeal.[23]  The Grantee reiterates its earlier arguments regarding the applicability of section 705(c).

Discussion

Appeal Timeliness

Applicants must file appeals within 60 days after receipt of a notice of the action that is being appealed.[24]  Within 60 days of receiving an applicant’s appeal, a grantee will review and forward the appeal to FEMA with a written recommendation.[25]  If either the applicant or the grantee fails to meet these deadlines, the appeal is untimely and the applicant’s appeal rights lapse.[26]

Regarding the Applicant’s initial filing on September 9, 2013, FEMA determined on first appeal that: (1) the filing was in fact a response to the OIG’s audit report recommendations;[27] (2) the deobligation of PA funding under PWs 7907, 8107, and 5296 (i.e., the appealable action) had not yet occurred by that date;[28] and, therefore, (3) the eligibility decisions underlying the deobligations were not ripe for adjudication through the PA appeal process.[29]  FEMA affirms these determinations on second appeal.

However, the Applicant asserts it resubmitted the first appeal after receiving notice of FEMA’s deobligations in November and December 2014.  Close scrutiny of the Applicant’s email exchange with the Grantee substantiates the Applicant’s assertion.  The emails demonstrate the Applicant resubmitted the September 2013 appeal documentation to the Grantee a second time, on January 14, 2015, presenting it as an appeal of FEMA’s PA funding deobligations.[30]  Furthermore, FEMA could find no provision of statute, regulation, or policy, nor any prior second appeal decisions, which would prohibit or otherwise limit an applicant from filing a first appeal using documents submitted prior to the appealable action occurring, but that address the same substantive matter.

Therefore, FEMA agrees with the Applicant that January 14, 2015 was the date on which the Applicant filed its first appeal of the PA funding deobligations at issue.  Accordingly, FEMA finds the first appeal was submitted in a timely manner.[31]

Sufficiency of the First Appeal

Section 423(a) of the Stafford Act provides that “any decision regarding eligibility for… assistance under this title may be appealed within 60 days after the date on which the applicant for such assistance is notified of the award or denial of award of such assistance.”  An appeal must contain documented justification supporting the applicant’s position, specifying the monetary figure in dispute and the provisions in Federal law, regulation, or policy with which the applicant believes the initial action was inconsistent.[32]

Seeing that FEMA Region IV concurred and deobligated in accordance with the OIG’s recommendations, the Applicant re-filed the September 9, 2013 appeal letter and analysis addressing the same substantive matters on January 14, 2015.  The appeal still bore the earlier date, and the Applicant did not update or modify the language therein, which contained specific references to the OIG’s audit report recommendations.  Nevertheless, as noted above, the email exchange between the Applicant and Grantee demonstrates the Applicant submitted the documents as an appeal of FEMA’s funding deobligations, and the Grantee clarified the subject of the appeal explicitly in the first appeal transmittal letter.[33] 

Additionally, the Applicant’s first appeal analysis of the costs on appeal contained arguments, and referenced documentation in the administrative record, which it asserted justifies its claim for the PA funding at issue.  Moreover, in several places in the analysis, the Applicant also referenced provisions in Federal regulation upon which it bases its claim for specific costs.[34]  Finally, in the first appeal transmittal, the Grantee asserted the deobligations were improper based on the section 705(c) prohibition against recoupment of funding.

Therefore, FEMA determines the Applicant submitted the first appeal in response to an appealable eligibility decision per Stafford Act section 423(a), and the appeal satisfied the format and content requirements of 44 C.F.R. § 206.206(a).

Support Documentation

When FEMA is considering denying a first appeal in whole or in part, the Regional Administrator (RA) must issue the applicant a Final RFI with an attached administrative record index.[35]  The Final RFI must explain the basis for the likely partial or complete denial of the appeal, request that the applicant provide any additional information to support its appeal, and state that the administrative record will close after the RA issues the first appeal decision.[36]

In the Final RFI, FEMA noted timeliness of the first appeal as the only issue of concern.  However, in the first appeal decision, FEMA based the denial of the appeal on two issues: timeliness of the Grantee’s transmittal, and sufficiency of the Applicant’s September 9, 2013 appeal submission.  Thus, FEMA erred by not providing the Applicant or Grantee an opportunity to address the sufficiency of the first appeal before issuing the first appeal decision.  However, as noted above, on second appeal FEMA determines the Applicant in fact met the statutory and regulatory requirements for the format and content of the appeal submission.  This determination renders any deficiency with the Final RFI moot.  FEMA’s error in this instance was harmless, and remanding the appeal to Region IV to issue a new Final RFI addressing the sufficiency of the first appeal is unnecessary.[37]

Conclusion

The Applicant submitted its first appeal in a timely manner and in response to an appealable eligibility decision.  Moreover, the appeal satisfied the format and content requirements found in Federal regulation.  Therefore, the second appeal is granted, and remanded to Region IV to address the substantive issues on appeal with a new first appeal decision.