FEMA Public Assistance Program Updates - FSFOAfsfoa.org/images/Maximizing_FEMA_Reimbursement.pdfFEMA...

Knowledge. Performance. Impact.

FEMA Public Assistance Program Updates

11/16/2017

Introduction

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Planning•Administrative Plans•Long-Term Recovery•Mitigation

Organizing•Pre-Event Contracts•MOA Development•Program Management Structure

Training•FEMA PA•Hazard Mitigation•Damage Assessment

Response•Damage Assessment•Debris Management•EOC Staffing Grant Management

•FEMA PW Development•Document Management•Alternate Funding Analysis

Finance •Reimbursement •Cash Flow Projection•Close-Out/Audit

Program Mgt.•Cost Estimating•Scheduling•Bid Development•Contractor Management

FEMA Public Assistance ProgramProcess Flow Pre-2017

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After a natural or man-made event that causes extensive damage, FEMA coordinates with the State to implement the Public Assistance Grant Program. The funding process consists of the following steps:

FEMA Public Assistance ProgramRe-Engineering 2017

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FEMA Public Assistance ProgramRe-Engineering 2017

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FEMA PA Re-Engineering 2017

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How Public Assistance Re-Engineering Affects You

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DAMAGE INTAKE AND ELIGIBILITY PHASE

• Designed to segment work based on already available data to assign toprocessing lanes:- 100% completed - Non-completed normal - Non-completed complex

• Triage process helps to assign appropriate resources (e.g., technical experts) tothe right types of projects. Involvement of EHP, mitigation and others begins much earlier in process (previously only in review phase)

• Now, damage eligibility will be determined BEFORE scope of work and costEstimates


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GRANT SCOPING AND COSTING

• Designed to assign scoping and costing responsibilities to appropriate resources(e.g., a WWTP expert would work on WWTP project, general staff focuses onsimple completed work)

For completed work, only formulate project based on actual costs, no moreEstimates

Agreement on disaster related damages prior to SOW encourages applicants touse internal engineering capacity or procure such services to scope and costWork

• Development of a pool of professional, licensed resources to provide technicalassistance to increase the accuracy of the scope and costs

• Work to be validated by FEMA to ensure scope aligns with agreed upondamages and costs are reasonable


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REVIEWS

• QA will only be a check for completeness, all QC has been done in the process using the tools that were developed.

• Reduced reviews and review queue time since damage eligibility determined earlier in process and special considerations were engaged earlier

• Quality data upfront, specific subcategory collection of information, and early determination of damage eligibility makes these reviews very fast

Subgrantee now signs a finalized PW instead of signing a preliminary PW (in current model) that was often subject to multiple revisions


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FEMA PA Categories of Work

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Category A – Debris Removal

Category B – Emergency Protective Measures

Category C – Infrastructure

Category D – Water Control Systems

Category E – Facilities

Category F – Utilities

Category G – Other (Parks, Beaches)

Eligible Work

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TIME OF DAMAGE – Did the damage happen within the Incident Period?

FACILITY USE – Was the Facility in use at the time of the event? What was its active function at the time of the event?

INSURANCE – Did you have Insurance? Is there a Claim? Will you maintain Insurance in the future?

IDLE TIME EQUIPMENT – When was your Equipment in Use?

COST MINIMUM – Does your Project(PW) at cost at least $3,100

MAINTENANCE – Did you maintain your facility? Are the repairs typical maintenance?

Special Considerations

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Special Considerations is the term used by FEMA to refer to matters that require specialized attention

Hazard Mitigation

Insurance Review

Environmental and Historical Review

Duplication of Benefits

FEMA Insurance Policy FP 206-086-1 (2015)

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Response•Damage Assessment•Debris Management•EOC Staffing



Updated FEMA Policy on Insurance alters eligible assistance for Property damage funded by FEMA in previous disasters.

SECTION VIIH. Subsequent Assistance. When a facility that received assistance is damaged by the same hazard in a subsequent disaster: 1. If the applicant failed to maintain the required insurance from the previous disaster, then the facility is not eligible for assistance in any subsequent disaster (see Section G of this part).17

2. Upon proof that the applicant maintained its required insurance, FEMA will reduce assistance in the subsequent disaster by the amount of insurance required in the previous disaster regardless of:

a. The amount of any deductible or self-insured retention the applicant assumed (i.e., "retained risk”);

b. The method of coverage the applicant chose in order to comply with the requirement(for example, commercial property insurance, which may include blanket policies; standard flood insurance policies; insurance pools; an approved self-insurance plan; or a combination thereof); 18 or

c. Whether the policy provides coverage for ineligible losses also incurred as a result of the disaster (for example, business interruption).

Small Projects

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Sites with damages up to $3,100 - $123,100

Process should encourage early submissions

Each small project with special considerations will undergo a special considerations review

Small PW’s may be approved and processed for payment quickly

Large Projects

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Projects over $123,100

Normally paid on a reimbursement basis.

Payment requests submitted to State

Summary of request, to include copies of invoices, proof of payment and all other relative information.

Project Worksheet for payment will be identified with percentage completed.

Emergency and Recovery Procurement

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In December 2014, FEMA will be joining with the Department of Homeland Security (“DHS”) in adopting the new “Governmentwide Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” codified at 2 C.F.R. pt. 200. FEMA will, as part of adopting the new Common Rule, remove the administrative requirements at 44 C.F.R. pt. 13 and no longer follow the procurement requirements at 2 C.F.R. pt. 215 (which have already been removed from the Code of Federal Regulations) for Stafford Act declarations after the date of promulgation.

Emergency and Recovery ProcurementWhat to Include

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•Administrative Contractual, or legal remedies (contracts over $150,000)•Termination for Cause or Convenience (contracts over $10,000)•Equal Employment Opportunity Clause•Davis-Bacon Act and Copeland “Anti-Kickback” Clause (construction contracts over $2,000)•Contract Work Hours and Safety Standard Clause (exceeds $100,000 and involves employment of mechanics or laborers)•Clean Air and Water Pollution Control Act (exceeds $150,000•Energy Policy and Conservation Act mandatory standards

Emergency and Recovery ProcurementWhat to Include

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•Suspension and Debarment Clause•Anti-Lobbying Clause (exceeding $100,000 bidders should submit certification)•Maximization of recovered/recycled materials clause•Small and Minority Business and Women’s Business Enterprises Participation Outreach and requirements when possible•Bonding Requirements for contracts exceeding $150,000

Emergency and Recovery ProcurementProcedures

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Applicants will utilize their own rules as long as the rules conform with Federal Standards

Must maintain a contract administration system

Utilize written code of standards governing personal or organizational conflicts of interest

Use Federal excess & surplus property in lieu of purchasing new equipment

Contract award to responsible contractors

Maintain records and documentation

Emergency and Recovery ProcurementCompetition

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All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. Do not place unreasonable requirements on firms in order to qualify Do not require unnecessary experience and excessive bondingNon-competitive pricing practices between firms or between affiliated companiesNon-competitive contracts to consultants that are on retainer contractsDo not require only a brand name to qualifyContractors that assist in developing or drafting specifications or statement of work can not bid

Emergency and Recovery ProcurementCompetition

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No state or local geographic preference for local contractors (Except for A/E services)Pre-qualified lists must be current, include adequate number of vendors, and not preclude any vendors during the solicitation periodNoncompetitive Bids (sole source)–Can only be used when the award of a contract is not feasibleunder small purchase procedures, sealed bids, or competitive proposals and the following apply:(1) Item is only available single source(2) An emergency exists that will not permit a delay(3) FEMA authorizes noncompetitive proposals(4) After solicitation, competition insufficient

Emergency and Recovery ProcurementMethods of Procurement

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Micro-Purchase (Below $3,500) – No solicitation requiredSmall purchase procedures (below $150,000) – Adequate number of qualified sourcesSealed BidsCompetitive ProposalNoncompetitive Bids (sole source)–Can only be used when the award of a contract is not feasible under small purchase procedures, sealed bids, or competitive proposals and the following apply:(1) Item is only available single source(2) An emergency exists that will not permit a delay(3) FEMA authorizes noncompetitive proposals(4) After solicitation, competition insufficient

Emergency and Recovery ProcurementContract Types

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Unit Price – Contract for work done on an itemized basis with prices with broken out per unit

Lump sum – Contract for work within a prescribed boundary with a clearly defined scope and a total price.

Cost Plus Fixed Fee – Either a lump sum or unit price contact with a fixed contractor fee added into the price.

Time and materials - should be avoided, but may be allow for work that is necessary immediately after the disaster has occurred

Cost plus a percentage of construction - Percentage of Construction Cost contracts, and Contingency Contract are noteligible

Emergency and Recovery ProcurementDocumentation

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Copy of Bid Advertisement

List of Bidders

Copy of Contract Awarded - best value

Exception statement -to low bid (if required)

Invoices

Site Inspections, Daily Logs, Other Back Up

Emergency and Recovery Procurement

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GET INVOLVED EARLY!! • COMPETITIVELY BID CONTRACTS EVERY TIME YOU POSSIBLY

CAN • DOCUMENT WHEN YOU CANNOT COMPETITIVE BID – WHY AND

FOR HOW LONG DID EMERGENCY LAST – ALSO DOCUMENT REASONABLENESS OF RATES

• INVEST SOME TIME IN COMPETITIVELY BID CONTINGENCY CONTRACTS PRIOR TO THE DISASTER

• IF YOU KNOW YOU CANNOT DO THAT IN A DISASTER SITUATION, THEN WRITE IN AN EXCEPTION INTO YOUR POLICY FOR CATASTROPHIC EVENTS THAT ALLOWS FOR A MORE STREAMLINED PROCESS

Emergency and Recovery ProcurementOIG Audit Findings

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Entity officials did not comply with federal procurement regulations and FEMA guidelines when they awarded four of five debris contracts totaling $44.6 million.

The Sub-grantee also did not monitor its time-and-material contracts.

Therefore, we question $44.6 million claimed for contract work because the Sub-grantee did not comply with federal procurement regulations

Emergency and Recovery ProcurementOIG Audit Findings

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The sub-grantee’s claim included unsupported costs, cost overruns, unused federal funds, and costs for ineligible work. As a result, we question $26,935,162. Our review questions in PA Program grant funding: • $15.9 million in disaster repair costs for projects in Texas due to

insurance proceeds not being allocated proportionately among all insured risks, and the inclusion of ineligible or excessive costs in the sub-grantee’s claimed costs calculations.

• $1.3 million in roof replacement costs in Texas because project documentation indicated that the roofs could be repaired to their pre-disaster condition rather than being totally replaced.

Emergency and Recovery ProcurementStafford Act Section 705

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Stafford Act Section 705: Disaster Grant Close-Out Procedures(c) Binding Nature of Grant Requirements - A State or local government shall not be liable for reimbursement or any other penalty for any payment made under this Act if –(1) the payment was authorized by an approved agreement

specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.

Financial Management and Program Controls

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Administration and Management of the Public Assistance Program incorporates tracking of: Project Budget, Scope of Work, Procurement Compliance, Documentation, and Financial Status

It also requires close communication with: Project Managers, Vendors Finance & Budget Offices, FEMA & State, and Public

Financial Management and Program ControlsTime Limits

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Time limits for project completion begin on the disaster declaration date.

Emergency work must be completed within – 6 months

Permanent work must be completed within – 18 months

Request for Public Assistance

30 Days

All Damages Identified60 Days

Debris and Emergency Work

Complete6 Months

Permanent Work Complete18 Month

Financial Management and Program ControlsFinancial Controls

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• Track funds related to the Disaster and show direct expenditures in your Accounting System

• Establish unique budget lines for the each funding stream and recovery expenses by Project

• Identify internal funding mechanisms for disaster related projects within your Accountingg System. This will allow for comprehensive financial reporting and establish local match.

• Report all other funding for Disaster Recovery to all Federal Grant Programs to ensure no duplication of benefits occur.

• Perform a single audit (A-133) for any fiscal year you receive total federal funds from all sources more than $500,000.


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Documentation- The process of establishing and maintaining accurate records of events and expenditures related to your disaster recovery work

Accurate Documentation:Recover all of your eligible costNecessary to develop your disaster projectValidate the accuracy of your small projectState or Federal auditsFederal Compliance Date, where an environmental or Historic assessments


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Ensure Documentation :Designate a person to coordinate the accumulation of records.Establish a file for each project.Maintain files for 3 years following State Close-Out of grant


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Select the Project Worksheet or Grant

Select Document Type for Filing or Retrieval

Financial Management and Program ControlsAgency Performed

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Summary Records Force Account Labor (FEMA Form 90-123)Force Account Equipment Summary (FEMA Form 90-127)Material Summary Record ( FEMA Form 90-124)Rented Equipment Summary Record (FEMA 90-125)Applicant’s Benefits Calculation Worksheet (FEMA Form 90-128)

Financial Management and Program ControlsContract Invoicing

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Should Conform with FEMA Project Worksheet Scope of Work

Should Include Back Up Documentation of Work Performed

Should Detail where Work was Performed

Should Comply with Contracting Requirements

Should Notify Project/Construction Managers if Additional Work Required Outside of Eligible Scope of Work

Should Supply Multiple Copies (Department, Finance, Recovery Office)

Financial Management and Program ControlsContract Work Summary

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Information Required:–Date Worked–Contractor–Invoice Number–Amount–Comments/ScopePlace all documentation in the Project File


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Federal Emergency Management AgencyPAGE ____ OF _____

ATTACHMENT E - CONTRACT WORK SUMMARY RECORDAPPLICANT PA ID NO. PROJECT NO. DISASTER

LOCATION/SITE CATEGORY PERIOD COVERING

TO

DESCRIPTION OF WORK PERFORMED

DATES WORKED CONTRACTOR BILLING/INVOICE NUMBER AMOUNT COMMENTS - SCOPE

GRAND TOTAL $0.00

Financial Management and Program ControlsReimbursement Request

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Part of your overall Financial Tracking

You should track reimbursement of each expense as well as for the entire grant:

Multiple expenses on one Reimbursement You can pinpoint partial reimbursement or errors in

reimbursement amount Other Reasons?

Request reimbursements throughout Project Life Cycle

Coordinate with the State on timing and process for reimbursement requests

Financial Management and Program ControlsReimbursement Request

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Compile group of expenses related to a Project Worksheet

Attach all back up documentation related to expenses

Identify Expense in Project Worksheet Scope of Work

Attach Procurement Information (advertisements, bids, RFP/Qs, bid tabulations, selection determination, contracts, notice to proceed, etc)

Track date submitted to State for reimbursement

Monitor for transfer of funds


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Utilizing Project Management tools can speed project delivery and increase Program efficiency and information dissemination

Financial Management and Program ControlsDirect Administrative Cost (DAC)

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Cost for administering the Public Assistance Program are eligible for reimbursement. Applying a reasonable level of effort and tracking time compliant with FEMA Policy is required

Financial Management and Program ControlsPublic Assistance Alternative Procedures for DAC

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On October 25, 2017, FEMA issued a Recovery Policy allowing for applicants to participate in an alternative procedure for calculating and funding eligible DAC tasks related to developing and administering the FEMA Public Assistance Program. • DAC to be estimated at 4% of Project Worksheet value before insurance

reductions

• DAC costs from any group of selected Project Worksheets can be combined in a single Project Worksheet to be obligated immediately

• DAC PW can be amended two additional times to add Project Worksheets or add DAC value based on versions to existing Project Worksheets

• An additional 1% DAC can be added to each Project Worksheet if its closed out within 90 days of the end of the project.

Financial Management and Program ControlsPublic Assistance Alternative Procedures for DAC

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Benefits• FEMA has increased the estimated cost to administer the program

• Consolidated PW creates an immediate funding source to draw down against actual DAC rather than waiting until end of project

• Requesting Reimbursement for DAC is simplified to a single Project Worksheet

• Cost under-runs for estimate DAC can be re-purposed to fund other FEMA approved projects.

Financial Management and Program ControlsSmall Project Close-Out

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You may close out your small projects when all small projects have been funded and completed. They will be closed based on the approved cost estimates.

You must certify to the State that all funds were expended and all the work described in the project scope of work is complete.

If you have a significant cost overrun associated with completing all work on all of your small projects, you may submit an appeal for additional funding. This request should be made in writing to the State within 60 days of completing the last small project

When Small Projects are 100% complete at the time the Project is written, this statement will be added: This project is 100% complete. The State at their discretion may accept this Project as final inspection on this project. This action will expedite project close-out and funding.

Financial Management and Program ControlsLarge Project Close-Out

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You will closeout large projects individually as each project is completed. There is a cost reconciliation (difference between estimated and actual costs for eligible work) on each individual large project when the project is complete.

You must notify the State immediately when you have completed each large project.

It is your responsibility to document all costs associated with your projects. Failure to properly document any project may result in loss of funding for any claimed work.

Make sure all documentation for a project is accurate, complete and up to date for closeout review.

Financial Management and Program ControlsAppeals

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The applicant must file an appeal with the State within 60 days of the applicant's receipt of a notice of the action that is being appealed.

FEMA has 90 days to respond to your Appeal

You have 60 days to file an second Appeal should one be necessary

Financial Management and Program ControlsAudit

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The Single Audit Act and appropriate OMB circulars dictate the audit requirements of local government and private non-profit organizations

Refer to OMB A-133 and Single Audit Act Amendments of 1996.

Any claimed expenses are subject to audit!

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