FEDERAL
EMERGENCY MANAGEMENT AGENCY
CFDA
83.516 DISASTER ASSISTANCE
I.
PROGRAM OBJECTIVE
The objective
of the Disaster Assistance Program is to provide assistance to States,
local governments, and selected non-profit organizations under the
Public Assistance Program and to individuals or families under the
Individual and Family Grant Program (IFG) for the alleviation of
suffering and hardship resulting from major disasters or emergencies
declared by the President.
II.
PROGRAM PROCEDURES
Following a
Presidential declaration of a major disaster or an emergency, the
Federal Emergency Management Agency (FEMA) awards grants for public
or individual assistance to States. The State may use the funds
to restore its own disaster-damaged projects, to provide subgrants
to local governments and selected private non-profit facilities,
and to provide assistance to individuals.
Public
Assistance Program
The Public
Assistance program is administered by the State (e.g., the State
Emergency Agency) in accordance with a FEMA-State Agreement to provide
assistance which may be available under an emergency or major disaster
declaration. The State acts as the grant administrator for all funds
provided under the Public Assistance grant program. The grant administrator's
responsibility includes providing technical advice and assistance
to eligible subgrantees, providing State support for damage survey
activities, ensuring that all potential applicants are aware of
assistance available, and submission of documents necessary for
grant awards (44 CFR sections 206.200-206.253).
For purposes
of the Public Assistance program, the following terms will be used:
State
- The State Agency which is defined as the Grantee under FEMA regulations
and acts as the grant administrator for the program.
Subgrantee
- The government or other legal entity to which a subgrant is awarded
and which is accountable to the grantee for the use of the funds
provided (44 CFR section 206.201(l). (For example, in explaining
this program, a State Highway Agency is considered a subgrantee
of a State Emergency Agency even though both agencies may be included
in the same state-wide single audit.)
RD
- The FEMA Regional Director .
Public Assistance
program awards are made based upon a Damage Survey Report (DSR)
which is prepared by an inspection team. The inspection team normally
includes a representative of FEMA, the State, and any subgrantee.
The DSR documents the inspection team's determination of the eligible
scope of work and cost estimate. The Disaster Assistance Program
will fund a part of this eligible work in accordance with the FEMA-State
Agreement. Each DSR has a control number and any supplemental DSRs
will be referenced to the original DSR.
Project funding
made for large and small projects is based upon the cost of the
eligible work for the individual project. Projects which equal or
exceed the threshold of $46,000 for October 1, 1996 through September
30, 1997 ($44,800 for October 1, 1995 through September 30, 1996)
are large projects. Projects below this threshold are small projects.
This threshold is adjusted by FEMA each October to reflect changes
in the Consumer Price Index. FEMA notifies the affected States each
year of the adjusted amount.
Small Projects
For small projects,
final payment of the Federal share of eligible costs is made upon
approval of the project. The amount awarded for small projects based
on the DSR generally will not change except under unusual circumstances,
such as the work was not done, there is an unexpected insurance
recovery, or there is an obvious error in calculation. At close-out
of the disaster contract, the State is required to certify that
all projects were properly completed and that the State contribution,
as specified in the FEMA-State Agreement, was paid to each subgrantee.
However, this certification does not specify the amount spent by
a subgrantee on small projects. If the actual cost for small projects
is less than the estimated cost on the DSR, FEMA generally will
not ask for a refund. Similarly, FEMA generally will not provide
additional funding when actual costs exceed the DSR estimate. However,
provision is made that, when a subgrantee has significant overruns,
a request may be made to FEMA for additional funding based upon
the total final costs for all small projects (44 CFR sections 206.204(e)
and 206.205(a)).
Large Projects
For large projects,
the State must make an accounting to FEMA of eligible costs for
each approved large project. In submitting the accounting, the State
must certify that reported costs were incurred in the performance
of eligible work, that the approved work was completed, that the
project is in compliance with the FEMA-State Agreement, and that
payments for the project have been made in accordance with the A-102
Common Rule's requirements for payment. The subgrantee is required
to make similar accounting and certifications to the State. If actual
costs are less than the approved amount, then the FEMA share will
be based upon the actual costs. The subgrantee may request additional
funding for eligible cost overruns on large projects. For additional
funding, these requests must include a written recommendation from
the State and approval of the RD (44 CFR sections 206.204(e) and
206.205).
Improved
Projects
If a subrecipient
desires to make improvements, but still restore the pre-disaster
function of a damaged facility, State approval must be obtained.
Federal funding for an improved project is limited to the Federal
share of the approved estimate of the eligible costs. Funds approved
as an improved project can only be used as a contribution for the
construction of larger or improved facilities that restore at least
the pre-disaster capacity of the damaged or destroyed facility.
For example, if eligible work to restore the pre-disaster capacity
is $100,000, and the subgrantee chooses to rebuild an improved facility
which costs $200,000, then the FEMA share is only based on the $100,000.
However, if the actual costs is less than the eligible work of $100,000
(e.g., construction costs are much lower than expected), then a
FEMA adjustment is required (44 CFR section 206.203).
Alternate
Projects
In a case where
the subgrantee determines that the public welfare would not be best
served by restoring a damaged public facility, the State may request
that FEMA approve an alternate project. Federal funding for such
alternate projects is based on 90 percent of the approved estimate
of eligible costs (44 CFR section 206.203(d)(2)). For example, if
the approved estimate of eligible costs to restore the pre-disaster
capacity is $100,000, and the entity chooses not to rebuild but
instead to do alternate work, then assuming a 75 percent match,
the Federal share is computed as:
Approved estimate
of eligible costs $100,000
Assumed match
of 75% Federal/25% State X 75%
Subtotal $
75,000
Adjustment
for alternate project X 90%
Federal share
$ 67,500
Funds contributed
for alternate projects may be used to repair or expand other selected
public facilities, to construct new facilities, or to fund hazard
mitigation measures. These funds may neither be used to pay the
non-Federal share of any project nor for any operating expense (44
CFR section 206.203(d)(2)).
Funds approved
for an alternate project can be used only for alternate projects
specifically approved by FEMA. While the States and subgrantees
have flexibility to propose the type and size of alternate projects
they wish to construct, FEMA must review such proposed projects
to ensure compliance with environmental and other special concerns
(44 CFR section 206.203).
Individual
and Family Grant Programs (IFG)
The Governor
may request that a Federal grant be made to a State for the purpose
of such State making grants to individuals or families who, as a
result of a major disaster, are unable to meet disaster-related
necessary expenses or serious needs. The total Federal grant is
made only on condition that 25 percent of the actual cost of meeting
individuals' or families' necessary expenses or serious needs is
paid from funds made available by the State (44 CFR section 206.131).
III.
COMPLIANCE REQUIREMENTS
In
developing the audit procedures to test compliance with the requirements
for a Federal program, the auditor should first look to Part 2,
Matrix of Compliance Requirements, to identify which of the 14 types
of compliance requirements described in Part 3 are applicable and
then look to Parts 3 and 4 for the details of the requirements.
A.
Activities Allowed or Unallowed
The allowed
activities for the Public Assistance program are for the approved
project as described on the DSR and supporting documentation.
B.
Allowable Costs/Cost Principles
Public
Assistance Program
1.
Equipment Rental
The Public
Assistance program restricts eligible direct costs for applicant-owned
equipment used to perform eligible work to reasonable rates that
were established under State guidelines, or when the hourly rate
exceeds $75, rates may be determined on a case by case basis by
FEMA. When local guidelines are used to establish equipment rates,
reimbursement is based on those rates or rates in a Schedule of
Equipment Rates published by FEMA, whichever is lower. Provision
is also made when no rates are established or the entity wishes
to claim an equipment rate which exceeds the FEMA Schedule (44 CFR
section 206.228).
2.
Administrative Costs
All administrative
costs of Public Assistance programs at the subgrantee level are
covered by a specific percentage in the Stafford Act (42 USC 5121
et seq). No costs of administering the program other than
that percentage should be charged by a subgrantee. For States, administrative
costs are allowed for extraordinary costs incurred by the State
for preparation of DSRs, final inspection reports, project applications,
financial audits, and related field inspections by State employees,
including overtime pay and per diem and travel expenses. However,
regular time for such employees is not covered by the percentage
allowance under the Stafford Act. States are permitted to recover
the straight time salaries and certain other direct management costs
when prescribed on a DSR (44 CFR section 206.228).
3.
Force Account Labor Costs
The straight-
or regular-time salaries and benefits of a subgrantee's permanently
employed personnel are not eligible in calculating the cost of eligible
work for emergency protective services or debris removal under sections
403 and 407 of the Stafford Act (42 USC 5170b and 5173, respectively).
For performance of eligible permanent restoration under section
406 of the Stafford Act (42 USC 5172), straight-time salaries and
benefits of a subgrantee's permanently employed personnel are eligible
(44 CFR section 206.228(a)(4)).
4.
Insurance and other recoveries
Auditor's are
advised that there are likely to be amounts from insurance settlements,
salvage, or other sources which must be considered in determining
allowable costs because allowable costs must be net of applicable
credits.
E.
Eligibility
1.
Eligibility for Individuals
IFG
- With respect to any one major disaster, an individual or family
may not receive a grant or grants under IFG totaling more than a
statutorily-determined amount. This amount is $13,100 for October
1, 1996 through September 30, 1997 ($12,900 for October 1, 1995
through September 30, 1996) and is adjusted annually to reflect
changes in the Consumer Price Index. FEMA notifies the States each
year of the adjusted amount.
The State determines
eligibility in accordance with the IFG State Administrative Plan,
as approved by FEMA in accordance with 44 CFR section 206.131. FEMA
performs damage verifications for the State on IFG applicants who
are not required to apply for a Small Business Administration (SBA)
loan, and on those applicants referred by SBA to IFG as a result
of that agency's loan application process. FEMA conducts verifications
(for States) in the categories of housing and real property, including
verification of home ownership and primary residency, personal property,
and transportation (vehicles) for those applicants who also have
real and/or personal property losses. FEMA contract inspectors collect
information for the State IFG program because they are at the damaged
residence to perform verification on real and/or personal property
losses. FEMA does not perform verification for applicants that only
have a vehicle loss; the State performs verifications for those
applicants. Certain damage or loss verifications are performed by
the State, such as on late applications or reinspections, medical,
dental, funeral, and other categories.
2.
Eligibility for Group of Individuals or Area of Service Delivery
- Not Applicable
3.
Eligibility for Subrecipients - Not Applicable
G.
Matching, Level of Effort, Earmarking
1.
Matching
a.
Public Assistance Program
Costs must
be on a shared basis, as specified in the FEMA-State agreement (Public
Law 93-288 as amended by the Stafford Act, 42 USC 5121 et seq,
44 CFR 206.203(b)). In general, the minimum Federal share is 75
percent of eligible costs. The matching split between the State
and the subgrantee will vary. The accountability for meeting the
matching requirement is determined at the time of project accounting
as part of project closeout, (e.g., the State match does not have
to be provided until the end of the project).
b.
IFG
The IFG program
is cost shared on a 75 percent Federal and 25 percent State basis
(44 CFR section 206.131(a)). The State must provide the matching
for IFG at the time of expenditure of Federal funds (e.g., when
each IFG dollar is paid, the State provides 25 cents and the Federal
funds provide 75 cents).
2.1
Level of Effort - Maintenance of Effort - Not
Applicable
2.2
Level of Effort - Supplement not Supplant - Not
Applicable
3.
Earmarking - Not Applicable
L.
Reporting
1.
Financial Reporting
a. SF-269,
Financial Status Report - (FEMA Form 20-10 is used in lieu
of the SF-269) - Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Programs - (FEMA Form 20-17 is used in lieu of the SF-271)
- Applicable
d. SF-272,
Federal Cash Transaction Report - Not Applicable
e. Public
Assistance Program (OMB No. 3067-0151) - The State is required
to submit quarterly progress reports to the RD. The reports should
describe the status of those projects on which a final payment of
the Federal share has not been made to the State and outline any
problems or circumstances expected to result in non-compliance with
the approved grant conditions (44 CFR section 206.204(f)). Subgrantee
reporting is as required by the State. The auditor is only required
to test the financial amounts on these reports.
2.
Performance Reporting - Not Applicable
3.
Special Reporting - Not Applicable
N.
Special Tests and Provisions
1.
Project accounting
Compliance
Requirement - For large projects, the State is required
to make an accounting to FEMA of eligible costs. Similarly, the
subgrantee must make an accounting to the State. In submitting the
accounting, the entity is required to certify that reported costs
were incurred in performance of eligible work, that the approved
work was completed, that the project is in compliance with the provisions
of the FEMA-State Agreement, and that payments for that project
were made in accordance with the A-102 Common Rule's payment provisions.
For improved and alternate projects, if the total cost of the projects
does not equal or exceed the approved eligible costs, then the auditor
should expect to see an adjustment to reduce eligible costs (44
CFR section 206.205).
Audit
Objective - Determine whether ongoing and completed projects
were accounted for in accordance with the required certification.
Suggested
Audit Procedures
Projects
not completed
a. Select a
sample of ongoing large projects and ascertain if costs submitted
for reimbursement were in compliance with the requirements for eligible
work under the applicable DSR. Testing should consider the differences
in the requirements and approvals required of improved and alternate
projects.
Completed
projects
b. Select a
sample of large projects completed during the audit period and ascertain
if the entity's files document the total costs as allowable costs
and if the costs are for allowable activities under the applicable
DSR. This testing should consider the differences in the requirements
and approvals required of improved and alternate projects.
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