Cost Eligibility

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	1791
Applicant	Houston
Appeal Type	Second
PA ID#	201-35000-00
PW ID#	PW 13922
Date Signed	2020-11-10T17:00:00

Summary Paragraph

During the incident period from September 7 to October 2, 2008, severe winds and heavy rainfall from Hurricane Ike caused flooding, power outages, and widespread damage to the City of Houston (Applicant).  As a result, the Applicant entered into a Mutual Aid Agreement with the City of Dallas to provide emergency services to disaster damaged areas.  FEMA prepared Project Worksheet (PW) 13922 and approved $459,637.34 to cover costs incurred by the Applicant for eligible mutual aid work provided by the City of Dallas.  On April 2, 2019, the Grantee notified FEMA at closeout that the materials costs were lower than the original estimate and requested FEMA deobligate funding.  FEMA deobligated a total of $82,070.00 in unsubstantiated costs from PW 13922.  The Applicant appealed stating that it provided invoices at the time of PW development, and with the first appeal, provided a “Purchasing Card Transaction Report” prepared by the City of Dallas in support of the costs it asserted were eligible for reimbursement.  FEMA denied the appeal finding the report provided only a generic description of relief efforts, such as fuel and expenses for evacuees.  It did not provide an itemized list of materials claimed or invoices and receipts to support the claimed costs.  The Applicant filed a second appeal asserting similar arguments. 

 

Authorities and Second Appeals

• Stafford Act § 403.
• 44 C.F.R. §§ 13.20(b)(6); 206.201(b).
• PA Guide, at 40.
• DAP 9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance, at 5, 7.

 

Headnotes

• Mutual aid work provided in the performance of emergency work necessary to meet immediate threats to life, public safety, and improved property is eligible.  FEMA will reimburse mutual aid costs for eligible emergency work when requested by the applicant if the claimed costs are reasonable and the applicant can document the work accomplished, and the billing and payment for assistance.  Only the costs that can be directly tied to the performance of eligible work are eligible.
  • The Applicant provided a purchasing card transaction report in support of costs incurred under its Mutual Aid Agreement for emergency services, however, the report did not contain enough detail to directly tie those costs to the performance of eligible work.

 

Conclusion

FEMA finds that the documentation provided by the Applicant did not provide enough detail to directly tie the costs to the performance of eligible work.  As such, the appeal is denied.

Appeal Letter

Appeal Analysis

Background

During the incident period from September 7 to October 2, 2008, severe winds and heavy rainfall from Hurricane Ike caused flooding, power outages, and widespread damage to the City of Houston (Applicant).  As a result, the Applicant entered into a Mutual Aid Agreement (MAA) with the City of Dallas to provide emergency services to disaster damaged areas.  From September 15-25, as part of the MAA, the City of Dallas provided personnel, supplies, and equipment to assist in emergency recovery efforts.  FEMA prepared Project Worksheet (PW) 13922 and approved $459,637.34 to cover costs incurred by the Applicant for eligible mutual aid work provided by the City of Dallas.

On April 2, 2019, the Texas Division of Emergency Management (Grantee) notified FEMA at closeout that the documented materials costs were lower than the original estimate.  The Grantee requested that FEMA deobligate $87,279.86 in force account materials and purchases from PW 13922 and award $5,209.86 in direct administrative costs.  In a letter dated October 29, 2019, FEMA notified the Grantee that it deobligated a total of $82,070.00 from PW 13922.

 

First Appeal

The Applicant appealed FEMA’s decision in a letter dated November 27, 2019.  The Applicant stated that all supporting documents including invoices and various financial analyses were provided by the Applicant and reviewed and approved by the Grantee and FEMA when FEMA obligated PW 13922.  In support of its appeal, the Applicant provided the Dallas Materials and Purchases support document, which was a “Purchasing Card Transaction Report” produced by the City of Dallas’ accounting system that shows the purchases made by Dallas for the Applicant as part of the MAA.  The Applicant stated that the data provided on the report shows a comprehensive record of each individual Hurricane Ike purchase by the Dallas Water Utilities Department.  The Applicant also cited to Title 2 of the Code of Federal Regulations Part 225 to support its claim that the costs were reasonable.  It states that the report shows that vendors chosen were well known and the costs were reasonable for the materials purchased.  The Applicant explained it understood the importance of invoices and receipts to support force account materials purchases, and although the invoices could not be located, it stated that it previously submitted the invoices to the Grantee and FEMA when FEMA originally obligated PW 13922.[1]  The Grantee supported the Applicant’s appeal and forwarded it to FEMA Region VI on December 13, 2019.

The Regional Administrator (RA) for Region VI denied the first appeal in a decision issued on February 19, 2020.  FEMA found that the Applicant did not provide detailed documentation to support $87,279.86 requested in costs.  FEMA noted the Applicant submitted the Purchasing Card Transaction Report only provided a generic description of relief efforts, such as fuel and expenses for evacuees.  It did not provide an itemized list of materials claimed or invoices and receipts to support the claimed costs.  FEMA emphasized that the Applicant acknowledged that the invoices to support the purchases “could not be located.”[2]

 

Second Appeal

The Applicant appealed the first appeal decision in a letter dated May 29, 2020.  The Applicant asserts that the $87,279.86 for force account materials and purchases were valid and adequately supported by the documents submitted with the first appeal.  The Applicant provides cost analyses and support documentation in the form of purchasing card reports and reimbursement checks from Dallas to support its appeal.  The Grantee supports the Applicant’s appeal and forwarded it on June 2, 2020.

 

Discussion

The Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403 states that FEMA is authorized to provide Public Assistance funding for emergency work.  This includes emergency protective measures, which is work that must be done immediately to save lives, protect public health and safety, protect improved property, or eliminate or lessen an immediate threat of additional damage.[3]  Mutual aid work provided from an outside jurisdiction (Providing Entity) in the implementation of emergency protective measures may be eligible.[4]  FEMA will reimburse mutual aid costs for eligible emergency work, when requested by the applicant (Receiving Entity) if the claimed costs are reasonable and if the work accomplished, the billing for assistance, and the payment for assistance can be documented.[5]  Receiving and Providing Entities must keep detailed records of the services requested and received, and provide those records as part of the supporting documentation for a reimbursement request.[6]  Records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records, contract and subgrant award documents, etc.[7]  Only the costs that can be directly tied to the performance of eligible work are eligible.[8]

To justify the costs requested, the Applicant provided a Purchasing Card Transaction Report, which includes the name(s) of the employee(s) who made a given purchase, the date of purchase, the amount of the purchase, the vendor, and a general description of the purchase.  The general descriptions include phrases such as “Hurricane Ike storm efforts;” “Hurricane Ike storm relief efforts;” “fuel for convoy;” “Hurricane Ike response,” “relief,” or “cleanup efforts;” and “expense for evacuees­.”[9]  These descriptions identify the vendor that provided the materials, but do not itemize the materials and items purchased.  In contrast, documentation such as invoices or receipts would provide the level of detail to show the services received or the work accomplished, as well as the billing or payment rendered for the services or work.[10]

The Applicant has not provided documentation such as invoices or receipts that would support the costs requested for reimbursement.  The Applicant argues that it previously provided invoices and receipts to justify costs, yet there is no evidence of such invoices in FEMA’s system of record nor the administrative record for this appeal.  Further, the Applicant states in its first appeal that the missing invoices cannot be located.  Without knowledge of the specific materials or services purchased, the Applicant is not able to directly tie any claimed costs to the performance of eligible work.

 

Conclusion

The Applicant has not provided detailed supporting documentation to directly tie the costs for force account materials and purchases to the performance of eligible work.  As such, this appeal is denied.

 

[1] Letter from Div. Mgr, Fin. Dept., City of Houston, to State Coordinator, TX Div. of Emergency Mgmt., at 3-4 (Nov. 27, 2019) [hereinafter Applicant’s First Appeal].

[2] Applicant’s First Appeal, at 3.

[3] Title 44 Code of Federal Regulations (C.F.R.) § 206.201(b) (2007).

[4] Disaster Assistance Policy DAP 9523.6, Mutual Aid Agreements for Public Assistance and

Fire Management Assistance, at 5 (Aug. 13, 2007).

[5] Public Assistance Guide, FEMA 322, at 50 (June 2007) [hereinafter P.A. Guide].

[6] DAP9523.6, at 7.

[7] 44 C.F.R. § 13.20(b)(6).

[8] P.A. Guide, at 40.

[9] See, e.g., Applicant’s First Appeal, Attachment B.

[10] See 44 C.F.R. § 13.20(b)(6); P.A. Guide, at 50.