Debris Disposal and Monitoring/Allowable & Reasonable Costs

Appeal Brief

Summary Paragraph

From December 10 to December 11, 2021, severe storms, tornadoes, straight-line winds, and flooding impacted the state of Kentucky. Pennyrile Rural Electric Cooperative Corporation (Applicant), a Private Nonprofit entity, requested Public Assistance funding for the costs to remove construction and demolition debris from rights of way throughout Caldwell and Lyon County. FEMA prepared Grants Manager Project 671325 to document the associated costs of $20,758.32. FEMA denied the total project cost, determining that the Applicant’s estimated cost was not reasonable. The Applicant appealed, stating the debris removal costs were directly tied to the performance of eligible work and were necessary and reasonable to accomplish the work properly and efficiently. Kentucky Emergency Management forwarded the Applicant’s appeal to FEMA requesting approval of the debris removal costs. FEMA denied the appeal stating that the Applicant did not substantiate the quantity, original location, or type of removed debris; and that the Applicant’s debris monitoring documentation was insufficient to validate the performance of eligible work, or to verify if the claimed costs were reasonable. The Applicant submits a second appeal arguing that it provided sufficient documentation to demonstrate that the claimed debris removal is eligible. 

Authorities

• Stafford Act § 407(a).
• 2 C.F.R. §§ 200.318(b), 200.403(g).
• 44 C.F.R. § 206.224(a).
• PAPPG, at 63-65, 99, 107.
• Missouri Department of Transportation, FEMA 4451-DR-MO, at 3.

Headnotes

• To be eligible, costs must be directly tied to the performance of eligible work, adequately documented, and necessary and reasonable to accomplish the work properly and efficiently. 
  • The Applicant did not provide documentation to substantiate that the claimed debris removal costs are directly tied to eligible work and reasonable.
• FEMA policy requires applicants to monitor all contracted debris operations to ensure that the quantities and work claimed are accurate and eligible. 
  • The Applicant has not substantiated throughrequired documentation, that its debris operations were directly tied to eligible work. 

Conclusion

FEMA finds the Applicant has not demonstrated that the costs claimed are directly tied to the performance of eligible work or that it monitored its contracted debris operations. 

Appeal Letter

Appeal Analysis

Background

From December 10 to December 11, 2021, severe storms, tornadoes, straight-line winds, and flooding impacted the state of Kentucky.[1] Pennyrile Rural Electric Cooperative Corporation (Applicant), a Private Nonprofit (PNP) entity, requested Public Assistance (PA) funding for debris removal operations it conducted from December 27, 2021, to January 3, 2022.  Specifically, the Applicant stated it removed 41,360 pounds of construction and demolition debris from rights of way (ROWs) to a landfill. FEMA prepared Grants Manager Project (GMP) 671325 to document the associated costs of $20,758.32. The Applicant provided bid documentation for the contractors, contract invoices, scale tickets, equipment and rates summaries, contract work summaries for 100 percent of the work. 

FEMA transmitted a Request for Information on October 20, 2022, stating that because the Applicant had previously stated it removed broken poles as part of its debris removal work, FEMA was requesting the Applicant clarify the number and size of poles removed and their final destination. In response, the Applicant stated that poles were taken to the landfill with other debris, that it did not count each pole as it was removed, and that the poles would have been counted as they were replaced. 

On February 23, 2023, FEMA transmitted a Determination Memorandum, denying all the requested costs. FEMA determined that, based on the provided documentation, the Applicant’s estimated cost of $20,758.32 was not reasonable. FEMA noted that the Applicant did not provide photographs or monitoring reports for the contracted debris removal activities.

First Appeal 

The Applicant filed a first appeal in a letter dated May 15, 2023. The Applicant stated the debris removal costs were directly tied to the performance of eligible work and were necessary and reasonable to accomplish the work properly and efficiently. In a letter dated May 17, 2023, Kentucky Emergency Management (Recipient) forwarded the Applicant’s appeal and recommended approval.

The FEMA Region 4 Regional Administrator denied the appeal in a letter dated October 11, 2023, finding that the Applicant did not substantiate the description, quantity, original location, or type of removed debris; and the Applicant’s debris monitoring documentation was incomplete and insufficient to validate the performance of eligible work or to verify if the claimed costs were reasonable. Accordingly, FEMA found the requested costs were ineligible. FEMA explained that the documentation provided (including invoices, lists of equipment used, and scale tickets) did not include a description of the work performed or the origination of the debris and omitted the quantity of debris removed. Additionally, FEMA stated that the Applicant did not submit photographs or monitoring reports for the debris removal activities.

Second Appeal

In a letter dated December 8, 2023, the Applicant submitted a second appeal, reiterating its request for $20,758.32. In addition to previously raised arguments, the Applicant states that the description of work performed is in the contractor’s invoices and receipts, and that the quantity of debris removed can be found on the scale tickets. In addition, the Applicant states that the type of debris was overhead assets (e.g., poles, wire, crossarms, etc.) and that the debris was picked up from multiple locations. The Applicant adds that there are photographs and a video of the debris uploaded in Grants Portal.[2] The Applicant then states that its foreman monitored the debris removed at each location. In a letter dated December 14, 2023, the Recipient forwarded the appeal to FEMA recommending approval. 

Discussion

FEMA is authorized to provide PA funding for debris removal, clearance, and disposal when it is in the public interest because it is necessary to eliminate immediate threats to lives, public health and safety, eliminate immediate threats of damage to improved public or private property; or ensure economic recovery, as a result of the disaster.^[3] For PNPs, eligible debris removal is limited to that associated with an eligible facility, including debris on the property of the eligible facility.^[4] Non-federal entities, including PNP applicants, must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts.^[5]FEMA policy requires applicants to monitor all contracted debris operations to ensure that the quantities and work claimed are accurate and eligible.[6] This monitoring includes  documenting debris types, quantities, reduction methods, and pickup and disposal locations to establish eligibility of the work.^[7] If the applicant does not monitor contracted debris removal operations, it will jeopardize its PA funding for that work.^[8] 

To be eligible, costs must be directly tied to the performance of eligible work and adequately documented.[9] Documentation should provide the “who, what, when, where, why, and how much” for each item claimed.[10] It is the applicant’s responsibility to substantiate its claim as eligible.[11] If the applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[12]

Here, the Applicant has not provided documentation that demonstrates that the claimed work is eligible. The Applicant has claimed that it removed debris such as broken poles,wire, and crossarms from ROWs. However, the documentation does not provide the requisite specific details such as the location of the debris removed, nor does the documentation show that the Applicant was required to remove the debris to access a facility. For example, the Applicant states that it provided photographs and a video showing the debris it removed; however, it is not evident how the photographs uploaded in Grants Portal are associated with the work claimed on appeal. Therefore, because the Applicant has not substantiated with supporting documentation that the claimed costs are directly tied to the performance of eligible work, the claimed costs are not reasonable.

In addition, the Applicant did not show it maintained oversight to ensure that contractors performed in accordance with the terms, conditions, and specifications of their contracts. While the Applicant states that its foreman monitored the contracted debris removal at each location, the Applicant has not provided documentation that supports this assertion, which would necessarily include information such as debris types, quantities, reduction methods, and pickup and disposal locations. Therefore, the Applicant has not demonstrated it monitored its debris operations.

Conclusion

FEMA finds the Applicant has not demonstrated that the costs claimed are directly tied to the performance of eligible work or that it monitored its contracted debris operations. Therefore, the appeal is denied.