C.2. Subaward Closeout

Subaward closeout is the process by which the recipient verifies that a subaward scope of work has been completed as approved and that all reimbursed costs were eligible.

The recipient has primary responsibility for the closeout tasks associated with both the program and subrecipient requirements. The recipient must conduct final inspections for activities, reconcile subrecipient expenditures, resolve negative audit findings, obtain final reports from subrecipients and reconcile the closeout activities of subrecipients with award requirements.^[245] These activities cannot extend beyond the award period of performance.

The end date for a subaward period of performance must occur no later than the end date of the period of performance for federal awards detailed in Part 8.G.1.

If the subaward period of performance ends on the same date as the award period of performance, the subrecipient has 90 calendar days from the end date of the subaward period of performance to submit final reports to the recipient.^[246] The recipient then has an additional 30 calendar days to submit final reports to FEMA for the entire award, including all subawards. All reports are due to FEMA 120 calendar days after the end of the award period of performance.

FEMA encourages recipients to establish subaward periods of performance and due dates for progress and any other reports that end earlier than the award period of performance. Setting earlier deadlines for subawards will allow the recipient additional time to submit all required reports and perform closeout activities prior to the end of the award period of performance.^[247]

A subrecipient must submit to the recipient, no later than 90 calendar days (or an earlier date as agreed upon by the recipient and subrecipient) after the end date of the subaward period of performance, all financial, performance, and other reports as required by the terms and conditions of the federal award.^[248] Unless the recipient authorizes an extension, the subrecipient must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the subaward period of performance.^[249]

If the recipient or subrecipient does not submit all reports in accordance with this section within one year of the award period of performance end date, FEMA must report the recipient or subrecipient’s material failure to comply with the terms and conditions of the award with the Office of Management and Budget (OMB)-designated integrity and performance system (currently the Federal Awardee Performance and Integrity Information System [FAPIIS]).^[250] FEMA may also pursue other enforcement actions according to 2 CFR § 200.339.

A completed HMA Closeout Checklist (refer to Table 10) should be submitted to FEMA.

The recipient will submit a claim signed by the governor’s authorized representative, tribal authorized representative or an executive authorized signature authority.^[251] The claim will certify that:

• The reported costs were incurred in the performance of eligible work.
• The approved work was completed.
• The mitigation activity complies with the provisions of the award agreement.

Additionally, the subaward closeout request must include the following:

• Document of non-federal match.
• Verification that any program income has been deducted from total activity costs as specified in 2 CFR § 200.307.
• For project subawards, final site inspection report that contains the name of the inspector, position of the inspector, date of inspection and verification that work was completed. The report should include photographs of the completed project clearly labeled with the FEMA project number, subrecipient name, property address and latitude/longitude to the nearest sixth decimal place, and source of the photograph.
  • Depending on the activity, FEMA may require multiple photographs of the exterior and interior of the properties and the structures or improvements to certify that the approved scope of work was completed.
• Final SF-425, Federal Financial Report.
• SF-428, Tangible Personal Property Report, if applicable.
• Final activity costs, including federal share, non-federal share, management costs (if applicable) and any modifications, such as approved underrun and overrun requests.
• Latitude and longitude to the nearest sixth decimal place.
  • For flood reduction, hazardous fuels reduction and soil stabilization projects, an accurate recording of the official acreage, using open file format geospatial files (i.e., shapefiles), must be submitted.
• Documentation that lists the environmental conditions that must be met when the project is carried out (from the Record of Environmental Considerations or Environmental Assessment) and certification that the project was completed in compliance with those environmental conditions. If conditions were assigned to the project, provide copies of EHP compliance documentation (such as an environmental permit).
• Certification that the project meets National Flood Insurance Program (NFIP) requirements (if applicable).
• For new or updated hazard mitigation plans, a final copy of the approved plan.
• For planning-related activities, documentation that the completed activity was consistent with the approved scope of work.
• Copies of deliverables identified in the scope of work, if applicable.

For activity-specific requirements, refer to Part 11, Part 12 and Part 13. Recipients should close out subawards as activities are completed. In addition, as cost underruns are identified, the recipient must submit de-obligation requests to FEMA.

FEMA will advise the recipient of the closeout requirements through the award agreement and the HMA Guide. The recipient will advise the subrecipient of closeout requirements through the state-subrecipient agreement.

Upon the completion of each subaward, the recipient submits a closeout request to FEMA for review and concurrence.

FEMA will review all closeout documentation for compliance and may send the recipient a Request for Information (RFI) if needed. FEMA will review the closeout request to verify that the approved mitigation measure complies with all subaward requirements associated with the subaward. The recipient must follow up on and complete all requests.

All correspondence (electronic or otherwise) related to closeout, including RFIs, must be maintained in the recipient’s files.

If FEMA does not concur with the closeout request, the agency will document the finding using the RFI process (refer to Part 7) to advise the recipient of the reason(s) for non-concurrence, request additional information and/or explain the corrective actions needed to resolve the non-compliance issues. The recipient must follow up and complete all requests. If the requested information is not submitted, FEMA may disallow costs.

A subaward is officially closed when FEMA approves the request and sends a closeout letter to the recipient confirming the final federal expenditures for the subaward. The recipient will send the subrecipient confirmation that their subaward has been officially closed by FEMA.

Unless there is evidence of civil or criminal fraud, FEMA cannot initiate administrative action in any forum to recover any payment made to a state or a local government for disaster or emergency assistance after the date that is three years after the date of transmission of the final expenditure report for project completion as certified by the recipient.^[252]

If FEMA identifies a debt, the FEMA Finance Center will notify the recipient in writing, after completion of the appeal process, of the type and amount of debt due, and to provide the recipient with all required notices.

When closeout documentation is incomplete or late, FEMA will notify the recipient of the deficiency and request that the issue be corrected following procedures in Part 8. If compliance cannot be achieved, FEMA will apply one or more of the remedy actions allowed in 2 CFR § 200.339. These actions may result in the temporary withholding of cash payments, reduction of assistance, the placement of special conditions upon the award, suspension or termination of the award, or withholding further awards for the program.

Financial records, supporting documents, statistical records and all other subrecipient records pertinent to a federal award must be retained for three years from the date of submission of the final expenditure report.^[253] The final expenditure report is final payment of claim to FEMA for each mitigation activity/subaward, as required by FEMA regulation, policy and guidance. FEMA will confirm the report after the receipt of a complete and accurate claim. The confirmed, complete and accurate subaward closeout report is the final expenditure report.

There are some exceptions where the retention period may be longer than three years as noted and required by the recipient.^[254] The following examples are the most common instances:

• When FEMA, the cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity notifies the recipient/subrecipient in writing, to extend the retention period, the recipient/subrecipient must keep records for as long as indicated in the notification, which may be longer than three years.
• Records for real property and equipment acquired with federal assistance must generally be retained for three years after disposition. Records for project types where property may be acquired (safe rooms, flood risk reduction measures, and property acquisition and structural demolition/structure relocation) must be kept for the project useful life.