Immediate Threat, Increased Operating Costs

Appeal Brief

Summary Paragraph

On March 25, 2020, the President declared a major disaster for the State of North Carolina in response to the Coronavirus Disease 2019 (COVID-19) pandemic. Mecklenburg County (Applicant) requested Public Assistance for childcare associated services, including force account labor (FAL), supplies and meals for childcare staff and participants, cleaning services, and security. FEMA prepared Grants Manager Project 152665/Project Worksheet 336 to document the $171,344.90 in claimed costs. FEMA issued a Determination Memorandum, denying $43,173.59 for childcare associated costs including security, force account labor (FAL), supplies and meals, finding that the activities were not related to eligible emergency protective measures and instead represented ineligible increased operating costs. The Applicant submitted a first appeal, requesting $22,365.95 for childcare related FAL, supplies, and meals, asserting that it provided childcare to essential workers doing eligible work, and that it met the criteria for eligible increased expenses related to operating a facility or providing a service. On September 2, 2022, FEMA issued a Request for Information, requesting documentation to substantiate eligible emergency work, such as activity logs. The Applicant provided spreadsheets indicating the work departments that it used to identify childcare participants as essential workers. On February 3, 2023, FEMA denied the appeal, finding that the Applicant did not demonstrate that its childcare services were required in response to an immediate threat to life, public health, or safety resulting directly from COVID-19. The Applicant submitted a second appeal dated April 4, 2023, reiterating previous arguments. It adds general work descriptions to a list of departments for employees participating in its childcare program, and references FEMA guidance, COVID-19 Legal Responsibility for Eligible Work: Retroactive Agreements; Limited Eligibility of Childcare and Shared Transportation Services; Non-Congregate Sheltering (Dec. 19, 2022). North Carolina Emergency Management transmitted the appeal with support in an April 27, 2023 letter. 

Authorities and Second Appeals

• Stafford Act § 403.
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a).
• PAPPG, at 19, 21, 42, 57, 60-61, 133.
• FEMA Fact Sheet: Eligible Emergency Protective Measures.
• COVID-19 Legal Responsibility for Eligible Work: Retroactive Agreements; Limited Eligibility of Childcare and Shared Transportation Services; Non-Congregate Sheltering, at 2.
• Sonoma Cnty., FEMA-4344-DR-CA, at 3 n.13; Atlantic City, FEMA-4488-DR-NJ, at 2; Campbell Cnty. Fire Dist. #1, FEMA-4497-DR-KY, at 3.

Headnotes

• For COVID-19 specifically, FEMA may provide assistance for childcare services when necessary to perform otherwise eligible emergency work. 
  • The Applicant did not demonstrate that the participants in the childcare program performed eligible emergency work. Therefore, the Applicant has not directly tied the childcare associated costs to the performance of eligible work, and those costs are ineligible.

Conclusion

FEMA finds the Applicant has not demonstrated that its costs associated with childcare services were related to eligible emergency protective measures in response to COVID-19. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

On March 25, 2020, the President declared a major disaster for the State of North Carolina in response to the Coronavirus Disease 2019 (COVID-19) pandemic, with an incident period of January 20, 2020, to May 11, 2023. Mecklenburg County (Applicant) requested Public Assistance (PA) for various measures associated with childcare services for essential workers, including force account labor (FAL), supplies and meals for childcare staff and participants, cleaning services, and security. FEMA prepared Grants Manager Project 152665/Project Worksheet 336 to document the $171,344.90 in claimed costs. On June 8, 2021, FEMA issued a Determination Memorandum, denying $43,173.59 for childcare-related FAL, supplies, meals, and security, finding that the activities were not related to eligible emergency protective measures and instead represented ineligible increased operating costs.[1] 

First Appeal 

The Applicant submitted a first appeal in a letter dated August 27, 2021, requesting $22,365.95 for childcare-related FAL, supplies, and meals.[2] The Applicant asserted that it provided childcare to essential workers performing eligible emergency work as defined in FEMA’s Fact Sheet, Coronavirus (COVID-19) Pandemic: Eligible Emergency Protective Measures [hereinafter Fact Sheet: Eligible Emergency Protective Measures].[3] Specifically, the Applicant stated its employees performed eligible emergency medical care, emergency medical transport, non-congregate sheltering, security and law enforcement, and communications of general health and safety information to the public. The Applicant also argued that it met the criteria for eligible expenses related to operating a facility or providing a service per FEMA guidance.[4] The North Carolina Emergency Management (Recipient) transmitted the Applicant’s first appeal to FEMA on September 8, 2021, recommending approval. 

On September 2, 2022, FEMA issued a Request for Information, requesting documentation to substantiate eligible emergency work, such as activity logs demonstrating that the Applicant’s essential workers who used the childcare program performed eligible emergency work. The Applicant responded, stating that it verified participating employees’ status as essential workers and registered/recorded children in its childcare program by the employees’ names and work departments. The Applicant provided spreadsheets showing a daily childcare roster by employee and department, and the number of children registered for childcare between March 23, 2020 and June 12, 2020. On February 3, 2023, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found that because the Applicant did not provide the requested activity logs, nor any documentation supporting its claim that its essential employees performed eligible emergency work, the associated childcare services were not an eligible cost.

Second Appeal

The Applicant submitted a second appeal dated April 4, 2023, reiterating previously raised arguments. It adds general work descriptions to a list of departments for the employees who participated in its childcare program,[5] asserting the departments identified the employees as essential workers that provided services related to eligible emergency actions to save lives or protect public health and safety per FEMA’s criteria for eligible increased operating costs.^[6] The Applicant also references FEMA’s memorandum, COVID-19 Legal Responsibility for Eligible Work: Retroactive Agreements; Limited Eligibility of Childcare and Shared Transportation Services; Non-Congregate Sheltering,[7] stating that it provided greater clarity regarding eligible COVID-19 related childcare costs. The Recipient transmitted the appeal with support in an April 27, 2023 letter.

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives or to protect public health and safety.^[8] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.^[9] Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.^[10] However, short-term increased costs that are directly related to accomplishing specific emergency health and safety tasks as part of emergency protective measures may be eligible if certain requirements are met, including that the services are specifically related to eligible emergency actions to save lives or protect public health and safety or improved property.^[11] Due to the COVID-19 pandemic, FEMA may reimburse State, Local, Tribal, or Territorial governments for emergency childcare services when necessary to perform otherwise eligible emergency work, as outlined in the COVID-19 policies in effect at the time the work was completed.^[12] To be eligible, costs must be directly tied to the performance of eligible work.^[13] If the applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[14]

The Applicant asserts that it provided childcare services for essential workers performing work required due to an immediate threat to public health and safety from COVID-19 in accordance with FEMA Fact Sheet: Eligible Emergency Protective Measures. However, the Applicant did not substantiate its assertion by providing documentation showing that its workers performed eligible emergency work, such as the requested activity logs. Instead, the Applicant listed the workers’ departments and provided broad work descriptions, some that may be associated with eligible COVID-19 emergency protective measures outlined in the COVID-19 policies in effect at the time the work was completed, such as “provided emergency medical care to residents who were COVID positive or had symptoms consistent with COVID with a known or unknown exposure,” and others that are not associated with eligible emergency work, such as “public utility” or “public rail transportation.” It is also unclear whether the employees who worked in departments such as the fire department, police department, or sheriff’s office were only performing work associated with eligible emergency protective measures or were also performing functions as part of a normal emergency services operations. In this case, the Applicant has not provided documentation that distinguishes work and costs associated with childcare services provided for workers that may be performing eligible emergency protective measures from those that are performing normal duties associated with their positions.[15]

It is not enough to rely on the Applicant’s statements claiming the workers were performing emergency protective measures related to COVID-19.[16] Based on the information provided, the Applicant has not demonstrated that the essential worker participants in the Applicant’s childcare program performed eligible emergency work. Therefore, the Applicant has not directly tied the childcare costs to the performance of eligible work. 

The Applicant also argues, the cost of temporary childcare is an eligible increased operating expense related to providing a service. However, as noted above, the Applicant has not demonstrated the childcare costs are specifically related to eligible emergency protective measures under FEMA Fact Sheet: Eligible Emergency Protective Measures or any other FEMA COVID-19 policy. Therefore, they do not constitute eligible increased operating costs.  

Conclusion

FEMA finds the Applicant has not demonstrated that its costs associated with childcare services were related to eligible emergency protective measures in response to COVID-19. Therefore, this appeal is denied.