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NSPO Request
Appeal Brief
Appeal Letter
Appeal Analysis
Cross-Reference: Net Small Project Overrun, Force Account Labor/Benefits, Documentation
Summary: The subgrantee completed its last small project on July 31, 1998, and submitted a request for $559,468 in additional funding for a net small project overrun (NSPO) to the State on September 25, 1998. The request was treated as a first appeal. The documentation provided in support of the request did not establish a clear relationship between the scopes of work performed and the actual costs of the work. Accordingly, FEMA denied the subgrantee's request by letter dated May 25, 1999.By letter dated August 9, 1999, the subgrantee submitted a second appeal of FEMA's denial of its request for additional funding for its NSPO. In its appeal, the subgrantee requests additional funding in the amount of $461,453 for its NSPO. FEMA reviewed supporting documentation to establish a relationship between work and cost for all of its DSRs. Based on that review, a portion of the additional costs have been determined eligible.
Issues: Does the documentation establish a clear relationship between the scopes of work performed and the actual costs claimed for the work?
Findings: 1. Yes. However, the subgrantee included some ineligible costs in its claim. A portion of the additional funding requested by the subgrantee is eligible.
Rationale: 44 CFR206.204(e); 44 CFR206.228(a)(4)
Due to the heavy rains and flooding that occurred during the FEMA-1046 winter storm event, various facilities within Monterey County were damaged. The Monterey County Department of Public Works (subgrantee) requested disaster assistance from the Federal Emergency Management Agency (FEMA) for the repair of these facilities. FEMA inspection teams, consisting of representatives of FEMA, the California Governor's Office of Emergency Services (OES), and the subgrantee, visited the affected facilities to document damages and prepare Damage Survey Reports (DSRs).
First Appeal
The subgrantee completed its last small project on July 31, 1998, and submitted a request for additional funding for a net small project overrun (NSPO) of $559,468, to the Governor's Office of Emergency Services (OES) on September 25, 1998. The subgrantee submitted a cost summary with its request and stated that documentation for each DSR was available for review upon request. Due to the large number of small project DSRs, FEMA determined that it would be more efficient to review the supporting documentation on site at the subgrantee's office. The documentation provided did not clearly establish a clear relationship between the scopes of work performed and the actual costs of the work. Accordingly, FEMA denied the subgrantee's request by letter dated May 25, 1999. Further, the letter stated that in conformance with Title 44 of the Code of Federal regulations (44 CFR) Section 206.204(e)(3), the subgrantee's request for additional funding for its small projects was a first appeal.
Second Appeal
By letter dated August 9, 1999, the subgrantee submitted a second appeal of FEMA's denial of its request for additional funding for its NSPO. In its appeal, the subgrantee requests additional funding in the amount of $461,453 for its NSPO. The subgrantee provided supporting documentation for a sample of its DSRs and stated that it has documentation necessary to establish a relationship between work and cost for all of its DSRs.
DISCUSSION
In response to the subgrantee's appeal, FEMA conducted a second on-site record review. In general, it was found that the subgrantee did have adequate documentation for all of its DSRs; however, in many cases, the eligible costs were found to be less than the amounts claimed by the subgrantee. The net small project reconciliation is in Table 1. The table shows prior approved cost, cost claimed by the subgrantee, and the cost found to be documented and eligible.
The subgrantee consistently claimed costs for force account regular time labor and benefits for emergency work (Categories A and B) DSRs. According to 44 CFR Section 206.228(a)(4), regular time salaries and benefits of a subgrantee's permanently employed personnel are not eligible when performing emergency work. Therefore, the cost of force account regular time labor and benefits was deducted from the subgrantee's claim for all Category A and B DSRs.
During the review of the subgrantee's force account labor records, it was found that the subgrantee was using the same benefit rate for both its regular time labor and overtime labor in its claim (63%). The benefit rate of 63% includes percentages for the costs of various fringe benefits that are not dependent on the number of hours worked. The cost of these fringe benefits (i.e., health insurance, vacation, sick leave, and holidays) is fixed and does not increase if overtime hours are worked. Therefore, the cost of such fringe benefits should not be included in the benefit rate applied to overtime hours.
The subgrantee was requested to provide FEMA with a more acceptable overtime benefit rate and documentation to support the rate. The documentation provided showed an overtime benefit rate of approximately 48%. While this rate does not include the cost of medical, dental, and life insurance, the 48% rate does include the cost of holidays, vacation, and sick leave. Guidelines that were followed during initial DSR preparation for disaster 1046, stated that unless a subgrantee could provide justification for a higher rate, 18% should be used for an overtime benefit rate. Because the subgrantee did not provide an acceptable overtime benefit rate, the overtime benefit rate was reduced to 18% in order to be consistent with similar funding determinations made during disaster 1046. A notation of "OT fringe benefit adjustment" in Table 1 indicates that the cost of force account overtime benefits was reduced based on this determination.
In addition, the subgrantee indicated that it did not complete five of its small projects (Table 2). The funding for these five projects, totaling $22,497, will be de-obligated.
CONCLUSION
The subgrantee's request for additional funding for its NSPO has been reviewed and funding determinations have been addressed. The Regional Director will prepare a supplemental DSR in the amount of $269,453 to provide additional eligible small project funding as shown in Table 1. The Regional Director will also prepare supplemental DSRs, totaling $22,497, to de-obligate five small projects that were not completed by the subgrantee. The subgrantee's appeal is partially granted.
Appeal Brief
| Disaster | FEMA-1046-DR |
| Applicant | Monterey County Department of Public Works |
| Appeal Type | Second |
| PA ID# | 053-91003 |
| PW ID# | Multiple |
| Date Signed | 2000-07-05T04:00:00 |
Summary: The subgrantee completed its last small project on July 31, 1998, and submitted a request for $559,468 in additional funding for a net small project overrun (NSPO) to the State on September 25, 1998. The request was treated as a first appeal. The documentation provided in support of the request did not establish a clear relationship between the scopes of work performed and the actual costs of the work. Accordingly, FEMA denied the subgrantee's request by letter dated May 25, 1999.By letter dated August 9, 1999, the subgrantee submitted a second appeal of FEMA's denial of its request for additional funding for its NSPO. In its appeal, the subgrantee requests additional funding in the amount of $461,453 for its NSPO. FEMA reviewed supporting documentation to establish a relationship between work and cost for all of its DSRs. Based on that review, a portion of the additional costs have been determined eligible.
Issues: Does the documentation establish a clear relationship between the scopes of work performed and the actual costs claimed for the work?
Findings: 1. Yes. However, the subgrantee included some ineligible costs in its claim. A portion of the additional funding requested by the subgrantee is eligible.
Rationale: 44 CFR206.204(e); 44 CFR206.228(a)(4)
Appeal Letter
July 5, 2000
Mr. D. A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
Reference: Second Appeal - NSPO Request; FEMA-1046-DR-CA, P.A. 053-91003; ubgrantee: Monterey County Department of Public Works
Dear Mr. Christian:
This is in response to your letter dated October 8, 1999, transmitting the referenced second appeal. On November 23, 1998, your office transmitted the subgrantee's first appeal for additional funding for its net small project overrun (NSPO). The documentation provided to FEMA in support of the request did not establish a clear relationship between the scopes of work performed and the costs claimed for the work. Therefore, the subgrantee's appeal was denied. The subgrantee is appealing this determination and is requesting additional funding in the amount of $461,453 for its NSPO. The subgrantee submitted a sample of its supporting, back-up documentation and stated that similar supporting documentation was available for all of its small project DSRs.
In response to the subgrantee's appeal, FEMA conducted a review of the subgrantee's supporting documentation at the subgrantee's office. The on-site record review began on December 13, 1998, and was completed on January 3, 2000. Based on the review of the documentation, I have determined that a portion of the additional costs claimed by the subgrantee is eligible for funding. The subgrantee's appeal is partially granted in accordance with my enclosed analysis. By copy of this letter, I am requesting that the Regional Director prepare a supplemental DSR in the amount of $269,453 as outlined in Table 1 included in my analysis. I also request that she de-obligate $22,497 for the five DSRs in Table 2 where the approved work was not completed.
Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Martha Z. Whetstone
Regional Director
FEMA Region IX
Mr. D. A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
Reference: Second Appeal - NSPO Request; FEMA-1046-DR-CA, P.A. 053-91003; ubgrantee: Monterey County Department of Public Works
Dear Mr. Christian:
This is in response to your letter dated October 8, 1999, transmitting the referenced second appeal. On November 23, 1998, your office transmitted the subgrantee's first appeal for additional funding for its net small project overrun (NSPO). The documentation provided to FEMA in support of the request did not establish a clear relationship between the scopes of work performed and the costs claimed for the work. Therefore, the subgrantee's appeal was denied. The subgrantee is appealing this determination and is requesting additional funding in the amount of $461,453 for its NSPO. The subgrantee submitted a sample of its supporting, back-up documentation and stated that similar supporting documentation was available for all of its small project DSRs.
In response to the subgrantee's appeal, FEMA conducted a review of the subgrantee's supporting documentation at the subgrantee's office. The on-site record review began on December 13, 1998, and was completed on January 3, 2000. Based on the review of the documentation, I have determined that a portion of the additional costs claimed by the subgrantee is eligible for funding. The subgrantee's appeal is partially granted in accordance with my enclosed analysis. By copy of this letter, I am requesting that the Regional Director prepare a supplemental DSR in the amount of $269,453 as outlined in Table 1 included in my analysis. I also request that she de-obligate $22,497 for the five DSRs in Table 2 where the approved work was not completed.
Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Martha Z. Whetstone
Regional Director
FEMA Region IX
Appeal Analysis
BACKGROUNDDue to the heavy rains and flooding that occurred during the FEMA-1046 winter storm event, various facilities within Monterey County were damaged. The Monterey County Department of Public Works (subgrantee) requested disaster assistance from the Federal Emergency Management Agency (FEMA) for the repair of these facilities. FEMA inspection teams, consisting of representatives of FEMA, the California Governor's Office of Emergency Services (OES), and the subgrantee, visited the affected facilities to document damages and prepare Damage Survey Reports (DSRs).
First Appeal
The subgrantee completed its last small project on July 31, 1998, and submitted a request for additional funding for a net small project overrun (NSPO) of $559,468, to the Governor's Office of Emergency Services (OES) on September 25, 1998. The subgrantee submitted a cost summary with its request and stated that documentation for each DSR was available for review upon request. Due to the large number of small project DSRs, FEMA determined that it would be more efficient to review the supporting documentation on site at the subgrantee's office. The documentation provided did not clearly establish a clear relationship between the scopes of work performed and the actual costs of the work. Accordingly, FEMA denied the subgrantee's request by letter dated May 25, 1999. Further, the letter stated that in conformance with Title 44 of the Code of Federal regulations (44 CFR) Section 206.204(e)(3), the subgrantee's request for additional funding for its small projects was a first appeal.
Second Appeal
By letter dated August 9, 1999, the subgrantee submitted a second appeal of FEMA's denial of its request for additional funding for its NSPO. In its appeal, the subgrantee requests additional funding in the amount of $461,453 for its NSPO. The subgrantee provided supporting documentation for a sample of its DSRs and stated that it has documentation necessary to establish a relationship between work and cost for all of its DSRs.
DISCUSSION
In response to the subgrantee's appeal, FEMA conducted a second on-site record review. In general, it was found that the subgrantee did have adequate documentation for all of its DSRs; however, in many cases, the eligible costs were found to be less than the amounts claimed by the subgrantee. The net small project reconciliation is in Table 1. The table shows prior approved cost, cost claimed by the subgrantee, and the cost found to be documented and eligible.
The subgrantee consistently claimed costs for force account regular time labor and benefits for emergency work (Categories A and B) DSRs. According to 44 CFR Section 206.228(a)(4), regular time salaries and benefits of a subgrantee's permanently employed personnel are not eligible when performing emergency work. Therefore, the cost of force account regular time labor and benefits was deducted from the subgrantee's claim for all Category A and B DSRs.
During the review of the subgrantee's force account labor records, it was found that the subgrantee was using the same benefit rate for both its regular time labor and overtime labor in its claim (63%). The benefit rate of 63% includes percentages for the costs of various fringe benefits that are not dependent on the number of hours worked. The cost of these fringe benefits (i.e., health insurance, vacation, sick leave, and holidays) is fixed and does not increase if overtime hours are worked. Therefore, the cost of such fringe benefits should not be included in the benefit rate applied to overtime hours.
The subgrantee was requested to provide FEMA with a more acceptable overtime benefit rate and documentation to support the rate. The documentation provided showed an overtime benefit rate of approximately 48%. While this rate does not include the cost of medical, dental, and life insurance, the 48% rate does include the cost of holidays, vacation, and sick leave. Guidelines that were followed during initial DSR preparation for disaster 1046, stated that unless a subgrantee could provide justification for a higher rate, 18% should be used for an overtime benefit rate. Because the subgrantee did not provide an acceptable overtime benefit rate, the overtime benefit rate was reduced to 18% in order to be consistent with similar funding determinations made during disaster 1046. A notation of "OT fringe benefit adjustment" in Table 1 indicates that the cost of force account overtime benefits was reduced based on this determination.
In addition, the subgrantee indicated that it did not complete five of its small projects (Table 2). The funding for these five projects, totaling $22,497, will be de-obligated.
CONCLUSION
The subgrantee's request for additional funding for its NSPO has been reviewed and funding determinations have been addressed. The Regional Director will prepare a supplemental DSR in the amount of $269,453 to provide additional eligible small project funding as shown in Table 1. The Regional Director will also prepare supplemental DSRs, totaling $22,497, to de-obligate five small projects that were not completed by the subgrantee. The subgrantee's appeal is partially granted.