C.3. Recipient Management Costs Closeout

Management costs closeout is the process by which the recipient and FEMA verify that all reimbursed costs were eligible. The recipient submits a request to FEMA to close out management costs; the final payment of management costs is based on actual costs incurred.

Upon completion of the last non-management costs subaward, the recipient must submit a letter to FEMA, signed by the governor’s authorized representative, tribal authorized representative or an executive authorized signature authority, certifying that the reported costs were incurred in the management of the HMA award.

The letter must include:

• A final accounting of eligible management costs. In addition, as cost underruns are identified, the recipient must submit de-obligation requests to FEMA.
• Documentation for cost share (FMA only).
• Confirmation that recipient has time and attendance records on file. The actual records do not need to be sent to FEMA; however, FEMA must confirm they are retained.
• A statement confirming that additional supporting documentation for management costs expenditures is available upon request.

The recipient must liquidate all obligations incurred under the period of performance no later than 120 calendar days after the period of performance expiration, unless FEMA authorizes an extension. FEMA will de-obligate any assistance not liquidated by the recipient.

For HMGP and HMGP Post Fire, costs incurred must comply with the procedures outlined in the recipient’s HMGP and HMGP Post Fire Administrative Plan.

FEMA reviews the supporting documentation for personnel costs and validates those costs across all open HMGP and HMGP Post Fire disasters administered by the recipient. This review is done to verify that employees’ salaries, contractor costs and actual costs paid from disaster awards are the following:

• Distributed equitably and do not exceed 100%.
• Equivalent to salaries paid in similar positions for non-federal awards.
• Not duplicating direct or management costs provided under subawards.
• In support of activities described in the recipient’s request for management cost assistance.

The recipient must submit form SF-428 if applicable. If not applicable, a statement must be included in the closeout cover letter.

Financial records, supporting documents, statistical records and all other recipient records pertinent to management costs must be retained for at least three years from the submission of the final expenditure report. Exceptions that may extend the retention period are defined in 2 CFR § 200.334.