K.1. Actions to Address Deficiencies

When there is a deficiency finding, FEMA will notify the recipient of the deficiency and request that the issue be corrected. If compliance cannot be achieved, FEMA will apply one of the remedy actions allowed in Remedies of Non-compliance.^[233] These actions may result in the reduction of assistance, the placement of special conditions upon the award, and/or suspension or termination of the award.

FEMA will generally work with the recipient to address the deficiency using the Request for Information (RFI) procedures. If attempts to work with the recipient do not result in compliance, the appropriate FEMA project officer will initiate the procedures outlined in this section, such as:

• Documenting the deficiency using an RFI.
• Reviewing the deficiency to determine if it can be corrected.
  • If the project officer determines the recipient can correct the deficiency, the officer will proceed with providing a compliance notification to the recipient. If the project officer determines the recipient cannot correct the deficiency, the officer will proceed with applying remedy actions.
  • If there is a regulation or program statute that requires FEMA to take specific enforcement action, such as administrative closeout, the project officer will proceed with providing a compliance notification to the recipient.^[234]

This process is an opportunity for the recipient to demonstrate it complies or to take actions to come into compliance prior to FEMA taking remedy actions.

After completing the RFI procedures, the FEMA regional administrator or their designee will send a written deficiency to the recipient advising of the deficiency, as well as the requirement to submit a Compliance Action Plan within 60 calendar days of the date of the notification. The notification will contain the following information:

• The deficiency at issue, with reference to the applicable law, regulation, guidance and/or policy, and the basis for FEMA’s determination that the deficiency exists.
• FEMA’s recommended corrective actions and completion dates to come into compliance.
• That the recipient has a maximum of 60 calendar days from the date of the deficiency notification to submit to FEMA either of the following:
  • A proposed Compliance Action Plan detailing corrective actions and the estimated completion dates to come into compliance.
  • If the recipient does not concur with FEMA’s finding of deficiency, an explanation and documentation to show compliance.
• That if the recipient does not demonstrate compliance within the prescribed completion dates, FEMA will take remedy action(s), which may include a reduction in assistance, placement of special conditions on the grant award, or suspension or termination of assistance.

FEMA will only approve a Compliance Action Plan that includes:

• A description of the corrective actions the recipient proposes to come into compliance with requirements.
• The estimated completion dates for each of the corrective action(s), with milestones. All deficiencies should be addressed prior to the end of the period of performance.

If the recipient does not provide the Compliance Action Plan to FEMA within 60 calendar days, FEMA will start remedy actions. If the recipient does not concur with FEMA’s finding of deficiency, it must provide to FEMA an explanation and documentation demonstrating that the recipient complies within 60 calendar days of the deficiency notification date. If FEMA determines the recipient’s explanation and documentation are not enough to demonstrate compliance, the recipient must provide a Compliance Action Plan within 30 calendar days of FEMA’s determination. Within 45 calendar days of receipt of the Compliance Action Plan, FEMA will review the proposed Compliance Action Plan and notify the recipient of the agency’s determination.

If the FEMA project officer approves the proposed Compliance Action Plan, the notice will include a timeline for corrective action updates from the recipient. If the project officer does not approve the Compliance Action Plan, the notice will include the reason the Compliance Action Plan is inadequate and provide a maximum additional 60 calendar days to adequately revise the Compliance Action Plan. If after the 60-day period the project officer determines the revised Compliance Action Plan is still inadequate, or the recipient is not responsive, the project officer will start procedures to apply remedy actions.

The recipient must provide updates every 90 calendar days, which can be included in the Quarterly Progress Reports, if applicable, or more frequently as prescribed by FEMA. If the recipient does not provide the FEMA project officer with timely progress reports or is otherwise not responsive to FEMA requests, the project officer will proceed with applying remedy actions.

Specific award conditions may include the following:^[235]

• Requiring payments as reimbursements rather than advance payments, such as imposing controlled drawdowns in the appropriate Award Payment System by (1) placing any assistance on hold and (2) only releasing assistance for drawdown when the recipient provides a request for reimbursement with SF-270 and full support documentation for the requested payment.
• Withholding authority from the recipient to proceed to later phases of its activity until FEMA receives satisfactory evidence of acceptable performance within a given period of performance.
• Requiring additional and/or more detailed financial or program progress reports.
• Requiring more frequent reports and/or additional information in reports on an as-needed basis or on a recurring schedule as deemed appropriate based on the non-compliance and circumstances.
• Requiring additional activity monitoring.
• Requiring the recipient/subrecipient to obtain technical or management assistance such as requiring technical assistance visits, desk reviews or site visits by the relevant program office to ensure recipients or subrecipients are taking the appropriate actions to correct non-compliance or if there is a need to continue monitoring because of non-compliance.
• Requiring the recipient or subrecipient to obtain specialized technical or management assistance, including but not limited to webinars targeted at specific issues or concerns, training from FEMA’s Procurement Disaster Assistance Team, or hiring a contractor to review the recipient’s financial systems and make recommendations.
• Establishing additional prior approvals.
• Placing a hold or stop payment on the grant award in the appropriate Award Payment System pending the recipient’s submission of satisfactory documentation showing acceptable performance.
• Notifying the recipient of the additional requirements, the reason the requirements are needed, the nature of the action needed, the time allowed for completing the actions, and information about the appeal process if the recipient determines the issues have been resolved. ^[236]

The recipient must provide documentation to demonstrate they have come into compliance and request closure of the relevant finding(s) of deficiency. If, after review of the recipient’s request for closure, the FEMA project officer determines the recipient completed the corrective action(s), the project officer will notify the recipient in writing of its compliance determination within 30 calendar days.

If, after reviewing the supporting documentation, the FEMA project officer determines the recipient did not complete the corrective action(s), the project officer will start procedures to apply remedy actions.

The project officer will consider the recipient’s failure to comply with a Compliance Action Plan as an aggravating factor and will start procedures to apply remedy actions.

If the FEMA project officer determines the recipient could not or did not correct the deficiency, the project officer will proceed to apply remedy actions by notifying the recipient of such action within 30 calendar days. The notice will contain the following:

• The requirement(s) at issue, with a reference to the applicable regulation and/or policy, and the basis for FEMA’s determination that the deficiency exists.
• Actions taken by the recipient, if any, to attempt to come into compliance, and actions taken by FEMA, if applicable, to assist the recipient with coming into compliance.
• Notification that FEMA is applying remedy action(s) and the effective date.
• Notice of the recipient’s opportunity to object through an appeal procedure.

FEMA reviewers can use remedies of non-compliance by considering mitigating and aggravating factors when determining which option to apply. FEMA may consider mitigating and aggravating factors in determining whether to apply remedies of non-compliance.

Mitigating factors include:

• Minor or single instance of deficiency.
• Emergency or extenuating circumstances directly impacting ability to comply.
• First-time deficiency.
• Capacity of the recipient (such as needing technical assistance to apply for an extraordinary HMGP award).
• Recipient self-identifies deficiency to FEMA along with a Compliance Action Plan to address.
• Unheeded requests for assistance from the recipient to FEMA to ensure compliance with new or involved grant requirements.
• Attendance at training events to better understand grant requirements.
• Deficiency is the result of incorrect or delayed information provided by FEMA.
• Other factors that the FEMA reviewer articulates in writing that indicate a relief is needed to manage the award.

Aggravating factors include:

• Experienced or sophisticated recipient or subrecipient with repeated prior instances of non-compliance.
• Numerous instances of non-compliance with the same activity, subaward or award.
• Civil or criminal penalties associated with the non-compliance.
• Non-responsiveness to FEMA requests.
• Fraudulent reporting or evidence of other deliberate intent to not follow requirements.
• Prior instances of fraud, waste and abuse.
• Failure to process required grants management activities in a timely manner.
• Declining or refusing to attend trainings explaining grants management requirements.
• Disregarded or failed opportunity to correct the non-compliance.
• Other factors that the compliance official articulates in writing that indicate a more severe remedy action.