FEMA Public Assistance Program Updates

FEMA Public Assistance Program Updates 11/16/2017 Knowledge. Performance. Impact.

Introduction 1

FEMA Public Assistance Program Process Flow Pre-2017 After a natural or man-made event that causes extensive damage, FEMA coordinates with the State to implement the Public Assistance Grant Program. The funding process consists of the following steps: 2

FEMA Public Assistance Program Re-Engineering 2017 3

FEMA Public Assistance Program Re-Engineering 2017 4

FEMA PA Re-Engineering 2017 5

FEMA PA Re-Engineering 2017 6

FEMA PA Re-Engineering 2017 7

How Public Assistance Re-Engineering Affects You - Non-completed normal - Non-completed complex Triage process Cash helps Flow Projection to assign appropriate resources (e.g., technical experts) to DAMAGE INTAKE AND ELIGIBILITY PHASE Designed to segment work based on already available data to assign to processing lanes: - 100% completed the right types of projects. Involvement of EHP, mitigation and others begins much earlier in process (previously only in review phase) Now, damage Program eligibility Mgt. will be determined BEFORE scope of work and cost Estimates 8

How Public Assistance Re-Engineering Affects You Designed to assign scoping and costing responsibilities to appropriate resources GRANT SCOPING AND COSTING (e.g., a WWTP expert would work on WWTP project, general staff focuses on simple completed work) For completed work, only formulate project based on actual costs, no more Estimates Agreement on disaster related damages prior to SOW encourages applicants to use internal engineering capacity or procure such services to scope and cost Work Development of a pool of professional, licensed resources to provide technical assistance to increase the accuracy of the scope and costs Work to be validated by FEMA to ensure scope aligns with agreed upon damages and costs are reasonable 9

How Public Assistance Re-Engineering Affects You QA will only be a check for completeness, all QC has been done in the process using the tools that were developed. REVIEWS Reduced reviews and review queue time since damage eligibility determined earlier in process and special considerations were engaged earlier determination of damage eligibility makes these reviews very FEMA fast PA Quality data upfront, specific subcategory collection of information, and early Subgrantee now signs a finalized PW instead of signing a preliminary PW (in current model) that was often subject to multiple revisions 10

How Public Assistance Re-Engineering Affects You 11

FEMA PA Categories of Work Category A Debris Removal Category B Emergency Protective Measures Category C Infrastructure Category D Water Control Systems Category E Facilities Category F Utilities Category G Other (Parks, Beaches) 12

Eligible Work TIME OF DAMAGE Did the damage happen within the Incident Period? FACILITY USE Was the Facility in use at the time of the event? What was its active function at the time of the event? INSURANCE Cash Flow Did Projection you have Insurance? Is there a Claim? Will you maintain Insurance in the future? IDLE TIME EQUIPMENT When was your Equipment in Use? COST MINIMUM Does your Project(PW) at cost at least $3,100 MAINTENANCE Did you Grant maintain Managementyour facility? Are the repairs typical maintenance? 13

Special Considerations Special Considerations is the term used by FEMA to refer to matters that require specialized attention Hazard Mitigation Insurance Review Environmental and Historical Review Duplication of Benefits 14

FEMA Insurance Policy FP 206-086-1 (2015) Updated FEMA Policy on Insurance alters eligible assistance for Property damage funded by FEMA in previous disasters. SECTION VII H. Subsequent Assistance. When a facility that received assistance is damaged by the same hazard in a subsequent disaster: 1. If the applicant failed to maintain the required insurance from the previous disaster, then the facility is not eligible for assistance in any subsequent disaster (see Section G of this part). 17 2. Upon proof that the applicant maintained its required insurance, will reduce assistance in the subsequent disaster by the amount of insurance required in the previous disaster regardless of: a. The amount of any deductible or self-insured retention the applicant assumed (i.e., "retained risk ); b. The method of Program coverage Mgt. the applicant chose in order to comply with the requirement(for example, commercial property insurance, which may include blanket policies; standard flood insurance policies; insurance pools; an approved self-insurance plan; or a combination thereof); 18 or c. Whether the policy Contractor provides Management coverage for ineligible losses also incurred as a result of the disaster (for example, business interruption). 15

Small Projects Sites with damages up to $3,100 - $123,100 Process should encourage early submissions Each small project with special considerations will undergo a special considerations review Small PW s may be approved and processed for payment quickly 16

Large Projects Projects over $123,100 Normally paid on a reimbursement basis. Payment requests submitted to State Summary of request, to include copies of invoices, proof of payment and all other relative information. Project Worksheet for payment will be identified with percentage completed. 17

Emergency and Recovery Procurement In December 2014, FEMA will Administrative be joining Plans with the Department of Homeland Security ( DHS ) in adopting the new Long-Term Governmentwide Recovery Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Program Awards Management codified at 2 C.F.R. pt. 200. FEMA will, as part of adopting the new Common Rule, remove the administrative requirements at 44 C.F.R. pt. 13 and no longer follow the procurement requirements at 2 C.F.R. pt. 215 (which have already been removed from the Code of Federal Regulations) for Stafford Act declarations after the date of promulgation. 18

Emergency and Recovery Procurement What to Include Administrative Contractual, or legal remedies (contracts over $150,000) Equal Employment Opportunity Clause Termination for Cause or Convenience (contracts over $10,000) Davis-Bacon Act and Copeland Anti-Kickback Clause (construction contracts over $2,000) Contract Work Hours and Safety Standard Clause (exceeds $100,000 and involves employment of mechanics or laborers) Clean Air and Water Pollution Control Act (exceeds $150,000 Energy Policy and Conservation Act mandatory standards 19

Emergency and Recovery Procurement What to Include Suspension and Debarment Clause Anti-Lobbying Clause (exceeding $100,000 bidders should submit certification) Maximization of recovered/recycled materials clause Small and Minority Business and Women s Business Enterprises Participation Outreach and requirements when possible Bonding Requirements for contracts exceeding $150,000 20

Emergency and Recovery Procurement Procedures Applicants will utilize their own rules as long as the rules conform with Federal Standards Must maintain a contract administration system Utilize written code of standards governing personal or organizational conflicts of interest Use Federal excess & surplus property in lieu of purchasing new equipment Contract award to responsible contractors Maintain records and documentation 21

Emergency and Recovery Procurement Competition All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. Do not place unreasonable requirements on firms in order to qualify Do not require unnecessary experience and excessive bonding Non-competitive pricing practices between Hazard firms Mitigation or between affiliated companies Non-competitive contracts to consultants that are on retainer contracts Do not require only a brand name to qualify Contractors that assist in developing or drafting specifications or statement of work can not bid 22

Emergency and Recovery Procurement Competition No state or local geographic preference for local contractors (Except for A/E services) proposals and Program the Mgt. following apply: Pre-qualified lists must be current, include adequate number of vendors, and not preclude any vendors during the solicitation period Noncompetitive Bids (sole source) Can only be used when the award of a contract is not feasible under small purchase procedures, sealed bids, or competitive (1) Item is only available single source (2) An emergency exists that will not permit a delay (3) FEMA authorizes noncompetitive proposals (4) After solicitation, competition insufficient 23

Emergency and Recovery Procurement Methods of Procurement Micro-Purchase (Below $3,500) No solicitation required Small purchase procedures (below $150,000) Adequate number of qualified sources Sealed Bids Competitive Proposal Noncompetitive Bids (sole source) Can only be used when the award of a contract is not feasible under small purchase procedures, sealed bids, or competitive proposals and the following apply: (1) Item is only available single source (2) An emergency exists that will not Debris permit Management a delay (3) FEMA authorizes FEMA noncompetitive PW Development proposals (4) After solicitation, competition insufficient 24

Emergency and Recovery Procurement Contract Types Unit Price Contract for work done on an itemized basis with prices with broken out per unit Lump sum Contract for work within a prescribed boundary with a clearly defined scope and a total price. Cost Plus Fixed Fee Either a lump sum or unit price contact with a fixed contractor fee added into the price. Time and materials - should be avoided, but may be allow for work that Program is necessary Mgt. immediately after the disaster has occurred Cost plus a percentage of construction Debris - Management Percentage of Construction Cost contracts, and Contingency Contract are not eligible 25

Emergency and Recovery Procurement Documentation Copy of Bid Advertisement List of Bidders Copy of Contract Awarded - best value Exception statement -to low bid (if required) Invoices Site Inspections, Daily Logs, Other Back Up 26

Emergency and Recovery Procurement GET INVOLVED EARLY!! COMPETITIVELY BID CONTRACTS EVERY TIME YOU POSSIBLY CAN DOCUMENT WHEN YOU CANNOT COMPETITIVE BID WHY AND FOR HOW LONG DID EMERGENCY LAST ALSO DOCUMENT REASONABLENESS OF RATES INVEST SOME TIME IN COMPETITIVELY BID FEMA CONTINGENCY PA CONTRACTS PRIOR TO THE DISASTER IF YOU KNOW YOU CANNOT DO THAT IN A DISASTER SITUATION, THEN WRITE IN AN EXCEPTION INTO YOUR POLICY FOR CATASTROPHIC EVENTS THAT ALLOWS FOR A MORE STREAMLINED PROCESS 27

Emergency and Recovery Procurement OIG Audit Findings Entity officials did not comply with federal procurement regulations and FEMA guidelines when they awarded four of five debris contracts totaling $44.6 million. The Sub-grantee also did not monitor its time-and-material contracts. Therefore, we question $44.6 million claimed for contract work because the Sub-grantee did not comply with federal procurement regulations 28

Emergency and Recovery Procurement OIG Audit Findings The sub-grantee s claim included unsupported costs, cost overruns, unused federal funds, and costs for ineligible work. As a result, we question $26,935,162. Our review questions in PA Program grant funding: $15.9 million in disaster repair costs for projects in Texas due to insurance proceeds not being allocated proportionately among all insured risks, and the inclusion of ineligible or excessive costs in the sub-grantee s claimed costs calculations. $1.3 million in roof replacement costs in Texas because project documentation indicated that the roofs could be repaired to their pre-disaster condition rather than being totally replaced. 29

Emergency and Recovery Procurement Stafford Act Section 705 Stafford Act Section 705: Disaster Grant Close-Out Procedures (c) Binding Nature of Grant Requirements - A State or local government shall not be liable for reimbursement or any other penalty for any payment made under this Act if (1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished. 30

Financial Management and Program Controls 31

Financial Management and Program Controls Administration and Management of the Public Assistance Program incorporates tracking of: Project Budget, Scope of Work, Procurement Compliance, Documentation, and Financial Status Project Managers, It also requires close communication with: Vendors Contractor & Budget Management Offices, FEMA & State, and Public 32

Financial Management and Program Controls Time Limits Time limits for project completion begin on the disaster declaration date. Emergency work must be completed within 6 months Permanent work must be completed within 18 months Request for Public Assistance 30 Days Debris and Emergency Work Complete 6 Months All Damages Identified 60 Days Permanent Work Complete 33 18 Month

Financial Management and Program Controls Financial Controls Track funds related to the Disaster and show direct expenditures in your Accounting System Establish unique budget lines for the each funding stream and recovery expenses by Project Identify internal funding mechanisms for disaster related projects within your Accountingg System. This will allow for comprehensive financial reporting and establish local match. Report all other funding for Disaster Recovery to all Federal Grant Programs to ensure no duplication of benefits occur. Perform a single audit (A-133) for any fiscal year you receive total federal funds from all sources more than $500,000. 35

Financial Management and Program Controls Documentation- The process of establishing and maintaining accurate records of events and expenditures related to your disaster recovery work Accurate Documentation: Recover all of your eligible cost Necessary to develop your disaster project Validate the accuracy of your small project State or Federal audits Federal Compliance Date, where an environmental or Historic assessments 36

Financial Management and Program Controls Ensure Documentation : Designate a person to coordinate the accumulation of records. Establish a file for each project. Maintain files for 3 years following State Close-Out of grant 37

Financial Management and Program Controls Select the Project Worksheet or Grant Select Document Type for Filing or Retrieval 38

Financial Management and Program Controls Agency Performed Summary Records Force Account Labor (FEMA Form 90-123) Force Account Equipment Summary (FEMA Form 90-127) Material Summary Record ( FEMA Form 90-124) Rented Cash Flow Equipment Projection Summary Record (FEMA 90-125) Applicant s Benefits Calculation Worksheet (FEMA Form 90-128) 39

Financial Management and Program Controls Contract Invoicing Should Conform with FEMA Project Worksheet Scope of Work Should Include Back Up Documentation of Work Performed Should Detail where Work was Performed Should Comply with Contracting Requirements Should Notify Project/Construction Managers if Additional Work Required Outside of Eligible Scope of Work Should Supply Multiple Copies (Department,, Recovery Contractor Office) Management 40

Financial Management and Program Controls Contract Work Summary Information Required: Date Worked Contractor Invoice Number Amount Comments/Scope Place all documentation in the Project File 41

Financial Management and Program Controls Federal Emergency Management Agency ATTACHMENT E - CONTRACT WORK SUMMARY RECORD PAGE OF APPLICANT PA ID NO. PROJECT NO. DISASTER LOCATION/SITE CATEGORY PERIOD COVERING TO DESCRIPTION OF WORK PERFORMED DATES WORKED CONTRACTOR BILLING/INVOICE NUMBER AMOUNT COMMENTS - SCOPE GRAND TOTAL $0.00 42

Financial Management and Program Controls Reimbursement Request Part of your overall Financial Tracking You should track reimbursement of each expense as well as for the entire grant: Multiple expenses on one Reimbursement You can pinpoint partial reimbursement or errors in reimbursement amount Other Reasons? Request reimbursements throughout Project Life Cycle Coordinate with the State on timing and process for reimbursement requests 43

Financial Management and Program Controls Reimbursement Request Compile group of expenses related to a Project Worksheet Attach all back up documentation related to expenses Identify Expense in Project Worksheet Scope of Work Attach Procurement Information (advertisements, bids, RFP/Qs, bid tabulations, selection determination, contracts, notice to proceed, etc) Track date submitted to State for reimbursement Monitor for transfer of funds 44

Financial Management and Program Controls Utilizing Project Management tools can speed project delivery and increase Program efficiency and information dissemination 45

Financial Management and Program Controls Direct Administrative Cost (DAC) Cost for administering the Public Assistance Program are eligible for reimbursement. Applying a reasonable level of effort and tracking time compliant with FEMA Policy is required 46

Financial Management and Program Controls Public Assistance Alternative Procedures for DAC On October 25, 2017, FEMA issued a Recovery Policy allowing for applicants to participate in an alternative procedure for calculating and funding eligible DAC tasks related to developing and administering the FEMA Public Assistance Program. DAC to be estimated at 4% of Project Worksheet value before insurance reductions DAC costs from any group of selected Project Worksheets can be combined in a single Project Worksheet to be obligated immediately DAC PW can be amended two additional times to add Project Worksheets or add DAC value based on versions to existing Project Worksheets An additional Program 1% DAC Mgt. can be added to each Project Worksheet if its closed out within 90 days of the end of the project. 47

Financial Management and Program Controls Public Assistance Alternative Procedures for DAC Benefits FEMA has increased the estimated cost to administer the program Consolidated PW creates an immediate funding source to draw down against actual DAC rather than waiting until end of project Requesting Reimbursement for DAC is simplified to a single Project Worksheet Cost under-runs for estimate DAC can be re-purposed to fund other FEMA approved projects. 48

Financial Management and Program Controls Small Project Close-Out You may close out your small projects when all small projects have been funded and completed. They will be closed based on the approved cost estimates. You must certify to the State that all funds were expended and all the work described in the project scope of work is complete. If you have a significant cost overrun associated with completing all work on all of your small projects, you may submit Hazard an Mitigation appeal for additional funding. This request should be made in writing to the State within 60 days of completing the last small project When Small Projects are 100% complete at the time the Project is written, this statement will be added: This project is 100% complete. The State at their discretion may accept this Project as final inspection on this project. This action will expedite project close-out and funding. 49

Financial Management and Program Controls Large Project Close-Out You will closeout large projects individually as each project is completed. There is a cost reconciliation (difference between estimated and actual costs for eligible Program work) Management on each individual large project when the project is complete. You must notify the State immediately when you have completed each large project. It is your responsibility to document all costs associated with your projects. Program Failure Mgt. to properly document any project may result in loss of funding for any claimed work. Make sure all documentation for a project is accurate, complete and up to date for closeout review. 50

Financial Management and Program Controls Appeals The applicant must file an appeal Pre-Event with Contracts the State within 60 days of the applicant's receipt Program of a notice Management of the action that is being appealed. FEMA has 90 days to respond to your Appeal You have 60 days to file an second Appeal should one be necessary 51

Financial Management and Program Controls Audit The Single Audit Act and appropriate OMB circulars dictate the audit requirements of local government and private non-profit organizations Refer to OMB A-133 and Single Audit Act Amendments of 1996. Any claimed expenses are subject to audit! 52

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