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The Integration of FEMA Public Assistance and Insurance

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Presentation on theme: "The Integration of FEMA Public Assistance and Insurance"— Presentation transcript:

1 The Integration of FEMA Public Assistance and Insurance
Jim Siciliano

2 Agenda Who’s Involved Integration of FEMA & Insurance The FEMA Process
Eligibility Cost Documentation Integration of FEMA & Insurance How Do you Prepare? Conclude

3 You must be in a position to be able to DRIVE your own recovery efforts

4 Your insurance claim and FEMA reimbursement represent the foundation for your financial recovery

5 FEMA Public Assistance
Program- Parameters Process People

6 Federal-FEMA Federal-FEMA Federal-FEMA Direct Services To Applicants
President of the United States Federal-FEMA Federal-FEMA Federal-FEMA State Under Secretary, Homeland Security Governor Regional Director State & Regional Policy & Management State Coordinating Officer (SCO); Governor’s Authorized Representative (GAR) Federal Coordinating Officer (FCO) State Public Assistance Officer (SPAO) Public Assistance Officer (PAO) Disaster Management Disaster Administrative Officer (DAO) Public Assistance Coordinator (PAC) Public Assistance Coordinator (PAC) Direct Services To Applicants Project Officers (PO) & Specialists Project Officers & Specialists Additional Stakeholders: Regional Managers & Local Emergency Managers

7 Site Visit/Project Formulation
Disaster strikes 1. PDA 2. Declaration 3. Kickoff Meeting 6. FEMA RPA 5. Req. Applicants’ Briefing 4. Projects funded 9. 8. Site Visit/Project Formulation 7. Project closeout and Audit 10. Project Worksheets

8 General Program Eligibility
Cost Work Facility Applicant 8

9 State government agencies or departments
Cost Work Facility Applicant State government agencies or departments Local governments & authorities Indian tribal governments and Alaskan native villages Certain Private Non-Profit organizations 9

10 What is a Facility? Buildings Furniture & equipment Vehicles Contents
Cost Work Facility Applicant What is a Facility? Buildings Furniture & equipment Vehicles Contents Parks Roads Culverts Dams Library books Sewer & water lines 10

11 Eligibility Criteria Legal responsibility
Cost Work Facility Applicant Legal responsibility Other Federal Agencies (OFAs) Facility use Active use Alternate use Under construction Repair vs. Replacement 11

12 Eligibility Criteria Cost Work Facility Applicant Must be required as a direct result of the declared event Must be within the designated disaster area Must be the legal responsibility of an eligible Applicant 12

13 Categories of Work Category A Debris Removal
Cost Categories of Work Work Facility Applicant Category A Debris Removal Category B Emergency Protective Measures Category C Road System Repairs Category D Water Control Facilities Category E Buildings and Equipment Category F Public Utility Systems Category G Parks, Recreation & Other 13

14 Considerations Negligence – Failure to Act to Protect
Cost Considerations Work Facility Applicant Negligence – Failure to Act to Protect Maintenance – Lack Thereof Pre-existing Damage Hazard Mitigation Codes & Standards 50% Rule (Repair vs. Replacement) Relocation 14

15 Cost Eligibility Reasonable and necessary to accomplish work
Facility Applicant Reasonable and necessary to accomplish work Compliant with Federal, State and local requirements for procurement Reduced by all applicable credits, such as insurance proceeds and salvage values 15

16 What’s Reasonable? Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. – OMB Circular A-87 16

17 Summary of Eligible Costs
Work Facility Applicant Force account labor Force account equipment Force account materials Purchase orders and contracts Rented equipment Purchased materials A&E consultants Contractors 17

18 Procurement Contracts must be reasonable
Cost Procurement Work Facility Applicant Contracts must be reasonable FEMA finds 4 methods of contracting acceptable: Small purchase procedures. $100,000 or below by obtaining price quotes from several vendors Sealed bids Competitive proposals, which are based more on unique qualifications 18

19 Procurement Noncompetitive proposals
Cost Procurement Work Facility Applicant Noncompetitive proposals Inadequate number of available contractors and to the extent that exhaustive methods to find competitors would be cost-prohibitive 19

20 Documentation Create a filing system
Cost Documentation Work Facility Applicant Create a filing system Designate a specific person to coordinate the accumulation of records Separate disaster related activities from normal activities – do not commingle disasters Summarize costs by category by PW by department 20

21 Documentation Audit trail tracking costs to the PW
Work Facility Applicant Audit trail tracking costs to the PW Cost summaries to source documents Reconciliation to accounting system 21

22 Cost Tracking Flow Diagram
Department- Level Summaries Cost Category Summaries Straight Time PW-Level Summaries Facilities PW No. 12345 Force Account Labor Overtime Purchased Materials Force Account Equipment PW No 67890 Rented Equipment Force Account Materials Purchases and Contracts A&E Consultants Contractors

23 Audit Findings Resulting in Loss of Funding
Cost Audit Findings Resulting in Loss of Funding Work Facility Applicant Failure to adequately describe work performed Claiming indirect costs Lack of documentation for fringe benefits Leave time Inability to reconcile equipment hours Failure to provide clear audit trail Failure to segregate ineligible work Applicant fails to gain permission for Alternate or Improved projects 23

24 Questions? 24

25 The Integration of Insurance

26 Stafford Act, Section 312 Disaster assistance will not be provided for damages or losses covered by insurance. Disaster assistance provided by FEMA is intended to supplement financial assistance from other sources.

27 Insurance Considerations
No insurance Deductibles Self-Insured Retention (SIR) Mandatory reductions (NFIP/SFHA) Insurance apportionment

28 Insurance Apportionment
Insured FEMA-eligible Insured FEMA-ineligible Uninsured FEMA-eligible Uninsured FEMA-ineligible

29 Insurance Settlement Documentation
Detailed By damaged facility By coverage Direct & indirect losses By agent of loss (peril)

30 Flood Insurance In a Special Flood Hazard Area (SFHA), amount of eligible funding for damages caused by flood is reduced by the maximum amount of coverage available under NFIP “standard” flood insurance policy: $500,000 Building $500,000 Contents $5,000 deductible Damaged facilities are valuated on an Actual Cash Value (ACV) basis

31 Stafford Act, Section 311 …with respect to any property to be replaced, restored, repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may be reasonably available, adequate, and necessary, to protect against future loss to such property….

32 Accounting & Audit Requirements
Documentation from Day One Filing system Ability to reconcile/track all costs associated with PWs Close-out vs. FEMA Office of the Inspector General (OIG) audit

33 How Do You Prepare? Providing a coordinated claim management strategy that enables you to maximize and expedite your financial recovery through your insurance and the FEMA Public Assistance Program 33

34 Complicated 34

35 Who in your organization can navigate all phases of both the FEMA program and your insurance claim?
Typically two people Finance/EM for FEMA Risk Management for Insurance Typically do not communicate Disaster Recovery Team Needed Disaster Recovery Manager 35

36 When Disaster Strikes Buildings, Vehicles, and Infrastructure are damaged or destroyed Communications and Information systems are damaged or destroyed Your staff has been personally impacted by this disaster You have NO cash flow 36

37 The Insurance Company Adjusters and Inspectors “Not covered”
“Didn’t hit your deductible” “Here is our offer” An offer is made Is the settlement right? How do you know? Where are your experts? 37

38 FEMA FEMA Project Officers “Not Eligible” “Not Reasonable”
“This Contract is no good” “You have 60 days to write your projects” “This is what we are going to do…” “You HAVE to do it this way…” FEMA will give you “How Much”? Is it right? How do you know? Where are your experts? 38

39 Proactive or Reactive? You must be in a position to be able to DRIVE your own recovery efforts The only way to survive these obstacles is to Proactively implement a Recovery Strategy Once implemented you are driving your recovery 39

40 The Big Questions Are: How are we going to pay for this disaster?
How much can we reasonably expect from our insurance company? How much can we reasonably expect from FEMA? 40

41 More Detailed Questions:
Do we have an Integrated Financial Recovery Strategy or plan? Do we have the dedicated personnel to implement a Plan? Do we have the resources to develop a plan while we are trying to respond to this disaster? Are we in control? 41

42 How Does Your Team Anticipate FEMA?
Eligibility issues & interpreting differences of opinion Gray areas and policy shift from disaster to disaster and region to region Rotating FEMA staff Lack of depth in FEMA staff training and experience Quota-driven approach Multiple requests for duplicate information What’s covered? Insurance vs. FEMA 42

43 How Does Your Insurance Team:
Complete a thorough evaluation of losses Coordinate claims Secure advance payments Support claim preparation & settlement to expedite & maximize recovery 43

44 Disaster Recovery Process
Get Organized Determine Losses Categorize Losses Determine Eligibility Develop a Rebuilding Plan Identify Funding Sources Implement the Plan Final Inspection and “Close-out” Complete the Audit Requirements


46 Adjusters International

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