Presentation on theme: "Introduction to Recovery"— Presentation transcript:
1 Introduction to Recovery Introductions—have everyone say their names and departmentPeter please give a brief overview of what our background as a company is
2 Presenters Peter Drenan Ron Campbell Dewberry, Associate Vice President32 years of experience including 10 years with FEMA’s Public Assistance program and 10+ years as architect at University of VirginiaRon CampbellUniversity of North Carolina Chapel Hill, Emergency Management Coordinator24 years of experience in emergency management including more than a dozen disaster events including Hurricane Irene at UNC-CH
3 Overview Recent Experience What is Public Assistance Common Challenges Tools and TipsRecovery ProgramWhat systems are needed to make it smoother next timeHow to weigh your options during an event to maximize reimbursement
4 Recent Experience Snow Storms Hurricane Irene Have the participants raise their hand if they had any involvement in ANY events and/or have familiarity with the public assistance process.What has your experience been?Was it easy? (Trying to get an emotional connection to it)
5 What is Public Assistance? Provides assistance so that communities can quickly respond to and recover from major disasters or emergencies declared by the President.FEMA provides supplemental Federal disaster grant assistance for:Debris removalEmergency protective measuresRepair, replacement, or restoration of disaster-damaged, publicly owned facilitiesProvides assistance for hazard mitigation measures during the recovery process.The Federal share of assistance is not less than 75% of the eligible cost for emergency measures and permanent restoration.Peter please give a brief overview of the PA Program, how it came about and what it is.
6 Why Should You Understand the Program? MONEY $$$$$Benefits:Maximum reimbursementExpeditious project approvalCredibility in program understandingMaximize time and resourcesConsequences:Minimal reimbursementDelays in project approvalDiminished credibilityAppealsAuditsDe-obligation of fundingPeter please provide some quick examples, to include:How long this process can take—how short can it be and how long can it be?Credibility issues—how are jurisdictions scrutinized after their credibility has come into question?De-obligation of funding--$238 Million dollars last year was de-obligated.
7 Common Challenges Project Accounting Unsupported Costs Duplication of BenefitsExcessive Equipment ChargesUnrelated Project ChargesExcessive Labor and Fringe Benefits ChargesPoor Contracting PracticesUnapplied CreditsIn a 2008 DHS Office of the Inspector General Report, eight 8 common challenges were identified. It is our experience, through work we have done out in the field that these are very valid. We will go through these and share examples for each, some specifically related to universities. If you have questions as we are going through them please stop me at anytime.Peter’s new class metaphor: When you start a new class you don’t know what to expect in terms of how you will be graded. Once the teacher gives you the class syllabus you know what to expect—these notes that we will give you today are kind of like the PA syllabus, they will help you understand what you need to know—the policy books in turn have the details.
8 Poor Project Accounting Criteria: Federal regulations (44 CFR and ) require each subgrantee to:maintain a system that accounts for FEMA funds on a project-by- project basis.The system must disclose the financial results for all FEMA- funded activities accurately, currently, and completely.Examples:Collecting or tracking the information well after the incidentNotes were maintained by handOften times documentation is not systematically maintained, so back tracking occurs months later and documentation has been lost, is misinterpreted, and/or causes confusion and frustration.Examples:The person collecting the information after the fact was not working during the incident and has no idea what was done or by whom.Notes were maintained by hand in writing, but are hard to read or are in short-hand.The time it takes to figure out what was done and by whom is often seen as not worth the effort.EACH PROJECT SHOULD BE TREATED AND TRACKED LIKE A BILL, YOU FILE AND PAY FOR YOUR BILLS SEPARATE!
9 Unsupported CostsCriteria: Federal regulations (OMB Circular A-87 and 44 CFR 13.20) require that costs claimed under federal programs be adequately supported by source documentation such as cancelled checks, payrolls, contracts, etc.Examples:Invoices do not provide detailed dates that coincided with the storm.Records for vehicle use does not match up with the payroll records.Records for vehicle use cannot be verified with event related calls.Receipts do not have an employees name associated with it.Often times documentation is not maintained or cannot be verified to support the claim, even if it was a legitimate claim.YOUR CLAIM FOR REIMBURSEMENT MAY BE VALID, BUT IF YOU CAN’T PROVE IT, YOU WON’T GET PAID. JUST LIKE A RETURN, IF YOU DON’T HAVE A RECEIPT MOST STORES WON’T TAKE IT BACK
10 Duplication of Benefits Criteria: Government laws and regulations (Stafford Act and 44 CFR ) prohibit duplication of benefits.Examples:Insurance claim not submitted for a project covered by insurance.Reimbursement from another source was not disclosed on the Project Worksheet.In other words, a subgrantee cannot receive disaster funding for activities covered by insurance benefits, other federal programs, or any other source.Damage to the City Hall gutters was covered in part by insurance, the overall project cost for repairing the gutters was $11,998.10, insurance covered $6, so FEMA approved the remaining amount of $5,Had the City not filed a claim through insurance or had not disclosed the insurance coverage then the entire claim could have been denied.Research insurance coverage and seek reimbursement for the maximum amount. Credit the appropriate FEMA project with that amount.Check with your Federal Grant Program Coordinator about the availability of funding under other federal programs (i.e., Federal Highway, Housing and Urban Development, etc.) and ensure that the final project claim does not include costs that were funded or should be funded by another federal agency.
11 Unapplied CreditsCriteria: According to OMB Circular A-87, grants must be reduced by credits that offset or reduce expenses allocable to federal awards.Examples:Jurisdiction received proceeds from the sale of scrap material related to the FEMA project but did not apply them.Jurisdiction received two credit discounts for early payments to a contractor that were not applied.Similar to the duplication of benefits, unapplied credits are also a common issue. Ex: Recycling, interest earned (if FEMA gives you money and you earn interest, that too has to be applied as a credit).THIS WAS NOT AN ISSUE FOR THE CITY, BUT GOOD TO NOTE.
12 Excessive Equipment Charges Criteria: Federal regulations (44 CFR ) require that subgrantees use the FEMA schedule of equipment rates or their local rates, whichever are lower.Example:Claiming the FEMA equipment rate rather than the lesser local rate.Applicants that do not have local established rates must use the FEMA equipment rates when claiming costs under a FEMA project.NEED TO VERIFY YOUR LOCAL COST FOR EQUIPMENT, FEMA GOES BY THE LOWEST OF THE TWO. STANDBY TIME IS OFTEN AN ISSUE, LUNCHTIME FOR EXAMPLE, IS STANDBY.You wouldn’t pay a higher price for gas if you can get it for less across the street.Owning vs. Leasing—Peter to expand on this.
13 Unrelated Project Charges Criteria: According to OMB Circular A-87, charges to federal grants must be necessary and reasonable to fulfill the objective of the grant program.Examples:Unrelated charges were included in a claim.Funding received was not applied to the correct project.Claim for repairs to a local electrical distribution system included charges of $10,000 for meals provided to the subgrantee’s vice presidents, car washes, and a VCR.Received $500,000 under a FEMA project to repair Road XYZ. However, the subgrantee’s claim included $250,000 for heavy equipment and material charges for Road ABC.Ensure that expenditures claimed under the FEMA project are reasonable and necessary, are authorized under the scope of work, and directly benefit the project.THIS RELATES TO DOCUMENTATION OF HOTELS AND FOOD
14 Excessive Labor and Fringe Benefit Charges Criteria: According to OMB Circular A-87, allowable costs must be consistent with policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the governmental unit. According to 44 CFR , straight or regular-time salaries and benefits of permanent employees engaged in emergency service work are not eligible for FEMA assistance.Example:Fringe benefit rates are applied differently to overtime compared to regular time.Regular time is almost always not eligible.Ensure that claims for overtime fringe benefits are based on cost items (i.e., F.I.C.A., worker’s compensation, etc.) that accrue as a result of overtime. Items such as health benefits and leave are not eligible as overtime fringe benefits.FRING BENEFIT RATES ARE DIFFERENT ON OVERTIME, FICA, LEAVE ETC…ARE APPLIED DIFFERENT ON OVERTIME.THE TOTAL FOR FIRE HOW THAT WAS DIFFERENT FROM THE OVERTIME TOTAL.
15 Poor Contracting Practices Criteria. According to federal regulations (44 CFR 13.36), a subgrantee must comply with specific procurement standards.Examples:Jurisdiction did not document the basis or method for the contract selection.Jurisdiction entered into a contract which included an overhead and profit allowance of 25% of actual costs.PETER TO EXPAND: (contractor you hire for your house—how would you go about doing that?)Specific procurement standards:The subgrantee must maintain records in sufficient detail to reflect the significant history of the procurement, including the rationale for the method of procurement, the basis for the contractor selection, and the basis for the contract price;The subgrantee is prohibited from using time-and-material-type contracts unless a determination is made that no other contract is suitable, and provided that the contract includes a ceiling price that the contractor exceeds at its own risk; andThe subgrantee is prohibited from using a “cost plus a percentage of cost” contract arrangement.Ensure that you document pertinent actions for contracts awarded under FEMA projects, including the rationale for the method of procurement, the basis for contractor selection, and the basis for the contract price. Remember that federal regulations prohibit “cost plus a percentage of cost” contracts.Finding: The subgrantee entered into 3 contracts for renovating 19 vacant buildings to be used as temporary emergency shelters. However, the subgrantee did not document the basis for the contractor selection or the basis for the contract price. Further, although payments under the contracts were based on “time and materials,” the subgrantee did not determine the availability of other contractual arrangements with more suitable pricing terms and, contrary to regulation, did not establish a ceiling price under the contracts.The OIG also noted that payments under the three contracts were on a “cost plus a percentage of cost” basis. The contractors were reimbursed for time and materials and were also given an overhead and profit allowance of 25 percent of actual costs. Under this type of contract, the greater the labor costs, the greater the overhead and profit. This payment arrangement is prohibited because there is a disincentive to reduce costs.At the time of our review, the subgrantee had paid $789,255 in profit and overhead to the contractor. Due to the improper contracting practices and related weak cost control measures, the OIG questioned the reasonableness of the $789,255 claimed for profit and overhead.
16 Tools and Tips Standard Systems Project Worksheet DocumentationChecks and BalancesUse it everydayProject WorksheetHow to fill them outHow to Think During an EventDocumentationBest if used everyday
18 Documentation Policies should require departments and personnel to: maintain a system that accounts for jurisdiction funds on a project-by-project basis.The system must disclose the financial results for all jurisdiction-funded activities accurately, currently, and completely.Costs being claimed must be adequately supported by source documentation such as cancelled checks, payrolls, contracts, etc.EACH PROJECT SHOULD BE TREATED AND TRACKED LIKE A BILL, YOU FILE AND PAY FOR YOUR BILLS SEPARATE!How do you currently track costs/expenditures/etc… in the City?Is there a standard system, or does each department have their own system?How do they get reconciled?Do you assign codes to different costs?Do you do assign a code to special events?The Federal regulations should not be that different from what City Finance requires for reimbursement?Sources documentation, does it paint the picture and tell the story?Company reimbursement processes?As part of an overall City system
19 Checks and Balances Duplication of Benefits Excessive Equipment ChargesExcessive Labor and Fringe BenefitsPoor Contracting PracticesUnapplied CreditsDuplication of BenefitsCheck to see if something is covered under insurance, or inquire about more appropriate funding from another source (i.e. Federal Highways, Housing and Urban Development).Excessive Equipment ChargesMake sure you check your local equipment rates before you assign a rate.Use the lower of the two.Excessive Labor and Fringe BenefitsRegular time fringe benefits don’t get applied to overtime.You would have paid for regular time anyway, but may not have been expecting to pay for overtime.Poor Contracting PracticesYour contracting practices should be at least as stringent at the Federal requirements (at least three bids and costs should be reasonable)Unapplied CreditsYou would want to be credited if you weren’t getting reimbursed.All of these things are just good financial practices and should apply to daily functions in the City.
20 The more you use it the easier it will be! Use it EverydayThe more you use it the easier it will be!Your systems more often than not will somehow be collecting/tracking the appropriate information, its just a matter or organizing it.
21 Project Worksheet: Main Components Basic Project InformationDamage Description and DimensionsScope of WorkSpecial ConsiderationsCostBriefly talk about the project worksheetIf you are so lucky to get tasked with pulling all the information together for reimbursement, then you will need to know how to fill out a project worksheet.We’ll quickly go over it
22 Telling the Story Describe the damage description and dimensions Describe the cause of the damageDescribe the pre-disaster conditionQuantify the disaster related damageDescribe how you fixed the damage, scope of workThe project worksheet is your justification for why you should be reimbursed, the better you articulate that, and make your argument the higher your chances.
23 How to Think During an Event Necessary vs. UnnecessaryJustifiable vs. UnjustifiableNormal Policies/Process vs. Not NormalYou are making decisions so quickly during an emergency event, often times you don’t have time to think beyond the immediate issues.Some quick things to keep in mind, if you are doing something you know or think you will request reimbursement for:Is this a necessary cost or use of resources?Can we justify this cost (what is the purpose of the cost)?Is this cost within our normal policies and procedures?
24 Recovery Program Next steps: Review systems Adjust/Develop systems Establish/adjust processes and policiesTrain staffTo make this easier next time, it would be ideal for the City to develop and implement an overall city recovery program. Taking a wholistic approach to it will allow the City to implement something that easily ties into the current operations and is easy to maintain by doing day-to-day.An evaluation of the City’s current systems, processes and policies, would then be the first step.Ken has asked us, as part of our current contract, to assist the City with an initial review, through meetings with each department. These meetings for some of you will be follow on discussions from the support we provided after the 2010 snow storms. Based on the information we collect we will provide the City with recommendations for how the City’s systems, process and policies can be adjusted and/or is new ones are needed.From there the City can determine the best way to go about developing the overall City Recovery Program.
25 Closing Common Challenges Can be Navigated Documentation, Documentation, Documentation!University Recovery ProgramQuestions?