summaries should mirror the line items shown on the PW. The major categories are Force Account Labor; Equipment Usage; Force Account Materials and Purchases; and Procurements and Contracts.
More than one cost summary may be required, especially for larger PWs. Sample no. 1, page 5, exhibits how a lead cost summary may be set up. Additional supporting summary schedules should then be prepared for each line item.
These supporting cost summaries should provide sufficient detail to enable the auditor to trace the costs, listed in the summaries, back to the source document.
The cost summaries should be updated, at least monthly, and included in the PW file. Regular updates and reviews of cost summaries assist the applicant to better manage the funding process and decide whether a supplemental PW needs to be requested.
Tip #5: Support Costs with Source Documentation
Accurate and complete documentation helps accelerate the Public Assistance process, maximize reimbursements, and minimize de-obligations during the final inspection and audit processes.
All eligible costs must be supported by source documentation that clearly identifies costs related to the disaster.
Source documentation supporting eligible costs can be the product of applicant systems and procedures that are already in place. If current records do not provide the necessary amount of detail, supplemental documentation will be required.
The FEMA Project Officers (POs) who write the original PW's typically only perform a random review of source documentation. However, during the final audit, a state or FEMA auditor performs a more detailed review. Where adequate source documentation is not available, applicants may be required to repay any FEMA funding related to that cost.
Clearly it is more efficient (and likely to produce more accurate results) if adequate source documentation is required and maintained by the applicant at the time that the costs are incurred.
As a rule of thumb, all source documentation intended to support eligible disaster-related costs should include the details of to whom, where, what, when and why the cost was incurred. A few basic checklists for the most frequently used types of source documentation are displayed in Sample no. 2, page 6.
Applicants should ensure that systems are in place to capture all the details required by FEMA and the state at the time the documentation is created and approved
. Only adequately detailed supporting documentation should
be included in summary sheets used for tracking disaster-related costs.
If, for example, a contractor neglects to include specific details on an invoice, such as time, site and a detailed description of duties performed, etc., authorization for payment of that invoice should be withheld until the requisite details have been included.Tip #6: Keep Tabs on Contractors
In recent years, FEMA has taken an active role in monitoring the performance of contractors and vendors. For example, FEMA has sent out “Debris Police” to ensure that contractors and/or departments are not overcharging for debris removal. In effect, FEMA charges an applicant to take the same precautions they would take if it were their money being spent (e.g. not paying an invoice until it is reconciled and signed off on by a project manager).
When working with contracts, applicants should keep the following in mind:
- If a contract involves a per-unit pay scale, the applicants should always be on hand to verify the amount being claimed.
- Where possible, items such as debris should actually be weighed as opposed to guessing the cubic yards or tonnage.
- No contractor invoice should be paid unless the project manager has approved it.
- If a contractor is working on a time-and-expense basis (if no other alternative exists), applicants must be reasonably certain that the hours charged are actually being worked.
Tip #7: Check Parameters of Official Accounting Systems
- If a contractor is in violation of a contract, the applicant should address the issue formally and then document it in the appropriate PW file.
- If a contractor performs any services outside of the FEMA-approved scope of work, those costs must be segregated and invoiced separately.
- When possible, before letting a large contract (where FEMA funds will be used), applicants should gain approval from the state.
- When dealing with FEMA disaster-related contracts, contractors must provide a greater level of detail on their invoices than normal.
In addition to creating and maintaining a clear audit trail, adequate source documentation, and an acceptable filing system, all eligible costs must be reconcilable to the official accounting records of the applicant. The approach taken to document and summarize eligible costs will determine the amount of reconciliation required.
Some institutions´ accounting systems may not be capable of tracking costs at sufficient levels of detail to support a disaster recovery program. In that case, all or part of the disaster program costs must be tracked outside
the official accounting system—but must remain reconcilable to it.
Other institutions´ accounting systems may effectively support a disaster recovery program. This type of system can provide cost accounting that can track by disaster site and segregate eligible and ineligible costs. The former approach would require a significant amount of reconciliation, while the latter may require none.
Tip #8: Track Deadlines and Extensions
Title 44 of the Code of Federal Regulations (44 CFR) imposes deadlines for many disaster response and recovery activities undertaken by FEMA grant applicants. Deadlines are delineated for submitting the Notice of Interest, for identifying damage, for completing work, and for filing appeals, to list a few.
Please note that certain deadlines can be further extended, if justified by the disaster. A special request from the state (acting on the applicant's behalf) to FEMA must be submitted, and, of course, the notice of approval properly saved to the appropriate file.
The FEMA grant process requires sound management from beginning to end.
Plan and prepare for the closing of your projects, and never assume that you have too much information. If the auditors open detailed, well-organized project files, they will be able to answer their questions with minimal effort and inquiries—and then move on to the next file and, eventually, the next applicant.
Staying ahead of documentation requirements will keep your FEMA grant intact, and assist with the smooth completion and closeout of your project. Remember, nobody understands what was done, why it was done and how it was done better than the applicant. Successful closeouts and audits hinge on your ability to articulate these items, and nothing speaks louder than clear, concise documentation.