Completion, Inspection and Audit

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When it’s time for the applicant, the state and FEMA to review a project, the applicant’s records will be expected to show a reconcilia- tion of the projects undertaken and funds spent against the projects written and the funds received from all sources: FEMA, other federal programs, and insurance. Insufficient documentation can cause FEMA to reduce its original funding and require the return of grant funds.

Where any significant amount of financial assistance has been provided under the FEMA Pub- lic Assistance Program, project completion typically involves two processes: final inspection and final audit.

Final inspection focuses on eligibil- ity issues, whereas the audit pri- marily focuses on accounting pro- cesses and documentation issues. There is, however, some similarity between the processes, and for this reason, they are discussed together in this issue.

Final Inspection

Final inspection occurs when a project is complete. Final inspec- tion reconciles the actual scope of work and costs incurred with the scope of work and estimated costs as described in the Project Work- sheet (PW).

The process also verifies costs against work eligibility: did spend- ing address the approved scope of work, comply with applicable codes and standards, and use rea- sonable and cost-effective methods to complete the project?

The basic objectives of the final in- spection are accomplished with an office visit to review the applicant’s documentation and a site inspec- tion to confirm the project work is complete.

Applicants initiate final inspection proceedings with the state when the applicant determines that the project is complete. The state is responsible for conducting a final inspection and making recommen- dations to FEMA. (It is not uncom- mon for FEMA to participate in the process.)

All Large Projects (projects with costs greater than a dollar thresh- hold set by FEMA) are subject to a final inspection. In addition, a selection of small projects may be inspected.

To prove that the project is com- plete, the applicant must dem- onstrate that all costs have been incurred and payments have been made, all documentation is in place, and that any problems and issues associated with the project have been resolved. The documen- tation—segregated by PW—should be made available to the inspec- tors, and the applicant should be prepared to address the following issues during the site visit:

• • Comparison of estimates, actual costs incurred, and approved PW expenditures;
• • Identification of any Improved Projects together with evidence of prior written approval by the state;
• • Identification of any Alternate Projects together with evidence of prior written approval by FEMA;
• • Evidence as to whether the work was accomplished within the regulatory timeframes (6 months for emergency work and 18 months for permanent work), or if not, whether the appropriate extensions were requested and obtained;
• • Physical inspection of all permanent work categories, including any PWs for work that was not initiated or for any projects that were abandoned;
• • Comparison of the work approved to the work performed (this will include a review of the plans/specifications and engineering reports, substantiated by applicable codes and standards);
• • Determination of any insurance settlements received;
• • Determination if funds were received from any other state or federal funding bodies. To prove that the project is complete, the applicant must demonstrate that all costs have been incurred and payments have been made, all documentation is in place, and that any problems and issues associated with the project have been resolved.