Supplemental Funding Sources in Community Recovery


Insurance Comes First

Just as important as understanding applicable cost shares is being aware of common grant rules (CFR 2 Part 200 “super circular”); specifically, that all federal funding must be net of applicable credits. As discussed in other editions of Disaster Recovery Today, this means that insurance is the first source of funding. In some instances, salvage may also create a credit.

Thus, federal funding is always considered to be supplemental and cannot duplicate any other direct benefits, regardless of source.


Regardless of which agency provides the funding, it is important to remember that recordkeeping and related requirements are generally consistent and must be met in accordance with OMB’s Super Circular. Costs must be tracked to specific projects in a manner that demonstrates “who was doing what, where, when, why, for how long and using what piece of equipment.” While many believe this metric is only to support force account labor, contractors must be able to provide this level of cost support in most circumstances as well.

In addition to documentation, it is important not to mix funding from various agencies —which is sometimes difficult depending on who is providing guidance. FEMA’s position is as follows:

“For certain types of facilities, other Federal agencies have authority to provide disaster assistance. Public assistance is not available for the permanent repair of such facilities and is limited to emergency work. This is true even when the responsible agency lacks funds. When an applicant requests Public Assistance for a facility whose repair FEMA considers to be within the authority of another Federal agency, FEMA will ask the specific Federal agency with responsibility to review the request and advise FEMA whether the work would be eligible under that agency’s authority. If the work falls outside the statutory authority of that agency, FEMA may consider providing assistance for the work under the Stafford Act.” (Source: FEMA, 2007)

While seemingly straightforward, this passage is often interpreted and applied differently by FEMA regions or even by FEMA staff working from the same facility. Ideally, as the coordinator of all federal relief efforts, FEMA will strive to be ahead of these issues and minimize any confusion for sub-recipients.

History shows that funding sources will eventually work themselves out. It is important, however, to prioritize the various sources to make the process more efficient and effective.

The bottom line is that having a working knowledge of all funding sources and a thorough strategy for employing them can be a huge benefit in a disaster recovery effort.