FEMA Grant

As required under the Grants Oversight and New Efficiency (GONE) Act of 2016, Public Law 114-117, we conducted a risk assessment of FEMA’s grant closeout process to determine whether a full audit is warranted in the future.  We identified risks in three overarching areas:  Unreliable Systems of Record, Lack of Integration in Grant Closeout Policies and Guidance, and Delays in Grant Closeout and Deobligation of Funds.  As a result, we may conduct a full audit of FEMA’s grant closeout process at a future date.  DHS and FEMA concurred with our risk assessment results.  We made no recommendations to FEMA.

At the time of our onsite work in July 2017, Box Elder County had not awarded any contracts under this grant. Therefore, we could not determine whether the County had complied with Federal procurement regulations. However, in reviewing Box Elder County’s written procurement policies and procedures we noted the County did not include procedures to ensure opportunities for small and minority businesses, women’s business enterprises, and labor surplus area firms to bid for federally funded work.  In addition, Box Elder County’s procurement policies did not require federally mandated provisions be incorporated in all contracts funded by Federal grants.  In response to our review, Box Elder County revised its procurement policies and procedures to include these Federal procurement requirements.  Consequently, we made no recommendations.

We determined that the Authority did not comply with Federal regulations in its award and administration of three contracts totaling $31.7 million. As a result, FEMA has no assurance that these costs were reasonable or that the Authority selected the most qualified contractors. Specifically, the Authority did not: perform cost/price analyses of bid proposals to ensure fair and reasonable costs; follow its own procurement policy and Federal regulations when evaluating and selecting its contractors; include all mandatory Federal provisions in contracts to document rights and responsibilities of the parties; maintain records sufficient to detail the significant history of its procurements; maintain an adequate contract administration system that included careful review of invoices; or include a ceiling price in time-and-material contracts that contractors exceed at their own risk. Therefore, we recommended that FEMA should ineligible contract costs, review costs associated with the Authority’s other large projects and disallow any costs that are ineligible; review the process the Authority used to procure its engineering contract; and direct the California Governor’s Office of Emergency Services, to provide increased guidance to the Authority and more closely monitor its performance to ensure the Authority complies with mandatory Federal regulations and FEMA guidelines.