Flood

FEMA awarded the Chippewa Cree Tribe a $32.4 million Public Assistance Program grant for damages from a June 2010 flood disaster. The award provided 100 percent Federal funding to replace the Tribe’s severely damaged health clinic. The Tribe failed to manage a $32.4 million Public Assistance Program grant from FEMA according to Federal regulations and FEMA guidelines. As a result, FEMA has no assurance that expenditures the Tribe claimed for Project 2 (engineering and design), and plans to claim for Projects 132 (facility construction) and 133 (site preparation) are valid, allowable, or eligible. Therefore, FEMA should disallow about $22.3 million of the grant award for these three projects.

We determined that The Hospital accounted for FEMA funds on a project-by-project basis as Federal regulations and FEMA guidelines require.  However, as of February 2017, the Hospital had not arranged for an audit of its Federal award, which it must complete and submit to the Federal Audit Clearinghouse by June 30, 2017.  We recommended that the Regional Administrator, FEMA Region IV, direct the South Carolina Emergency Division to actively monitor the Hospital’s compliance with the annual audit requirements.  If the Hospital does not meets it audit requirement by the June 30, 2017, due date, FEMA should direct South Carolina to impose appropriate additional award conditions to ensure the integrity of the FEMA award.

Fort Bend County, Texas (County), needs additional technical assistance to account for FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines. Specifically, the County needs to revise its accounting policies and procedures to ensure it can fully support the disaster work it intends to complete with its own labor force. In addition, although the County’s procurement policies and procedures generally comply with Federal procurement standards, they did not include all required contract provisions in either of their disaster contracts. Because of our audit, the County revised its policies and procedures to include implementing a plan that specifically addressed Federal requirements for documenting and accounting for disaster-related costs and compliance with Federal procurement standards.

We conducted this audit early in the Public Assistance process to identify areas where the Department may need additional technical assistance, or monitoring to ensure compliance, before improperly expending any of the Federal grant funds.  We determined if the Department conforms to its policies, procedures, and business practices, FEMA has reasonable assurance, but not absolute, that the Department will properly manage the Public Assistance grant funds it receives. During our audit, we determined the Department did not always use the lowest of FEMA and local rates for equipment costs.  Department officials agreed with this finding and took immediate corrective action by notifying Oregon that they would revise and resubmit payment reimbursement claims with correct equipment rate costs.  The Department has revised its procurement procedures for small contracts to include affirmative steps and assure the use of DBEs when possible, as 2 CFR 200.321 requires.  We are not requiring any further action from FEMA, therefore we consider this audit closed.