“When determining eligible costs, the defining factor will be whether the costs are deemed ‘reasonable.’”
likely determine the facility ineligible. Also, if the facility was being utilized for purposes other than its intended use, FEMA will only provide repairs to support that function. An example of this would be an old county garage being used to store maintenance equipment: FEMA would repair/replace only the cost of the same square footage being used for storage purposes. Eligible Costs Once eligible work is established, the next hurdle is to verify that the costs incurred are eligible for reimbursement. Not all costs incurred by an eligible Subrecipient are eligible for Public Assistance funding. Eligible costs are costs that are:
Necessary and reasonable to accomplish the work properly and efficiently.
The eligible cost criteria apply to all direct costs, including salaries, wages, fringe benefits, materials, equipment, and contracts awarded for eligible work. Prior to FEMA’s arrival, Subrecipients are often forced to make decisions on the spot. Unfortunately, some of these decisions allow for subsequent second- guessing on issues such as procurement, reasonable costs, and actual performance. As discussed in earlier issues of Disaster Recovery Today, any pre-disaster preparation, such as pre-selecting qualified contractors, will help reduce future problems. When determining eligible costs, the defining factor will be whether the costs are deemed “reasonable.” A Subrecipient will need to prove to FEMA that the cost incurred was appropriate for the work completed. Many factors such as availability of resources, local cost factors, difficulty of the project, and the timing of completion can make costs appear exorbitantly high. Oftentimes, if a Subrecipient can demonstrate that they have paid similar costs for comparable work, FEMA will be satisfied.
Directly tied to the performance of eligible work;
Adequately documented;
Reduced by all applicable credits, such as insurance proceeds and salvage values;
Authorized and not prohibited under federal, state, territorial, Tribal, or local government laws or regulations; Consistent with the Subrecipient’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the Subrecipient; and
Unfortunately, the term “reasonable” is very subjective, often making it difficult to
9
TIDALBASINGROUP.COM
Made with FlippingBook - PDF hosting