FEMA and FHWA Emergency Relief Funds Reimbursements to State Departments of Transportation (2015)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

40 CHALLENGES TO KEEP IN MIND Survey respondents and case example participants identified several key challenges related to the programs. They include understanding the programs and program differences; eli- gibility criteria; project formulation; variations in accepted rates, prices, and contracting guidelines; state-to-state varia- tions in regulations and guidance; and FEMA PA implemen- tation practices by the state EMAs. Specific state DOT observations about application time, audits, contractor issues, and deadlines follow. Application Time State DOTs expressed concern about the time required to complete the applications; some noted a shortage in available state DOT personnel to assist with and manage reimburse- ment applications. According to the survey respondents, the average time it took to complete a FEMA PA application was 68 person-hours, whereas the average amount of time spent by state DOT personnel working on FHWA ER applications was 40 person-hours. Twelve respondents stated that the application process was time-consuming for their staff. A few respondents indicated that they do not apply for reimburse- ment when the perceived value (benefits) of the reimburse- ment is low compared with the resources they must expend. Audits Several state DOTs noted that they have been audited, that audits can be resource intensive, and that there was a change in their total reimbursement amount because of the audit. Audit findings included the following: • Documentation and invoice discrepancies, such as miss- ing invoices and differences between costs in the account- ing system compared with the actual invoice. • Insufficient materials cost documentation, which required the state DOT to return $5 million to FEMA. • Calculation of overtime and fringe benefits. The state DOT that received this finding decided to appeal the decision; the matter is pending. State DOT experiences with the FEMA PA and FHWA ER programs were identified through the screening survey, information review, and case examples. The survey was developed by pilot testing an initial survey and integrating suggested changes. The finalized survey was distributed to AASHTO’s Special Committee on Transportation Security and Emergency Management (SCOTSEM) members, of whom representatives from 35 unique state DOTs responded. Upon the recommendation of the panel on June 6, 2013, the contractor with the assistance of the panel sought to obtain additional responses, but they were not forthcoming. The survey questions addressed respondent experiences with the FEMA PA and FHWA ER programs, including the applica- tion and documentation processes, eligibility requirements, appeals and audits, amendments, cost sharing, local public agencies (LPAs), and contractor issues. Additional topics included in the survey were cost tracking, document reten- tion, and backup practices and satisfaction levels. The infor- mation review included a literature review and interviews and communications with panel members, representatives of FHWA and FEMA, two state emergency management agen- cies (EMAs), and the APWA. Both FEMA and FHWA are attempting to address program differences, as feasible, by working in tandem (FHWA Con- struction and Contract Administration Team Leader and FEMA Headquarters Public Assistance Division Staff, personal com- munication, June 6, 2013). Furthermore, interviews with the case study participants indicate that there has already been a series of dialogues among state DOTs in the Northeast to identify possible solutions to these challenges. FEMA has been implementing Sandy Recovery Improvement Act (SRIA)-related changes to the FEMA PA program and add- ing flexibility to the FEMA PA program eligibility criteria (FEMA Headquarters Public Assistance Division Staff, per- sonal communication, April 30, 2014). In addition, a FEMA PA consistency initiative is being implemented to provide consistency during disasters and address personnel rotations [Recommendations for Executive Action, Disaster Recov- ery (GAO-09-129) 2008]. FHWA has been implementing MAP-21 changes to the FHWA ER program and improve- ments recommended by the 2013 National Review of the Emergency Relief Program. chapter three STATE DEPARTMENTS OF TRANSPORTATION EXPERIENCE WITH FEDERAL EMERGENCY MANAGEMENT AGENCY PUBLIC ASSISTANCE AND FHWA EMERGENCY RELIEF PROGRAMS

41 Contractor Issues Contractor issues included the following: • Contractor payment; • Integrating federal requirements into contracts; and • Rented or leased equipment issues. Deadlines With regard to both programs, delays in performing site assessments (usually because of the inaccessibility of the disaster sites) were a cause of significant concern. This con- cern is especially salient in cases of prolonged flooding and snow storms because of the emergency work deadlines state DOTs are required to meet. Program Differences and Changes Over Time State DOT experiences were influenced by the programs’ dif- ferent eligibility criteria, documentation requirements, con- tract requirements, definitions, and acceptable rates for labor, equipment, and materials. In addition, the changes being made to the programs through SRIA, MAP-21, the 2013 National Review of the Emergency Relief Program, internal FHWA and FEMA initiatives, and increased coordination between FHWA and FEMA are expected to result in improvements to the FHWA ER and FEMA PA programs and consequently better experiences for state DOTs. Nonetheless, these changes and any other changes yet unforeseen will require an adjustment period, which poses its own challenges. At a regional meeting of Northeastern states, the topic of streamlining the two programs was raised by the FHWA administrator. He inquired about the issues concerning the differing requirements of the FHWA ER and FEMA PA pro- grams and the benefits of minimizing the differences between the programs. A key benefit that was cited by meeting partici- pants included the significant cost savings for state DOTs and LPAs. APWA involvement and assistance in the coordination process between the two programs may also be sought. During the meeting, the following specific initiatives were proposed: • Joint briefings for the two programs. [Note that Ver- mont’s DOT (VTrans) has already decided to combine the briefings.] • Combined Damage Assessment Form (DDIR) and project worksheet (PW) documentation form. VTrans has taken on this initiative by creating a combined form (VTrans case example interview, personal communication.) State-to-State Variations State variations in FHWA ER and FEMA PA implementa- tion procedures and guidance provided by FHWA Division Offices and state EMAs can affect state DOT experiences with the programs. Some of these differences are a result of differences in state laws. Each state’s administrative plan describes the “roles, responsibilities, processes, and proce- dures” for administering the FEMA PA program and is incor- porated into the state’s emergency plan (“Public Assistance Administrative Plan Template” 2013). The plan may include the following items: • Development and review of PWs—level of state sup- port provided to the applicant during this effort; • Project funding and requirements, including requesting fund advances and reviewing insurance policies; • Processing appeals, reinspections, and requests for time extensions; • Making project approval and appeals recommendations to FEMA; • Project completion and final inspection procedures; • Standards for financial management systems; • Procurement procedures; • Quarterly reporting procedures; and • State audit requirements. Table 11 describes the state-to-state variations in requirements identified through the survey and follow-up communications. Project Formulation Project formulation/documentation-related comments have been summarized in Tables 12 and 13. FEMA Personnel Rotation and Relationship Building State DOTs that have a better understanding of FEMA’s internal structure, organization, and policies tend to experi- ence better reimbursement outcomes. Because FEMA rotates personnel, state DOTs can expect to have contact with dif- ferent FEMA staff for the subsequent disaster. FEMA’s PA Consistency Initiative addresses FEMA personnel rotations through a Mid-level Managers Hiring Initiative to deploy mid-level managers to provide consistency during disasters and PA Consistency Training to train stakeholders in the implementation and administration of the FEMA PA program and relevant systems and processes. In addition, FEMA has developed protocols to facilitate the field staff rotation pro- cess and will be communicating personnel changes to appli- cants. Furthermore, FEMA’s PA Division is using online sites to promote knowledge sharing and centralized storage of relevant PA information [Recommendations for Executive Action, Disaster Recovery (GAO-09-129) (2008)]. In addition, FEMA PA guidance may be intentionally gen- eral compared with FHWA ER guidance because the latter is

42 Cost accounting State cost accounting principles may differ. Caltrans, for instance, needs to follow accounting principles contained in the California Uniform Construction Cost Accounting Commission Cost Accounting Policies and Procedures Manual. Documentation Additional documentation. States may require documentation in excess of FEMA requirements. For example, Arizona State statutes require audits on all projects, large and small. Project worksheet development. Some state EMAs may complete the project worksheets on behalf of state DOTs, whereas others may require varying degrees of technical assistance. Documentation retention policies vary by state. Equipment rates FHWA Division Offices may allow reimbursement of equipment based on different manuals or schedules. Environmental laws Environmental laws and requirements may vary by state as well as by locality. Contracting procedures Contracting and emergency waiver requirements may vary by state as well as by locality. Role in emergency organization Some state DOTs play a bigger role in their state’s emergency organization and thus may have better control of documentation and record-keeping procedures. For example, Tennessee DOT (TDOT) is considered a first responder in the state of Tennessee, and in fact, TDOT personnel have been the state’s Incident Commander during disasters and emergencies. State EMA FEMA PA administration There are state-to-state variations in the manner in which state EMAs administer the FEMA PA program; some of the variations are due to differing state laws, regulations, and practices, whereas others are due to different administration methods and resource availability. The way in which the state EMA administers the FEMA PA process affects the experience of state DOTs. One state DOT had noted that the amount of documentation required by its state EMA was excessive. However, other state DOTs stated that its state EMA has been helpful during the FEMA PA process and serves as an effective FEMA liaison. Florida’s EMA provides a web-based portal through which various documents may be uploaded, and Louisiana’s EMA has implemented an Express Pay System that makes 75% of the reimbursement amount available to Louisiana DOTD within 10–14 days. TABLE 11 STATE-TO-STATE VARIATIONS Definition of emergency repairs versus permanent repairs, and predisaster conditions. One state DOT observed that doing permanent repairs along with emergency repairs was cost effective in some cases. However, they had no assurance that the permanent repairs done without obtaining FHWA approval would be reimbursed. Determining the cause of damage when landslides and rockslides occur and when two disasters occur within a short period of time Equipment/facility eligibility and rates - Equipment rates—Rates approved by FHWA may not be acceptable to FEMA, and vice versa. For example, the 2013 Emergency Relief Manual recognizes the Associated Equipment Distributors Manual for equipment rentals (p. 15) and the Rental Rate Blue Book for equipment usage (p. 53). In contrast, FEMA’s schedule of equipment rates is available online at the following hyperlink: http://www.fema.gov/schedule-equipment-rates (“Schedule of Equipment Rates” 2013). - Equipment-related questions focused on rented or leased equipment and equipment rates. - Using equipment owned by another agency caused reimbursement issues for one state DOT. - Facilities—Eligibility becomes more challenging to ascertain in cases of reimbursement for work performed on facilities owned by another agency or for work performed on behalf of state DOTs by other agencies. TABLE 12 PROJECT FORMULATION COMMENTS FOR BOTH FHWA ER AND FEMA PA PROGRAMS

43 intended for a limited number of projects, whereas the former is for the myriad projects FEMA encounters. Better “peace time” coordination between state DOTs and FEMA regional coordinators may be beneficial: that is, coordinating during the planning and preparedness phases before a disaster occurs (rather than coordinating only during the postdisaster recovery phase) may support relationship- building efforts that could result in better cost recovery out- comes (FEMA Headquarters Public Assistance Division Staff, personal communication, June 6, 2013). In addition, several case example state DOTs report that there are benefits to fos- tering a positive working relationship with their state EMA (in addition to their relationship with FEMA). Training State DOTs noted that they would appreciate additional training on FEMA PA and FHWA ER programs and proce- dures, and the funds needed to deliver such training to their staff and to LPAs. Interacting with LPAs During the synthesis study, state DOT representatives iden- tified, through the survey responses and case examples, the challenges they encountered while interacting with LPAs. Such anecdotal information is not necessarily representative; indeed, such information may exaggerate the negative aspects of the interaction at the expense of the positive aspects. None- theless, these responses suggest the challenges that a state DOT could potentially face in its cost recovery efforts. State DOTs observed that LPAs often require assistance in the application processes because of questions regarding eli- gibility requirements and application procedures of the two programs. Given the limited size and geographic scope of LPAs and employee turnover and shortages, LPAs often lack knowledge of federal aid, of federal programs such as FEMA PA and FHWA ER, and of state contracting procedures. Thus, state DOTs must expect to take a leadership role, spend time in assisting LPAs, and review and revise the DDIRs that the LPAs have submitted. One survey question concerns the extent of state DOT interactions with LPAs. For the FHWA ER program, 18 of 32 state DOTs responding to the LPA interaction question stated that they submit FHWA ER applications to the FHWA on behalf of LPAs. Fourteen of these 18 survey respondents noted that they provide training or resources to their LPAs primarily on FHWA ER reimbursement procedures. Because FEMA PA applications typically are submitted directly to FEMA through the state EMA by LPAs, the state EMAs provide FEMA PA assistance/training to the LPAs, whereas state DOTs do not. To support their state EMAs in helping LPAs, Iowa (IDOT) and Missouri (MoDOT) provide FHWA ER training to state EMA staff. Comments by respondents on their challenges in serving LPAs are provided in Table 14. GENERAL FINDINGS FHWA ER Program In general, state DOTs revealed that they had excellent work- ing relationships with their FHWA Division Offices. They coordinate with the same members of the offices usually on a daily basis on many federal-aid topics and programs and are familiar with federal-aid rules and procedures. This sig- nificant level of coordination is already being practiced on a normal basis, and excellent understanding of FHWA policies and procedures is helpful during disasters in coordinating on the FHWA ER reimbursement process. FHWA ER program Site definition—Defining the dimensions of a single site was an issue that was raised by a state DOT. FEMA PA program Reimbursements vs. estimated costs—Respondents and case study participants mentioned that small project reimbursements based on estimated costs are received sooner than large project reimbursements. New SRIA procedures for large projects allow subgrantees to voluntarily request large project reimbursements based on estimated costs. Duplicate documentation requests—State DOTs noted that they have had to provide the same documentation to FEMA for different purposes. Some state DOTs stated that the documentation process and document retrieval are resource intensive. (FEMA’s electronic database, EMMIE, stores PWs and accompanying documents. This database reduces the need for FEMA to ask applicants for duplicate documents and assists FEMA and state EMAs in tracking and managing projects. In addition, good information management practices, including documentation, storage, and backup procedures, on the part of state DOTs will assist them in responding to any FEMA information request or audit.) PW amendments—Several state DOTs noted that they at times had not been notified about the creation of PWs and PW amendments and would appreciate notification. FEMA PA staff has confirmed that FEMA notifies the grantee, who should then notify subgrantees (FEMA Headquarters Public Assistance Division Staff, personal communication, April 30, 2014). TABLE 13 ADDITIONAL PROJECT FORMULATION COMMENTS FOR FHWA ER AND FEMA PA PROGRAMS, SEPARATELY

44 Cost Tracking Costs are primarily tracked in-house, either manually or by means of a spreadsheet, notes, or reports. In addition, finan- cial project coding is used. Other cost-tracking tools and tech- nologies include GPS, maintenance management systems, and disaster configuration integrated into SAP software. Addi- tional information about financial management systems and maintenance management systems and how they are used to track costs is included in chapter four. Documentation Retention and Backup State DOTs consistently reported that they back up their information. For both the FEMA PA and the FHWA ER pro- grams, survey respondents retained documentation for an average of 6.4 years. Denials and Appeals When FEMA or FHWA denies applications or specific expenses, formal appeals require the state DOT to provide justification, additional information, and reasons the decision should be reversed. The state DOT may also need to review policy or regulations and cite specific sources of legislation. A state DOT respondent noted that the state agency escalated a FEMA field decision to the JFO for reconsideration before filing a formal appeal. Additional information on appeals experiences of state DOTs are contained in chapter four. Of the 31 survey respon- dents who answered the survey question on appeals experi- ences, 18 noted that their PWs had been denied and 19 noted that their Damage Assessment Form (DDIRs) had been denied in the past. Reasons for PW and DDIR denials are provided in Table 15. FEMA and FHWA Process Satisfaction Levels FEMA Application Process Satisfaction Levels In terms of the application process satisfaction levels, the 31 survey respondents who answered the FEMA process satis- faction question expressed mixed perspectives. Eleven were generally dissatisfied, eight were neutral, and 10 were gener- ally satisfied. FHWA Application Process Satisfaction Levels In terms of the application process satisfaction levels, the 31 survey respondents who answered the FHWA process satis- faction question also expressed mixed perspectives, although they expressed greater satisfaction with FHWA’s process than with FEMA’s. Three were generally dissatisfied, two were neu- tral, 16 were generally satisfied, and nine were very satisfied. As noted, changes are occurring through MAP-21 changes, SRIA, the 2013 National Review of the Emergency Relief Pro- gram, and other initiatives to engender closer FEMA-FHWA coordination. These changes are aimed at enhancing state DOT experiences with the FHWA ER and FEMA PA programs. Lack of sufficient staff and training at their LPAs Difficulty by LPAs in identifying federal-aid roadways Turnover issues at their own state DOTs State DOTs’ need for disaster assistance and training Smaller LPAs make payments to vendors using IOUs Submission of excessive FHWA ER documentation to make it audit-proof (requiring the state DOT to scan all received items to meet its agency policy of electronic storage of documents) TABLE 14 CHALLENGES TO SERVING LOCAL PUBLIC AGENCIES Reasons for project worksheet (PW) denials Inadequate documentation Ineligible items “Work site expense estimate was below minimum threshold” “Missing deadlines due to flooding events” “Lack of adequate documentation” “Contractor working on Time + Materials basis” “Changed SOW [scope of work] based on other agency requirements” “Determining whether one storm or the storms caused damages” Approval of equipment rates/unit prices (note that new post-SRIA procedures will provide more flexibility in equipment rates and unit prices) Reasons for detailed damage inspection report (DDIR) denials “Related events that occurred prior to the Governor’s proclamation were denied.” “Related events in rock fall areas caused difficulty in separating disaster related events from pre-disaster conditions.” TABLE 15 REASONS FOR DENIAL OF PROJECT WORKSHEET AND DETAILED DAMAGE INSPECTION REPORT