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06/16/2020
Hurricane Season 2020: Real-time strategies for state and local governments to speed recovery and fiscal resiliency
COVID-19 has reminded the nation of the extensive financial distress that large-scale disasters can inflict on states and local jurisdictions. As we head into what the National Oceanic and Atmospheric Administration (NOAA) has predicted to be an “above-normal” Atlantic hurricane season, CohnReznick’s Emergency Management Advisory team offers weekly recommendations for state and local government officials charged with overseeing disaster response and cost recovery efforts. Follow these tips to maximize federal funding, minimize deobligations, and accelerate the overall pace of your disaster recovery programs.
Pre-Landfall
Added June 11
The 2020 Atlantic hurricane season is here.
Now is the perfect time to deliver an internal training focusing on the recordkeeping requirements of federally funded disaster recovery programs. Make sure to focus your training on these critical topic areas:
FORCE ACCOUNT DOCUMENTATION
Entities must provide detailed records to support their claimed costs when seeking federal assistance. Too often, organizations unsuccessfully attempt to roll out “disaster timesheets” amid response activities. Experience has taught us that when life-saving measures are underway, steering an organization’s attention to recordkeeping requirements is virtually unachievable. Train your staff on how to properly log their disaster time, as well as their equipment and material usage. Even better, if your timekeeping system is modifiable, work with your system administrators to preload department-specific disaster response activities.
Anything that reduces the burden of manually entering disaster-specific time is tremendously useful. Providing your staff with the ability to easily assign their time to a preloaded disaster activity can increase the accuracy of your reporting, and ultimately increase your ability to offset actual costs with federal funding.
DONATED RESOURCES
Remind your departments that FEMA allows the value of certain donated resources to offset your organization’s non-federal cost share.
Develop a form for tracking these donated resources. Educate your staff on the importance of the different data fields that must be captured. It is vital to provide FEMA with a description of the donation and how it was used in the performance of eligible work.
Need a refresher on donated resources? See FEMA’s policy here.
PROCUREMENT AND ADMINISTRATIVE POLICIES AND PROCEDURES
Ensure that your departments are up to date with their respective procurement, labor, and insurance policies.
As a condition to receiving federal funding, your entity will be required to demonstrate that it followed the same policies and procedures that were in place prior to the disaster.
Deviations from pre-disaster policy will require justification and often result in delays to grant awards, or worse, the disqualification of otherwise eligible costs.
Review our article Weathering the Financial Storm to make sure you steer clear of these pitfalls.
MUTUAL AID
Educate your staff on FEMA policy regarding mutual aid. Somewhat counterintuitively, FEMA provides reimbursement to the entity that receives aid, not the providing entity. Accordingly, your organization must document and track its mutual aid agreements and the costs associated with those response functions.
Underscore the importance of documenting services requested and any post-incident agreements. The “Requesting Entity” must be able to provide a description of the services received, along with documentation of associated costs.
EMERGENCY OR EXIGENCY PROCUREMENT IMPLEMENTATION
Emphasize the FEMA requirement for local jurisdictions to document the specific emergency or exigency conditions that required your organization to complete a noncompetitive procurement of services, equipment, or materials. It is insufficient to justify a noncompetitive procurement by arguing that the procurement occurred within the disaster’s “incident period.”
Landfall
Added June 16
As we move further into the 2020 Atlantic hurricane season, now is the time to ensure that your organization is equipped to immediately and accurately track and document emergency measure activities. Keep the topics below in mind as a hurricane makes landfall to ensure that your organization maximizes forthcoming federal funding.
DEBRIS REMOVAL
Ensure that your departments have reviewed your debris management plan and are aware of the standard procedures for debris clearance, removal, and disposal operations.
If debris will be removed using force account labor, ensure that your staff is aware of their recordkeeping requirements.
If debris causes an immediate public health concern and your organization must perform an emergency procurement to hire a debris removal vendor, remember that FEMA will require documentation justifying this noncompetitive procurement. Review FEMA’s fact sheet on exigent or emergency procurement here.
Lastly, FEMA requires monitoring of all contracted debris removal operations to ensure that the quantities and work claimed are accurate and eligible. Don’t jeopardize potential federal funding by failing to maintain debris monitoring records.
RELOCATION OF ESSENTIAL SERVICES
If the hurricane destroys or renders an essential facility inoperable, FEMA will require confirmation that your organization chose the most cost-effective option for relocation, whether that is to lease, purchase, or construct a new facility. Be prepared to provide FEMA with your cost analysis to avoid a disqualification for federal funding.
Post Landfall -Short Term Recovery
After a hurricane makes landfall, state and local governments will be immersed in recovery and clean-up efforts. Below are a few thoughts for government entities during this phase of recovery.1. MUTUAL AID
The 2020 hurricane season will be unique as first responders face an additional challenge – exposure to coronavirus. With the pandemic looming in the background, infection control policies and procedures must be implemented, and extra PPE costs should be expected during the performance of emergency work.
Will it be more difficult to obtain mutual aid from neighboring states and jurisdictions this season? Perhaps.
Depending on infection rates in their respective jurisdictions, states, territories, and local governments may lack the capacity to share resources with their neighbors. Therefore, there may be a greater dependence on Direct Federal Assistance this hurricane season.
2. DIRECT FEDERAL ASSISTANCE
When Direct Federal Assistance (DFA) is requested from FEMA, a “mission assignment” may be ordered to provide the requesting state with federal resources required to save lives and preserve public health or safety.
Before any mission assignment can commence, a FEMA-State agreement must be signed, and a statement of work cost estimate must be prepared. If states intend to rely heavily on DFA this hurricane season, they must also be prepared for the extra time and effort that go into making these requests. States must also keep in mind DFA cost shares will mirror the cost share of its corresponding presidentially declared disaster.
3. SHELTERING
To mitigate the risks of COVID-19 spread, non-congregate sheltering will be vital during the 2020 hurricane season. FEMA does not provide specific guidelines on the appropriate length of time an individual should be non-congregate sheltering. Instead, local jurisdictions should act in accordance with direction from state and local health officials.
States and local jurisdictions must maintain tracking mechanisms to establish eligibility and costs for individuals that’ve tested positive, have been exposed, or are at reasonable risk of having been exposed. To qualify for federal funding, states and local governments must be able to provide FEMA with the exact length of stay’s and costs for each individual placed in non-congregate sheltering.
Long-Term Recovery and Redevelopment
The weeks following a hurricane are always a stark reminder of the challenges that communities face in mitigating damages and costs from the increased frequency and severity of disaster impacts. Building resilience and sustainability should be the focus for communities actively engaged in short- and long-term recovery operations. It is important to identify all opportunities to implement solutions that will help increase community resilience and rebuild in a long-term post-recovery environment.1. PREPARING COMMUNITIES FOR HAZARD MITIGATION GRANT PROGRAM (HMGP) FUNDING
The objective of HMGP is to improve resiliency against future events by reducing the risk of loss from future disasters. To participate in HGMP, a state, tribal, or local government must develop and adopt a hazard mitigation plan. Jurisdictions are required to update these plans and submit to FEMA for approval every five years.
Developing a hazard mitigation plan will help states and communities identify the risks of a potential disaster and the work needed to reduce those risks. With a well-developed hazard mitigation plan, jurisdictions will be prepared to participate in the HMGP program and rebuild a resilient community.
In the aftermath of a disaster, communities can align the sustained damages with activities identified in the hazard mitigation plan, which will provide a roadmap toward long-term recovery.
For more information, review our previous insights on how to optimize the value of HMGP and other funding sources.
2. LOOKING TO OTHER FUNDING SOURCES
Communities can rely on numerous sources of funding to help build resiliency after a disaster. Knowing all of your options and becoming familiar with the funding sources available to your state, agency, or project is critical to maximizing funding of your mitigation and resiliency efforts.
In the wake of a major disaster declaration, Congress may appropriate additional Community Development Block Grant – Disaster Recovery (CDBG-DR) funding to help communities recover. This flexible funding source supports a broad range of recovery activities, giving communities the opportunity to rebuild stronger.
In addition, new programs such as the Community Development Block Grant – Mitigation (CDBG-MIT) Program and the Building Resilient Infrastructure and Communities (BRIC) Program provide federal funding to communities undertaking projects to reduce disaster risk and future losses. States and communities should consider lobbying their local representatives to ensure that their interests are being properly conveyed to Congress.
3. PLANNING AHEAD FOR FUTURE DISASTERS
The road to long-term recovery requires communities to optimize their opportunities for disaster funding. In the wake of disaster, state and local governments incur significant costs that can affect the entity’s ability to operate effectively. It is crucial for state and local governments to plan and implement effective disaster financial management practices.
FEMA released the Disaster Financial Management Guide in April with the specific intention of helping communities lessen the financial and operational impacts of a disaster.
Contact
Frank Banda, CPA, CFE, CGMA, PMP, Managing Partner – Government and Public Sector Advisory
301.280.1856
Subject matter expertise
Frank Banda
CPA, CFE, PMP, Managing Partner – Government and Public Sector Advisory
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This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.