Large sections of the United States were recently devastated by extraordinary rainfall, producing widespread flooding in many local areas. The impact has been significant: overflowing rivers, closed and damaged roads, car accidents, damaged and destroyed buildings and homes, disrupting the lives of thousands of citizens.
Governments that have not typically had to worry about disaster recovery must now put it front and center on their agenda. One area of disaster recovery that poses a particular challenge is compliance with the accounting, documentation and operational requirements that accompany the award of disaster recovery aid. Expectations for federal awards are high, with requirements coming from the Federal Emergency Management Agency (FEMA), Uniform Guidance, federal cost principles, and the Public Assistance Program and Policy Guide (PAPPG).
Fortunately, there are several steps you can take now to meet these requirements if and when aid becomes available.
Monies spent on labor during disaster recovery efforts are subject to extensive documentation requirements, and some employees (including certain salaried workers) may not be eligible for certain funding. Governments can find it difficult to accurately track hours and expenses throughout the recovery process in accordance with these rules, and to ensure charges are appropriately identified in reports.
What you can do now
Unless urgent or emergency circumstances dictate otherwise, procurement for disaster recovery projects usually need to be conducted through a fully competitive, open bidding process. Guidelines also exist for the replacement of existing inventory and documentation requirements are extensive.
What you can do now
Governments are required to use either the FEMA rates or their own local rates (whichever is lower) when using their own equipment for recovery activities. They are also required to maintain a list of equipment and vehicles on hand, document their condition before and after the event and track equipment’s use by individual personnel.
What you can do now
Claims must be supported by documentation of costs incurred under federal programs. Governments are required to establish and maintain internal controls over awards — this includes maintenance of records and verification that expenditures are authorized under the scope of work. Duplication of cost recovery from multiple sources is also prohibited.
What you can do now
Baker Tilly has a host of resources and services available to you. At our Disaster Recovery Resource Center, you will find more knowledge sharing on disaster recovery topics and Baker Tilly’s disaster recovery service portfolio for government entities, which includes awards oversight, auditing assistance, record keeping and monitorship services to address many of the challenges mentioned here.
Diligent accounting today is key to future cost recovery.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.