FEMA cannot extend the POA for the Recipient to expend management funds beyond October 19, 2021. Therefore, this appeal is denied. Appeal Letter SENT VIA EMAIL Dawn Brantley Director Massachusetts Emergency Management Agency 400 Worcester Road Framingham, Massachusetts 01702-5399 Re: Second Appeal – Massachusetts Emergency Management Agency, PA ID: 000-UUHQZ-00, FEMA-4379-DR-MA, Grants Manager Project (GMP) 73882/Project Worksheet (PW) 73 – Direct Administrative Costs and Management Costs Dear Dawn Brantley: This is in response to the Massachusetts Emergency Management Agency’s (Recipient) letter dated September 20, 2024, appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s denial of the Recipient’s request to extend the Period of Availability (POA) to expend Public Assistance (PA) management cost funds. As explained in the enclosed analysis, I have determined that FEMA cannot extend the POA beyond October 19, 2021, which was 180 days after the latest performance period date of a non-management cost PA project. Therefore, this appeal is denied. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals. Sincerely, /S/ Robert M. Pesapane Director, Public Assistance Enclosure cc: Lori Ehrlich Regional Administrator FEMA Region 1 Appeal Analysis Background From March 13 through 14, 2018, a severe winter storm and snowstorm caused damage in the Commonwealth of Massachusetts.[1] FEMA prepared Grants Manager Project 73882/Project Worksheet (PW) 73 as a Category Z project to document management costs incurred by the Massachusetts Emergency Management Agency (Recipient) to administer the Public Assistance (PA) award for the event on behalf of applicants that incurred eligible expenses. In accordance with federal regulation, the Recipient could expend management cost funds during the period of availability (POA), which in this case is 180 days after the latest period of performance (POP) date of a non-management cost (non-Category Z) project.[2] The POP is the time during which an applicant may incur new obligations to carry out the work authorized under the Federal award.[3] On August 31, 2023, the Recipient sent FEMA a request to extend the POA from its current May 30, 2023 deadline, to May 30, 2024. The Recipient also noted that it may require additional extensions should one applicant, the City of Melrose, choose to appeal a pending Determination Memorandum (DM) for PW 234 (hereinafter referred to as “the Melrose project”). On September 6, 2023, FEMA issued a DM for the Melrose project, finding it to be ineligible. On September 25, 2023, after receiving confirmation from the City of Melrose that it did not intend to appeal the DM, the Recipient submitted an amended POA extension request to extend the deadline until December 31, 2023. On February 29, 2024, FEMA Region 1 denied the request, explaining that since the Melrose project was found to be ineligible, the last eligible project completion deadline/POP was not tied to the Melrose project. Instead, the last eligible project completion deadline/POP was that of the City of Everett’s PW 319 (hereinafter referred to as “the Everett project”). Since the Everett project’s POP ended on April 22, 2021, the Recipient could claim management costs incurred no later than 180 days after that date, which was October 19, 2021. As such, FEMA found there was no basis to provide an extension of the POA until December 31, 2023. First Appeal On April 29, 2024, the Recipient submitted a first appeal, disagreeing with FEMA’s decision to align the POA with the Everett project’s POP as a result of the Melrose ineligibility finding. The Recipient asserted that FEMA’s application of its management costs policy was inconsistent with the regulatory intent of Title 2 of the Code of Federal Regulations (2 C.F.R.) section 200.343, which states that certain costs during a suspension or after termination of a Federal award or subaward are allowable if, among other requirements, the costs result from financial obligations incurred before the suspension or termination. The Recipient acknowledged that the regulation did not address the specific situation on appeal but stated that it indicated clear intent to reimburse recipients for legitimately incurred management costs.The Recipient explained that it incurred management costs for other open applicant projects, including for the Everett project during the eight-month period that it took FEMA to issue the DM for the Melrose project. Thus, the Recipient requested that FEMA extend the POA until September 7, 2023, the date it received the Melrose DM, and award management costs accordingly. The Recipient acknowledged that the time extensions granted to the Melrose project allowed the Recipient to prioritize other projects and other disasters, including the coronavirus (COVID-19) pandemic. The Recipient stated that it would have prioritized closeout activities for this disaster within the original POA had it not been anticipating further review and extension of the Melrose project. On July 22, 2024, the FEMA Region 1 RA denied the first appeal, explaining that it could not extend the POA without there being a corresponding POP extension of a non-management cost project to trigger a later POA date. FEMA added that the Recipient stated in its first appeal that it chose to prioritize other projects and other disasters on the basis that the POA for this disaster would be extended due to the prolonged work completion timeline of the Melrose project, thus delaying the timely closeout of other projects within the disaster. FEMA stated that 2 C.F.R. section 200.343 did not apply in this case, explaining that the regulation applied to suspension and termination, and FEMA did not suspend or terminate the Melrose project, but rather determined that the work was not eligible for PA. Therefore, FEMA stated that there was no opportunity available to the Recipient to receive management cost funding under the provision at 2 C.F.R. section 200.343. Second Appeal On September 20, 2024, the Recipient submitted a second appeal, reiterating prior arguments. The Recipient emphasizes that it does not request management costs incurred after FEMA determined that the Melrose project was ineligible, but rather only those management costs incurred while the Melrose project was still considered an eligible project. The Recipient states that denying funding to properly administer grants (whether or not they are subsequently determined to be eligible projects) is contrary to the regulatory intent of 2 C.F.R. section 200.343, as evidenced by the clarification made to 2 C.F.R. section 200.309 in 2020.[4] Therefore, the Recipient requests that FEMA extend the Melrose project’s POP to September 6, 2023, the date of the Melrose DM, which would effectively extend the POA until March 5, 2024 (180 days after September 6, 2023) and allow the Recipient to retain $120,738.54 in management costs. Discussion FEMA is authorized to provide PA funding for management costs.[5] However, Federal regulation places a limit on the POA.[6]For major disaster declarations, the recipient may expend management cost funds for allowable costs for a maximum of eight years from the date of the major disaster declaration or 180 days after the latest performance period date of a non-management cost PA project respectively, whichever is sooner.[7] The POA for management costs may be extended only at the recipient’s written request, with the recommendation of the RA, and with the approval of the FEMA Chief Financial Officer.[8] Here, the Recipient anticipated that FEMA would extend the Melrose project’s POP, making it the last non-management cost project, which would in turn extend the POA for the Recipient to expend management funds. Thus, the Recipient states that it focused on working on other disasters and delayed processing and closing out projects under this disaster. However, FEMA ultimately found the Melrose project to be ineligible, issuing a DM on September 6, 2023. The Recipient argues that it should be able to claim management costs based on that date pursuant to 2 C.F.R. section 200.309, as a version of the regulation promulgated after the disaster states that if a termination occurs, the POP will be amended to end upon the effective date of termination. Yet, the version of the regulation that the Recipient refers to was not in effect at the time of the disaster, and nevertheless, FEMA found that the scope of work completed for the Melrose project was not eligible.[9] Additionally, the FEMA Region 1 RA denied the Recipient’s POA extension request, and FEMA cannot extend the POA without the RA’s recommendation. Consequently, the Recipient can only expend management funds up to October 19, 2021, which was 180 days after the latest POP of a non-management cost project (Everett’s) ended on April 22, 2021. Therefore, any management costs expended after October 19, 2021, are ineligible for PA. Conclusion