44 C.F.R. § 206.253(b)(2) provides that if a facility insured under a blanket insurance policy is damaged in a future similar other than flood disaster, eligible costs will be reduced by the amount of eligible damage sustained in the previous disaster. The RA correctly determined that FEMA was required to reduce eligible costs by the amount of prior eligible damage sustained in the previous similar other than flood disaster because the Applicant used blanket coverage to meet its prior insurance requirement. Stafford Act § 705(c) bars FEMA from deobligating any payment to a State or local government if the payment was authorized in an approved agreement specifying the costs, the costs were reasonable, and the purpose of the grant was accomplished. FEMA Recovery Policy FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, states FEMA will adjust and correct funding based on supported costs (e.g., insurance reductions applied to prevent duplicated benefits) prior to determining if Stafford Act § 705(c) applies. The Applicant correctly argues that prior loss reductions do not fall within the category of project cost adjustments that are excluded from the protections of Stafford Act § 705(c). In addition, FEMA is barred from recovering the previously obligated funds because all three conditions of Stafford Act § 705(c) are met. Conclusion The appeal is granted, and $5,928.44 in funds will be reinstated.

Stafford Act §§ 406(f)(1), 705(c) 44 C.F.R. §§ 206.228(a)(2)(ii), 206.253(b)(2). FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures, at 2, 4–5. PA Guide, at 97. 44 Fed. Reg. 64560. Terrebonne Par. Consol. Gov’t, FEMA-1786-DR-LA, at 3–4 (Sept. 26, 2014). Broward Cty. Sch. Bd. of Fla., FEMA-1609-DR-FL, at 6–7 (Nov. 28, 2018).