44 C.F.R. 206.253(b)(2) provides that if a facility that is insured under a blanket insurance policy is damaged in a similar (other than flood) future disaster; eligible costs will be reduced by the amount of eligible damage sustained on the previous disaster.Here; the $10;835.59 in costs to repair the facility in PW 5758 are ineligible because the Applicant utilized a blanket insurance policy at the time of the disaster and the same facilities that had funding reduced in PW 5758; sustained that amount in eligible damages in prior; similar; other than flood disasters.Section 705(c) of the Stafford Act bars FEMA from deobligating any payment to a State or local government if: (1) the payment was authorized in an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished. Further; FP 205-081-2; Stafford Act Section 705; Disaster Grant Closeout Procedures; states that this section applies even if FEMA later determines that it made an error in determining the eligibility of the previously awarded funding.FEMA concurs with the Applicant that the deobligation resulting from a prior loss insurance reduction is not a permitted project cost adjustment that is exempt from a section 705(c) analysis. Therefore; even though FEMA has determined that the previously awarded funding is ineligible; because all three conditions of section 705(c) are satisfied; it will reinstate the $10;835.59.

Terrebonne Par. Consol. Gov’t; FEMA-1786-DR-LA; at 3-4.44 C.F.R. § 206.253(b)(2) provides that if a facility that is insured under a blanket insurance policy is damaged in a similar (other than flood) future disaster; eligible costs will be reduced by the amount of eligible damage sustained on the previous disaster.Here; the $10;835.59 in costs to repair the facility in PW 5758 are ineligible because the Applicant utilized a blanket insurance policy at the time of the disaster and the same facilities that had funding reduced in PW 5758; sustained that amount in eligible damages in prior; similar; other than flood disasters.Section 705(c) of the Stafford Act bars FEMA from deobligating any payment to a State or local government if: (1) the payment was authorized in an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.  Further; FP 205-081-2; Stafford Act Section 705; Disaster Grant Closeout Procedures; states that this section applies even if FEMA later determines that it made an error in determining the eligibility of the previously awarded funding.FEMA concurs with the Applicant that the deobligation resulting from a prior loss insurance reduction is not a permitted project cost adjustment that is exempt from a section 705(c) analysis.  Therefore; even though FEMA has determined that the previously awarded funding is ineligible; because all three conditions of section 705(c) are satisfied; it will reinstate the $10;835.59.