**STATE OF FLORIDA**

**COMPARISON ANALYSIS FOR**

**STATE MANAGEMENT COSTS INTERIM RULE (1660-AA21)**

In order to better determine the financial impact of the Fixed Rate
State Management Costs (current formula) for the Public Assistance
Program (PA), the **State of Florida** compared the current fixed rate
to ten years of prior year disaster State Management Costs and
administrative sliding scale costs.  This comparison does not calculate
funding provided to Sub-grantees through the administrative Allowance.
Based on the comparative analysis, the **State of Florida** recommends
the following increase in Fixed Rate for Disasters and supporting
rationale:

1.  The SMC Fixed Rate for Disasters should be increased to a range of
3.34% to 10% to cover the Grantee\'s actual documented costs, in
addition to providing adequate funding to Sub-grantees to assist with
administering and managing local Public Assistance projects in
catastrophic disasters.  As per the Grantee\'s analysis, the SMC Fixed
Percentage Rate should be at least 5% to 7% to cover the Grantee\'s
actual documented SMC costs for normal disasters costing up to
\$500,000,000.

            2.  In Florida, the current 3.34 Fixed SMC rate would not
provide sufficient funding for disasters in excess of \$1 Billion, as
has been documented through the use of contractual services during
Fiscal Years 2004 and 2005 Hurricane Seasons in Florida and currently
being used to assist in the administration of the Public Assistance
Program for eighteen (18) open disasters. 

            3.  In catastrophic events, the Grantee and Sub-grantee
would be required to obtain contractual services, and the current 3.34
Fixed Rate would be substantively inadequate to fund the Public
Assistance Program when required to adhere to the current rules and
regulations as outlined in 44 CFR 206, 44 CFR Part 13, 44 CFR Part 14,
OMB Circular A-87, and all the other Federal Emergency Management Agency
Disaster Assistance Policies and Disaster-Specific Guidance.

            In summary, the **State of Florida** recommends a SMC Fixed
Rate of 3.34% to 10%, based upon our management and administrative costs
documented for current and prior year disaster recovery activities.  For
catastrophic disasters, the \$20 million SMC cap would be insufficient
to provide for needed contractual services and to pass through funding
to Sub-grantees. Additionally, the lock-mechanism should be eliminated
and replaced with the total SMC Fixed Rate percentage being provided on
the State\'s letter of Credit for drawn down, as appropriate, from the
State Smartlnk Account. With the present lock-in system, the Grantee is
required to operate and administer the program with state funds for two
to three months without funds to hire or increase staff as needed by the
disaster.  The Grantee should be free to add and reduce staff, enter
into contracts for assistance, develop and maintain electronic databases
and acquire needed supplies and equipment to administer the PA Program
as necessary without undue FEMA pre-authorization and approval delays
subject primarily to application of reasonableness, as per the OMB
Circular A-87 standards.  The Grantee acknowledges its responsibilities
upon execution of the State and Federal Disaster Assistance Agreement,
and therefore should be able to fully account for the use of all SMC
funds through the Quarterly Report requirement, Interim and Final
Inspection Closure per 44 CFR, Part 13, OMB Circular A-87, and the
Single Audit Act, Part 14.

The **State of Florida** is administering FEMA's Program, and therefore
FEMA should pay all State costs for administration of the program
without unnecessary rules and regulations that delay or hinder the
recovery process.