Columbia County Roads 

Department, Oregon, 

Needs Continued State 

and FEMA Assistance in 

Managing Its FEMA Grant 

February 1, 2017 

OIG-17-34-D 
 

 

 

DHS OIG HIGHLIGHTS 

Columbia County Roads Department, 

Oregon, Needs Continued State and 

FEMA Assistance in Managing Its FEMA Grant
 

February 1, 2017 

Why We Did 

This Audit 

The Columbia County Roads 

Department, Oregon 

(Department), expects to 

receive a $2 million FEMA 

grant for damages from the 

December 2015 flooding 

disaster. We conducted this 

audit early in the grant 

process to identify areas 

where the Department may 

need additional technical 

assistance or monitoring to 

ensure compliance with 

Federal regulations and 

FEMA guidelines. 

What We 

Recommend 

FEMA should direct the 

Oregon Office of Emergency 

Management (Oregon), as its 

grant recipient, to provide 

increased monitoring and 

technical assistance to the 

Department, to ensure the 

Department follows Federal 

regulations and FEMA 

guidelines and avoids 

misspending its $2 million 

grant award. 

For Further Information: 

Contact our Office of Public Affairs at 

(202) 254-4100, or email us at 

DHSOIG.OfficePublicAffairs@oig.dhs.gov 

What We Found 

We determined that the Department — 

x does not have written procurement policies 

and procedures that fully conform to Federal 

procurement standards; 

x is not accounting for direct administrative 

costs properly; and 

x had not yet initiated large permanent work 

projects. 

These findings occurred because Department 

officials were not adequately familiar with 

applicable Federal regulations and FEMA 

guidelines. In addition, Oregon is responsible for 

ensuring that its subrecipient (the Department) is 

aware of and complies with these requirements, as 

well as for providing technical assistance and 

monitoring grant activities. 

Because of our audit, the Department is revising 

its policies and procedures to comply with Federal 

requirements. However, it needs additional, 

ongoing assistance from Oregon and FEMA to 

ensure that it properly manages the $2 million 

FEMA grant it expects to receive. 

FEMA Response 

FEMA agreed with our findings and 

recommendations and provided us their written 

response on December 15, 2016 (see appendix C). 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Washington, DC 20528 / www.oig.dhs.gov 


February 1, 2017 


MEMORANDUM FOR: Kenneth D. Murphy 

Regional Administrator, Region X 

Federal Emergency Management Agency 

~'M-~ 

FROM: Thomas M. Salmon 

Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: Columbia County Roads Department, Oregon, Needs 

Continued State and FEMA Assistance in Managing Its 

FEMA Grant 

Audit Report Number OIG- 17-34-D 

We audited the capability of the Columbia County Roads Department, Oregon 

(Department), to manage Federal Emergency Management Agency (FEMA) 

Public Assistance grant funds. We conducted this audit early in the Public 

Assistance process to identify areas where the Department may need additional 

technical assistance or monitoring to ensure compliance with Federal 

regulations and FEMA guidelines. In addition, by undergoing an audit early in 

the grant cycle, grant subrecipients have the opportunity to correct 

noncompliance before they spend the majority of their grant funding. It also 

allows them the opportunity to supplement deficient documentation or locate 

missing records before too much time elapses. 

FEMA and the Oregon Office of Emergency Management (Oregon), the FEMA 

grant recipient, are evaluating the Department's damages to award funding for 

the December 2015 flooding disaster. The funds, when awarded, will provide 75 

percent Federal funding for debris removal, emergency protective measures, 

and permanent work. At the time of our audit, the Department had completed 

some of its small projects, including emergency work. Therefore, our audit 

primarily assessed the Department's written policies and procedures to 

account for and expend FEMA funds, as well as one contract the Department 

awarded for disaster-related work. 

www.oig.dhs.gov 1 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background
 

Columbia County, Oregon (County), borders the longest stretch of the 

Columbia River in the State of Oregon, which serves as a major route of oceangoing vessels and for recreational purposes. The County’s Roads Department 

maintains County roads, implements County ordinances, contracts for large 

projects, and obtains permits for work in environmentally sensitive areas. 

Between December 6 and 23, 2015, severe winter storms, straight-line winds, 

flooding, landslides, and mudslides damaged 44 road sites in the County. 

Figure 1: Disaster Damage, Holbrook Road; Columbia County, Oregon 

Source: Columbia County Roads Department 

To provide Federal assistance, the President signed a major disaster 

declaration (DR-4258-OR) on February 17, 2016, to provide Oregon and local 

governments assistance with recovery efforts for the incident period of 

December 6 through 23, 2015.1 The declaration authorized Federal assistance 

for Public Assistance in the designated areas and hazard mitigation throughout 

Oregon.2 

1 Federal Register, Major Disaster and Related Determinations, 81 Fed. Reg. 14873 (March 18, 

2016)
 2 FEMA’s Public Assistance Program awards grants to state, local, and federally recognized
 

tribal governments and certain private non-profit entities to assist them with the response to
 

and recovery from federally declared disasters. Hazard mitigation is any action taken to reduce
 

or eliminate long-term risk to people and property from natural hazards.
 

www.oig.dhs.gov 2 OIG-17-34-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Results of Audit
 

We determined that the Department — 

x does not have written procurement policies and procedures that fully 

conform to Federal procurement standards (finding A); 

x is not accounting for direct administrative costs properly (finding B); and 

x cannot yet initiate large permanent work projects more than 9 months 

after the disaster (finding C). 

These findings occurred because Department officials were not adequately 

familiar with applicable Federal regulations and FEMA guidelines. In addition, 

Oregon is responsible for ensuring that its subrecipient (the Department) is 

aware of and complies with these requirements, as well as for providing 

technical assistance and monitoring grant activities (finding D). 

Because of our audit, the Department is revising its policies and procedures to 

comply with Federal requirements. However, the Department needs additional, 

ongoing assistance from Oregon and FEMA to ensure that it properly manages 

the $2 million FEMA grant it expects to receive. 

Finding A: Procurement 

The Department’s written procurement policies and procedures do not conform 

to Federal procurement standards fully. We reviewed the Department’s written 

procurement policies and procedures, as well as its practices for the one 

contract ($87,876) for emergency repairs that it awarded, for compliance with 

Federal regulations. We determined that these policies and procedures do not 

adequately support the regulatory requirements at 2 Code of Federal 

Regulations (CFR) 200 and 44 CFR 13.36 for — 3 

x maintaining records detailing the significant history of the procurement 

(2 CFR 200.318(i) and 44 CFR 13.36(b)(9)); 

x maintaining a contract administration system and oversight to ensure 

contractors perform according to the conditions and specifications of the 

contract and any purchase orders (2 CFR 200.318(b) and 44 CFR 

13.36(b)(2)); 

x requiring and performing a cost or price analysis in connection with 

procurement actions (2 CFR 200.323 and 44 CFR 13.36(f)(1)); 

3 The Columbia County Board of Commissioners elected to exercise a grace period to postpone 

implementation of the procurement requirements of 2 CFR 200 until June 30, 2017. Therefore, 

they must comply with all applicable requirements of 44 CFR 13.36 until that date. 

www.oig.dhs.gov 3 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

x limiting the use of time-and-material contracts (2 CFR 200.318(j) and 44 

CFR 13.36(b)(10)); and 

x taking affirmative steps to ensure the use of small and minority firms, 

women’s business enterprises, and labor surplus area firms when possible 

(2 CFR 200.321 and 44 CFR 13.36(e)(1)). 

We reviewed the Department’s procurement practices associated with the 

emergency contract it awarded and determined that the practices also did not 

comply fully with the regulatory requirements at 2 CFR 200 and 44 CFR 13.36. 

The Department awarded this contract noncompetitively (i.e., sole source) on 

an unrestricted time-and-material basis, without — 

x documenting the basis for selection or justification for the 

noncompetitive award; 

x determining reasonableness through a cost or price analysis; 

x including a ceiling price that the contractor would exceed at its own risk; 

x documenting its oversight (monitoring) of the contractor’s work (i.e., 

through a contract administration system); and 

x documenting whether the contractor was suspended or debarred from 

federally funded work. 

Department officials told us they agree with our finding and said that they are 

in the process of revising the Department’s policies and procedures to include 

applicable Federal procurement requirements and plan to award all future 

work competitively, on a firm, fixed-price basis. They also provided us with a 

written explanation describing why they selected the emergency contractor 

noncompetitively; how they determined the contractor’s rates were reasonable; 

and the measures they implemented to control contract costs. Oregon and 

FEMA officials agreed with our finding. FEMA officials stated that they will 

continue to work with Department officials and Oregon to provide support and 

guidance as the Department revises its policies and procedures to ensure 

compliance with Federal procurement requirements. FEMA officials also stated 

that they will evaluate contract costs under the FEMA grant and only those 

costs determined to be reasonable will be eligible and awarded. 

Finding B: Direct Administrative Costs 

Department officials are not documenting and accounting for direct 

administrative costs properly, nor do they have policies and procedures 

instructing them how to do so. They told us that they record administrative 

costs as a percentage to each project, which Federal regulations and FEMA 

guidelines do not allow. 

Federal regulations and FEMA guidelines require grant subrecipients to — 

www.oig.dhs.gov 4 OIG-17-34-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

x maintain accounting records that adequately identify the source and 

application of Federal funds, and maintain source documentation to 

support those accounting records (2 CFR 200.302(a) and (b)(3)); and 

x track, charge, and account for costs directly to a specific eligible project 

for such costs to be eligible as direct administrative costs, and not charge 

costs to a project if they were previously allocated for the same purpose 

in similar circumstances to indirect costs (Public Assistance Program and 

Policy Guide, Cost Eligibility, FP 104-009-2, Section V(N)(2), January 

2016). 

Department officials agreed with our finding and said that they were not 

accounting for administrative costs properly because they were unaware of how 

to do so and need additional assistance from FEMA and Oregon. Oregon and 

FEMA officials agreed with our finding. FEMA officials stated that they will 

provide guidance to strengthen Oregon’s existing training efforts on the 

calculation of direct administrative costs for its FEMA grant subrecipients 

(including the Department). 

Finding C: Project Delays 

By the end of our fieldwork, the Department has not initiated any large 

permanent work projects, which affects the County’s overall recovery. These 

delays occurred because of requirements related to FEMA’s Environmental and 

Historic Preservation review and approval.4 

Federal regulations require grant subrecipients to complete permanent work 

within 18 months of the disaster declaration date (44 CFR 206.204(c)(1)). 

Because the President signed a major disaster declaration for FEMA Public 

Assistance on February 17, 2016, the Department has until August 17, 2017 

to complete the work. Consequently, the Department risks losing its Federal 

funding if it does not complete the work or obtain an approved extension by 

this date. Therefore, Oregon and FEMA should work with the Department to 

ensure project approval and completion as soon as possible. 

Department officials agreed with our finding, noting that they may have to 

postpone repairs until September 2017 because of various environmental 

requirements with which they must comply. They also told us that coordination 

with its Board of Commissioners and Oregon has required additional time. 

4 Environmental Planning and Historic Preservation approval ensures that FEMA's activities 

and programs related to disaster response and recovery, hazard mitigation, and emergency 

preparedness comply with Federal environmental and historic preservation laws and executive 

orders. 

www.oig.dhs.gov 5 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Oregon and FEMA officials agreed with our finding. FEMA officials stated that 

they anticipate the Department will provide any necessary and justified time 

extensions for these projects up to the 30-month regulatory allowance. Beyond 

that, FEMA will provide time extensions for these projects if extenuating 

circumstances justify additional time. FEMA officials also stated they would 

continue to focus efforts on assisting Oregon and the Department to complete 

the Department’s projects in an efficient and successful manner. 

Finding D: Grant Management 

The findings in this report demonstrate that Department officials did not 

always have an adequate understanding of Federal grant requirements related 

to procurement, accounting for administrative costs, and deadlines for project 

completion. Federal regulations require grant recipients to ensure that 

subrecipients are aware of Federal grant requirements and monitor 

subrecipient activities for compliance. They should also provide subrecipients 

training and technical assistance on program-related matters (2 CFR 200.331). 

Therefore, Oregon, as FEMA’s grant recipient, should strengthen its grant 

management procedures to ensure that its subrecipients comply with all 

applicable grant requirements. 

Department officials told us that our audit prompted them to begin corrective 

actions to comply fully with Federal regulations and FEMA guidelines. They 

also said that they could benefit from additional guidance from Oregon. Oregon 

and FEMA officials agreed with our finding. FEMA officials stated that they will 

continue to identify opportunities to partner with Oregon and the Department 

to strengthen existing policies and procedures related to Federal grant 

management, bolster effective monitoring of subgrant activities, and provide 

more thorough and targeted technical assistance to support Oregon's existing 

and substantial training and technical support capability related to FEMA 

grant subrecipients. In addition, FEMA officials noted that, as standard 

practice, they would review all costs submitted by the Department to ensure 

eligibility criteria and applicable Federal grant requirements are satisfied. 

Recommendations 

We recommend that the Regional Administrator, FEMA Region X: 

Recommendation 1: Disallow contract costs that do not comply with 

applicable Federal procurement standards, unless FEMA grants an exception 

to the administrative requirements as 2 CFR 200.102 allows and determines 

the costs are reasonable (finding A). 

www.oig.dhs.gov 6 OIG-17-34-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Recommendation 2: Direct Oregon to ensure the Department’s claims for 

direct administrative costs are fully documented and eligible in accordance 

with Federal regulations and FEMA guidelines (finding B). 

Recommendation 3: Direct Oregon to work with the Department to provide 

FEMA the documentation necessary for them to approve and fund its projects 

timely; obtain a time extension for the projects, if necessary; and assist its 

officials initiate and complete the projects efficiently (finding C). 

Recommendation 4: Direct Oregon to (1) assist the Department in developing 

appropriate policies and procedures for managing Federal grant funds; 

(2) increase monitoring of subgrant activities; and (3) provide additional 

technical advice and assistance to ensure the Department complies with all 

applicable Federal grant requirements — particularly those related to 

procurement, direct administrative costs, and project deadlines — to avoid 

improperly spending the $2,009,971 ($1,507,478 Federal share) in Public 

Assistance funding it expects to receive from FEMA (findings A, B, C, and D). 

Discussion with Management and Audit Follow-Up 

We discussed the results of our audit with Department, Oregon, and FEMA 

officials during our audit. We also provided a draft report in advance to these 

officials, and discussed it at exit conferences with FEMA on November 17, 

2016, and with Oregon, Department, and FEMA officials on November 23, 

2016. We included these officials’ comments, as applicable, in the body of this 

report, and FEMA’s written response (received on December 15, 2016) in 

appendix C. 

FEMA Region X officials provided a written response on December 15, 2016, 

agreeing with our findings and recommendations (see appendix C). The 

response indicated that FEMA has begun implementing its proposed corrective 

actions to address the recommendations. Therefore, we consider all four 

recommendations resolved but open. We will close the recommendations when 

we receive and review documentation that FEMA has completed its proposed 

corrective actions. Please email closeout documentation and request 

to Humberto.Melara@oig.dhs.gov. 

The Office of Emergency Management Oversight major contributors to this 

report are Humberto Melara, Director; Devin Polster, Audit Manager; and 

Ravi Anand, Senior Auditor. 

Please call me with any questions at (202) 254-4100, or your staff may contact 

Humberto Melara, Director, Western Regional Office, at (510) 637-1463. 

www.oig.dhs.gov 7 OIG-17-34-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope and Methodology 

We audited the capability of the Department (Public Assistance Identification 

Number 009-UR2PF-00) to manage FEMA Public Assistance grant funds. We 

audited FEMA Public Assistance grant funds awarded to the Department. Our 

audit objective was to determine whether the Department’s policies, 

procedures, and business practices are adequate to account for and expend 

FEMA Public Assistance Program grant funds according to Federal regulations 

and FEMA guidelines for FEMA Disaster Number 4258-DR-OR. 

The Department expects to receive a Public Assistance grant award of $2,009,971 

from Oregon, the FEMA grant recipient. The award will provide 75 percent 

FEMA funding for an estimated 4 large projects and 16 small projects (see table 

1).5 As of August 26, 2016, our audit cutoff date, the Department has not yet 

claimed costs for FEMA reimbursement. Our audit covered the period of 

December 6, 2015, the first day of the incident period, through August 26, 

2016, our audit cutoff date. We assessed the policies and procedures the 

Department used to account for and expend FEMA funds, and audited 

$176,282 of the $426,907 Department had expended on disaster-related 

expenditures by the end of our fieldwork (August 2016). 

To accomplish our objectives, we interviewed FEMA, Oregon, and Department 

officials; assessed the adequacy of the policies, procedures, and business 

practices the Department uses or plans to use to account for and expend 

Federal grant funds and to procure and monitor contracts for disaster work; 

judgmentally selected and reviewed procurement transactions; reviewed 

applicable Federal regulations and FEMA guidelines; and performed other 

procedures considered necessary to accomplish our objective. As part of our 

standard audit procedures, we also notified our Office of Information 

Technology Audits of the contract the subgrantee awarded under the grant 

that we reviewed to determine whether the contractors were debarred or 

whether there were any indications of other issues related to that contractor 

that would indicate fraud, waste, or abuse. As of the date of this report, the 

Office of Information Technology Audits’ analysis of the contract was ongoing. 

When it is complete, we will review the results and determine whether 

additional action is necessary. We did not perform a detailed assessment of the 

Department’s internal controls over its grant activities because it was not 

necessary to accomplish our audit objective. 

5 Federal regulations in effect at the time of the disaster set the large project threshold at 

$121,600 [Federal Register, Notice of Adjustment of Disaster Grant Amounts, 80 FR 61836; 

October 14, 2015]. 

www.oig.dhs.gov 8 OIG-17-34-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A (continued) 

Table 1: Department Projects and Anticipated Award Amounts 

Project 

Number6 

Category 

of Work7 

Anticipated 

Award 

Amount 

111* C $98,525 

261* C 23,535 

262* A 91,848 

269* A 56,645 

270* C 75,844 

271* C 76,821 

272 C 191,317 

273* C 100,626 

274 C 131,780 

275* C 47,432 

276* C 120,434 

277 C 148,042 

278 C 437,577 

279* C 77,446 

280* C 71,954 

281* C 28,406 

282* C 77,271 

283* G 64,786 

284* E 1,467 

357* C 88,215 

Total $2,009,971 

Source: Office of Inspector General (OIG) and Department project listing 

* Small Project 

We conducted this performance audit between August and November 2016, 

pursuant to the Inspector General Act of 1978, as amended, and according to 

generally accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based upon our 

audit objective. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based upon our audit objective. We 

6 The Department assigned these project numbers; FEMA will likewise assign numbers after
 

approving the Department’s projects. 

7 FEMA identifies type of work by category: A for debris removal, B for emergency protective
 

measures, and C–G for permanent work.
 

www.oig.dhs.gov 9 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A (continued) 

conducted this audit by applying the statutes, regulations, and FEMA policies 

and guidelines in effect at the time of the disaster. 

www.oig.dhs.gov 10 OIG-17-34-D 
 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

Potential Monetary Benefits 

Table 2: Summary of Potential Monetary Benefits 

Type of Potential Monetary Benefit Total Federal 

Share 

Questioned Costs – Ineligible $ 0 $ 0 

Questioned Costs – Unsupported 0 0 

Funds Put to Better Use (Cost Avoidance) 2,009,971 1,507,478 

Totals $2,009,971 $1,507,478 

Source: OIG analysis of findings in this report 

www.oig.dhs.gov 11 OIG-17-34-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

FEMA’s Comments to the Draft Report 

www.oig.dhs.gov 12 OIG-17-34-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued) 

www.oig.dhs.gov 13 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued) 

www.oig.dhs.gov 14 OIG-17-34-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Chief of Staff 

Chief Financial Officer 

Under Secretary of Management 

Executive Secretary 

Chief Privacy Officer 

Audit Liaison, DHS 

Federal Emergency Management Agency 

Administrator 

Chief of Staff 

Chief Financial Officer 

Chief Counsel 

Chief Procurement Officer 

Director, Risk Management and Compliance 

Associate Administrator for Policy, Program Analysis, and International Affairs 

Audit Liaison, FEMA Region X 

Audit Liaison, FEMA (Job Code G-16-038) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

External 

Director, Oregon Office of Emergency Management 

Audit Liaison, Oregon Office of Emergency Management 

Oregon Secretary of State, Audits 

Commissioners, Columbia County, Oregon 

Treasurer/Finance Director, Columbia County, Oregon 

Transportation Planner, Columbia County Roads Department, Oregon 

www.oig.dhs.gov 15 OIG-17-34-D 
 

 

 

 

 

 

 

ADDITIONAL INFORMATION AND COPIES 

To view this and any of our other reports, please visit our website at: www.oig.dhs.gov. 

For further information or questions, please contact Office of Inspector General Public Affairs 

at: DHS-OIG.OfficePublicAffairs@oig.dhs.gov. Follow us on Twitter at: @dhsoig. 

OIG HOTLINE 

To report fraud, waste, or abuse, visit our website at www.oig.dhs.gov and click on the red 

"Hotline" tab. If you cannot access our website, call our hotline at (800) 323-8603, fax our 

hotline at (202) 254-4297, or write to us at: 

Department of Homeland Security 

Office of Inspector General, Mail Stop 0305 

Attention: Hotline 

245 Murray Drive, SW 

Washington, DC 20528-0305