FEMA Should Disallow 

$2.0 Million of $3.59 

Million Awarded to 

Stratford, Connecticut 

January 9, 2017 

OIG-17-18-D 
 

 

DHS OIG HIGHLIGHTS 

FEMA Should Disallow $2.0 Million of 

$3.59 Million Awarded to Stratford, Connecticut 

January 9, 2017 

Why We Did 

This Audit 

The Town of Stratford, 

Connecticut (Town) 

received a $3.59 million 

Public Assistance grant 

award from the 

Connecticut Division of 

Emergency Management 

and Homeland Security 

(Connecticut), a Federal 

Emergency Management 

Agency (FEMA) grantee, 

for damages from 

Hurricane Sandy in 

October 2012. 

What We 

Recommend 

FEMA should disallow 

$2.0 million of ineligible 

or unsupported costs 

and request Connecticut 

to work with Town 

officials to ensure their 

understanding and 

compliance with Federal 

procurement standards 

and documentation 

requirements. 

For Further Information: 

Contact our Office of Public Affairs at 

(202) 254-4100, or email us at 

DHS-OIG.OfficePublicAffairs@oig.dhs.gov 

What We Found 

The Town did not always account for and expend FEMA 

grant funds according to Federal regulations and FEMA 

guidelines. Therefore, FEMA should disallow $2.0 million of 

$3.59 million in grant funds awarded to the Town. 

Specifically, the Town did not follow Federal procurement 

standards in awarding $2.0 million for the 13 contracts we 

reviewed. In addition, the Town did not provide sufficient 

documentation to support more than half of these costs and 

claimed some costs twice. 

These findings occurred primarily because of Town officials’ 

limited familiarity with Federal regulations and FEMA 

guidelines. However, Connecticut, as FEMA’s grantee, is 

responsible and should have done more to ensure the Town 

was aware of and complied with Federal requirements. 

FEMA Response 

FEMA officials agreed with our findings and 

recommendations. Appendix C includes FEMA’s written 

response in its entirety. 

www.oig.dhs.gov OIG-17-18-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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


January 9, 2017 


MEMORANDUM FOR: Paul F. Ford 

Regional Administrator, Region I 

Federal Emergency Management Agency 

~'M·~ 

FROM: Thomas M. Salmon 

Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: FEMA Should Disallow $2.0 Million of$3.59 Million 

Awarded to Stratford, Connecticut 

Audit Report Number OIG-17-18-D 

We audited Public Assistance grant funds awarded to the Town of Stratford, 

Connecticut (Town). The Connecticut Division of Emergency Management and 

Homeland Security (Connecticut), a Federal Emergency Management Agency 

(FEMA) grantee, awarded the Town $3.59 million for damages from Hurricane 

Sandy that occurred in October 2012. The award provided 75 percent FEMA 

funding. We audited nine projects totaling $3.58 million, or 99.7 percent of the 

total award (see table 4 in appendix A).1 At the time of our audit, the Town had 

completed work on all its projects and had submitted final claims to 

Connecticut for expenditures under those projects. 

Background 

The Town of Stratford is located in Fairfield County, Connecticut. Hurricane 

Sandy's high winds and widespread landfall caused severe storm surge, 

flooding, structural damages, and loss of power to homes and businesses. The 

storm also blocked roads with debris and downed power lines. 

1 For the nine projects we audited, the Town did not receive any insurance proceeds. 

www.oig.dhs.gov 1 OIG-17-18-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Figure 1: Downed Tree Limbs Blocking Road Access 

Source: Town of Stratford, Connecticut 

Results of Audit 

The Town did not always account for and expend FEMA grant funds according 

to Federal regulations and FEMA guidelines. Therefore, we question 

$2.0 million of the $3.58 million in costs we reviewed as ineligible or 

unsupported. 

Specifically, the Town did not follow Federal procurement standards in 

awarding $2.0 million for the 13 contracts we reviewed,2 which included 

$987,314 for exigent work and $967,963 for non-exigent work. The Town did 

not properly obtain contracted goods and services through full and open 

competition, take required steps to provide opportunities to disadvantaged 

businesses such as small and minority firms, or abide by other procurement 

standards. In addition, the Town did not provide sufficient documentation to 

support more than half of these costs and claimed some costs twice. We 

generally do not question the eligibility of costs necessary to save lives and 

property immediately after a disaster. However, Federal cost principles require 

supporting documentation for all costs regardless of the type of work. 

Therefore, we question $967,963 for non-exigent work as ineligible and 

2 We concluded the purchase orders and vouchers the Town used to conduct business are 

contracts because they contained all four key elements of a contract. Specifically, they 

contained an offer, acceptance, consideration, and legal intent. 

www.oig.dhs.gov 2 OIG-17-18-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

question the remaining $987,314 the Town claimed for exigent work as 

unsupported. We also question $15,600 of equipment costs the Town claimed 

twice. 

These findings occurred primarily because of Town officials’ limited familiarity 

with Federal regulations and FEMA guidelines. However, Connecticut, as 

FEMA’s grantee, is responsible and should have done more to ensure the Town 

was aware of and complied with Federal requirements. 

Finding A: Improper Contracting 

The Town did not follow Federal procurement standards in awarding 

$2.0 million for the 13 contracts we reviewed, which included $987,314 for 

exigent work and $967,963 for non-exigent work. As a result, full and open 

competition did not always occur, which increased the risk of fraud, waste, and 

abuse and decreased opportunities for disadvantaged firms, such as small and 

minority firms, to compete for federally funded work. In addition, because 

competition was inadequate, FEMA has no assurance that costs were 

reasonable. 

We question all of the non-exigent work totaling $967,963 as ineligible. 

However, 44 Code of Federal Regulations (CFR) 13.36(d)(4)(i) allows an 

exception to competition when the public exigency or emergency for the 

requirement will not permit a delay resulting from competitive solicitation. 

Therefore, we do not question the eligibility of the $987,314 the Town claimed 

for exigent work because lives and property were at risk.3 

Federal procurement standards at 44 CFR 13.36, in part, require that 

subgrantees — 

1.	 conduct procurement transactions in a manner providing full and open 

competition (44 CFR 13.36(c)(1)); 

2.	 take all necessary affirmative steps to assure the use of small and minority 

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

possible (44 CFR13.36(e)(1)); and 

3.	 include required provisions in contracts (44 CFR 13.36(i)). 

3 Although we are not questioning as ineligible any of the $987,314 the Town claimed for 

contracts associated with exigent work on the basis of a violation of 44 CFR 13.36, we do 

question all of the $987,314 as unsupported in finding B. 

www.oig.dhs.gov 3 OIG-17-18-D 
 

 

 

 

 

 

 

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 1 summarizes the 13 contracts we reviewed and identifies the violations 

with the preceding list of four procurement standards. 

Table 1: Violations of Federal Procurement Standards 

Notes 

Contract 

Number 

Contract 

Award 

Amount 

Exigent 

Work 

NonExigent 

Work 

Violations 

1 2 3 

1 2011-017 $ 225,367 $ 0 $ 225,367 X X

 2012-044 11,600 0 11,600 X X 

1 2012-077 529,501 514,201 15,300 n/a X 

1 2012-082 141,400 0 141,400 X X 

2013-036 322,891 0 322,891 X X 

2013-081 89,090 0 89,090 X X 

3 98701 50,000 0 50,000 X X X 

3 98702 233,640 233,640 0 n/a n/a X 

3 98703 139,473 139,473 0 n/a n/a X 

3 98705 100,000 100,000 0 n/a n/a X 

3 172073 31,608 0 31,608 X X X 

3 172075 19,343 0 19,343 X X X 

1, 2, 

3 Multiple 61,364 0 61,364 X X X 

Totals $1,955,277 $987,314 $967,963 4 9 13 

Source: Office of Inspector General (OIG) analyses of Town data 

1.	 Although the Town did not take all required steps to ensure opportunities to 

disadvantaged firms, the Town awarded these four contracts to women-owned or small 

business enterprises. 

2.	 The Town used multiple purchase orders and vouchers to procure professional services 

that one contractor provided for dock repair and pier reconstruction work. 

3.	 The Town asserted its 13 project worksheets were provided under 5 separate bids, 

purchases, or contracts. In our review, we did not find sufficient evidence to confirm 

this purchase order or voucher was associated with a particular bid. Therefore, we 

concluded the purchase order or voucher is a contract because it contained all four key 

elements of a contract (offer, acceptance, consideration, and legal intent). 

Full and Open Competition 

The Town did not provide full and open competition in awarding 4 of 

13 contracts we reviewed. As table 2 shows, these four contracts totaled 

$162,315. Without full and open competition, FEMA has little assurance that 

contract costs are reasonable. Full and open competition usually increases the 

number of bids received and thereby increases the opportunity for obtaining 

reasonable pricing from the most qualified contractors. It also helps discourage 

and prevent favoritism, collusion, fraud, waste, and mismanagement of Federal 

funds. 

www.oig.dhs.gov 4 OIG-17-18-D 
 

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 2: Four Non-competitive Contracts 

Contract 

Number Amount 

Exigent 

Work 

NonExigent 

Work Description of Work 

1 98701 $ 50,000 $0 $ 50,000 

Repair concrete sidewalks and 

masonry fire pits, and install 

concrete deck at a beach 

2 172073 31,608 0 31,608 

Install washed away sand berm at 

a beach 

3 172075 19,343 0 19,343 

Strip sand and vegetation at a 

beach bath house 

4 Multiple 61,364 $0 61,364 

Architectural, engineering, and 

project management for dock 

repair and pier reconstruction 

Totals $162,315 $0 $162,315 

Source: OIG analyses of Town data 

Contracts 1, 2, and 3. The Town awarded these three contracts totaling 

$100,951 without soliciting bids or rate quotes from any other sources.4 The 

Town hired the contractor to repair concrete sidewalks and masonry fire pits 

and to install a concrete deck at a beach, install a washed away sand berm, 

and to strip sand and vegetation from a beach bathhouse. We determined the 

work was non-exigent because lives and property were not at risk. 

Furthermore, the contractor did not submit two of its three quotes to the Town 

to perform the work until approximately 6 months after Hurricane Sandy. 

Instead of soliciting competitive proposals or quotes, the Town’s Mayor 

approved a waiver of the competitive bidding process on these three contracts. 

When an emergency exists, the Town’s Administrative Policy Manual Number 

8.0, (III)(6)(c) Emergency Purchases, authorizes the Mayor to allow the 

Purchasing Department to waive the requirement of using competitive bidding 

for purchases, if doing so is in the Town’s best interest. While the Town 

contended that an emergency existed, we do not agree that the circumstances 

were exigent and warranted non-competitive contracting. 

Contract 4. The Town also awarded $61,364 for professional services without 

soliciting bids or rate quotes from any other sources. The Town used an 

architectural firm, in conjunction with a structural engineering firm, for 

engineering design and project management on three pier projects totaling 

$61,364. Federal procurement standards at 44 CFR 13.36(b)(1) allow 

subgrantees to use their own procurement procedures providing that, at a 

minimum, they conform with applicable Federal regulations at 44 CFR 

13.36(b)–(i). Section 14-4(B) of the Town’s Charter and Administrative Policy 

4 For procurements less than the simplified acquisition threshold (currently $150,000), 

subgrantees must obtain price or rate quotes from an adequate number of qualified sources 

(44 CFR 13.36(d)(1)). 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Manual No. 8.0, (III)(6)(a) Professional Services, states, “Competitive bidding 

shall not be required for contracts for professional services.” Although the 

Town followed its own procurement procedures, those procedures did not 

conform to applicable Federal procurement regulations that require 

competition for professional services contracts. A Town official explained that 

the Town solicited architectural services in 2010 and decided to use the same 

architectural firm on this project. 

Small and Minority Firms, Women’s Business Enterprises, and Labor Surplus 

Area Firms 

The Town did not take the required affirmative steps to ensure the use of small 

and minority firms, women’s business enterprises, or labor surplus area firms 

whenever possible for any of the nine contracts we reviewed that did not 

involve exigent work. Federal regulations require subgrantees to, at minimum, 

take the following six specific steps to assure the use of these types of 

disadvantaged firms whenever possible: 

1. place qualified small and minority businesses and women’s business 

enterprises on solicitation lists; 

2. solicit small and minority businesses and women’s business enterprises 

whenever they are potential sources; 

3. divide total requirements, when economically feasible, into smaller tasks 

or quantities to permit maximum participation by small and minority 

businesses, and women’s business enterprises; 

4. establish delivery schedules, where the requirement permits, which 

encourage participation by small and minority businesses, and women’s 

business enterprises; 

5. use the services and assistance of the Small Business Administration 

and the Minority Business Development Agency of the Department of 

Commerce; and 

6. require the prime contractor to ensure that subcontractors, if used, take 

the five affirmative steps previously listed. 

Without taking these required affirmative steps, the Town cannot provide 

reasonable assurance that it provided disadvantaged firms sufficient 

opportunities to compete for federally funded work. A Town official said the 

Town has no requirement to reach out to small businesses, minority firms, and 

women’s business enterprises, but the Town does take affirmative steps when 

the State or Federal Government requires it. Specifically, the Town’s bid 

documents state, “Small, minority, women business enterprises and disabled 

persons are encouraged to participate,” and “The Town of Stratford is an Equal 

Opportunity and Affirmative Action Employer.” While the Town official claimed 

it included the preceding language in its bid documents, we determined that 

www.oig.dhs.gov 6 OIG-17-18-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

none of the six contracts (first six contracts listed in table 1) the Town solicited 

included such language. Further, merely including such language in contracts 

is not the same as taking affirmative steps to solicit disadvantaged firms. The 

official later said that the Town did not take the required steps because none of 

the bids at the time of advertisement were for State or Federal 

contracts/monies. However, we determined the Town solicited two of the six 

contracts after Hurricane Sandy that were eligible for FEMA reimbursement at 

75 percent of costs. The Town official also said it was not necessary to add the 

language to the bid documents because Connecticut state law requires 

municipalities to be equal opportunity and affirmative action employers. 

Although the Town has no requirement to take affirmative action steps and did 

not take the steps, a Town official stated that two of the five contractors that 

provided services under the nine contracts we reviewed that did not involve 

exigent work were women-owned or small business enterprises. Specifically, 

the two contractors the Town official identified provided services under three 

contracts totaling $428,131, or 45 percent of the $952,663 in contracts we 

reviewed that did not involve exigent work. Therefore, if this had been the 

Town’s only violation of Federal procurement standards, we would not have 

questioned the costs as ineligible. 

Contract Provisions 

The Town did not include all required provisions in any of the 13 contracts we 

reviewed. Federal regulations list 13 provisions that grantees and subgrantees 

must include in their contracts (44 CFR 13.36(i)(1)–(13)). These provisions 

document the basic rights and responsibilities of the parties, minimize the risk 

of misinterpretations and disputes, document the legal remedies in instances 

where contractors violate or breach contract terms, and provide for such 

sanctions and penalties as may be appropriate. For example, two provisions 

that were particularly needed in the Town’s contracts were those related to 

access to contractor’s records and retention of records. Only 1 of the 

13 contracts we reviewed contained provisions requiring contractors to keep 

and provide access to records. If the Town had included these two provisions in 

its contracts, the contractors would have been obligated to provide all 

documents and records to support their invoices and maintain records for at 

least 3 years. As a result, the Town has been unable to obtain additional 

records from its contractors to support $1,244,965 in contract costs, as we 

discuss in finding B. 

Connecticut and Town officials disagreed with this audit finding. State and 

Town Officials asserted that the Town acted in full compliance with 

requirements contained in FEMA Form 90-91 (Project Worksheet), which 

required it to comply with its local, state, or Federal procurement laws, 

www.oig.dhs.gov 7 OIG-17-18-D 
 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

regulations, and procedures. The Town fully complied with its Charter, Code of 

Ordinances, and Administrative Policy Manual, as well as state statutes. In 

addition, they asserted that auditors should give considerable weight to the 

Town's determination of what constitutes exigent and what costs FEMA already 

determined were eligible, properly procured, and supported by appropriate 

records. The Town provided FEMA project specialists, who assisted with the 

Town's application for Federal assistance, complete documentation including 

an audit of its contracts and operations. 

Our position remains unchanged. While the Town may authorize emergency 

contracts, the Town did not present evidence that the work was exigent — or 

that life and property were at risk. Further, a state or town cannot waive 

Federal grant requirements. The FEMA-State Agreement for Federal Disaster 

4087-DR-CT requires Connecticut to comply with the requirements of laws and 

regulations found in the Robert T. Stafford Disaster Relief and Emergency 

Assistance Act, as amended (Stafford Act) and 44 CFR. Although Federal 

regulation does not define exigent circumstances, we have consistently 

interpreted it to mean a period when life and property are at risk requiring 

immediate action that “will not permit a delay resulting from competitive 

solicitation.” During our review we also did not find evidence of FEMA making a 

final determination that the Town properly procured contracts in accordance 

with Federal procurement standards. 

Finding B: Unsupported Costs 

The Town did not provide documentation adequate to support $1,244,965 of 

$1,481,932 it claimed for 10 contracts (see table 3). As a result, FEMA has no 

assurance that these costs are valid and eligible or that contractors billed 

according to the contracted rates. According to 44 CFR 13.20(b)(2) and (6), 

subgrantees must maintain accounting records that adequately identify the 

source and application of Federal funds and maintain source documentation to 

support those accounting records. 

www.oig.dhs.gov 8 OIG-17-18-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 3: Contract Costs 

Contract 

Number 

Costs 

Reviewed 

Costs 

Supported 

Costs 

Unsupported 

Costs Both 

Unsupported 

and 

Ineligible 

2011-017 $ 225,367 $225,367 $ 0 $ 0 

2012-044 11,600 11,600 0 0 

2012-077 529,501 0 529,501 15,300 

2012-082 141,400 0 141,400 141,400 

98701 50,000 0 50,000 50,000 

98702 233,640 0 233,640 0 

98703 139,473 0 139,473 0 

98705 100,000 0 100,000 0 

172073 31,608 0 31,608 31,608 

172075 19,343 0 19,343 19,343 

Total $1,481,932 $236,967 $1,244,965 $257,651 

Source: OIG analyses of FEMA and Town documentation 

The Town’s contractors provided invoices for their work, but did not include 

supporting documentation, such as equipment usage and work activity logs or 

records of debris removal locations. The Town paid the invoices without 

requesting documentation sufficient to support the invoiced amounts. A Town 

official said its employees monitored contractor’s work on a daily basis to 

ensure the work was completed and billed according to contractual 

requirements. Although the official claimed the Town monitored the 

contractor’s work, the Town did not maintain records documenting its 

monitoring activities. Without maintaining sufficient records, the Town cannot 

provide reasonable assurance it properly monitored and documented 

contractor expenses. 

Of the $1,244,965 in unsupported costs, $257,651 are also ineligible and 

included in the $967,963 we questioned in finding A as ineligible contract 

costs. Therefore, to avoid questioning the same costs twice, we question the net 

amount of $987,314 in this finding as unsupported ($1,244,965 minus 

$257,651) (see table 4 in appendix A). If FEMA allows any part of the 

$967,963 in ineligible contract costs we question in finding A, FEMA should 

add those costs (up to the $257,651 we question in both findings A and B) 

back to the net $987,314 amount we recommend for disallowance as 

unsupported in finding B. We point this out because, even if FEMA determines 

costs are eligible, the costs must still be supported. 

www.oig.dhs.gov 9 OIG-17-18-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Discussions with Town Officials 

On May 10, 2016, we discussed our findings with Town officials. One official 

told us they did not expect OIG to have problems with records supporting their 

contract costs. The official explained that both FEMA and Connecticut left 

them with the impression the Town properly accounted for Hurricane Sandy 

disaster costs. She also said that if the Town had been more familiar with 

Federal documentation requirements, it would have reached out to the 

contractors and obtained the necessary support at the time of the disaster. The 

Town official added that it would be difficult to go back to the contractor 31⁄2 

years after the disaster to request additional records to support their invoices. 

The official was not sure whether the contractors still had the records 

supporting the Town’s paid invoices. 

After the May 10, 2016 discussion, the Town submitted additional contractor 

records to support its claim. We reviewed the additional records, but could not 

match them to specific invoices. As a result, we were unable to verify tasks the 

contract employees performed or that the equipment hours claimed were the 

actual number of hours the equipment was in operation in relation to the 

specific invoice. 

Connecticut and Town officials disagreed with this audit finding. They asserted 

that the full record of documentation and evidentiary material confirms that 

the costs claimed by the Town were eligible and properly procured and 

supported. They also asserted that we should also give considerable weight to 

the fact that FEMA reviewed the vast majority of the town's projects and backup documentation before submission to FEMA for reimbursement and found, 

at that time, that the costs were eligible and properly procured and supported 

by appropriate records. They added that after our exit conference with the 

Town on August 31, 2016, the Town submitted/re-submitted detailed 

supporting documentation to FEMA, which should prove sufficient evidence, 

including information and documentation regarding the execution of contracts, 

as well as the monitoring and back-up documentation related to the work 

performed. 

Our position remains unchanged. The Town has not provided provide sufficient 

documentation to support $1,244,965 of its contract costs. In its response to 

this report (appendix C), FEMA stated that, by March 15, 2017, it would review 

the additional documentation the Town provided to them to determine whether 

it is sufficient to support the costs. 

www.oig.dhs.gov 10 OIG-17-18-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Finding C: Improper Overpayment 

The Town claimed $15,600 of duplicate contract costs under Project 0557. The 

Town erroneously submitted two copies of the same invoice and listed the 

invoice twice on the Contract Work Summary Record. Receiving financial 

assistance under the same Public Assistance grant more than once would be 

receiving a duplicate benefit. Section 312(a) of the Stafford Act prohibits 

duplication of benefits from any source. Because of our audit, FEMA has 

disallowed and deobligated the claimed $15,600 in duplicative contract costs. 

Therefore, we consider this finding resolved and closed. 

Finding D: Grant Management 

Connecticut should have done more as FEMA’s grantee to ensure the Town was 

aware of and complied with Federal procurement standards and 

documentation requirements. In its FEMA-State Agreement, Connecticut 

agreed to “comply with the requirements of laws and regulations found in the 

Stafford Act and 44 CFR.” Further, Federal regulations at 44 CFR 13.37(a)(2) 

and 13.40(a) require grantees to (1) ensure that subgrantees are aware of 

Federal regulations, (2) manage the operations of subgrant activity, and 

(3) monitor subgrant activity to ensure compliance. It was Connecticut’s 

responsibility to ensure the Town complied with applicable Federal regulations 

and FEMA guidelines. It is FEMA’s responsibility to hold Connecticut 

accountable for proper grant administration. 

On March 1, 2016, we discussed this issue with Connecticut officials who 

provided written comments on March 4, 2016. A Connecticut official said that 

Connecticut exercises due diligence through its efforts (1) to make all 

applicants aware of policy and regulation and provide them assistance and 

training, and (2) in partnership with FEMA, to consistently make staff expertise 

and resources available to any and all applicants upon request. The official 

went on to state that Connecticut maintains a website with briefing materials, 

forms, FEMA work sheets, policy, and guidance. The official stated that 

Connecticut also conducts related training during periods when there are no 

immediate disasters or emergencies. 

Connecticut officials disagreed with this audit finding. They said they provided 

sufficient information to subgrantees on the possible need to comply with 

Federal regulations and requirements. They also said that Federal agencies are 

best equipped to provide detailed training on Federal regulations and 

requirements; and Connecticut held applicant briefings in the wake of 

Hurricane Sandy. 

www.oig.dhs.gov 11 OIG-17-18-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Five representatives from the Town were present at Connecticut’s November 27, 

2012 applicant briefing, which included a presentation reminding applicants 

that, to be eligible, costs and documentation must comply with Federal, state, 

and local laws and regulations. In addition, Connecticut maintains a “Disaster 

Assistance Programs” web page, with a specific page devoted to links related to 

Public Assistance. The site is easily accessible and includes briefing materials, 

forms, FEMA worksheets, and policy and guidance. The State also conducts 

related training during periods when there are no immediate disasters or 

emergencies. For example, in 2015, Connecticut held debris management 

workshops for municipalities, which also included discussions regarding the 

importance of meeting Federal requirements. 

We recognize Connecticut’s efforts to educate potential applicants and 

subgrantees. However, making subgrantees aware of the rules is not enough. 

Federal regulations also require that grantees monitor subgrantees and ensure 

they comply with Federal grant requirements. Based on our findings, 

Connecticut needs to improve its grant management to ensure compliance with 

those requirements. 

Recommendations 

We recommend the Regional Administrator, FEMA Region I: 

Recommendation #1: Disallow $967,963 (Federal share $725,972) as 

ineligible contract costs, unless FEMA grants an exception for all or part of the 

costs as 44 CFR 13.6(c) allows and determines the costs are reasonable 

(finding A). 

Recommendation #2: Disallow $987,314 (Federal share $740,486) as 

unsupported contract costs unless the Town provides additional 

documentation that FEMA determines is sufficient to support the costs (finding 

B). If FEMA allows any part of the $967,963 in ineligible contract costs we 

question in finding A, FEMA should also determine whether the Town 

supported those costs adequately because we determined in finding B that 

$257,651 of the $967,963 was unsupported. 

Recommendation #3: Disallow $15,600 (Federal share $11,700) of 

ineligible duplicate contract costs. Because of our audit, FEMA has disallowed 

and deobligated the claimed $15,600 in duplicate contract costs; therefore, we 

consider this recommendation resolved and closed (finding C). 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Recommendation #4: Request Connecticut to work with Town officials to 

ensure their understanding and compliance with Federal procurement 

standards and documentation requirements (finding D). 

Discussion with Management and Audit Follow-up 

We discussed the results of our audit with Town, Connecticut, 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 August 16, 2016, 

Connecticut on August 24, 2016, and the Town on August 31, 2016. 

On September 15, 2016, FEMA provided its written response (see appendix C). 

FEMA provided both Connecticut's and Town's comments as attachments for 

OIG's consideration. We did not include Connecticut’s or the Town’s comments 

in this report, but did paraphrase and incorporate their comments into the 

report as we deemed appropriate. 

FEMA agreed to our recommendations (see appendix C). The response 

indicated that FEMA had not yet completed a review of the relevant 

documentation nor made any determinations as to Recommendations 1, 2, 

and 4. FEMA also requested closure of Recommendation 3. 

In determining how to resolve Recommendations 1 and 2, FEMA will evaluate 

all relevant documentation and will consider numerous factors, including the 

eligibility of the work, reasonableness of the costs, sufficiency of supporting 

documentation, the extent to which retroactive action to disallow and recover 

funding would further harm the Town's recovery, and whether a punitive action 

approach would have a deterrent effect on future applicants. In determining 

how to resolve Recommendation 4, FEMA will review the actions already taken 

by Connecticut to inform the Town of the relevant procurement standards and 

the extent to which further training and education will prove beneficial. FEMA 

will take steps to work with Connecticut and the Town to resolve underlying 

issues associated with Recommendations 1, 2, and 4, which could make any 

disallowance or other corrective action unnecessary. 

FEMA’s response was sufficient to resolve and close recommendation 3; 

therefore, we require no further action from FEMA for this recommendation. 

FEMA expects to complete its proposed corrective actions to address 

Recommendations 1, 2, and 4 by March 15, 2017. Therefore, we consider 

Recommendations 1, 2, and 4 resolved and open. We will evaluate closure 

upon documentation that FEMA has implemented its proposed corrective 

actions. Please email closeout documentation and requests 

to William.Johnson@oig.dhs.gov. 

www.oig.dhs.gov 13 OIG-17-18-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

The Office of Emergency Management Oversight major contributors to this 

report are William Johnson, Director; Anthony Colache, Audit Manager; and 

Kevin Donahue, Auditor-in-Charge. 

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

William Johnson, Director, Eastern Regional Office - North, at (404) 832-6703. 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

We audited FEMA Public Assistance Program grant funds awarded to the Town, 

Public Assistance Identification Number 001-74190-00. Our audit objective 

was to determine whether the Town accounted for and expended FEMA grant 

funds according to Federal regulations and FEMA guidelines for FEMA Disaster 

4087-DR-CT. The Town received a Public Assistance award of $3.59 million 

from Connecticut, a FEMA grantee, for Hurricane Sandy damages, which 

occurred in October 2012. The award provided 75 percent FEMA funding for 

debris removal, emergency protective measures, and permanent repairs and 

consisted of four large projects and seven small projects.5 

We audited nine projects totaling $3.58 million (see table 4). The audit covered 

the period from October 27, 2012, through December 17, 2015. At the time of 

our audit, the Town had completed work on all its projects and had submitted 

final claims to Connecticut for expenditures under those projects. 

To accomplish our objective, we interviewed Town, Connecticut, and FEMA 

personnel, and gained an understanding of the Town’s method of accounting 

for disaster-related costs and its procurement policies and procedures. We 

judgmentally selected (generally based on dollar amounts) and reviewed project 

costs and procurement transactions for the projects in our audit scope, 

reviewed applicable Federal regulations and FEMA guidelines; and performed 

other procedures considered necessary to accomplish our audit objective. We 

did not perform a detailed assessment of the Town’s internal controls 

applicable to its grant activities because it was not necessary to accomplish our 

audit objective. 

We conducted this performance audit between May 2015 and June 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 the evidence obtained provides a reasonable basis 

for our findings and conclusions based upon our audit objective. To conduct 

this audit, we applied the statutes, regulations, and FEMA policies and 

guidelines in effect at the time of the disaster. 

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

$67,500. [Notice of Adjustment of Disaster Grant Amounts, 77 Fed. Reg. 61423 (Oct. 9, 2012)] 

www.oig.dhs.gov 15 OIG-17-18-D 
 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A (continued) 

Table 4: Schedule of Projects and Questioned Costs 

Project 

Number – Category 

of Work* 

Award 

Amount 

Ineligible 

Costs 

(Findings 

A & C) 

Unsupported 

Costs 

(Finding B) 

Total 

Costs 

Questioned 

Projects Audited 

0437 - F $ 29,207 $ 0 $ 0 $ 0 

0480 - E 17,284 0 0 0 

0543 - E 11,751 0 0 0 

0546 - D 217,481 31,608 217,481 249,089 

0557 - A 2,199,493 428,610 977,484 1,406,094 

0567 - A 8,500 0 0 0 

0589 - E 45,485 0 0 0 

0659 - G 636,295 523,345 50,000 573,345 

0688 - B 410,557 0 0 0 

Subtotal $3,576,053 $983,563 $1,244,965 $2,228,528 

Other Projects 

0599 - C $ 6,614 $ 0 $ 0 $ 0 

0677 - B 4,482 0 0 0 

Subtotal $ 11,096 $ 0 $ 0 $ 0 

Gross Totals $3,587,149 $983,563 $1,244,965 $2,228,528 

Less Costs 

Questioned Twice 0 0 ($257,651) ($257,651) 

Net Totals $3,587,149 $983,563 $987,314 $1,970,877 

Source: OIG analyses of FEMA and Town documentation 

*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 16 OIG-17-18-D 
 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

Potential Monetary Benefits 

Table 5: Summary of Potential Monetary Benefits 

Type of Potential Monetary Benefit Total Federal Share 

Questioned Costs – Ineligible $ 983,563 $ 737,672 

Questioned Costs – Unsupported 987,314 740,486 

Totals $1,970,877 $1,478,158 

Source: OIG analysis of findings in this report 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

FEMA Region I Audit Response 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued)
 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued)
 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued)
 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C (continued)
 

www.oig.dhs.gov 22 OIG-17-18-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 for Management 

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 

Audit Liaison, FEMA Region I 

Audit Liaison, FEMA (Job Code G-15-029) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Executive Congressional Oversight and Appropriations Committees 

External 

Deputy Commissioner, Department of Emergency Services and Public 

Protection, Connecticut 

State Emergency Management Director, Department of Emergency Services 

and Public Protection, Connecticut 

Emergency Management Program Supervisor / Disaster Recovery Supervisor, 

Division of Emergency Management and Homeland Security, Department of 

Emergency Services and Public Protection, Connecticut 

Auditor of Public Accounts, Connecticut 

Mayor, Town of Stratford 

Chief Administrative Officer, Town of Stratford 

Public Works Director, Town of Stratford 

www.oig.dhs.gov 23 OIG-17-18-D 
 

 

 

 

 

 

 

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

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