Escambia County, Florida, 

Has Adequate Policies, 

Procedures, and Business 

Practices to Effectively 

Manage FEMA Grant 

Funds Awarded to 

Replace Its Central 

Booking and Detention 

Center 

February 6, 2017 

OIG-17-35-D 
 

 

 

 

DHS OIG HIGHLIGHTS 

Escambia County, Florida, Has Adequate Policies,

Procedures, and Business Practices to Effectively

Manage FEMA Grant Funds Awarded to Replace Its

Central Booking and Detention Center
 

February 6, 2017 

Why We Did 

This Audit 

Escambia County, Florida 

(County) received an $86.0 

million net grant award from 

the Florida Division of 

Emergency Management 

(Florida), a FEMA grantee, 

which included $55.4 million 

to replace its Central Booking 

and Detention Center 

damaged as a result of severe 

storms and flooding in April 

and May 2014. We conducted 

this audit early in the grant 

process to identify areas 

where the County may need 

additional technical 

assistance or monitoring to 

ensure compliance with 

Federal requirements. 

What We 

Recommend 

The report contains no 

recommendations. 

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 County has established policies, procedures, and 

business practices to properly account for and expend 

FEMA Public Assistance grant funds awarded to replace 

the County’s Central Booking and Detention Center 

(Project 1006). Therefore, if the County adheres to those 

policies, procedures, and business practices, FEMA has 

reasonable assurance that the County will properly 

manage the estimated $55.4 million in FEMA project 

funding awarded for replacement of the facility. 

FEMA Response

Because the audit did not identify any issues requiring 

further action from FEMA Region IV, we consider this 

audit closed. 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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


February 6, 2017 


MEMORANDUM FOR: Gracia Szczech 

Regional Administrator, Region IV 

Federal Emergency Management Agency 

~~·~ 

FROM: Thomas M. Salmon 

Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: Escambia County, Florida, Has Adequate Policies, 

Procedures, and Business Practices to Effectively 

Manage FEMA Grant Funds Awarded to Replace Its 

Central Booking and Detention Center 

Audit Report Number OIG-17-35-D 

We audited Federal Emergency Management Agency (FEMA) Public Assistance 

grant funds awarded to Escambia County, Florida (County) to replace its 

Central Booking and Detention Center (Project 1006). We conducted this audit 

early in the Public Assistance process to identify areas where the County 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 recipients 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. 

As of September 7, 2016 (our audit cutoff date), the Florida Division of 

Emergency Management (Florida), a FEMA grantee, had awarded the County 

$86.0 million for disaster-related damages, which included $55.4 million to 

replace the County's Central Booking and Detention Facility (Project 1006).1 

The award provided 75 percent FEMA funding. At the time of our fieldwork, the 

County had expended $1.85 million in disaster costs under Project 1006 but 

had not filed reimbursement claims to Florida for any expenditures. We 

assessed the policies, procedures, and business practices the County used to 

account for and expend the $1.85 million in disaster costs. 

1 FEMA's allocation of insurance recoveries to all damaged facilities was ongoing at the time of 

our audit. 

www.oig.dhs.gov 1 OIG-17-35-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background 

Escambia County experienced intense and prolonged rainfall from April 28, 

through May 6, 2014, that caused substantial flooding in the county. 

Floodwaters inundated the County’s Central Booking and Detention Center 

and gas-powered dryers located in the bottom floor laundry room of the facility 

began to float and damage gas lines attached to the dryers. An unknown 

ignition source ultimately caused the room to explode, substantially damaging 

the laundry room and other rooms surrounding it (see figure 1). FEMA 

determined that the estimated cost to repair the facility exceeded 50 percent of 

the estimated replacement cost; therefore, the County was eligible for full 

replacement of the facility.2 At the time of our audit, the new facility was in the 

design phase. 

Figure 1: Laundry Room Explosion Site 

Source: Office of Inspector General 

2 According to 44 Code of Federal Regulations (CFR) 206.226(f)(1) and FEMA’s Public Assistance 

Guide (FEMA 322, June 2007, p. 37), a facility is eligible for replacement when the cost of 

repairing the facility exceeds 50 percent of the replacement cost. 

www.oig.dhs.gov 2 OIG-17-35-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

The President signed a Major Disaster Declaration (DR-4177-FL) on May 6, 

2014, authorizing FEMA to support State and local response and begin 

recovery efforts. 

Results of Audit 

The County has established policies, procedures, and business practices to 

properly account for and expend FEMA Public Assistance grant funds awarded 

to replace the County’s Central Booking and Detention Center (Project 1006). 

Therefore, if the County adheres to those policies, procedures, and business 

practices, FEMA has reasonable assurance that the County will properly 

manage the estimated $55.4 million in FEMA project funding awarded for 

replacement of the facility. 

Accounting Policies and Procedures 

The County has an effective system in place to ensure it accounts for disasterrelated costs on a project-by-project basis and that such costs are adequately 

supported as the following Federal regulations and FEMA guidelines require: 

x Grantees must account for large project expenditures on a project-byproject basis (44 Code of Federal Regulations (CFR) 206.205(b)). FEMA 

instructs subgrantees to keep records for all projects on a project-byproject basis (Public Assistance Guide, FEMA 322, June 2007, p. 137). 

x Grantees and subgrantees must maintain accounting records that 

adequately identify the source and application of Federal funds and 

maintain source documentation to support those accounting records (44 

CFR 13.20(b)(2) and (6). 

The County’s accounting system tracks disaster-related expenditures and 

revenues by a specific disaster fund code that enables it to assign a unique 

accounting code to each FEMA-funded project. As of September 7, 2016, our 

audit cutoff date, the County had expended $1.85 million of disaster costs for 

Project 1006. We judgmentally selected $1.81 million of project costs and 

reviewed applicable invoices, payments, and payroll records that supported the 

costs. We determined that the costs were eligible, properly charged to the 

project, and adequately supported. 

www.oig.dhs.gov 3 OIG-17-35-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Procurement Practices 

The County has sufficient and adequate procurement policies and procedures 

to comply with the Federal procurement standards. These Federal procurement 

standards required the County to, among other activities — 

x conduct procurement transactions in a manner providing full and open 

competition (44 CFR 13.36(c)(1)). Full and open competition increases 

the probability of reasonable pricing from the most qualified contractors, 

and helps discourage and prevent favoritism, collusion, fraud, waste, and 

mismanagement of Federal resources; 

x include specific contract provisions in federally funded contracts (44 CFR 

13.36(i)). These Federal contract provisions document the rights and 

responsibilities of the parties and minimize the risk of contract 

misinterpretations and disputes; 

x ensure the use of small or disadvantaged business enterprises, such as 

minority firms and women’s business enterprises, when possible (44 CFR 

13.36(e)(2)(i) through (v)). As a result, FEMA has assurance that these 

types of firms had sufficient opportunities to bid on Federal work as 

Congress intended. 

As of September 7, 2016, our audit cutoff date, the County had awarded three 

contracts totaling $6.1 million for disaster-related work under Project 1006. We 

reviewed the County’s procurement policies and procedures and discussed 

these practices with the County’s contracting officials. We also reviewed 

procurement records such as those for contract selection, basis for contract 

price, requests for proposals, bid tabulations, agreements, and contracts for 

the three contracts the County had awarded for project work. We determined 

that the County complied with applicable Federal procurement requirements 

when awarding the disaster work. 

Insurance Policies and Procedures 

The County’s insurance procedures and business practices are adequate to 

ensure that the County deducts anticipated insurance proceeds from eligible 

projects in accordance with Federal regulations (44 CFR 206.250(c)). 

As of September 7, 2016, the County had submitted a claim with its insurance 

carrier and had received $30.4 million (net of legal fees) from insurance 

settlements and mediation to cover all damaged County facilities, including the 

Central Booking and Detention Center. At the time of our audit, FEMA was 

www.oig.dhs.gov 4 OIG-17-35-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

reviewing all insurance considerations to determine how best to allocate the 

insurance proceeds. 

In our discussions, we also confirmed that County officials are aware that 

obtaining and maintaining insurance on damaged insurable facilities is a 

condition of current and future FEMA funding (44 CFR 206.252(d)). 

Discussion with Management and Audit Follow-up 

We discussed the results of our audit with the County, Florida, and FEMA 

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

officials and discussed it at the exit conference held on December 12, 2016. 

Because the audit did not identify any issues requiring further action, we 

consider this audit closed. 

The Office of Emergency Management Oversight major contributors to this 

report are David Kimble, Director; Adrianne Bryant, Audit Manager; 

John R. Schmidt, Auditor-in-Charge; and Larry Jones, Auditor. 

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

David Kimble, Director, Eastern Regional Office – South at (404) 832-6702. 

www.oig.dhs.gov 5 OIG-17-35-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

We audited Public Assistance grant funds awarded to the County (FIPS Code 

033-99033-00) to replace its Central Booking and Detention Center damaged 

under FEMA Disaster Number 4177-DR-FL. The award provided 75 percent 

FEMA funding for the facility. Our audit objective was to determine whether the 

County’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. We conducted this audit early in the 

Public Assistance process to identify areas where the County may need 

additional technical assistance or monitoring to ensure compliance and prevent 

improper expenditure of Federal grant funds. 

Our audit covered the period of April 28, 2014, the first day of the incident 

period for the disaster, through September 7, 2016, our audit cutoff date. At 

the time of our audit, Florida had awarded the County $86.0 million for 

disaster-related damages, which included $55.4 million to replace the County’s 

Central Booking and Detention Facility (Project 1006). As of September 7, 

2016, the County had incurred $1.85 million in disaster costs under Project 

1006 but had not submitted any reimbursement claims to Florida. Our audit 

assessed the policies, procedures, and business practices the County used to 

account for and expend the $1.85 million of costs. 

We interviewed County, Florida, and FEMA personnel; assessed the adequacy 

of the policies, procedures, and business practices the County uses and plans 

to use to account for and expend Federal grant funds, and to procure and 

monitor contracts for disaster work; reviewed applicable Federal regulations 

and FEMA guidelines; and performed other procedures considered necessary to 

accomplish our objective. We did not perform a detailed assessment of the 

County’s internal control over its grant activities because it was not necessary 

to accomplish our audit objective. 

We conducted this performance audit between August and December 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. In 

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

and guidelines in effect at the time of the disaster. 

www.oig.dhs.gov 6 OIG-17-35-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

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 IV 

Audit Liaison, FEMA (Job Code G-16-048) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

External 

Director, Florida Division of Emergency Management 

State Auditor, Florida 

County Administrator, Escambia County 

Assistant County Administrator, Escambia County 

www.oig.dhs.gov 7 OIG-17-35-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