Perth Amboy, New Jersey, 

Effectively Managed 

FEMA Grant Funds 

Awarded for Hurricane 

Sandy Damages 

January 12, 2017 

OIG-17-21-D 
 

 

DHS OIG HIGHLIGHTS
 

Perth Amboy, New Jersey, Effectively Managed FEMA

Grant Funds Awarded for Hurricane Sandy Damages
 

January 12, 2017 

Why We Did 

This Audit 

The City of Perth Amboy, 

New Jersey (City), 

received an $11.3 million 

grant award from the 

New Jersey Office of 

Emergency Management 

(New Jersey), a FEMA 

grantee, for damages 

resulting from Hurricane 

Sandy in October 2012. 

We audited nine projects 

with net awards totaling 

$8.1 million. Our audit 

objective was to 

determine whether the 

City accounted for and 

expended FEMA funds 

according to Federal 

requirements. 

What We 

Recommend 

This 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 

For the projects we reviewed, the City effectively accounted for 

and expended Federal Emergency Management Agency (FEMA) 

Public Assistance grant funds according to Federal regulations 

and FEMA guidelines. City officials accounted for disaster 

expenditures on a project-by-project basis; procured contracts 

for disaster work appropriately, and maintained adequate 

documentation to support the costs. 

FEMA Response

Because the audit did not identify any issues requiring further 

action from FEMA Region II, we consider this audit closed. 

oig.dhs.gvo OIG 17-21-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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


January 12, 2017 


MEMORANDUM FOR: Jerome Hatfield 

Regional Administrator, Region II 

Federal Emergency Management Agency 

~'ft1·~ 

FROM: Thomas M. Salmon 

Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: Perth Amboy, New Jersey, Effectively Managed FEMA 

Grant Funds Awarded for Hurricane Sandy Damages 

Audit Report Number OIG-17-21-D 

We audited Public Assistance grant funds awarded to the City of Perth Amboy, 

New Jersey (City). The New Jersey Office of Emergency Management (New 

Jersey), a Federal Emergency Management Agency (FEMA) grantee, awarded 

the City $11.3 million ($11.2 million net of insurance and other credits) for 

damages resulting from Hurricane Sandy, which occurred in October 2012. 

The award provided 90 percent FEMA funding for debris removal, emergency 

protective measures, and permanent repairs to buildings and facilities. We 

audited six large projects and three small projects with awards totaling $8.1 

million (see appendix A, table 1). At the time of our audit, the City had 

completed work on several of its projects in our audit scope but had not 

submitted final claims to New Jersey. 

Results of Audit 

For the projects we reviewed, the City effectively accounted for and expended 

FEMA Public Assistance grant funds according to Federal regulations and 

FEMA guidelines. City officials accounted for disaster expenditures on a 

project-by-project basis, procured contracts for disaster work appropriately, 

and maintained adequate documentation to support the costs. 

1 www.oig.dhs.gov OIG- 17-21 -D 

• 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Discussion with Management and Audit Follow-up 

We discussed the results of our audit with City, New Jersey, and FEMA officials 

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

and discussed it at the exit conference on November 15, 2016. Because the 

audit did not identify any issues requiring further action from FEMA Region II, 

we consider this audit closed. 

The Office of Emergency Management Oversight contributors to this report are 

David Kimble, Director; Felipe Pubillones, Audit Manager; Salvador MaldonadoAvila, Auditor-in-Charge; and Vilmarie Serrano-Rosario, Senior 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. 

2 www.oig.dhs.gov OIG-17-21-D 
 

 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

We audited Public Assistance grant funds awarded to the City, FIPS Code 023-

58200-00. Our audit objective was to determine whether the City accounted for 

and expended FEMA grant funds according to Federal regulations and FEMA 

guidelines for Disaster Number 4086-DR-NJ. The City received a Public 

Assistance grant award of $11.2 million (net of insurance and other credits) 

from New Jersey, a FEMA grantee, for damages resulting from Hurricane 

Sandy, which occurred in October 2012. The award provided 90 percent FEMA 

funding for debris removal, emergency protective measures, and permanent 

repairs to buildings and facilities under 16 projects (8 large and 8 small).1 

We audited six large and three small projects with awards totaling $8.1 million 

as table 1 shows. The audit covered the period October 24, 2012, to March 31, 

2016, during which the City prepared claims for $8.1 million under the nine 

projects in our audit scope. At the time of our audit, the City had completed 

work on several of its projects in our audit scope but had not submitted final 

claims to New Jersey. 

Table 1: Projects Audited 

Project 

Number 

Category 

of Work2 

Type of 

Project 

Net 

Amount 

Awarded 

2289 A Large $ 191,642 

2298 B Large 102,783 

2349 B Large 897,054 

2546 G Large 6,357,024 

2547 B Large 344,721 

3678 B Large 112,575 

1791 F Small 44,919 

2049 C Small 17,912 

2282 B Small 31,173 

Totals $8,099,803 

Source: FEMA Project Worksheets, City Records, and
 

Office of Inspector General Analyses
 

1

 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. 61,423 (Oct. 9, 2012)]. 2 FEMA classifies disaster-related work by type: debris removal (Category A), emergency 

protective measures (Category B), and permanent work (Categories C through G). 

3 www.oig.dhs.gov OIG-17-21-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A (continued) 

To accomplish our objective, we interviewed City, New Jersey, and FEMA 

personnel; gained an understanding of the City’s method of accounting for 

disaster-related costs and its procurement policies and procedures; 

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

As part of our standard auditing procedures, we also notified our Office of 

Information Technology Audits of all contracts 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 those 

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

report, the Office of Information Technology Audits analysis of contracts 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 

City’s internal controls applicable to its grant activities because it was not 

necessary to accomplish our audit objective. 

We conducted this performance audit between April 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 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. 

4 www.oig.dhs.gov OIG-17-21-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

Report Distribution 

Department of Homeland Security 

Secretary 

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 

Executive Director, Hurricane Sandy Recovery Field Office 

Audit Liaison, FEMA Region II 

Audit Liaison, FEMA (Job Code G-14-013) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

External 

State Coordination Officer, New Jersey State Police, Homeland Security Branch 

Executive Director, Governor’s Office of Recovery and Rebuilding, New Jersey 

State Auditor, New Jersey 

Attorney General, New Jersey 

Mayor, City of Perth Amboy 

City Administrator, City of Perth Amboy 

Chief Financial Officer, City of Perth Amboy 

5 www.oig.dhs.gov OIG-17-21-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 

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"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