St. Johns County, Florida, 

Could Benefit From 

Additional Technical 

Assistance and 

Monitoring to Ensure 

Compliance with FEMA 

Grant Requirements 

September 19, 2017 

OIG-17-105-D 
 

 

 

 

DHS OIG HIGHLIGHTS
 

St. Johns County, Florida, Could Benefit

from Additional Technical Assistance and Monitoring to

Ensure Compliance with FEMA Grant Requirements
 

September 19, 2017 

Why We Did 

This Audit 

St. Johns County, Florida 

(County), sustained an 

estimated $43.3 million in 

damages from Hurricane 

Matthew in October 2016. We 

conducted the audit early in 

the grant process to identify 

areas where the County may 

need additional technical 

assistance or monitoring to 

ensure compliance with 

Federal regulations and FEMA 

guidelines. As of our audit 

cutoff date, FEMA had not 

obligated any funding and the 

County was still developing its 

disaster claim. 

What We 

Recommend 

FEMA should direct Florida to 

provide additional technical 

assistance and monitoring of 

the County’s future projects. 

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’s accounting policies, procedures, and 

business practices appear adequate to account for 

Federal Emergency Management Agency (FEMA) grant 

funds according to Federal regulations and FEMA 

guidelines. However, as of April 2017 FEMA had not 

obligated funds or completed any project worksheets for 

the overall $43.3 million in estimated damages, which 

includes approximately $10 million in damages to the 

County’s beaches. Such projects could be complex in 

nature. Further, during our fieldwork, County officials 

posed numerous technical questions to us regarding 

FEMA’s project formulation process and the Public 

Assistance program. They also said that FEMA and 

Florida Division of Emergency Management (Florida) were 

not readily available to provide assistance as the County 

moved forward with project formulation. Florida officials 

acknowledged that the agency’s guidance had not been 

optimal and said that the agency has reorganized to 

improve its service. Florida is responsible for ensuring 

that the County is aware of and follows Federal 

regulations, and it is FEMA’s responsibility to hold 

Florida accountable. Therefore, Florida, as FEMA’s grant 

recipient, should provide additional technical assistance 

and monitoring to ensure the County complies with 

Federal grant requirements. 

FEMA Response

FEMA Region IV officials concurred with our finding and 

recommendation. Appendix B includes FEMA’s written 

response in its entirety. 

www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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


September 19, 2017 


MEMORANDUM FOR: Gracia Szczech 

Regional Administrator, Region IV 

Federal Emergency Management Agency 

/£c:~~ FROM: John E. McCoy II 

Acting Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: St. Johns County, Florida, Could Benefit from Additional 

Technical Assistance and Monitoring to Ensure 

Compliance with FEMA Grant Requirements 

Audit Report Number OIG-17-105-D 

We audited the capability of St. Johns County, Florida (County), 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 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 earlier in the grant management process. 

As of April 24, 2017, our audit cutoff date, the Florida Division of Emergency 

Management (Florida), a FEMA grant recipient, had not awarded any funding 

for an estimated $43.3 million in damages the County sustained from 

Hurricane Matthew in October 2016. 1 The grant award will provide 75 percent 

Federal funding for emergency and permanent work. At the time of our 

fieldwork, the County had incurred costs of $11.7 million for work related to 

debris removal and emergency protective measures. However, FEMA had not 

completed formulating project worksheets and the County had not filed any 

reimbursement claims to Florida for disaster-related expenditures. We assessed 

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

for and expend the $11.7 million in disaster-related costs. 

1 Damage estimates as of April 24, 2017, provided by FEMA officials. 

1 www.oig.dhs.gov OIG-17-105-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background
 

St. Johns County was established in 1821. St. Augustine, which is the County 

seat, was founded over 400 years ago by Spanish explorers and is the nation’s 

oldest city. The County encompasses approximately 608 square miles and is 

located in the northeast region of the State of Florida directly south of the City 

of Jacksonville, and is bordered on the west by the St. Johns River, on the 

south by Flagler County, and on the east by the Atlantic Ocean. 

According to St. Johns County officials, Hurricane Matthew approached the 

east coast of Florida late Thursday, October 6, 2016, and weakened into a 

Category 3 hurricane by 1:00 a.m. on October 7. At that time it was located 

approximately 140 miles southeast of St. Augustine. Impacts were felt 

throughout St. Johns County all that day. Storm surge flooding affected the St. 

Augustine area, including major flooding on Anastasia Island where water was 

reported to be 3 to 4 feet above ground level. The storm surge caused major to 

extreme beach erosion along the coast such that the dunes were eroded as 

much as 30 to 40 feet by the wave action and produced 12 to 16 foot cliffs. The 

extreme erosion undermined numerous structures and caused major sand 

washouts along the beachfront and coastal lines. 

The President signed a Major Disaster Declaration (DR-4283-FL) on 

October 8, 2016, authorizing FEMA to support State and local response and 

begin recovery efforts. 

Figure 1: Damages at North Beach 

Source: St. Johns County, Florida 

2 www.oig.dhs.gov OIG-17-105-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Results of Audit 

The County’s accounting policies, procedures, and business practices appear 

adequate to account for FEMA grant funds according to Federal regulations 

and FEMA guidelines. However, as of April 2017, FEMA had not obligated 

funds or completed any project worksheets for the overall $43.3 million in 

estimated damages, which includes approximately $10 million in damages to 

the County’s beaches. Such projects could be complex in nature. Further, 

during our fieldwork, County officials posed numerous technical questions to 

us regarding FEMA’s project formulation process and the Public Assistance 

program. Therefore, the County could benefit from additional technical 

assistance and monitoring from Florida. Such additional oversight activities 

should provide FEMA with reasonable assurance that the County will adhere to 

Federal grant requirements when spending the estimated $43.3 million of 

FEMA grant funding it expects to receive for disaster-related damages. Florida 

is responsible for ensuring that the County is aware of and follows Federal 

regulations, and it is FEMA’s responsibility to hold Florida accountable. 

Project Cost Accounting 

The County appears to have an effective system in place to ensure it accounts 

for disaster-related costs on a project-by-project basis and that such costs are 

adequately supported as the following Federal regulations and FEMA guidelines 

require: 

x Subrecipients must maintain accounting records that adequately identify 

the source and application of Federal funds and maintain source 

documentation to support those accounting records (2 Code of Federal 

Regulations (CFR) 200.302(b)(3). 

x Applicants must maintain all source documentation supporting project 

costs. In addition, applicants should file all supporting documentation by 

project to facilitate closeout and audits (Public Assistance Program and 

Policy Guide, FP 104-009-2, January 2016, p. 134). 

We reviewed the County’s policies and procedures for accounting for disasterrelated expenditures and revenues and discussed the policies and procedures 

with County officials. The County’s accounting system allows the County to 

assign a unique accounting code to each FEMA-funded project to account for 

disaster-related procurement costs and the County’s own labor, equipment, 

and materials. We judgmentally selected $6.1 million of $11.7 million of 

disaster-related costs the County had incurred at the time of our fieldwork and 

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

3 www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

the costs. We determined that the costs were properly segregated by project 

and adequately supported. 

Procurement Practices 

The County appears to have adequate procurement policies and procedures to 

comply with the Federal procurement standards. These Federal procurement 

standards required the County to, among other actions— 

x conduct procurement transactions in a manner providing full and open 

competition (2 CFR 200.319(a)). 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 (2 CFR 

200.326). These Federal contract provisions document the rights and 

responsibilities of the parties and minimize the risk of contract 

misinterpretations and disputes; and 

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

minority firms and women’s business enterprises, when possible (2 CFR 

200.321(a)). Therefore, FEMA has assurance that these types of firms 

had sufficient opportunities to bid on Federal work as Congress 

intended. 

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 

seven contracts totaling $16 million the County had awarded for debris 

removal work. We determined that the County complied with applicable Federal 

procurement requirements when awarding the contracts. 

Insurance Policies and Procedures 

At the time of our fieldwork, the County was still developing its insurance 

claim. We confirmed that the County is aware that obtaining and maintaining 

insurance on insurable facilities is a condition for receiving current and future 

FEMA funding. The County must obtain and maintain insurance that is 

reasonable and necessary to protect facilities repaired or replaced using 

Federal funds against future loss from the types of hazards that caused the 

major disaster (44 CFR 206.252(d) and 206.253(b)(1) and (f)). 

4 www.oig.dhs.gov OIG-17-105-D 
 

 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

We also determined that the County will be able to properly identify anticipated 

insurance recoveries related to eligible project costs as Federal regulations at 

44 CFR 206.250(c) require. 

Finding A: Grant Management 

The County could benefit from additional technical assistance and monitoring 

to ensure it complies with Federal grant requirements. Florida is responsible 

for ensuring that the County is aware of and follows Federal regulations, and it 

is FEMA’s responsibility to hold Florida accountable. In its FEMA-State 

Agreement, Florida agreed to comply and require all sub-recipients to comply 

with the requirements of all applicable laws and regulation including the Robert 

T. Stafford Disaster Relief and Emergency Assistance Act, as amended, and 

FEMA Policies and guidance. In addition, 2 CFR 200.331(d) requires recipients 

to monitor the sub-recipient’s activities to ensure “compliance with Federal 

statutes, regulations, and the terms and conditions of the subaward.” 

During our fieldwork, County officials posed numerous technical questions to 

us regarding FEMA’s project formulation process and the Public Assistance 

program. The officials also said that FEMA and Florida were not readily 

available to provide guidance as the County moved forward with project 

formulation. Florida officials acknowledged that its technical assistance and 

guidance to FEMA applicants affected by the disaster had not been optimal and 

said that the agency is undergoing a reorganization that should improve 

assistance provided to the applicants. FEMA has estimated the County’s 

disaster damages at $43.3 million, which includes approximately $10 million in 

damages to the County’s beaches. Such projects could be complex in nature. 

Therefore, Florida, as FEMA’s grant recipient, should provide additional 

technical assistance and monitoring to ensure the County complies with 

Federal grant requirements. 

Recommendation 

We recommend that the Regional Administrator, FEMA Region IV: 

Recommendation 1: Direct Florida to provide additional technical 

assistance and monitoring of the County’s projects to provide FEMA with 

reasonable assurance that the County will comply with Federal requirements 

when spending the estimated $43.3 million of FEMA grant funding (finding A). 

5 www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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 May 31, 2017. County 

and Florida officials agreed with our finding and recommendation. FEMA 

Region IV provided a written response on June 29, 2017, agreeing with our one 

report recommendation (see appendix B). The response indicated that FEMA 

expects to implement its proposed corrective action to address the 

recommendation by August 31, 2017. Therefore, we consider the report 

recommendation to be resolved but open. We will evaluate for closure upon 

documentation that FEMA has implemented its proposed corrective action. 

Please email closeout documentation and request to 

emo.auditliaison@oig.dhs.gov. 

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; Larry Jones, Auditor; Christine Alvarez, 

Senior Program Analyst; and Emma Peyton, Independent Referencer. 

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

Paul Wood, Acting Deputy Assistant Inspector General at (202) 254-4100 or 

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

6 www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

We audited the capability of St. Johns County, Florida (FIPS Code 109-99109-

00), to manage FEMA Public Assistance grant funds. 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 for FEMA Disaster 

Number 4283-DR-FL, which the President declared on October 8, 2016. 

Our audit covered the period of October 3, 2016, the first day of the incident 

period for the disaster, through April 24, 2017, our audit cut-off date. At the 

time of our audit, FEMA had not written any projects and had not yet obligated 

any funding for damages resulting from the disaster, which occurred in 

October 2016. The award will provide 75 percent FEMA funding for debris 

removal, emergency work, and permanent work for large and small projects.2 

To accomplish our audit objective, we interviewed County, Florida, and FEMA 

personnel; reviewed and gained an understanding of the policies and 

procedures the County uses and plans to use to account for and expend 

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

judgmentally selected and reviewed $6.1 million of $11.7 million of disasterrelated costs the County had incurred at the time of our fieldwork; reviewed the 

County’s procurement process for awarding $16 million of contracts for debris 

removal 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 

controls applicable to its grant activities because it was not necessary to 

accomplish our audit objective. However, we did assess 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 for and monitor 

disaster work. 

We conducted this performance audit between January 2017 through May 

2017 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 

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

greater than $123,100 [Notice of Adjustment of Disaster Grant Amounts, Vol. 81, No. 197, Fed. 

Reg. 70434 (October 12, 2016)] 

7 www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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. 

8 www.oig.dhs.gov OIG-17-105-D 
 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B 

FEMA Region IV Response 

9 www.oig.dhs.gov OIG-17-105-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

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-17-012) 

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 

Chair, Commissioner District 1 

10 www.oig.dhs.gov OIG-17-105-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