Fort Bend County, Texas, 

Needs Additional 

Assistance and 

Monitoring to Ensure 

Proper Management of Its 

FEMA Grant 

June 28, 2017 

OIG-17-83-D 
 

 

 

 

DHS OIG HIGHLIGHTS 

Fort Bend County, Texas, Needs

Additional Assistance and Monitoring to

Ensure Proper Management of Its FEMA Grant
 

June 28, 2017 

Why We Did 

This Audit 

The County estimated it 

had sustained 

$6.4 million in damages 

from flooding in April 

and May 2016, for two 

disasters. 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 

FEMA should not fund 

$50,000 of unsupported 

force account labor 

costs and direct Texas to 

provide additional 

technical assistance and 

monitoring to the 

County to ensure it 

complies with Federal 

regulations and FEMA 

guidelines. 

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 

Fort Bend County, Texas (County), needs additional 

technical assistance to account for FEMA Public 

Assistance grant funds according to Federal regulations 

and FEMA guidelines. Specifically, the County needs to 

revise its accounting policies and procedures to ensure it 

can fully support the disaster work it intends to 

complete with its own labor force. In addition, although 

the County’s procurement policies and procedures 

generally comply with Federal procurement standards, 

they did not include all required contract provisions in 

either of their disaster contracts. Because of our audit, 

the County revised its policies and procedures to include 

implementing a plan that specifically addressed Federal 

requirements for documenting and accounting for 

disaster-related costs and compliance with Federal 

procurement standards. 

At the time of our fieldwork, FEMA had not completed 

project worksheets to define the scope of disaster work. 

Because of this uncertainty, Texas should provide the 

County with additional technical assistance and 

monitoring. Doing so should provide FEMA reasonable 

assurance that the County will follow Federal accounting 

and procurement standards in spending the remaining 

estimated $5.0 million in eligible disaster-related costs. 

FEMA Response 

FEMA officials generally agreed with our findings and 

recommendations and have taken action sufficient to 

resolve and close our recommendations. Therefore, we 

consider this report closed and require no further action 

from FEMA. 

www.oig.dhs.gov OIG-17-83-D 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 


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


June 28, 2017 

MEMORANDUM FOR: 

FROM: 

George A. Robinson 

Regional Administrator, Region VI 

Federal Emergency Management Agency 

/£c:­?___;r 

John E. McCoy II 

Acting Assistant Inspector General 

Office of Emergency Management Oversight 

SUBJECT: Fort Bend County, Texas, Needs Additional Assistance 

and Monitoring to Ensure Proper Management ofIts 

FEMA Grant 

Audit Report Number OIG-17-83-D 

We audited the capability of Fort Bend County, Texas (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 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. 

We initially planned a review of DR-4269-TX with estimated disaster damages 

from severe storms and flooding of $4. l million. However, because we identified 

potential problems with the County's policies, procedures, and business 

practices for documenting force account labor costs and its methodology for 

procuring contractors, we expanded the scope of our audit to include the more 

recent disaster DR-4272-TX with estimated disaster damages of approximately 

$2.3 million. 

At the time of our fieldwork, the Texas Department of Public Safety, Texas 

Division of Emergency Management (Texas), a FEMA grant recipient, had not 

yet awarded any of the $6.4 million in disaster damages the County estimated 

it sustained from severe storms and flooding in April 2016 (DR-4269-TX) or 

May 2016 (DR-4272-TX). The awards will provide 75 percent Federal funding 

for debris removal, emergency protective measures, and permanent work. The 

disasters did not cause damage to insurable facilities. Therefore, the County 

did not receive any insurance proceeds for damages resulting from these 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

disasters or need to obtain insurance to cover similar damages in future 

disasters. At the time of our fieldwork, FEMA had not completed project 

worksheets to define the scope of disaster work, and the County had not yet 

completed most of its disaster-related work or filed claims for reimbursement. 

Background 

Fort Bend County is located in southeast Texas about 33 miles west of 

Houston. It covers approximately 875 square miles and is home to nearly 

585,000 residents. In mid-April 2016, storms caused flooding of the County’s 

waterways and damage to several of its eligible infrastructures. The President 

declared a major disaster (DR-4269-TX) on April 25, 2016. The next month, 

severe storms caused additional flooding and damage to the County’s ditches 

and culverts. On June 11, 2016, the President declared another major disaster 

(DR-4272-TX) for damages that occurred in May 2016. 

Figure 1: Bessie Creek Washout, Fort Bend County, Texas 

Source: Fort Bend County, Texas 

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OFFICE OF INSPECTOR GENERAL 

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Results of Audit 

The County does not have adequate accounting policies, procedures, and 

business practices to adequately document and support its own labor and 

equipment costs in accordance with Federal regulations and FEMA guidelines. 

As a result, FEMA should not fund $50,000 of force account labor costs the 

County improperly documented. In addition, although the County’s 

procurement policies, procedures, and business practices generally comply 

with Federal procurement standards, they did not include all required 

provisions in contracts the County awarded totaling $1.4 million. Therefore, 

FEMA should direct Texas, as FEMA’s grantee, to provide the County with 

additional technical assistance and monitoring to ensure it complies with all 

applicable Federal requirements in spending the remaining estimated $5.0 

million for eligible disaster work for the two disasters. 

Finding A: Policies, Procedures, and Business Practices 

Project Cost Accounting 

The County does not have adequate policies, procedures, and business 

practices to account for FEMA grant funds properly. As a result, the County 

cannot adequately identify the source and application of Federal funds or to 

support project costs. For instance, many of the employees’ timesheets did not 

(1) include an adequate description of the disaster-related work performed, 

(2) identify hours worked to a specific disaster or project, or (3) include 

required employee or supervisor approvals. Federal regulations and FEMA 

guidelines require that — 

x subrecipients 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)); and 

x applicants 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). 

County officials said they plan to spend about $635,000 using their own labor, 

materials, and equipment for disaster-related repairs. We discussed accounting 

procedures with County officials and reviewed examples of documentation 

supporting disaster costs. Although the County designates specific accounting 

codes for all disaster-related costs, it does not have procedures in place to 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

adequately document and support its own labor, materials, and equipment 

costs. 

County officials said they were unaware of the Federal requirements for 

documenting and supporting labor, materials, and equipment costs and, as a 

result, will not claim FEMA reimbursement for the County’s unsupported force 

account labor costs of about $50,000. However, if the County decides to seek 

reimbursement, FEMA should disallow the $50,000 unless the County can 

provide documentation to support these costs. The County still intends to 

claim the remaining $585,000 of estimated disaster-related labor, materials, 

and equipment costs for permanent work. Therefore, Texas should provide the 

County with additional assistance and monitoring to ensure it maintains 

records that adequately identify and support its labor and equipment costs. 

Because of our audit, the County said it will revise its policies and procedures 

to require its employees to describe the work they perform for each project by 

disaster, and to sign and obtain proper approvals on individual timesheets. The 

County also implemented a compliance plan that specifically addresses Federal 

requirements for documenting and accounting for its disaster-related costs. 

Procurement Practices 

The County’s procurement policies, procedures, and business practices 

generally comply with Federal procurement standards. Nevertheless, the 

County did not include all required Federal provisions in either of its debris 

removal or debris monitoring contracts totaling $1.4 million. Federal 

regulations require specific provisions for contracts and subcontracts, 

including remedies and termination clauses, non-discrimination, compliance 

with labor laws, and prohibitions of “kickbacks” (2 CFR Part 200, Appendix II). 

These provisions describe the rights and responsibilities of the parties and 

minimize the risk of misinterpretations and disputes. 

To evaluate the County’s procurement practices, we reviewed its policies and 

procedures in effect at the time of the two disasters and reviewed the 

methodology it used to award contracts. We also discussed procurement 

practices with County officials. Although the County did not follow all Federal 

procurement standards, it did have policies, procedures, and business 

practices in place to (1) conduct cost or price analyses; (2) maintain adequate 

records documenting its procurement history; (3) avoid or prevent situations 

involving conflicts of interest; and (4) monitor its vendors to ensure they met 

the terms, conditions, and specifications of their contracts.

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

County officials said they plan to use contract labor for approximately 

$5.7 million for debris removal and the repair and replacement of drainage 

ditches and culverts. As of August 26, 2016, the County had awarded two 

contracts totaling $1.4 million, and incurred $767,000 in debris removal and 

monitoring costs. We did not question any contracting costs because the 

County generally followed Federal procurement regulations. 

On August 23, 2016, shortly after our audit began, County officials informed 

us that they were not in compliance with all Federal procurement standards 

and provided us with a memorandum addressed to their independent auditors 

indicating their intent to comply with previous Federal procurement standards 

(44 CFR 13.36) as permitted under 2 CFR 200.110(a). To make this election, 

the County must have previously documented its decision in its internal 

procurement policies. Nonetheless, the County did not comply with those 

regulations nor had it incorporated its decision to comply with previous 

procurement standards in its policies and procedures. 

As a result of our audit, the County implemented a plan to provide reasonable 

assurance that it complies with Federal procurement requirements that 

includes, among other actions, working closely with its independent auditors to 

identify and correct contract procurement weaknesses in accordance with 

2 CFR 200.317 through 2 CFR 200.326. 

Finding B: Grant Management 

Texas should continue to monitor and provide technical assistance to the 

County to ensure it complies with all Federal accounting and procurement 

standards. In its FEMA-State Agreement (FSA-4269-FEMA-DR-TX, p. 2), Texas 

agreed to comply with all applicable Federal laws and regulations, including 

2 CFR Part 200. In addition, Federal regulation at 2 CFR 200.331(d) requires 

recipients to monitor the subrecipient’s activities “to ensure that the subaward 

is used . . . in compliance with Federal statutes, regulations, and the terms and 

conditions of the subaward.” 

On July 6, 2016, Texas conducted a joint meeting with potential disaster 

applicants (including the County) for DR-4269-TX and DR-4272-TX, and on 

July 25, 2016, participated in a FEMA-led meeting to discuss the Public 

Assistance grant program’s requirements. Texas also provided the County with 

copies of its Procurement Guidance Checklist on August 12, 2016, and again 

on October 4, 2016, as an aid to properly procuring its contracts. In addition, 

Texas officials said they had hired approximately 84 individuals to help provide 

technical assistance and monitor subrecipients’ activities, and that during 

future visits with the County, they would have addressed and resolved the 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

issues we identified. However, the County could benefit from additional grant 

management and continued monitoring to ensure that it complies with Federal 

accounting and procurement standards. Doing so should provide reasonable 

assurance that the County will spend the remaining $5.0 million ($6.4 million 

minus $1.4 million awarded contract costs) in estimated damages for eligible 

disaster work in accordance with Federal regulations and FEMA guidelines. 

Recommendations 

We recommend that the Regional Administrator, FEMA Region VI: 

Recommendation 1: Not fund $50,000 ($37,500 Federal share) of 

unsupported labor costs, unless the County can provide FEMA with 

documentation to support the costs (finding A).1 We consider this 

recommendation to be resolved and closed and require no further action from 

FEMA because, on May 30, 2017, FEMA agreed that if the County submits 

funding for the affected projects, FEMA will review them to determine what 

costs, if any, are eligible and reasonable for FEMA reimbursement. 

Recommendation 2: Direct Texas to provide additional technical assistance 

and monitoring to the County to ensure it complies with Federal accounting 

and procurement regulations for awarding disaster contracts and to prevent 

the potential improper spending of approximately $585,000 ($438,750 Federal 

share) in estimated labor, materials, and equipment costs (finding B). We 

consider this recommendation to be resolved and closed and require no further 

action from FEMA because on February 13, 2017, FEMA instructed Texas to 

continue providing technical assistance to the County, while monitoring their 

compliance with Federal procurement, accounting, and grants management 

standards. 

Discussions with Management and Audit Follow-Up 

We discussed the preliminary results of our fieldwork with FEMA and Texas 

officials on September 7, 2016, and County officials on August 26, 2016, as 

well as during our audit. We considered their comments in developing our final 

report and incorporated their comments as appropriate. We also provided a 

draft report in advance to these officials and discussed it at exit conferences 

with FEMA officials on January 10, 2017; and with County and Texas officials 

on January 11 and January 12, 2017, respectively. FEMA and Texas officials 

generally agreed with our findings and recommendations. However, County 

officials disagreed and said they would provide us with additional 

1 Because FEMA had not yet obligated these costs, we classify them as cost avoidance. 

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documentation not previously provided to address our original findings. As a 

result of that new information, we revised the report accordingly. 

On May 30, 2017, we received FEMA’s written response to this report (see 

appendix B). FEMA officials concurred with recommendations 1 and 2. FEMA 

officials acknowledge the County did not have a system in place to allow it to 

track its employees’ work on a project-by-project basis and agreed that if the 

County submitted requests for funding that it will review them to determine 

what costs, if any, are eligible and reasonable for FEMA reimbursement. FEMA 

officials also acknowledge the County needs additional technical assistance 

and on February 13, 2017, instructed Texas to continue providing technical 

assistance to the County, while monitoring their compliance with Federal 

procurement, accounting, and grants management standards. Based on 

FEMA’s proposed actions, we consider recommendations 1 and 2 to be resolved 

and closed and require no further action from FEMA. 

The Office of Emergency Management Oversight major contributors to this 

report are Paige Hamrick, Director; David B. Fox, Audit Manager; Raeshonda 

Keys, Auditor-in-Charge; Douglas Denson, Auditor; Jacqueline Lim, Auditor; 

and John Skrmetti, Independent Reference Reviewer. 

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

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

Paige Hamrick, Director, Central Regional Office - North, at (214) 436-5200. 

www.oig.dhs.gov 7 OIG-17-83-D 
 

 

OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

We audited the capability of Fort Bend County, Texas (County), Public 

Assistance Identification Number 157-99157-00 to manage Federal Emergency 

Management Agency (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 grant funds according 

to Federal regulations and FEMA guidelines for FEMA Disaster Number DR4269-TX. Because our initial review of the County’s force account labor and 

contracting methodology identified potential problems and because the County 

was the recipient of another FEMA Public Assistance grant, for force account 

and contracting purposes only, we expanded the scope of our audit to include 

FEMA Disaster Number DR-4272-TX. 

As of August 26, 2016, the cutoff date of our audit, FEMA had not yet obligated 

any funding or completed its development of project worksheets for damages 

resulting from the two severe storms and flooding from April 17, 2016, through 

May 26, 2016. The County estimated it had sustained approximately 

$6.4 million of disaster-related damages (see table 1). The award will provide 

75 percent FEMA funding for debris removal, emergency protective measures, 

and permanent work for large and small projects.2 

Table 1: Estimated Disaster-Related Damages by Disaster 

Disaster Estimated 

Damages Force Account Contract 

DR-4269-TX $ 4,050,000 $ 0 $ 4,050,000 

DR-4272-TX 2,300,000 635,000 1,665,000 

Totals $6,350,000 $635,000 $5,715,000 

Source: Office of Inspector General (OIG) analysis 

We interviewed FEMA, Texas, and County officials; judgmentally selected and 

reviewed (generally based on dollar amounts) procurement transactions; 

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 over 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. 

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

greater than $121,800 [Notice of Adjustment of Disaster Grant Amounts, Vol. 80, No. 198, Fed. 

Reg. 61,836 (Oct. 14, 2015)]. 

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OFFICE OF INSPECTOR GENERAL 

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Appendix A (continued) 

We conducted this performance audit between August 2016 and January 

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 

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 two 

disasters. 

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Appendix B 

FEMA Region VI Audit Response 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B (continued) 

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OFFICE OF INSPECTOR GENERAL 

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Appendix B (continued) 

www.oig.dhs.gov 12 OIG-17-83-D 
 

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

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Appendix C 

Potential Monetary Benefits 

Table 2: Potential Cost Avoidance 

Disaster 

Number Type of Work 

Estimated Cost 

to Repair or 

Incurred 

Cost 

Avoidance* 

DR-4269-TX 

Contract (Estimated) $ 4,050,000 $ 0 

Subtotal $ 4,050,000 $ 0 

DR-4272-TX 

Contract (Incurred) $ 767,000 0

 Contract (Estimated) 898,000 0

 Force Account 

(Incurred) ** 50,000 50,000

 Force Account 

(Estimated) 585,000 585,000 

Subtotal $ 2,300,000 $ 635,000 

Totals $6,350,000 $635,000 

Source: Office of Inspector General (OIG) analysis 

* At the time of our fieldwork, FEMA had not yet obligated funds to cover the estimated 

$6,350,000 of damage to the projects on which the County expects to expend disasterrelated costs; therefore, we classify these costs as cost avoidance. In addition, we did not 

question any contract costs because the County generally followed Federal procurement 

regulations. 

** County officials said they will no longer seek FEMA reimbursement for these costs. 

Table 3: Summary of Potential Monetary Benefits 

Type of Potential Monetary Benefit Amount 

Federal 

Share 

Questioned Costs – Ineligible $ 0 $ 0 

Questioned Costs – Unsupported 0 0 

Funds Put to Better Use (Cost Avoidance) 635,000 476,250 

Totals $635,000 $476,250 

Source: OIG analysis of report findings 

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Department of Homeland Security 

Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Chief of Staff 

Chief Financial Officer 

Under Secretary for Management 

Audit Liaison, DHS 

Chief Privacy Officer 

Federal Emergency Management Agency 

Administrator 

Chief of Staff 

Chief Financial Officer 

Deputy Chief Financial Officer 

Chief Counsel 

Chief Procurement Officer 

Director, Risk Management and Compliance 

Federal Coordinating Officer, DR-4269-TX and DR-4272-TX 

Audit Liaison, FEMA (Job Code G-16-047) 

Audit Liaison, FEMA Region VI 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

External 

Director, Texas Department of Public Safety, Texas Department of Emergency 

Management 

Audit Liaison, Texas Department of Public Safety, Texas Department of 

Emergency Management 

State Auditor, Office of the Texas State Auditor 

County Auditor, Fort Bend County, Texas 

www.oig.dhs.gov 14 OIG-17-83-D 
 

 

 

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