FEMA Should Disallow 

$12.2 Million in Disaster Case 

Management Program 

Grant Funds Awarded to 

New York for Hurricane Sandy 

November 18, 2020 

OIG-21-10 
November 18, 2020
DHS OIG HIGHLIGHTS 

FEMA Should Disallow $12.2 Million in 

Disaster Case Management Program Grant

Funds Awarded to New York for Hurricane Sandy 

November 18, 2020 

Why We Did 

This Audit 

At the request of FEMA, 

we conducted this audit to 

determine whether 

DHSES-NY accounted for 

and expended FEMA grant 

funds according to Federal 

regulations and FEMA 

guidelines. Under DCMP, 

FEMA provided DHSES-NY 

an Individual Assistance 

grant of $40.8 million to 

provide individual disaster 

recovery plans to disaster 

survivors. 

What We 

Recommend 

We made six 

recommendations to FEMA 

that, when implemented, 

should help strengthen 

oversight of FEMA’s 

individual assistance grant 

funds. 

For Further Information: 

Contact our Office of Public Affairs 

at (202) 981-6000, or email us at 

DHS-OIG.OfficePublicAffairs@oig.dhs.gov. 

What We Found 

The Federal Emergency Management Agency (FEMA) did 

not provide the oversight needed to ensure the Department 

of Homeland Security Emergency Services, New York 

(DHSES-NY) fully carried out its responsibilities related to 

the Disaster Case Management Program (DCMP). DHSESNY, the FEMA grantee, and its managing contractor did not 

always properly account for FEMA grant funds in 

accordance with Federal regulations and FEMA guidelines 

when approving claimed contractor costs, resulting in 

questioned costs of $12.2 million. Specifically, DHSES-NY: 

 lacked supporting documentation for $8.7 million in 

contractor claims; 

 approved and paid $1.7 million in ineligible other than 

personnel services costs; and 

 approved and paid $1.8 million in duplicate 

administrative overhead rate charges. 

This occurred because FEMA did not provide adequate 

oversight of DHSES-NY’s paper-based system for tracking 

DCMP grant funding and expenditures to ensure 

contractors claimed eligible costs for payment. 

Additionally, DHSES-NY did not investigate further 

questionable costs claimed prior to approving payment. As 

a result, there is no assurance the contractors’ claimed 

costs are valid, putting Federal funds and taxpayers’ money 

at risk of fraud, waste, and abuse. 

FEMA Response 

FEMA concurred with all six recommendations. Appendix A 

contains FEMA’s response in its entirety. All 

recommendations will remain open pending evidence to 

support completion of the corrective actions. 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background 

On October 30, 2012, the President declared Hurricane Sandy a major disaster 

in the State of New York and approved Individual Assistance (IA)1 program 

funding for the 13 counties affected.2 The Federal Emergency Management 

Agency (FEMA) approved the Department of Homeland Security Emergency 

Services, New York’s (DHSES-NY) application for about $40.8 million to provide 

Disaster Case Management Program (DCMP) services to disaster survivors for 

household recovery efforts. See Table 1 for the DCMP award and costs. 

Table 1. Total Award and Costs for DCMP Services 

Total DCMP 

Award 

DHSES-NY’s 

DCMP Costs 

19 Contractors’ DCMP 

Costs 

$40,839,256 $472,026 $40,367,230 

Source: Office of Inspector General (OIG) analysis of FEMA and DHSES-NY records 

DCMP, administered by FEMA and funded by the Disaster Relief Fund 

pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act 

(Stafford Act, as amended), is intended to promote effective delivery of postdisaster case management services in partnership with affected states. 

Specifically, DCMP is designed to provide relief to disaster survivors by 

connecting them with the resources and services of multiple state and locallevel agencies. DCMP provides Federal funding to voluntary, faith-based, and 

nonprofit organizations that deliver post-disaster case management services. 

In the event of a major disaster declaration (e.g., Hurricane Sandy), an affected 

state may request DCMP funding if the declaration is approved for an IA 

program grant. States responsible for DCMP oversight may contract directly 

with local service providers or with a contractor to manage service subproviders. 

DHSES-NY contracted with a non-profit organization based in New York City to 

manage the program for obtaining FEMA DCMP services. In all, there were 18 

subcontractors: the managing contractor subcontracted to itself and 17 other 

organizations to deliver DCMP services. 

1 FEMA's Individual Assistance Program helps individuals who have suffered loss from a 

disaster, whether a tornado or hurricane, an explosion, or a terrorist event. 

2 The October 30, 2012 declaration originally approved IA funding for seven counties. The 

amendments brought the total to 13 counties. 

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Department of Homeland Security 

Results of Audit 

DHSES-NY Did Not Have Supporting Documentation for 

$8.7 Million in Contractor Claims 

According to Federal regulations, costs must be adequately documented to be 

allowable under Federal awards. Additionally, the April 16, 2013 contract 

between DHSES-NY and the managing contractor required all accounting 

records be supported by source documentation to establish an auditable trail 

of evidence. However, DHSES-NY approved and paid its managing contractor’s 

submitted costs without sufficient supporting documentation. Specifically, the 

managing contractor lacked supporting documentation for: 

 personnel services, such as salary and benefits, totaling $6,102,360; 

 administrative overhead costs calculations totaling $2,531,519; and 

 other than personnel services contractor costs (OTPS), such as travel, 

telephone, and utility costs totaling $67,492. 

As a result, FEMA has no assurance that $8,701,371 in claimed costs were 

eligible for FEMA funding. 

Personnel Services Costs (Salaries and Fringe Benefits Costs) 

According to 2 Code of Federal Regulations (C.F.R.); Part 225, Appendix B; 

Section (8)(h)(4), when employees are engaged in multiple activities, 

documentation must show the allocation of salaries or wages to each program. 

The managing contractor and subcontractors collectively claimed $31,110,349 

in personnel services costs ($24,450,714 for salaries and $6,659,635 for fringe 

benefits). Of the total, we determined that $6,102,360 in costs claimed and 

paid ($4,805,905 for salaries and $1,296,455 for fringe benefits) to the 

managing contractor and its subcontractors were not properly supported by 

documentation. 

Specifically, for the claim amounts we reviewed, some contractors claimed they 

split their time performing work between DCMP and other Federal programs. 

Contractors recorded the proportion of time they spent working on DCMP 

activities, which they applied against their salaries and submitted as costs 

claimed for reimbursement. Table 2 provides an example of how a contractor 

calculated a cost claim for an employee, applying the percent of time spent 

working on DCMP activities to monthly salaries. 

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Department of Homeland Security 

Table 2. Example of Contractor Cost Claims for Work under 

Multiple Federal Programs, Including DCMP 

Source: OIG analysis of DHSES-NY and contractor records 

However, neither DHSES-NY nor the managing contractor could support 

contractor time percentage allocations related to DCMP activities with activity 

logs, time sheets, work logs, or equivalent documentation, as required by 44 

C.F.R. 13.20(b)(6). Additionally, they could not support how they calculated 

the associated $1,296,455 in fringe benefits. 

DHSES-NY and managing contractor officials stated they did not require 

subcontractors to comply with the documentation requirement to support the 

contractors’ time percentage allocations. As a result, DHSES-NY reimbursed 

$6,102,360 in questionable, unsupported claimed personnel costs. Further, 

because neither DHSES-NY nor the managing contractor required 

subcontractors to submit supporting documentation, FEMA has no assurance 

that the remaining $25,007,989 in personnel services costs claimed and paid 

under the contract for DCMP activities complied with Federal regulations. 

Administrative Overhead Rate Charges 

DHSES-NY did not comply with Federal requirements3 to support overhead rate 

charges properly, and 11 subcontractors did not comply with their contract 

terms resulting in $2,531,519 in unsupported costs. Specifically, 

 Five subcontractors did not submit the cost data they used to calculate 

administrative overhead rates totaling $914,615. These contractors 

instead submitted an annual percentage rate to claim administrative 

overhead rate costs to the program. We could not validate the rate 

percentages or the costs claimed. 

 Four subcontractors used rates from prior to the program’s existence to 

claim costs totaling $1,119,293 that were not applicable. 

 Two subcontractors did not submit any data for $497,611 in 

administration overhead rate charges. 

3 44 C.F.R. 13.20(b)(2) and (b)(6). 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

DHSES-NY did not properly review the administrative overhead rate charges 

and thus approved and paid $2,531,519 in questionable costs. 

Other Than Personnel Services Costs 

DHSES-NY approved and paid $67,492 in unsupported, OTPS claims for 

contractor travel, telephone, and utilities. Specifically, 

 $41,897 of the $77,744 claimed for privately-owned vehicles, rental 

cars, meals, and metro cards were not supported by mileage logs, 

receipts, and names of commuters; and 

 $25,595 of the $63,152 claimed for telephones and utilities were not 

supported by invoices, checks, or other payment documents. 

As a result, DHSES-NY reimbursed $67,492 in questionable, unsupported 

travel, telephone, and utility costs. 

DHSES-NY Approved and Paid $1.7 Million in Ineligible 

Costs 

DHSES-NY did not comply with FEMA requirements when it approved and paid 

$1,264,441 in contractors’ ineligible OTPS costs for rent and lease of buildings 

as well as $381,324 in ineligible, unrelated OTPS costs for equipment, 

construction, telephones/utilities, insurance, and personal services. As a 

result, DHSES-NY approved and paid $1,645,765 in ineligible costs. 

Ineligible Indirect OTPS Rent and Lease of Buildings Costs 

FEMA does not authorize the use of funds for indirect costs. According to 

Federal regulations,4 indirect costs are those incurred to benefit more than one 

cost objective (i.e., Federal program). DHSES-NY approved and paid 

$1,264,441 for contractors’ rent and lease costs for 34 office space locations 

under DCMP. However, these rent and lease costs were indirect costs because 

the contractors used the space for other Federal programs in addition to 

DCMP. Specifically: 

 For nine locations, subcontractors claimed $643,901 for leases 

established prior to Hurricane Sandy. Furthermore, the leased spaces 

were used for more than one Federal program, but subcontractors did 

not provide documentation showing how they allocated and dedicated 

square-foot office space use to DCMP. Because the leases were 

4 2 C.F.R. 225, App. A, Section (F)(1). 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

established prior to Hurricane Sandy and used for other purposes in 

addition to DCMP, they met the criteria for indirect costs and were 

ineligible for FEMA funding under DCMP. 

 Subcontractors claimed $373,532 for 19 locations established after 

Hurricane Sandy that were used for more than one Federal program. 

However, neither DHSES-NY nor the managing contractor provided 

documentation to show that these costs were necessary for performance 

and administration of DCMP. 

Additionally, we determined: 

 For five locations, subcontractors involved in more than one Federal 

program claimed $202,425 in costs even though the subcontractors did 

not pay rent for their work space. For these locations, subcontractors 

submitted other costs such as operating costs and utility expenses. 

 One lease established after Hurricane Sandy was between the managing 

contractor and a DCMP subcontractor involved in more than one 

Federal program. However, the managing contractor, which was the 

parent company of the subcontractor, held financial control of the 

subcontractor. As a result, we questioned $44,583 in costs claimed. 

Although FEMA initially disallowed rent and lease costs, it later agreed that 

because the grantee entered into a contract with a managing contractor, rent 

and lease costs were generally allowable as direct costs when executing the 

DCMP award. When requested, FEMA could not provide us legal justification 

for allowing lease and rent costs as direct costs under DCMP. 

Ineligible, Unrelated OTPS Costs for Equipment, Construction, 

Telephone/Utilities, Insurance, and Personal Services 

According to FEMA’s DCMP Guide: 

 The use of grant funds to conduct damage assessments beyond disaster 

victims’ unmet needs (food, clothing, shelter, financial, physical, 

emotional, or spiritual well-being) is not allowed. 

 FEMA must provide prior approval for equipment purchases equal to or 

in excess of $5,000. 

 Construction costs are not allowed; and telephone/utilities costs must 

be directly related to DCMP. 

However, DHSES-NY approved and paid $381,324 to its managing contractor 

and subcontractors for ineligible, unrelated OTPS project management, 

equipment, construction, telephone/utilities, insurance, and personal services 

costs. Specifically, the managing contractor’s claimed costs included: 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

 $276,975 for contractor performance of damage assessments of disaster 

victims’ homes, which did not meet DCMP criteria for ‘unmet’ needs; 

 $19,060 for telephone, security, and intercom systems without 

obtaining required pre-approval from FEMA to validate that the 

additional equipment directly supported DCMP; 

 $6,400 to begin a new lease, building renovations, and structural repairs 

for one subcontractor, but FEMA’s DCMP Guide states that construction 

costs are an unallowable expense; and 

 $6,260 for telephones and utilities incurred at locations not identified as 

performing DCMP work. 

Additionally, we identified ineligible contractor claims for: 

 $72,329 for insurance between the managing contractor and its 

subcontractors, although their contract stipulated subcontractors shall 

maintain general liability insurance costs “at their own expense”; and 

 $300 for acupuncture services. 

As a result, DHSES-NY approved and paid $381,324 in questionable costs for 

ineligible, unrelated OTPS claims for equipment, construction, 

telephone/utilities, insurance, and personal services. 

DHSES-NY Approved and Paid $1.8 Million in Duplicate 

Administrative Overhead Rate Charges 

According to the Stafford Act5 an entity may not receive duplicate funding from 

different sources for the same item of work. However, DHSES-NY’s managing 

contractor and subcontractors duplicated $1,831,834 in administration 

overhead rate charges. We reviewed and compared the expenses included in 

calculating the administration overhead rate to already claimed DCMP 

expenses. 

Eight contractors calculated this rate using their annual functional expenses 

for all Federal programs such as payroll/fringe benefits, rent, and utilities 

listed in their respective Comprehensive Annual Financial Reports (CAFR).6 

5 42 U.S.C. 5155. 

6 A CAFR is a set of U.S. government financial statements comprising the financial report of a 

state, municipal, or other governmental entity that complies with the accounting requirements 

promulgated by the Governmental Accounting Standards Board. The purpose is to provide 

accurate and meaningful information concerning an entity’s financial condition and 

performance. CAFRs are verified by independent auditors to ensure the entity has fairly 

presented its financial position, in all material respects, in accordance with accounting 

principles generally accepted in the United States. 

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Department of Homeland Security 

DCMP expenses were not removed when calculating this percentage, though it 

is also a Federal program. DHSES-NY approved and paid these costs twice 

(once in the administration overhead rate and the other within DCMP 

expenses) with FEMA grant funds. This occurred because DHSES-NY and 

FEMA did not properly review administration overhead rates claimed to 

determine duplication of costs. As a result, DHSES-NY paid $1,831,834 in 

questionable costs. 

DHSES-NY and FEMA Did Not Provide Appropriate Oversight of 

DCMP 

According to 44 C.F.R. 13.40(a), grantees are required to manage the day-today grant program activities. As the grantee, DHSES-NY was responsible for 

overseeing contractor activities, which included determining the eligibility of 

contractor-claimed costs and distributing payment. However, breakdowns in 

controls over the cost approval process resulted in DHSES-NY approving 

ineligible costs. 

To illustrate, DHSES-NY used a paper-based system that was inadequate to 

track grant funding and expenditures. DHSES-NY hired the managing 

contractor and paid it $4.7 million to be accountable for the program’s 

accounting system and records. The managing contractor submitted all 

records and invoices to DHSES-NY in paper form. To help determine eligibility 

of contractor-claimed costs, DHSES-NY then relied on a consulting firm to 

consolidate and review the cost documentation provided by the managing 

contractor and to make payment recommendations according to Federal 

regulations and FEMA guidance. However, this paper-based system caused 

the consulting firm significant challenges. The cost claims submitted by 19 

contractors had to be traced to more than 100 hardcopy binders of 

documentation to determine whether the costs complied with Federal 

regulations and program guidelines. According to 44 C.F.R. 13.20(a)(2), funds 

must be sufficiently traceable to establish they have not been used in violation 

of the restrictions and prohibitions of applicable statutes. See Figure 1 for 

photos of the voluminous hardcopy documentation. 

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OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Figure 1. DHSES-NY Binders of Funding and Expenditure Documentation

Source: OIG photos of binders belonging to DHSES-NY, July 2017 

Additionally, when the consulting firm identified instances of questionable 

eligibility for some claimed costs, the DHSES-NY approving official did not 

investigate further before approving the costs. In instances of questionable 

cost claims, the approving official should have requested additional 

documentation from the contractor to support the claims. According to 

DHSES-NY officials, they did not request additional supporting documentation 

from the managing contractor and subcontractors because requesting and 

reviewing the additional information would have delayed payment to the 

contractors. Under New York state law7 failure to make contract payments by 

required due dates would have required DHSES-NY to pay interest to the 

contractors. To avoid interest payments, DHSES-NY chose to approve 

contractor cost claims despite questionable support. 

According to 31 United States Code (U.S.C.) 7504(a)(1), FEMA is ultimately 

responsible for monitoring grants it awards, as well as overseeing the grantee’s 

use and management of Federal awards. However, FEMA did not provide 

7 New York State Finance Law, Section 179-f. 

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Department of Homeland Security 

sufficient grant oversight to ensure DHSES-NY had an adequate financial 

management system to account for and track DCMP grant funding. As a 

result, DHSES-NY, the FEMA grantee, and its managing contractor did not 

always properly account for FEMA grant funds in accordance with Federal 

regulations and FEMA guidelines when approving claimed contractor costs of 

$12.2 million. 

Without adequate internal controls and systems, future DCMP funding may 

also be exposed to significant risk of waste, fraud, and abuse. Therefore, FEMA 

should ensure grant recipients have adequate financial management systems 

in place to accurately account for DCMP grant funding. FEMA should also 

review the Disaster Case Management Program Guide’s grant monitoring 

requirements and revise them to ensure grantees comply with Federal 

regulations for managing day-to-day grant program activities. 

Recommendations 

Recommendation 1: We recommend the Regional Administrator, Federal 

Emergency Management Agency, Region II disallow unsupported salaries and 

fringe benefits, administrative overhead costs, and other than personnel 

services costs of $8,701,371. 

Recommendation 2: We recommend the Regional Administrator, Federal 

Emergency Management Agency, Region II ensure the remaining balance of 

$25,007,989 claimed for salaries and fringe benefits costs comply with Federal 

regulations and Federal Emergency Management Agency guidelines. 

Recommendation 3: We recommend the Regional Administrator, Federal 

Emergency Management Agency, Region II disallow $1,645,765 in ineligible 

other than personnel services costs that did not comply with Federal 

regulations and Federal Emergency Management Agency requirements. 

Recommendation 4: We recommend the Regional Administrator, Federal 

Emergency Management Agency, Region II disallow $1,831,834 in duplicate 

administrative overhead rate charges. 

Recommendation 5: We recommend the Regional Administrator, Federal 

Emergency Management Agency, Region II closely monitor the Department of 

Homeland Security Emergency Services, New York to ensure it maintains an 

accounting system that adequately identifies the source and application of 

funds with support by source documentation (44 C.F.R. 13.20(b)(2)(6)). 

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Department of Homeland Security 

Recommendation 6: We recommend the Federal Emergency Management 

Agency Administrator review and revise the Disaster Case Management Program 

Guide grantee monitoring requirements as required to ensure compliance with 

Federal regulations to manage the day-to-day operations of grant program 

activities (44 C.F.R. 13.40(a)). 

FEMA’s Response and OIG Analysis 

FEMA provided written comments to our draft report on September 17, 2020. 

FEMA concurred with all six recommendations. Appendix A contains a copy of 

FEMA’s response in its entirety. We also received technical comments and 

incorporated changes to the report where appropriate. We consider 

recommendations 1, 2, 3, 4, and 5 resolved and open with an estimated 

completion date of July 30, 2021. Recommendation 6 is considered unresolved 

and open. A summary of FEMA’s responses to the recommendations and our 

analysis follows. 

FEMA’s Response to Recommendation 1: Concur. FEMA will review the 

documentation associated with salaries and fringe benefits, administrative 

overhead costs, and other than personnel service costs to disallow any 

unallowable costs. Estimated Completion Date (ECD): July 30, 2021. 

OIG Analysis: FEMA’s corrective action is responsive to the recommendation. 

The recommendation will remain resolved and open until FEMA provides 

evidence to support that corrective actions are completed. 

FEMA’s Response to Recommendation 2: Concur. FEMA will work with the 

grantee to review the claims for salaries and fringe benefits and determine if 

they comply with Federal regulations and FEMA policy. ECD: July 30, 2021. 

OIG Analysis: FEMA’s corrective action is responsive to the recommendation. 

The recommendation will remain resolved and open until FEMA provides 

evidence to support that corrective actions are completed. 

FEMA’s Response to Recommendation 3: Concur. FEMA will work with the 

grantee to determine if the “other than personnel services” costs claimed 

comply with Federal regulations and FEMA policy and will disallow any 

ineligible costs. ECD: July 30, 2021. 

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OIG Analysis: FEMA’s corrective action is responsive to the recommendation. 

The recommendation will remain resolved and open until FEMA provides 

evidence to support that corrective actions are completed. 

FEMA’s Response to Recommendation 4: Concur. FEMA will review the 

administrative overhead rate charges and will disallow any duplicate costs. 

ECD: July 30, 2021. 

OIG Analysis: FEMA’s corrective action is responsive to the recommendation. 

The recommendation will remain resolved and open until FEMA provides 

evidence to support that corrective actions are completed. 

FEMA’s Response to Recommendation 5: Concur. FEMA will work with the 

grantee and provide technical assistance to ensure the grantee is aware of 

Federal grant requirements and regulations and maintains an accounting 

system that adequately identifies the source and application of funds. ECD: 

July 30, 2021. 

OIG Analysis: FEMA’s corrective action is responsive to the recommendation. 

The recommendation will remain resolved and open until FEMA provides 

evidence to support that corrective actions are completed. 

FEMA’s Response to Recommendation 6: Concur. FEMA indicated the 

Disaster Case Management Program Guide was superseded by the Individual 

Assistance Program and Policy Guide (IAPPG), published in March 2019. The 

IAPPG includes monitoring requirements to ensure compliance with Federal 

regulations. Additionally, FEMA offered Federal Grants Management courses 

and provided them to Individual Assistance staff in FEMA HQ and FEMA 

Regions in 2020 to ensure compliance with Federal regulations. According to 

FEMA, the previously delivered IAPPG and completed training actions address 

the intent of the recommendation. As such, FEMA requested we close this 

recommendation. 

OIG Analysis: FEMA’s corrective action is partially responsive to the 

recommendation. Although FEMA included monitoring requirements in the 

IAPPG, it has not updated the requirements to address the issues identified in 

our report. For instance, guidance is still lacking on how states should assist 

and monitor the grantee to ensure claimed costs are supported by source 

documentation, eligible for reimbursement, and not duplicated, in accordance 

with Federal grant requirements and regulations. Additionally, FEMA did not 

provide evidence of the Federal Grants Management courses offered and 

provided to Individual Assistance staff in FEMA Headquarters and Regions in 

2020. The recommendation will remain unresolved and open until FEMA 

provides evidence to support that corrective actions are completed. 

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Department of Homeland Security 

Objective, Scope, and Methodology 

The Department of Homeland Security Office of Inspector General was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by 

amendment to the Inspector General Act of 1978. 

We performed this audit based on a request from FEMA to review Individual 

Assistance funds awarded to DHSES-NY (Agreement Number 4085DRNYIDCM). 

Our objective was to determine whether DHSES-NY, as a grantee, accounted 

for and expended FEMA grant funds according to Federal regulations and 

FEMA guidelines for Disaster Number 4085 DR-NY. 

FEMA awarded $40.8 million to provide DCMP services to disaster survivors 

resulting from Hurricane Sandy in October 2012. The audit covered the period 

from October 30, 2012 to September 30, 2016. 

We selected our cost claim sample for testing from a universe of awarded 

Individual Assistance funds downloaded from FEMA’s computerized Integrated 

Financial Management Information System (IFMIS) and verified that payments 

and claimed costs were supported by source documents. We did not rely on or 

test the data from the system. However, we deemed the information sufficient 

to answer our audit objective. We compared FEMA’s awarded costs to state 

payments and verified the payments were supported by source documents. 

We assessed the reliability of computer-based and hardcopy data received from 

FEMA, DHSES-NY, and the managing contractor’s claimed costs by reviewing 

supporting documentation. For personnel services costs (salaries and fringe 

benefits), we judgmentally selected a sample based on dollar value totaling 20 

percent of the claimed and paid amounts. 

For OTPS costs, we judgmentally selected samples based on the dollar value 

totaling 76 percent of the claimed and paid amounts. Lastly, for 

administration overhead and DHSES-NY’s oversight costs, we performed a 100 

percent review. For the purpose of this report, we determined the data was 

sufficiently reliable. 

To accomplish our objective, we interviewed FEMA, DHSES-NY, and managing 

contractor personnel; gained an understanding of DHSES-NY’s method of 

accounting for DCMP-related costs in our audit scope; reviewed applicable 

Federal regulations and FEMA guidelines; and performed other procedures 

considered necessary to accomplish our audit objective. In addition, we 

reviewed FEMA’s and DHSES-NY’s determination memos and other 

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Department of Homeland Security 

documents such as contracts and contract amendments. 

We did not perform a detailed assessment of DHSES-NY’s internal controls 

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

audit objective. 

We conducted this performance audit between July 2017 and October 2019 

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. 

Office of Audits contributors to this report are David Kimble, Director (retired); 

Larry Arnold, Director; Felipe Pubillones, Audit Manager; Nadine F. Ramjohn, 

Auditor-in-Charge; Sabrina Paul, Program Analyst; Helen White, Auditor; 

Amos Dienye, Auditor; Nedra Rucker, Auditor; Jessica Makowski, Program 

Analyst; Omar Russell, Auditor; Angela McNabb, Independent Referencer 

Reviewer; and Thomas Hamlin, Communications Analyst. 

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Department of Homeland Security 

Appendix A 

FEMA’s Response to the Draft Report 

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Appendix B 

Potential Monetary Benefits 

Table 3. Questioned Costs by Finding Area and Program Area 

Finding Area Program Area Questioned Cost Amount 

Unsupported Costs 

Personnel Services (Salaries 

and Fringe Benefits) $6,102,360 

Administration Overhead Rate $2,531,519 

OTPS (Travel, Telephone and 

Utilities) $67,492 

Ineligible Costs 

OTPS (Rent and Lease of 

Buildings) $1,264,441 

OTPS (Unrelated Costs for 

Insurance, Equipment, 

Construction, 

Telephone/Utilities, and 

Personal Services) $381,324 

Duplicate Costs Administration Overhead Rate $1,831,834 

Total $12,178,970 

Type of Potential Monetary 

Benefit 

Rec. 

No. 

Amounts Federal Share 

Questioned Cost – Unsupported 1 $8,701,371 $8,701,371 

Questioned Cost – Ineligible 3 $1,645,765 $1,645,765 

Questioned Cost – Duplicate 4 $1,831,834 $1,831,834 

Totals $12,178,970 $12,178,970 

Source: OIG analysis of findings in this report 

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Department of Homeland Security 

Appendix C 

Report Distribution 

Department of Homeland Security 

Secretary Chief of Staff 

Chief Financial Officer 

Under Secretary for Management Director, GAO/OIG Liaison Office 

Federal Emergency Management Agency 

Administrator Chief of Staff 

Deputy Chiefs of Staff Chief Financial Officer Chief Counsel 

Director, Risk Management and Compliance Audit Liaison, FEMA Region II 

Audit Liaison, FEMA (Job Code G-17-031-EMO-FEMA) 

Office of Management and Budget 

Chief, Homeland Security Branch DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees 

External 

State Auditor, New York 

New York State Division of Homeland Security and Emergency Services 

Executive Director, Governor’s Office, New York 

www.oig.dhs.gov 18 OIG-21-10 
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