Department of Homeland Security
 

Erie County, New York, Generally Followed 


Regulations for Spending Public Assistance Grant 


Funds for Flooding in August 2009 


OIG-13-25 January 2013
 
OFFICE OF INSPECTOR GENERAL 

ikpartment ofIIomdan(i Stxurily 

JAN 2. 9 2013 

MEMORANDUM FOR: 

Region 

FROM: 

i 

Office of 

SUBJECT: Erie County, New York, Generally Followed Regulations for 

Spending Public Anistance Grant Funds for Flooding in 

August 2009 

Audit Report Number OIG-13-2S 

We ~udited Public Assistance (PA) funds awarded to the Erie County (County), New York 

(Public Assistance Identification Number 029-99029-00). Our audit objective was to determine 

whether the County accounted for Jnd expended Federal Emergency ManJgement Agency 

(FEMA) gr~nt funds according to Federal regulation5 ~nd FEMA guidelines. 

The New York State Divi5ion of Homeland Security and Emergency Services (HSES), a FEMA 

grantee, ~warded the County $10.2 million for damJge5 cau~ed bv he~vy r~ins in August 2009. 

The award provided 75 percent FEMA funding for 28 large and 177 small projects.' The ~udit 

covered the period August 8, 2009, through August 17, 2012, and included a review of 11 

large project5 tot~ling less than $1.5 million, or less th~n 15 percent of t he total award (see 

Exhibit A, Schedule of Project~ Audited)_ As of the cutoff date of our audit, none of the I~ rge 

projects that we reviewed were closed. 

We conducted thi5 performance ~udit between February ~nd August 2012 pursu~nt to the 

Inspector General Act of 1978, as amended, and ~ccording to generally accepted government 

auditing standards_ The~e standards require that we plan and perform the ~udit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and condu5ion~ 

b~sed upon our audit objective. We believe th~t the evidence obtained provides a 

reasonable basi5 for our findings and conclusions based upon our ~udit objective We 

conducted this audit u5ing the statutes, regulations, and FEMA policies and guidelines in 

effect ~t the time of the disaster. 

'Federal reEu lation, in effect ot th" time 01 Ihe di""'ler set tr.e IMp,e project thr.,hold at $6 ,lOO 
 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

We interviewed FEMA, HSES, and County officials; reviewed judgmentally selected 

project costs (generally based on dollar value); and performed other procedures 

considered necessary to accomplish our objective. We did not assess the adequacy of 

the County’s internal controls applicable to grant activities because it was not necessary 

to accomplish our audit objective. We did, however, gain an understanding of the 

County’s method of accounting for disaster-related costs and its procurement policies 

and procedures. 

RESULTS OF AUDIT 

The County accounted for grant funds on a project-by-project basis as required and 

followed spending regulations. However, we did determine that FEMA should 

deobligate and put to better use $73,251 of unused Federal funds that exceed the 

amount the County spent. In addition, we found $13,567 in unsupported costs. 

Finding A: Unused Federal Funds 

The County spent $73,251 less than the amount authorized on three completed projects 

(see table 1). Even though the County has not submitted its final claim, FEMA should 

deobligate and put to better use the $73,251. FEMA approved the projects based on 

estimates. 

Table 1. Estimated and Actual Project Costs 

Project Amount Actual Amount 

Number Estimated Costs Questioned 

264 $ 143,305 $ 122,319 $ 20,986 

265 115,333 63,989 51,344 

1195 128,281 127,360 921

 $ 73,251 

County Response. County officials agree with this finding. The actual costs (as shown in 

table 1) will be used by the County to close those projects. 

Finding B: Ineligible Costs 

Of the County’s $13,567 in direct administrative costs, we question $13,567 as being 

unsupported (see table 2). 

www.oig.dhs.gov 2 OIG-13-25 
 

 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 2. Ineligible Costs
 

Project Number Amount Ineligible 

266 $ 995 

326 8,227 

491 1,534 

632 2,811

 $13,567 

We reviewed individual handwritten time records that the County used as support for 

its direct administrative costs. During our review, we noted a great similarity in 

signatures. We determined that a clerk had completed the time records and signed for 

the employees, but did not have any documentation for the time being recorded. No 

notations on the time records being submitted for reimbursement signified that the 

signatures were not authentic. The County could not provide any alternative 

documentation for the time that was claimed. Thus, we question $13,567 for direct 

administrative costs claimed as inadequately supported, and we referred this manner to 

our Office of Investigations for further review. 

County Response. County officials agree with this finding. 

RECOMMENDATIONS 

We recommend that the Regional Administrator, FEMA Region II: 

Recommendation #1: Deobligate $73,251 (Federal share $54,938) as unneeded project 

funding. (See exhibit A.) 

Recommendation #2: Disallow $13,567 (Federal share $10,175) as unsupported costs. 

(See exhibit A .) 

DISCUSSION WITH MANAGEMENT AND AUDIT FOLLOWUP 

We discussed the results of our audit with County officials and included their comments 

in this report, as appropriate. We held an exit conference with the County on August 

17, 2012. 

Within 90 days of the date of this memorandum, please provide our office with a 

written response that includes your (1) agreement or disagreement, (2) corrective 

action plan, and (3) target completion date for each recommendation. Also, please 

include responsible parties and any other supporting documentation necessary to 

www.oig.dhs.gov 3 OIG-13-25 
 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

inform us about the current status of the recommendation. Until your response is 

received and evaluated, the recommendation will be considered open and unresolved. 

Consistent with our responsibility under the Inspector General Act, we are providing 

copies of our report to appropriate congressional committees with oversight and 

appropriation responsibility over the Department of Homeland Security. We will post 

the report on our website for public dissemination. 

Major contributors to this report were Kaye McTighe, Division Director; Trudi Powell, 

Audit Manager; and Ken Valrance, Senior Auditor. 

Please call with any questions, or your staff may contact John Kelly, Deputy Assistant 

Inspector General at (202) 254-4100. 

www.oig.dhs.gov 4 OIG-13-25 
 

 

 

 

 

 

 

 

 

 

 

 

 

Project 

Number 

Award 

Amount 

Unused 

Funds 

Finding A Finding B 

Total 

Questioned 

Costs 

264 $ 143,305 $ 20,986 $ 20,986 

265 115,333 51,344 51,344

266 70,367 $ 995 995 

326 415,976 8,227 8,227

344 91,136 0

347 94,568 0

491 76,605 1,534 1,534

632 167,040 2,811 2,811

814 80,355 0

815 75,357 0

1195 128,281 921 921

Totals $1,458,323 $ 73,251 $13,567 $86,818

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

EXHIBIT A 

Schedule of Projects Audited
 

Erie County, New York
 

FEMA Disaster Number 1857-DR-NY
 

www.oig.dhs.gov 5 OIG-13-25 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Report Distribution 

Department of Homeland Security 

Secretary 

Chief Financial Officer 

Under Secretary for Management 

Audit Liaison, DHS 

Federal Emergency Management Agency 

Administrator 

Chief of Staff 

Chief Financial Officer 

Chief Counsel 

Director, Risk Management and Compliance 

Audit Liaison, FEMA Region II 

Audit Liaison, FEMA (Job Code G-12-016) 

Grantee 

Director, New York State Division of Homeland Security and Emergency Services 

Deputy Comptroller for local Government and School Accountability, New York State 

Division of Homeland Security and Emergency Services 

Subgrantee 

Erie County, New York 

www.oig.dhs.gov 6 OIG-13-25 
 

ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this document, please call us at (202) 254-4100, fax your 

request to (202) 254-4305, or e-mail your request to our Office of Inspector General 

(OIG) Office of Public Affairs at: DHS-OIG.OfficePublicAffairs@oig.dhs.gov. 

For additional information, visit our website at: www.oig.dhs.gov, or follow us on Twitter 

at: @dhsoig. 

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