Department of Homeland Security
 

Costs Claimed by Snoqualmie Pass, WA, 


Fire & Rescue Under Fire Station Construction 


Grant Number EMW-2009-FC-02883R 


American Recovery and Reinvestment Act of 2009 

OIG-13-02 October 2012
 
OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

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

OCT 18 2012 

MEMORANDUM FOR: Elizabeth M. Harman 

Assistant Administrator 

Grant Programs Directorate 

Federal Emergency Management Agency 

FROM: Anne l. Richards ~,/t~ Assistant Inspector General for Audits 

SUBJECT: Costs Claimed by Snoqualmie Pass, WA, Fire & Rescue 

Under Fire Station Construction Grant Number EMW-2009-

FC-02883R 

Attached for your action is our final letter report, Costs Claimed by Snoqualmie Pass, WA, 

Fire & Rescue, Under Fire Station Construction Grant Number EMW-2009-FC-02883R. 

Since the report contains no recommendations to Federal Emergency Management 

Agency officials, we did not solicit formal comments. 

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

copies of our report to 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 are Roger LaRouche, Director of Recovery Act Audits; 

Matthew Mongin, Auditor; and Jeanne Genao, Report Referencer. 

Please call me with any question, or your staff may contact John E. McCoy II, Deputy 

Assistant Inspector General for Audits, at (202) 254-4100. 

Attachment 
 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Background 

The American Recovery and Reinvestment Act of 2009 (Recovery Act), as amended, 

appropriated $210 million to the Federal Emergency Management Agency (FEMA) for 

competitive grants for modifying, upgrading, or constructing non-Federal fire stations. 

On September 25, 2009, FEMA awarded a grant of $4,007,374 to Snoqualmie Pass Fire 

& Rescue to construct a new fire station. 

The grant specified a period of performance from September 25, 2009, to September 

24, 2012. As of April 15, 2012, Snoqualmie Pass Fire & Rescue had completed the 

construction of the new fire station (see figure 1) and had received reimbursements of 

$4,007,374 from FEMA for project design, engineering, construction, and management. 

Figure 1. Snoqualmie Pass, WA, Fire & Rescue Fire Station #291

Source: KIROTV Seattle, Washington, website. 

Under the terms of the grant, Snoqualmie Pass Fire & Rescue agreed to use the grant 

funds according to FEMA’s American Reinvestment and Recovery Act, Assistance to 

Firefighters, Fire Station Construction Grants, Guidance and Application Kit (Guidance 

and Application Kit), and to comply with Office of Management and Budget (OMB) 

Circular A-87, Revised, Cost Principles for State, Local and Indian Tribal Governments,

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

and the Uniform Administrative Requirements for Grants and Cooperative Agreements 

to State and Local Governments in the Code of Federal Regulations (44 CFR 13). The 

grant also includes requirements for complying with OMB Circular A-133, Revised, 

Audits of States, Local Governments, and Non-Profit Organizations, and Recovery Act 

provisions for submitting quarterly recipient reports to the Department of Homeland 

Security (DHS) on the use of Recovery Act funds; paying prevailing wages as 

determined by the Secretary of Labor; and using American-made iron, steel, and 

manufactured goods. 

Results of Audit 

Snoqualmie Pass Fire & Rescue spent $5,862,192 to complete construction of the new 

fire station. Of that amount, we determined that Snoqualmie Pass Fire & Rescue 

incurred sufficient allowable, allocable, and reasonable costs to earn the $4,007,374 

that it claimed for reimbursement. During our inspection of the new fire station, we 

observed a large multipurpose room that could be used for training firefighters or for 

various community events and ancillary offices. Although FEMA specifically denies the 

use of grant funds for nonoperational space, FEMA does permit grantees to construct 

such facilities using local funds, as did Snoqualmie Pass Fire & Rescue. We concluded

that Snoqualmie Pass Fire & Rescue complied with Recovery Act requirements for 

submitting quarterly Recovery Act reports to DHS and for ensuring that contractors 

were paid prevailing wages and used American-made iron, steel, and manufactured 

goods in the construction of the new fire station. 

Nonoperational Space 

The Guidance and Application Kit states that spaces for activities that are not directly 

related to daily operation of the fire department are ineligible for grant reimbursement. 

Such spaces include community meeting space, ballrooms, and support spaces for 

administrative or other governmental functions such as police or emergency 

management facilities. The Guidance and Application Kit notes that a department’s 

ability to use nonoperational space for eligible activities, such as training, does not 

mean that the space is eligible for grant funding. However, the Guidance and 

Application Kit states that there is no penalty for including nonoperational space in a 

fire station construction project, because it contributes to the purpose of the Recovery 

Act (creating and/or sustaining jobs). 

Our inspection of the new fire station disclosed a large, 32’ × 50’ multipurpose room 

with an elevated platform at one end. The Fire Chief stated that the room was 

designed for firefighter training and other uses, such as emergency operations or 

community meetings. He explained that Snoqualmie Pass does not have a community 

building and there are times when the residents need a centrally located facility to 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

meet. The Fire Chief said that the space could also serve as an emergency shelter. We 

also observed four other office-sized rooms that were designated for nonoperational 

purposes, including storage for local search and rescue teams, two rooms for a future 

daytime medical clinic, and an office for a State Patrol Officer or Sheriff’s Deputy. The 

Fire Chief explained that these rooms could offer important services that previously 

had not been available to the community, particularly for its many recreational visitors. 

We measured the nonoperational space as 2,071 square feet, and using the FEMA 

guidance, we calculated its construction cost as $716,566. Notwithstanding the cost of 

the nonoperational space, Snoqualmie Pass Fire & Rescue spent enough on eligible 

items to earn the $4,007,374 grant. 

Compliance With Requirements for Reporting, Buying American, and Paying 

Prevailing Wage 

The Recovery Act requires grant recipients to submit quarterly reports on project 

activities to DHS; to ensure that projects are accomplished with American-made iron, 

steel, and manufactured goods; and to ensure that laborers and mechanics are paid, at 

a minimum, prevailing wages as determined by the Secretary of Labor under 40 United 

States Code Chapter 31, Subchapter IV. We verified that Snoqualmie Pass Fire & 

Rescue submitted the required quarterly reports. We determined that “Buy American” 

and prevailing wage provisions were followed during the construction of the fire 

station by including Recovery Act provisions in the public solicitation and general 

construction contracts and by the Project Manager’s onsite oversight. Additionally, the 

Project Manager reviewed pay vouchers to confirm payment of prevailing wage rates. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Purpose, Scope, and Methodology

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

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

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

The objective of this audit was to determine whether costs claimed by Snoqualmie Pass 

Fire & Rescue were allowable, allocable, and reasonable according to the grant and 

applicable Federal regulations. To accomplish our audit objective, we examined costs 

of $5,862,192 incurred by Snoqualmie Pass Fire & Rescue from June 2011 to April 2012. 

In conducting our audit, we did the following: 

•	 Obtained and reviewed the Recovery Act, the grant application and award, the 

grant Guidance and Application Kit, and Federal cost principles and grant 

administrative requirements; 

•	 Interviewed Snoqualmie Pass Fire & Rescue personnel to gain an understanding of 

their accounting system and the applicable internal controls; 

•	 Reviewed the fiscal year 2010 Single Audit report and interviewed the responsible 

auditor to identify issues and other conditions that could affect our examination; 

•	 Reviewed the recipient’s internal controls specifically related to our objectives; 

•	 Examined vendor invoices and other evidence supporting the costs incurred and 

claimed for FEMA reimbursement; 

•	 Reviewed contract files and supporting documentation for primary contractors and 

professional service providers for the fire station construction project; 

•	 Reviewed accounting transactions related to purchases, payments, and receipt of 

FEMA reimbursements;

•	 Used the grant provisions and applicable Federal requirements to determine 

whether amounts claimed were eligible for reimbursement; 

•	 Performed fraud detection procedures; 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

•	 Confirmed compliance with Recovery Act provisions for buying American and 

paying prevailing wages to laborers and mechanics; and

•	 Inspected the new fire station and surrounding property.

We conducted this performance review between April and June 2012, 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 objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based upon our 

audit objectives.

www.oig.dhs.gov 6 	 OIG-13-02 
 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix B

Report Distribution 

Department of Homeland Security

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs

Assistant Secretary for Office of Legislative Affairs 

Acting Chief Privacy Officer 

Recovery Act Coordinator 

Federal Emergency Management Agency

Administrator 

Assistant Administrator, Grant Programs Directorate,

 Federal Emergency Management Agency

Audit Liaison Official 

Office of Management and Budget

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress

Congressional Oversight and Appropriations Committees, as appropriate 

www.oig.dhs.gov 7 OIG-13-02 
 

ADDITIONAL INFORMATION AND COPIES 

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