US. Department of Homeland Security Region 111 One Independence Mall. (uh Floor (ilS Chestnut Street Philadelphia. PA 19106-4404 FEMA own 3? 539-? 3 NOV 1 2 2015 .oii i; 50 Mr. Jimmy Gianato Director and Homeland Security AdviSOr West Virginia Division of Homeland Security and Emergency Management Building 1, Room EB-80 1900 Kanawha Boulevard, East Charleston, West Virginia 25305-0360 Dear Mr. Gianato: We are in receipt of your letter dated September 1, 2015 in response to the Federal Emergency Management Agency (FEMA), Region Grants Division?s list of ?ndings and associated corrective actions resulting from the site visit on March 5, 2015. While was able to close out 4 of the 6 identi?ed corrective actions, has not advanced in developing a ?nancial monitoring plan for sub-recipients or in providing source documentation. The purpose of this letter is to inform that 60 days from the date of this letter FEMA Region will impose manual reimbursement for all open grants, due to need to develop a sub?recipient ?nancial monitoring plan. Status of Corrective Actions: 1. Finding: Failure to report sub-recipients in FFATA sub award reporting system for Disaster grants. Corrective Action: should ensure all sub-recipients receiving or more as of October 1, 2010 are reported into the Federal Funding Accountability and Transparency Act Sub?award Reporting System (FSRS). Response: has hired new staff with responsibility of entering required information in We expect to meet this requirement by October 1, 2015. EMA Response: WV successfully uploaded the required FFATA reports into STATUS: CLOSED 2. Finding: Failure to establish current plan to ?nancially monitor sub-recipients. Corrective Action: Submit a ?nancial monitoring plan based on risk assessment by August 31, 2015. Response: New staff will be responsible for ?nancial monitoring with emphasis on all areas of risk. A ?ow chart of the process is included with this response. FEMA Response: This ?nding is still considered unresolved. The reSponse letter received does not provide evidence as to how assesses which of their sub- recipients will be ?nancially monitored nor did they provide a schedule identifying what sub-recipients would be monitored and when. simply stated that they will begin to conduct ?nancial site visits and desk reviews in September 2015. Please provide FEMA Region with a schedule indicating the sub-recipients to be ?nancially monitored and the methodology on how these sub-recipients were chosen. STATUS: OPEN 3. Finding: Incomplete approval forms for EMPG reimbursements. Corrective Action: Adopt the Financial Recap document for all EMPG award reimbursement to sub-recipients. Response: As stated earlier, the new employee hired will be responsible for reviewing reimbursements to ensure proper checks and balances. A ?owchart to document the process has been provided with this response. FEMA Response: This process will be veri?ed during Region next site visit. STATUS: CLOSED 4. Finding: Inadequate source documentation for sample drawdowns. Corrective Action: needs to provide all the backup source documentation needed to justify the drawdowns made as re?ected in the questioned costs section of the site visit protocol. Response: Submitted the necessary back up documentation. FEMA Response: provided all the source documentation required except for sample #2 below. seemed to have charged HMGP related expense to a Public Assistance grant award without justi?cation. After further discussion with FEMA Region Mitigation and Recovery Divisions, it was determined that these charges are accurate, but they are charged to the incorrect disaster. They should have been applied to Public Assistance DR4071 and not DR4061. Please provide EMA Region with evidence that the charge in the amount of $70,660 for City of Logan acquisition was reversed for DR4061 and charged to DR4071. This is due to FEMA Region by December 15, 2015. Failure to provide evidence of the journal entry correction will result in FEMA Region issuing a bill for collection. Sample No. Grant Number Reimbursement amount Comments $70,660.00 We are questioning $70,660 of the total $385,355 drawn down on 7/23/2014 to the City of Logan. This represents reimbursement of property acquisition on a Public Assistance grant. STATUS: OPEN 5. Finding: No accounting data transferred from IMS into the new OASIS system since its implementation in July 2014. Corrective Action: should develop a transition program to transfer all data associated with all grant ?mds from the old ?nancial system into the new OASIS system. The use of spreadsheet to reconcile both FIMS and OASIS is not a viable way to account and monitor federal funds. This method also increases the chances of errors. Response: We expect to transfer all data by March 31, 2016. FEMA Response: This transfer of data will be validated during Region next ,site visit. STATUS: CLOSED 6. Finding: Lack of budgetary controls in the new OASIS system. currently relies on FEMA systems to ensure each grant award is not overdrawn. There is no mechanism to track fund award verses actual expenditure. Corrective Action: must submit a plan to enter the award/obligation amount for all grants, even those awarded in the legacy FIMS system. Response: With the new staff in place, we expect to have this completed by December 31, 2015. FEMA Response: We will validate processes put in place during the next site visit. STATUS: CLOSED FEMA Action Due to lack of Sub-recipient financial monitoring continues to struggle to build a ?nancial monitoring plan for sub-recipients. Lack of sub-recipient monitoring has been a consistent ?nding during Region site visits to West Virginia for the past several years. Below is a summary of activity regarding the sub-recipient ?nancial monitoring to date: The 2011 site visit report dated June 9, 2011, Region 111 found that had inadequate sub-recipient monitoring and requested that provide a Corrective Action Plan (CAP). submitted three CAPS that stated it would develop Monitoring Site Visit Protocols, a Monitoring Plan, and a Monitoring schedule. Region accepted Corrective Action Plans that were submitted July 15, 2011; August 31, 2011; and May 21, 2012. Region scheduled a technical assistance visit for September 5, 2012 in coordination with In the June 14, 2012 letter announcing that visit, Region stated the purpose of the visit was to validate had taken steps to develop and maintain a sub-recipient ?nancial monitoring program. Region conducted a Technical Assistance visit on September 5, 2012duri_ng which could not demonstrate that it had a sub-recipient monitoring system in place. As a result, in a November 5, 2012 letter to Region requested that complete two actions to resolve this issue: 1. Establish an annual sub-recipient site visit schedule (due January 15, 2013); and 2. Provide a copy of an approved and practical site visit protocol (due January 15, 2013) On January 8, 2013 requested and was given a thirty-day extension to complete the actions. On February 15, 2013 provided site visit protocols but did not submit a site visit schedule. In an April 3, 2015 letter from EMA Region was informed that as of that date, no site visit schedule had been provided. In a May 17, 2013 letter, provided a corrective action plan response, which: 1. Provided a schedule for site visits 2. Established sub-recipient monitoring protocols In a letter dated June 28, 2013, Region 111 approved the schedule for monitoring and site visit protocols. FEMA Region conducted a site visit to verify CAP implementation for June 25-27, 2013. Sub-recipient monitoring ?ndings were again identi?ed. In an exit letter dated August 9, 2013, EMA Region outlined several issues regarding sub-recipient monitoring. Corrective actions were due to the Grants Division October 1, 2013. 1. Financial sub-recipient monitoring is not being conducted for Public Assistance. I Submit a ?nancial monitoring plan for ?scal year 2014 identifying the Public Assistance sub-recipients to be monitored along with scheduled dates monitoring will be conducted. Upon receipt of the plan and schedule, the FEMA regional of?ce will work with to identify which monitoring reports we will require a copy of and the associated due dates. 2. No sub-recipient ?nancial and programmatic site visits and/or desk reviews have been conducted in FY 2013 with regard to sub-recipients of EMPG grant funds (44 CFR 13.40). I Develop a sub-recipient ?nancial and programmatic monitoring site visit and desk review schedule for FY 2014 and provide Region with a copy of the schedule. Upon receipt of the plan and schedule, the EMA regional of?ce will work with to identify which monitoring reports we will require a copy of and the associated due dates. I Investigate the possibility of funding the hiring of additional staff for monitoring purposes by expending or reallocating funds from open EMPG awards. 0 Region did not receive a response by the due date and sent a second noti?cation letter on December 5, 2013. 0 Response from was received on December 10, 2013. However, the response did not address all of the de?ciencies observed during the site visit or provide all of the requested information; speci?cally information was submitted regarding programmatic monitoring. However, in the August 9, 2013 and December 5, 2013 letters, Region requested that WVHSEM provide ?nancial monitoring protocols and a listing of sub- recipients that would be ?nancially monitored. On January 28, 2014, a new due date of February 28, 2014 was given to WVHSEM to provide the requested information. On February 28, 2014, provided a response to the January 28, 2014 letter. The response included a ?nancial monitoring schedule and informed Region that had hired an additional full time staff member to assist with ?nancial and programmatic monitoring of sub-recipients. On April 2, 2014, Region closed these corrective actions and requested that two monitoring reports be forwarded to FEMA Region 1111 no later than May 15, 2014. 0 On June 3, 2014, WVHSEM informed Region that work was being done to prepare the reports, but no reports were provided. On July 17, 2014, provided the two reports. 0 After review of the two reports, on August 28, 2014, FEMA Region acknowledged receipt of the reports and closed the CAPS. Although Region had closed the CAP, it had some concerns about processes and procedures for sub-recipient monitoring. Based on the monitoring reports and supporting documentation Region noted the following: 1. Inadequate noti?cation to the sub-recipient of the site visit (such as indicating which project worksheets would be reviewed for the speci?ed Public Assistance disasters); 2. Inconsistencies in conducting the monitoring review (Incomplete monitoring checklists/audit review); 3. Incomplete follow-up after the site visit report had been sent; 4. Failure to impose corrective actions to remedy A-l33 audit ?ndings; and 5. Failure to inquire from the sub-recipients why they have not had an A-133 Audit conducted 0 These issues were to be discussed during the next Region site visit in November 2014. In a letter dated October 30 2014, requested a postponement to the November 2014 site visit due to sudden departure of the Comptroller, recent change to the Financial Management System, and training shortfalls of two administrative staff. EMA Region agreed to the postponement and rescheduled the site visit to March 5, 2015. Since 2011, the Grants Division supported to create a ?nancial monitoring plan, conduct site visits, write monitoring reports, and has provided guidance on following up on issues documented on monitoring visits. continues to lack a ?nancial monitoring system for sub-recipients, as most recently summarized after FEMA Region last site visit completed on March 5, 2015. FEMA Action: Manual Reimbursement Because missed the deadline of August 31, 2015 to submit a ?nancial monitoring plan for review, is noncompliant with 44 CFR 13.40 Monitoring by Grantees and 2 CF 200.331 Requirements for pass-through entities as required by the Articles of Agreement or FEMA State Agreement. Without proper oversight of sub-recipients, cannot provide evidence that Federal Funds are being effectively managed or utilized in accordance to federal regulations. Per CFR Part 13.43, Remedies for non-compliance, if a grantee or sub-recipient materially fails to comply with any terms of an award, whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, the awarding agency may take one or more actions against the grantee. As of 60 days from the date of this letter, FEMA Region will impose manual reimbursement for all open awards as listed below: rogram Hazard gation Grant Program (I-IMGP) - 97 039 Disaster $213231; Mitigation Grant Program (HMGP) Disaster 3172132131 Mitigation Grant Program (HMGP) - Disaster $751321? Mitigation Grant Program (HMGP) - Disaster gig; Mmgau?m Grant Program (HMGP) Disaster 19472120er Mitigation Grant Program (I-IMGP) - Disaster 31:32:; Mitigation Grant Program (I-IMGP) Disaster 19-17213? Mitigation Grant Program (HMGP) - Disaster Public Assistance - 97.036 Disaster Public Assistance 97.036 Disaster Public Assistance - 97.036 Disaster Public Assistance 97.036 Disaster Public Assistance 97.036 Disaster Public Assistance - 97.036 Disaster Public Assistance - 97.036 Disaster Public Assistance - 97.036 Disaster Public Assistance - 97.036 Disaster Public Assistance - 97.036 Disaster Community Assistance Program - State Support Non? Services Element - 97.023 Disaster Program Grant Number 3" Program . Cooperating Technical Partners 97.045 me? Disaster Cooperating Technical Partners 97.045 Non- Disaster EMW-2015-CA-00050 Cooperating Technical Partners - 97.045 Non- Disaster 0 69 Emergency Management Performance Grants Non~ 97.042 Disaster BMW-2013-EP-0 0 0 69 Emergency Management Performance Grants Non? 97.042 Disaster Emergency Management Performance Grants Non- 97.042 Disaster Emergency Management Performance Grants - Non- 97.042 Disaster Removing Manual Reimbursement In order to remove this manual reimbursement enforcement action, must: 0 Submit a Financial Monitoring Plan and Monitoring Schedule to Region Grants Division for review. The schedule should include recipient name, grants to be reviewed, type of monitoring activity (desk review or site visit) and the month of the planned monitoring activity. 0 EMA Region will select a random sample of sub?recipients from the Financial Monitoring Plan and provide that list to From that list of sub-recipients, will be responsible for providing the following items: 1. The request to the sub-recipient initiating the monitoring activity 2. Final Report to the sub?recipient after the monitoring activity is complete 3. Corrective Action or Follow-up communication (if applicable) Once these items are provided and detemiined adequate, Region will validate implementation of monitoring program at the next scheduled site visit to WV. Only when FEMA Region is confident that the sub-recipient financial monitoring program is fully implemented by and there are no new findings for WV regarding sub?recipient monitoring, will EMA Region release the manual reimbursement on all open FEMA awards administered by Region listed above. Instructions for requesting manual reimbursement are provided in Attachment #1 for: 0 Hazard Mitigation Grants Program (HMGP) - Public Assistance (PA) 0 Non Disaster Grants (EMPG, CTP) All correspondence related to this matter should be addressed to: U.S. Department of Homeland Security, FEMA Region Grants Division Philadelphia 615 Chestnut Street, 6th Floor Philadelphia, PA 19106 Attention: Janice P. Barlow, Director, Grants Division has a right to appeal this action within 60 days of the date of this letter. Written appeals should be sent directly to the Regional Administrator, MaryAnn Tierney. The Region Grants Division, Business Branch Chief, Regeane Frederique is available to respond to any questions you may have. She can be contacted at (215) 931-5683 or The Grants Division remains committed to helping build a strong grants management program and will continue to provide technical assistance as requested. Sincerely, Janice P. Barlow Director, Grants Division cc: MaryAnn Tierney, Administrator, EMA Region 111 Gene Gruber, Director, Mitigation Division, Region 111 Jack Schuback, Director, Recovery Division, Region FEMA HQ Regional Coordination and Oversight Branch, FEMA HQ Tommy Dingess, Attachment 1 Instructions for reguesting reimbursements for Hazard Mitigation Grants Program 1. Complete a SF 270 request signed by authorized of?cial 2. Attach documentation certi?ed by the State Hazard Mitigation Of?cer (SHMO) or their designee supporting the amount being requested is eligible, allowable, reasonable, and aligns with the approved budget. Invoices and proof of payment do not have to be submitted with the SF-27O request. FEMA Region Program and Financial staff reserve the right to review source documentation during scheduled monitoring visits. Instructions for requesting reimbursements for Public Assistance 1. Complete a SF 270 request signed by authorized of?cial 2. Attach documentation certi?ed by the Public Assistance Of?cer or their designee supporting the amount being requested is eligible, allowable, reasonable, and aligns with the approved PW. 3. Invoices and proof of payment do not have to be submitted with the SF-27O request. However, FEMA Region Program and Financial staff reserve the right to review source documentation during scheduled monitoring visits where should be able to produce valid source documentation such as contract invoices, force account timesheets, equipment logs, cancelled checks, etc. upon request. Instructions for reguesting reimbursements for Non-Disaster Grants 1. Complete a SF 270 request signed by authorized of?cial 2. Attach source documentation to include Recap summary that clearly justi?es the amount being requested on the SF 270. Please note: Source documentation is being requested for Non-Disaster Grant reimbursements. If required information is not received with the SF 270 request, your request will be returned for the missing information and will not be processed. Reimbursement requests can be subiitted via mail or e-mail: Mail: US. Department of Homeland Security-FEMA Region [11 Grants Division Philadelphia 615 Chestnut Street, Floor Philadelphia, PA 191 06 Attention: Raechelle Walker-Ellis, Grants Management Specialist 0r E-Mail: In the subject line, add: Manual Reimbursement Request 10