Disaster Discourse: The Hagerty Blog

Extension of the 100% Federal Cost Share for COVID-19 FEMA Public Assistance Funding

On March 1, 2022, President Biden directed the Federal Emergency Management Agency (FEMA) Administrator Deanne Criswell to extend the 100 percent federal cost share for Public Assistance (PA) awarded under COVID-19 Stafford Act declarations.

This means FEMA will fully fund PA-eligible emergency work to combat the pandemic performed between January 20, 2020 and July 1, 2022. A subsequent FEMA Advisory announcing this extension indicated that after July 1, 2022, the federal cost share will be reduced to 90 percent, which is still higher than the statutory minimum 75 percent.

What is a federal cost share?

FEMA provides PA funding to eligible state, local, tribal, and territorial (SLTT) governments and private nonprofits (PNPs) on a reimbursement basis via a cost share. Typically, the federal share is 75 percent, and the local share is 25 percent, unless there is catastrophic damage. In this scenario, if a local government or nonprofit hospital performs PA-eligible work that costs $100,000, FEMA would fund $75,000. 100 percent federal cost shares are rare. This latest extension adds to the unprecedented nature of COVID-19 and federal efforts to support communities in response and recovery from the pandemic.

How does the federal cost share extension apply to other PA deadlines?

The deadline to complete eligible COVID-19 emergency work remains open “until further notice.” FEMA has stipulated that it will provide at least 30 days’ notice prior to establishing a deadline; however, it is not yet clear if FEMA will tie this deadline to the United States (US) Health and Human Services (HHS) Public Health Emergency (PHE), which was renewed effective January 16, 2022, or use another basis. Therefore, while the 100 percent federal cost share is extended through July 1, 2022, Applicants should monitor FEMA guidance on the deadline to complete eligible work, which is not dictated by the federal cost share.

Is there a catch?

Yes, FEMA PA funding is challenging to obtain and retain. Regulation and policy that underpin the program are complex, with heavy documentation requirements. Moreover, FEMA issued several forms of disaster-specific guidance and policy for COVID-19 declarations, which adds to the complexity.

Therefore, the extension to the 100 percent federal cost share does not automatically mean FEMA will fund all COVID-19 work. Funding is based on activities supported by policy that Applicants can demonstrate were necessary and reasonable based on prevailing circumstances. As such, SLTTs and PNPs submitting PA claims should be ready to explain how existing or projected needs, coupled with public health guidance, caused them to incur costs related to specific COVID-19 work.

Wondering how to pursue this federal funding? Here are a few important tips,

  • Submit a Request for Public Assistance (RPA) if you have not already.
  • Familiarize yourself with PA policy, COVID-19 disaster-specific guidance and the COVID-19 Streamlined Project Application.
  • Track and document all potentially PA-eligible work and costs.
  • Separate work and costs performed after July 1, 2022, since FEMA will likely require new project applications for work under the reduced 90 percent federal cost share.
  • Be prepared to demonstrate that all costs were necessary and reasonable.
  • Justify all COVID-19 work in the context of applicable federal, state and/or local public health guidance.

Ari Renoni is a Deputy Director of Recovery Programs with more than a decade of experience working with government and international public organizations with emergency management programs and policy. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida.

Neetika Prabhakar Cox is an Independent Management Consultant with Hagerty Consulting. With nearly two decades of experience supporting emergency management programs and FEMA projects, she is a subject-matter expert as it relates to the intersection of federal policy and business analytics with public sector operations.

Hagerty can help! Contact us today to learn more about FEMA PA and other federal recovery programs.