POLICY UPDATE: 100% FEDERAL COST SHARE FOR ELIGIBLE FEMA PUBLIC ASSISTANCE FUNDING ASSOCIATED WITH COVID-19
The unprecedented nature of the COVID-19 pandemic has led to constantly evolving Federal Emergency Management Agency (FEMA) Public Assistance (PA) policies and procedures. Typically, under a major disaster declaration, the federal cost share is 75 percent whereas the state responsibility is 25 percent. Given the fiscal constraints at the state and local level associated with the ongoing COVID-19 response and recovery, on January 21, 2021 President Biden signed an initial Executive Order (EO) increasing the FEMA PA federal cost share – for certain COVID-19 eligible costs – to 100 percent through September 30, 2021. Subsequently, on February 2, 2021, President Biden issued another EO directing retroactive FEMA PA reimbursements and expanding eligibility for certain COVID-19 eligible costs. Since then, states, cities, tribes, territories, private non-profits, and emergency managers have been anxiously awaiting how this directive would be interpreted and relayed by FEMA.
Yesterday, in accordance with the President’s directives, FEMA (via memo to their Regional Administrators) announced that the Agency would be retroactively reimbursing applicants fully for eligible emergency protective measures such as certain personal protective equipment (e.g., masks and gloves), emergency feeding, sheltering at-risk populations, and mobilization of the National Guard. These retroactive reimbursements will be backdated to the beginning of the pandemic’s ongoing major disaster incident period, which officially began on January 20, 2020. FEMA PA projects that were previously awarded at the 75 percent federal cost share will automatically be adjusted by FEMA, whereas those not yet awarded will be processed with 100 percent federal funding.
The President has also directed FEMA to expand the activities eligible for PA reimbursement beginning January 21, 2021 until September 30, 2021. This expanded eligibility applies to the opening and operation of eligible schools, childcare facilities, healthcare facilities, non-congregate shelters, domestic violence shelters, transit system and potentially other eligible applicants. While the 100 percent cost share adjustment was previously implemented for vaccine administration, it remains to be seen how FEMA will address these newly eligible activities.
Nevertheless, this cost share shift and additional FEMA guidance is promising news for applicants attempting to use funds strategically during the pandemic. Many recipients and sub-recipients of Coronavirus Relief Funds (CRF) now have increased flexibility to use funds previously devoted to meeting the FEMA state/ local cost share for other purposes to address the ongoing public health emergency.
MANAGING YOUR COST RECOVERY
In addition to being knowledgeable about changing federal grant programs and policies, there are tangible steps you can take now to set up for a more successful cost recovery in the future. As with many recovery efforts, tracking all costs and procedures related to COVID-19 response and recovery is critical and, more specifically, we recommend the following:
- Track all COVID-19 related costs. Establish dedicated codes in your financial management or reporting systems to distinctly track different COVID-19 related costs. Additionally, record and save all documentation, invoices, proofs of payments, procurement methodologies, etc.
- Initiate the FEMA PA process. If you are an eligible applicant and have not yet pursued FEMA PA funding in response to COVID-19, submit your “Request for Public Assistance” (RPA). There is no required commitment to submit a grant or funding request.
- Identify and activate subject matter expertise as well as staff augmentation. As illustrated above, federal recovery programs are complex and constantly changing; meanwhile, you (and your existing staff) already have a full-time job responding to the ongoing event(s). Moreover, many federal programs provide funding for costs related to management and administration of grants.
As new federal programs and policy changes continue to be announced almost daily, there are many factors and priorities to consider; however, planning for and organizing your cost recovery now will help prevent the need to untangle information after the fact, increase your chances of federal reimbursement, and prepare you for any future audits you may face.
HAGERTY CAN HELP!
Our professionals have supported state and local governments and over 100 hospitals and healthcare systems nationwide in their response to the ongoing COVID-19 pandemic. Over the past several months, our professionals have assisted our clients as they address immediate treatment needs and medical surge requirements; implement important community and facility mitigation measures; and establish vaccine distribution, management, and administration plans. We are also ensuring our clients have access to immediate resources to facilitate the ongoing response, short-term financial recovery, as well as long-term cost-recovery to ensure future readiness. Contact us to discuss how we can help you meet your preparedness, response, and recovery needs.
Mark O’Mara is Hagerty’s Director of Recovery and is an experienced project manager with more than 14 years’ experience in developing, managing, and leading the formulation, administration, and implementation of more than $16 billion in federal disaster recovery grants.
Ari Renoni is one of Hagerty’s Deputy Directors for Recovery Program. Working in the Recovery Division for seven years, Ari is a FEMA PA policy expert advising clients across the United States to maximize their recoveries from major disasters.
Neetika Prabhakar is the Policy Team Lead for COVID-19 Recovery within the Recovery Division at Hagerty.