Disaster Discourse: The Hagerty Blog

The Secret to Mitigation Success: Management Costs

Anyone who has applied for Hazard Mitigation Assistance (HMA) grants knows application submission is only half the battle. Administering and implementing the grant successfully can be even more challenging. As with all federally funded programs, there are fiscal and compliance requirements that must be met to prevent jeopardizing grant recoupment. Document retention, file management, procurement, and expenditure tracking can all be heavy lifts for both states and local jurisdictions. Additionally, managing the actual project to meet all program requirement – i.e. project timelines, budget, and cost share – can be burdensome if the right resources are not in place.

What are management costs?

Historically, the Hazard Mitigation Grant Program (HMGP) offered each grant recipient (State, Territory, or Federally Recognized Indian Tribes) 4.89 percent of their HMGP total to manage the grant itself. The recipient had the option to pass down a percentage of management costs to their sub-recipients at the local level; however, most opted not to because the 4.89 percent was already not enough to manage the program themselves at the recipient level.

With the passage of the Disaster Recovery Reform Act (DRRA) in October of 2018, recipients are now eligible for up to 10 percent of the total HMGP amount for management costs. Not only did the DRRA benefit the recipient, but it also provided sub-recipients the opportunity to apply for up to five percent of their total project costs for management costs. The management costs are reimbursable to both the Recipient and Sub-recipient at 100 percent federal share, meaning there are no out-of-pocket costs for the applicable State or local jurisdiction.

Grant Management through Management Costs

Management costs are designed to be utilized by grant recipients and sub-recipients to manage the HMA grant itself versus managing the actual project (e.g., project management). This helps curtail the financial burden associated with grant management at the state and local level, thereby ensuring more effective and efficient grant management and successful mitigation projects reaching completion in a more fiscally responsible and timely manner.

Examples of Eligible Management Costs include:

  • Application development, including the benefit-cost analysis (BCA),
  • Preparing quarterly reports,
  • Processing payments,
  • Relevant training and site visits,
  • Preparing closeout documentation, and
  • Staff salary or consultant costs directly related to performing the activities listed above.

FEMA BRIC Program Technical Assistance: Source

Management Costs and BRIC

With the Federal Emergency Management Agency (FEMA) Building Resilient Infrastructure and Communities (BRIC) Program application period now open, proper grant management is even more important as these complex projects may be higher in dollar value. Applicants (states) and sub-applicants selected for BRIC funding are also eligible for 10 percent and 5 percent management costs, respectively; however, applicants must apply for management costs in a separate application. Sub-applicants should include management costs in the application as a line item in the budget and describe how the funds will be spent in the scope of work.

Hagerty Can Help

Our professionals are experts in navigating the pre- and post-disaster funding world with significant experience applying for, managing, and closing out mitigation grant programs for our clients. Management costs can be used to pay for our expertise at no cost to the applicant or sub-applicant.

We are available to talk about your recovery needs, including how to get the right people in the room and access all funding available through federal grant programs. To learn more, contact Hagerty’s Mitigation Team.

LISTON CONRAD is a Senior Recovery Manager at Hagerty Consulting with experience in the implementation of FEMA mitigation and Public Assistance (PA)  programs along with housing and infrastructure programs funded through Community Development Block Grant – Disaster Recovery (CDBG-DR). With over 10 years’ experience in the disaster recovery environment, Liston has assisted the states of Mississippi, Colorado, North Carolina, Texas, and California navigate the complexities that disasters bring, including Wildfires, hurricanes and extreme Floods.