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The Integration of FEMA The Integration of FEMA Public Assistance and Public Assistance and
InsuranceInsurance
The Integration of FEMA The Integration of FEMA Public Assistance and Public Assistance and
InsuranceInsurance
Jim SicilianoJim Siciliano
2
AgendaAgenda
Who’s InvolvedWho’s Involved The FEMA ProcessThe FEMA Process EligibilityEligibility Cost DocumentationCost Documentation
Integration of FEMA & Integration of FEMA & InsuranceInsurance
How Do you Prepare?How Do you Prepare? ConcludeConclude
You must be in a position to be able to DRIVE your own
recovery efforts
You must be in a position to be able to DRIVE your own
recovery efforts
Your insurance claim and FEMA
reimbursement represent the
foundation for your financial recovery
Your insurance claim and FEMA
reimbursement represent the
foundation for your financial recovery
FEMA Public Assistance
•Program- Parameters
•Process
•People
President of the United States
GovernorUnder Secretary, Homeland Security
State Coordinating Officer (SCO);Governor’s Authorized Representative
(GAR)
State Public Assistance Officer
(SPAO)
Federal Coordinating Officer (FCO)
Public Assistance Officer (PAO)
Public Assistance Coordinator (PAC)
Project Officers (PO) & Specialists
Public Assistance Coordinator (PAC)
Project Officers & Specialists
Direct Services
To Applicants
Disaster Management
State & Regional Policy &
Management
Additional Stakeholders: Regional Managers & Local Emergency Managers
Disaster Administrative Officer (DAO)
Regional Director
Disaster strikes
1.
PDA
2.
Declaration
3.
Applicants’ Briefing
4.
Site Visit/Project Formulation
7.
Project Worksheets
8.
Projects funded
9.
RPA
5.Req.
Kickoff Meeting
6.
FEMA
Projectcloseout and Audit10.
8
Applicant
Facility
Work
General Program EligibilityGeneral Program Eligibility
Cost
9
State government agencies or State government agencies or departmentsdepartments
Local governments & authoritiesLocal governments & authorities Indian tribal governments and Indian tribal governments and
Alaskan native villagesAlaskan native villagesCertain Private Non-Profit Certain Private Non-Profit
organizationsorganizations
ApplicantFacilityWorkCost
10
What is a Facility?What is a Facility?•BuildingsBuildings
•Furniture & equipmentFurniture & equipment
•VehiclesVehicles
•ContentsContents
•ParksParks
•RoadsRoads
•CulvertsCulverts
•DamsDams
•Library booksLibrary books
•Sewer & water linesSewer & water lines
ApplicantFacilityWorkCost
11
ApplicantFacilityWorkCost
• Legal responsibilityLegal responsibility
• Other Federal Agencies (OFAs)Other Federal Agencies (OFAs)
• Facility useFacility use
•Active useActive use
•Alternate useAlternate use
• Under constructionUnder construction
• Repair vs. ReplacementRepair vs. Replacement
Eligibility CriteriaEligibility Criteria
12
Must be required as a direct result Must be required as a direct result of the declared eventof the declared event
Must be within the designated Must be within the designated disaster areadisaster area
Must be the legal responsibility of Must be the legal responsibility of an eligible Applicantan eligible Applicant
ApplicantFacilityWorkCost
Eligibility CriteriaEligibility Criteria
13
Categories of WorkCategories of WorkCategories of WorkCategories of Work
Category ACategory A Debris RemovalDebris Removal Category BCategory B Emergency Protective Emergency Protective
MeasuresMeasures Category CCategory C Road System RepairsRoad System Repairs Category DCategory D Water Control FacilitiesWater Control Facilities Category ECategory E Buildings and Buildings and
EquipmentEquipment Category FCategory F Public Utility SystemsPublic Utility Systems Category GCategory G Parks, Recreation & Parks, Recreation &
OtherOther
Category ACategory A Debris RemovalDebris Removal Category BCategory B Emergency Protective Emergency Protective
MeasuresMeasures Category CCategory C Road System RepairsRoad System Repairs Category DCategory D Water Control FacilitiesWater Control Facilities Category ECategory E Buildings and Buildings and
EquipmentEquipment Category FCategory F Public Utility SystemsPublic Utility Systems Category GCategory G Parks, Recreation & Parks, Recreation &
OtherOther
ApplicantFacilityWorkCost
14
ConsiderationsConsiderationsApplicantFacilityWorkCost
• Negligence – Failure to Act to ProtectNegligence – Failure to Act to Protect
• Maintenance – Lack ThereofMaintenance – Lack Thereof
• Pre-existing DamagePre-existing Damage
• Hazard MitigationHazard Mitigation
• Codes & StandardsCodes & Standards
• 50% Rule (Repair vs. Replacement)50% Rule (Repair vs. Replacement)
• RelocationRelocation
15
ApplicantFacilityWorkCost
Cost EligibilityCost Eligibility
• Reasonable and necessary to accomplish workReasonable and necessary to accomplish work
• Compliant with Federal, State and local Compliant with Federal, State and local requirements for procurementrequirements for procurement
• Reduced by all applicable credits, such as Reduced by all applicable credits, such as insurance proceeds and salvage valuesinsurance proceeds and salvage values
16
What’s Reasonable?What’s Reasonable?
Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
– OMB Circular A-87
Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
– OMB Circular A-87
17
Summary of Summary of Eligible CostsEligible CostsSummary of Summary of Eligible CostsEligible Costs
Force account laborForce account labor Force account equipmentForce account equipment Force account materialsForce account materials Purchase orders and Purchase orders and
contractscontractsRented equipmentRented equipmentPurchased materialsPurchased materialsA&E consultantsA&E consultantsContractorsContractors
Force account laborForce account labor Force account equipmentForce account equipment Force account materialsForce account materials Purchase orders and Purchase orders and
contractscontractsRented equipmentRented equipmentPurchased materialsPurchased materialsA&E consultantsA&E consultantsContractorsContractors
ApplicantFacilityWorkCost
18
PProcurementrocurementPProcurementrocurement
Contracts must be reasonable FEMA finds 4 methods of contracting
acceptable:1. Small purchase procedures.
$100,000 or below by obtaining price quotes from several vendors
2. Sealed bids3. Competitive proposals, which are
based more on unique qualifications
Contracts must be reasonable FEMA finds 4 methods of contracting
acceptable:1. Small purchase procedures.
$100,000 or below by obtaining price quotes from several vendors
2. Sealed bids3. Competitive proposals, which are
based more on unique qualifications
ApplicantFacilityWorkCost
19
4. Noncompetitive proposals Inadequate number of available
contractors and to the extent that exhaustive methods to find competitors would be cost-prohibitive
4. Noncompetitive proposals Inadequate number of available
contractors and to the extent that exhaustive methods to find competitors would be cost-prohibitive
PProcurementrocurementPProcurementrocurementApplicantFacilityWorkCost
20
DocumentationDocumentationDocumentationDocumentation
Create a filing systemCreate a filing system Designate a specific person to Designate a specific person to
coordinate the accumulation of recordscoordinate the accumulation of records Separate disaster related activities from Separate disaster related activities from
normal activities – do not commingle normal activities – do not commingle disastersdisasters
Summarize costs by category by PW by Summarize costs by category by PW by departmentdepartment
Create a filing systemCreate a filing system Designate a specific person to Designate a specific person to
coordinate the accumulation of recordscoordinate the accumulation of records Separate disaster related activities from Separate disaster related activities from
normal activities – do not commingle normal activities – do not commingle disastersdisasters
Summarize costs by category by PW by Summarize costs by category by PW by departmentdepartment
ApplicantFacilityWorkCost
21
Audit trail tracking costs to the PWAudit trail tracking costs to the PW Cost summaries to source documentsCost summaries to source documents Reconciliation to Reconciliation to
accounting systemaccounting system
Audit trail tracking costs to the PWAudit trail tracking costs to the PW Cost summaries to source documentsCost summaries to source documents Reconciliation to Reconciliation to
accounting systemaccounting system
DocumentationDocumentationDocumentationDocumentationApplicantFacilityWorkCost
Facilities PW No.12345
Force Account Labor
Force AccountEquipment
Force AccountMaterials
Purchasesand Contracts
A&EConsultants
Contractors
PW-LevelSummaries
Department- Level
Summaries
Cost Category
Summaries
Cost Tracking Flow Cost Tracking Flow DiagramDiagram
StraightTime
Overtime
PW No 67890
RentedEquipment
PurchasedMaterials
23
Audit FindingsAudit FindingsResulting in Loss of FundingResulting in Loss of Funding
Audit FindingsAudit FindingsResulting in Loss of FundingResulting in Loss of Funding
Failure to adequately describe work Failure to adequately describe work performedperformed
Claiming indirect costsClaiming indirect costs Lack of documentation for fringe benefitsLack of documentation for fringe benefits Leave timeLeave time Inability to reconcile equipment hoursInability to reconcile equipment hours Failure to provide clear audit trail Failure to provide clear audit trail Failure to segregate ineligible workFailure to segregate ineligible work Applicant fails to gain permission for Applicant fails to gain permission for
Alternate or Improved projectsAlternate or Improved projects
Failure to adequately describe work Failure to adequately describe work performedperformed
Claiming indirect costsClaiming indirect costs Lack of documentation for fringe benefitsLack of documentation for fringe benefits Leave timeLeave time Inability to reconcile equipment hoursInability to reconcile equipment hours Failure to provide clear audit trail Failure to provide clear audit trail Failure to segregate ineligible workFailure to segregate ineligible work Applicant fails to gain permission for Applicant fails to gain permission for
Alternate or Improved projectsAlternate or Improved projects
ApplicantFacilityWorkCost
24
Questions?Questions?
25
The Integration The Integration of Insuranceof Insurance
26
Stafford Act, Section 312Stafford Act, Section 312
Disaster assistance will not be provided for damages or losses covered by insurance.
Disaster assistance provided by FEMA is intended to supplement financial assistance from other sources.
Disaster assistance will not be provided for damages or losses covered by insurance.
Disaster assistance provided by FEMA is intended to supplement financial assistance from other sources.
27
Insurance ConsiderationsInsurance Considerations
No insuranceDeductiblesSelf-Insured Retention (SIR)Mandatory reductions
(NFIP/SFHA) Insurance apportionment
No insuranceDeductiblesSelf-Insured Retention (SIR)Mandatory reductions
(NFIP/SFHA) Insurance apportionment
Insurance ApportionmentInsurance Apportionment
InsuredInsuredFEMA-eligibleFEMA-eligible
Insured Insured FEMA-ineligibleFEMA-ineligible
UninsuredUninsuredFEMA-eligibleFEMA-eligible
UninsuredUninsuredFEMA-ineligibleFEMA-ineligible
29
Insurance Settlement Documentation
Insurance Settlement Documentation
Detailed By damaged facilityBy coverageDirect & indirect lossesBy agent of loss (peril)
Detailed By damaged facilityBy coverageDirect & indirect lossesBy agent of loss (peril)
30
Flood InsuranceFlood InsuranceFlood InsuranceFlood Insurance
In a Special Flood Hazard Area (SFHA), In a Special Flood Hazard Area (SFHA), amount of eligible funding for damages amount of eligible funding for damages caused by flood is reduced by the caused by flood is reduced by the maximum amount of coverage available maximum amount of coverage available under NFIP “standard” flood insurance under NFIP “standard” flood insurance policy:policy:$500,000 Building$500,000 Building$500,000 Contents$500,000 Contents$5,000 deductible$5,000 deductible
Damaged facilities are valuated on an Damaged facilities are valuated on an Actual Cash Value (ACV) basisActual Cash Value (ACV) basis
In a Special Flood Hazard Area (SFHA), In a Special Flood Hazard Area (SFHA), amount of eligible funding for damages amount of eligible funding for damages caused by flood is reduced by the caused by flood is reduced by the maximum amount of coverage available maximum amount of coverage available under NFIP “standard” flood insurance under NFIP “standard” flood insurance policy:policy:$500,000 Building$500,000 Building$500,000 Contents$500,000 Contents$5,000 deductible$5,000 deductible
Damaged facilities are valuated on an Damaged facilities are valuated on an Actual Cash Value (ACV) basisActual Cash Value (ACV) basis
31
Stafford Act, Section 311Stafford Act, Section 311
…with respect to any property to be replaced, restored, repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may be reasonably available, adequate, and necessary, to protect against future loss to such property….
…with respect to any property to be replaced, restored, repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may be reasonably available, adequate, and necessary, to protect against future loss to such property….
32
Accounting & Audit Requirements
Accounting & Audit Requirements
Documentation from Day OneFiling systemAbility to reconcile/track all
costs associated with PWsClose-out vs. FEMA Office of
the Inspector General (OIG) audit
Documentation from Day OneFiling systemAbility to reconcile/track all
costs associated with PWsClose-out vs. FEMA Office of
the Inspector General (OIG) audit
How Do You Prepare?How Do You Prepare?
Providing a coordinated claim management strategy that enables you to maximize and expedite your financial recovery through your insurance and the FEMA Public Assistance Program
Providing a coordinated claim management strategy that enables you to maximize and expedite your financial recovery through your insurance and the FEMA Public Assistance Program
Who in your organization can navigate all phases of both the FEMA program and your insurance claim?
Who in your organization can navigate all phases of both the FEMA program and your insurance claim?
– Typically two people• Finance/EM for FEMA• Risk Management for Insurance• Typically do not communicate
– Disaster Recovery Team Needed• Disaster Recovery Manager
Buildings, Vehicles, and Infrastructure are damaged or destroyed
Communications and Information systems are damaged or destroyed
Your staff has been personally impacted by this disaster
You have NO cash flow
Buildings, Vehicles, and Infrastructure are damaged or destroyed
Communications and Information systems are damaged or destroyed
Your staff has been personally impacted by this disaster
You have NO cash flow
When Disaster StrikesWhen Disaster Strikes
The Insurance CompanyThe Insurance Company
Adjusters and Inspectors“Not covered”“Didn’t hit your deductible”“Here is our offer”
An offer is madeIs the settlement right?How do you know?Where are your experts?
Adjusters and Inspectors“Not covered”“Didn’t hit your deductible”“Here is our offer”
An offer is madeIs the settlement right?How do you know?Where are your experts?
FEMAFEMA
FEMA Project Officers“Not Eligible”“Not Reasonable”“This Contract is no good”“You have 60 days to write your projects”“This is what we are going to do…”“You HAVE to do it this way…”
FEMA will give you “How Much”?Is it right?How do you know?Where are your experts?
FEMA Project Officers“Not Eligible”“Not Reasonable”“This Contract is no good”“You have 60 days to write your projects”“This is what we are going to do…”“You HAVE to do it this way…”
FEMA will give you “How Much”?Is it right?How do you know?Where are your experts?
Proactive or Reactive?Proactive or Reactive?
You must be in a position to be able to DRIVE your own recovery efforts
The only way to survive these obstacles is to Proactively implement a Recovery Strategy
Once implemented you are driving your recovery
You must be in a position to be able to DRIVE your own recovery efforts
The only way to survive these obstacles is to Proactively implement a Recovery Strategy
Once implemented you are driving your recovery
The Big Questions Are:The Big Questions Are:
How are we going to pay for this disaster?
How much can we reasonably expect from our insurance company?
How much can we reasonably expect from FEMA?
How are we going to pay for this disaster?
How much can we reasonably expect from our insurance company?
How much can we reasonably expect from FEMA?
More Detailed Questions:More Detailed Questions:
Do we have an Integrated Financial Recovery Strategy or plan?
Do we have the dedicated personnel to implement a Plan?
Do we have the resources to develop a plan while we are trying to respond to this disaster?
Are we in control?
Do we have an Integrated Financial Recovery Strategy or plan?
Do we have the dedicated personnel to implement a Plan?
Do we have the resources to develop a plan while we are trying to respond to this disaster?
Are we in control?
How Does Your Team Anticipate FEMA?
How Does Your Team Anticipate FEMA?
Eligibility issues & interpreting differences of opinion
Gray areas and policy shift from disaster to disaster and region to region
Rotating FEMA staff Lack of depth in FEMA staff training and
experience Quota-driven approach Multiple requests for duplicate information What’s covered? Insurance vs. FEMA
Eligibility issues & interpreting differences of opinion
Gray areas and policy shift from disaster to disaster and region to region
Rotating FEMA staff Lack of depth in FEMA staff training and
experience Quota-driven approach Multiple requests for duplicate information What’s covered? Insurance vs. FEMA
How Does Your Insurance Team:How Does Your Insurance Team:
Complete a thorough evaluation of losses Coordinate claims Secure advance payments Support claim preparation & settlement
to expedite & maximize recovery
Complete a thorough evaluation of losses Coordinate claims Secure advance payments Support claim preparation & settlement
to expedite & maximize recovery
Disaster Recovery Process
1. Get Organized2. Determine Losses3. Categorize Losses4. Determine Eligibility5. Develop a Rebuilding Plan6. Identify Funding Sources7. Implement the Plan8. Final Inspection and “Close-out”9. Complete the Audit Requirements
45
QUESTIONSQUESTIONS
46
Adjusters International
www.adjustersinternational.com800-382-2468
Adjusters International
www.adjustersinternational.com800-382-2468