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A TRUE COPY <br />CERTIFICATION ON LAST PAGE <br />J.R. SMITH, CLERK <br />Attachment J <br />DHS OIG AUDIT ISSUES and ACKNOWLEDGEMENT <br />The Department of Homeland Security (DHS) Office of Inspector General (OIG) was tasked by <br />Congress to audit all FEMA projects for fiscal year 2014. A synopsis of those findings are listed <br />below: <br />There have been 32 separate instances where Grantees/Recipients or Sub -Recipients did not follow the <br />prescribed rules to the point that the OIG believed the below listed violations could have nullified the <br />FEMA/State agreement. <br />1. Non Competitive contracting practices. <br />2. Failure to include required contract provisions. <br />3. Failure to employ the required procedures to ensure that small, minority, and women's owned firms <br />were all given fair consideration. <br />4. Improper "cost -plus -a -percentage -of -cost" contracting practices. <br />The following information comes directly from DHS's OIG Audit Tips for Managing Disaster Related <br />Project Costs; Report Number OIG -16-109-D dated July 1, 2016. The following may be reasons for <br />the disallowance or total de -obligation of funding given under the FEMA/State agreement: <br />1. Use of improper contracting practices. <br />2. Unsupported costs. <br />3. Poor project accounting. <br />4. Duplication of benefits. <br />5. Excessive equipment charges (applicability may vary with hazard mitigation projects). <br />6. Excessive labor and fringe benefit charges. <br />7. Unrelated project costs. <br />8. Direct Administrative Costs. <br />9. Failure to meet the requirement to obtain and maintain insurance. <br />Key Points that must be followed when Administering FEMA Grants: <br />• Designate one person to coordinate the accumulation of records. <br />• Establish a separate and distinct account for recording revenue and expenditures, and a separate <br />identifier for each specific FEMA project. <br />• Ensure that the final claim for each project is supported by amounts recorded in the accounting <br />system. <br />• Ensure that each expenditure is recorded in the accounting books and references supporting <br />sources of documentation (checks, invoices, etc.) that can be readily retrieved. <br />• Research insurance coverage and seek reimbursement for the maximum amount. Credit the <br />appropriate FEMA project with that amount. <br />71 <br />