The Office of Inspector General at the Department of Homeland Security contracted with KPMG, LLP to conduct an audit to determine whether the Federal Emergency Management Agency (FEMA) ensured the Virgin Islands Emergency Management Agency (VITEMA), and Virgin Islands Water and Power Authority (VIWAPA) established and implemented policies, procedures, and practices to account for and expend Public Assistance (PA) disaster grant funds in accordance with Federal regulations and FEMA guidance.
KPMG found that FEMA did not always ensure VITEMA and VIWAPA established and implemented policies, procedures, and practices to account for and expend PA disaster grant funds in accordance with Federal regulations and FEMA guidance. Specifically, the audit found that VITEMA did not establish policies and procedures to ensure VIWAPA submitted management costs in accordance with requirements. In addition, VIWAPA did not fully ensure contract costs were reasonable and allowable. KPMG also found that neither VITEMA nor VIWAPA fully implemented FEMA’s Grants Manager and Grants Portal Tool, a web-based, project tracking system.
OIG says this occurred because FEMA did not consistently provide adequate oversight and did not ensure VITEMA and VIWAPA established and implemented policies, procedures, and practices to account for and expend PA disaster grant funds in accordance with Federal regulations and FEMA guidance. Because of these deficiencies, there is increased risk the PA program may be mismanaged and funds may be used for unallowable activities.
In its June report, OIG set out three recommendations to improve grant management at FEMA. First, the watchdog recommended that FEMA provide VITEMA and VIWAPA with additional guidance to update their policies and procedures to ensure they comply with the Disaster Recovery Reform Act of 2018 and FEMA’s February 2019 Public Assistance Management Costs Interim Policy – Standard Operating Procedures. FEMA concurred and estimates completion by April 30, 2021.
OIG also recommended that FEMA work with VITEMA to request VIWAPA to incorporate conflict of interest provisions related to the selection and award of contracts, including the selection of the bid evaluation committee; incorporate additional guidance for full and open competition waivers so they clearly define the rationale for the waivers; require review of the SAM prior to awarding a contract to verify that proposed contractors and subcontractors are not suspended or debarred, and remove the waiver provision allowing VIWAPA to award contracts to suspended or debarred contractors or subcontractors; and incorporate additional guidance for expenditures incurred under cost-plus-percent-of-cost contracts to ensure related costs are allowable. FEMA concurred and again expects to complete the necessary work by April 30 2021.
Finally, OIG recommended that FEMA coordinate with VITEMA and VIWAPA to identify and grant access to individuals whose job responsibilities require access to FEMA’s Grants Manager and Grants Portal Tool and ensure all appropriate personnel receive Grants Manager and Grants Portal Tool training. FEMA responded that it has granted Grants Portal access and trained all VITEMA and VIWAPA personnel identified by the agencies to require access. Specifically, FEMA Region II provided training to VITEMA and Territorial applicants on Grants Manager Basics on August 13, 2018; Grants Manager Portal on January 23, 2019; Grants Portal Overview (specifically for VITEMA) on February 7, 2019; Grants Portal on February 27, 2019; and Grants Portal Applicant Training on June 21, 2019). FEMA said it will also provide additional Grants Portal training upon request. OIG considers this recommendation resolved and closed.