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Texas Emergency Management ONLINE 2017 Vol. 64 No. 4

Local Jurisdictions: Are you financially prepared for a disaster?

As emergency managers in Texas, we tend to focus on mitigating, preparing and responding to emergencies and disasters from an operational perspective. Seldom do we do the same for the fiscal side of emergency management, with areas such as recovery often becoming an afterthought. With today's economy, fiscal responsibility needs to be considered at the beginning of the disaster, not at the end. Finance is part of all phases of emergency management and we should be concerned with much more than just how to respond to disasters. We should also be concerned with how much the disaster costs and if our local jurisdictions have the tools they need to track, calculate and justify those costs.

The Texas Division of Emergency Management (TDEM), along with the Governor's Office, has committed to ensuring that local jurisdictions have the tools necessary to financially recover from a disaster. On May 7, 2014, the Office of the Governor authorized a grant to help implement the Regional Disaster Finance Coordination Program. The program is an innovative, proactive program designed to give local jurisdictions the financial tools needed to help recover from a disaster before the disaster occurs, as well as facilitate collaboration and communication between responders and financial managers prior to a disaster occurring. As a unit within the TDEM Recovery Section, this program is overseen by a state coordinator and employs eight finance coordinators stationed throughout the state. Program efforts focus on accounting practices of individual finance departments, cataloguing current budget capabilities and ensuring compliance with federal rules to improve financial standard operating procedures and systems used during a disaster. This focus is aligned with interim changes for the 83rd Legislature for the Texas House of Representatives Committee on Homeland Security and Public Safety and the Committee on County Affairs to assess and improve the level of preparedness and to coordinate with local emergency response organizations to ensure economic stability.

The program encompasses comprehensive training for local jurisdictions designed to analyze accounting practices of their finance departments during a disaster, develop a process for calculating a daily burn rate and how that corresponds with county and state thresholds during a major disaster declaration, understand the incident command system (ICS) structure and the finance sections responsibility in emergency operations center (EOC) operations, develop a written disaster finance plan, and exercise the disaster finance plan. The training is designed to ensure local jurisdictions can successfully document labor, equipment, procurement and contracts and any other costs related to a disaster.

Documenting all of the expenditures properly will help mitigate potential negative audit findings later. The most frequent Office of Inspector General (OIG) Audit findings local jurisdictions face are:

  • Improper contracting practices
  • Unsupported costs
  • Poor project accounting
  • Excessive equipment charges
  • Unapplied credits
  • Excessive labor and fringe benefit charges
  • Duplication of benefits
  • Unrelated project charges
  • Direct administrative costs
  • Obtaining and maintaining insurance

When administering a FEMA grant the following are helpful tips for a jurisdiction to follow to ensure proper oversight:

  • Identify a coordinator for record keeping.
  • Separate accounts for revenue/expenditures should be established.
  • Create separate identifiers for each distinct FEMA project.
  • Final claim for projects reconciles with accounting system.
  • Ensure expenditures reference source documentation.
  • Insurance coverage should be credited to the FEMA project.
  • Check the availability of funding under other federal programs.  Expenditures claimed should be:
    • Reasonable, necessary and directly benefit the project.
    • Authorized under the scope of work.

Over the last two years, several local jurisdictions have been affected by tornadoes, floods, severe storms, fires and winter weather. These events generated a lot of expense and created the need for the locals to have proper documentation for FEMA reimbursement. The Regional Disaster Finance Program has partnered with locals jurisdictions before, during and after disasters. The program coordinators are committed to ensuring the local jurisdictions receive the necessary training needed to be financially prepared for a disaster.

Please visit the Regional Disaster Finance Program for additional information regarding the program, its coordinators, recovery resources and financial tools. 

Shari A. Ramirez-MacKay, CEM
State Coordinator - Regional Disaster Finance Program
Texas Division of Emergency Management

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