Lesson 5 Overview and Objectives

This lesson provides the closeout requirements of the Applicant and Recipient.

Upon completion of this lesson, the participants will be able to:

  • Explain closeout requirements of the Applicant and Recipient
Overview of Closeouts

The grant life cycle outlines the process by which Applicants apply for, receive, and use grant funding.

  • Applicant Collaboration
  • Project Formulation
  • Project Reviews
  • Project Funding
  • Grant Management and Monitoring
  • Closeout

This lesson focuses on the requirements and conditions Applicants and Recipients can expect to encounter during the closeout phase of the grant lifecycle. This lesson provides an overview of the closeout phase followed by a discussion of required closeout documentation.

Grant closeout is the last phase of the grant lifecycle and marks the completion of scope of work and reconciliation of funding.

Purpose of the Closeout

The purpose of closeout is for the Recipient and Applicant to certify that all work has been completed.

FEMA closes Large Projects individually as each is completed. FEMA closes all Small Projects together when the last Small Project is completed.

During closeout, FEMA reviews all projects to ensure the Applicant complied with the terms and conditions of the grant. The terms and conditions include, but are not limited to:

  • Equipment and property disposition
  • Record keeping
  • Procurement
  • Minimum standards requirements for buildings
  • Special considerations such as environmental and historic preservation, hazard mitigation, and insurance

For additional information on project closeout, please refer to the Public Assistance Program and Policy Guide.

Closeout Requirements

The four fundamental requirements Applicants must meet for grant closeout are:

  • Meeting deadlines for the completion of work
  • Meeting deadlines for incurring costs
  • Meeting deadlines for submitting documentation
  • Completion of the approved scope of work
FEMA Public Assistance Applicants gather for a presentation at an Applicant's Briefing in Hot Springs, South Dakota.
Validating the Completion of Approved Scope of Work

During closeout, FEMA validates the completion of an approved scope of work.

Therefore, the Applicant and Recipient must certify and demonstrate that the work outlined in the approved scope of work was completed by submitting required documentation.

This also includes ensuring the Applicant used hazard mitigation funding according to Federal policy and regulations.

Project Work Completion Deadline

As a condition of the grant award, during closeout, FEMA reviews documentation to ensure the Applicant met the project work completion deadlines.

Therefore, the Applicant and Recipient must certify and demonstrate that the applicable project and regulatory deadlines were met.

During closeout, FEMA also reviews any time extensions the Recipient approved during the course of the project to ensure the Applicant followed the approved extended timeline.

Overview: Required Closeout Documentation

For FEMA to review an Applicant's project(s) for closeout, the Applicant and Recipient must submit all the required documentation.

This section covers documentation requirements for the closeout phase of the grant project. The closeout documentation Applicants and Recipients are required to submit differ slightly for Large Projects and Small Projects.

Large Project: A project for which the final obligation (Federal and non-Federal) amount is equal to or greater than the annually adjusted cost threshold for large project grants.

Small Project: A project for which the final obligated (Federal and non-Federal) amount is less than the annually adjusted cost threshold for small project grants.

The threshold for small projects is adjusted each fiscal year. During the initial collaboration, Applicants will be informed of the large and small project thresholds and impacts for the Applicant's project(s).

Three individuals documenting recovery efforts along the Sauquoit creek after flooding from Hurricane Irene.
Closeout Request Documents

To ensure a timely closeout process, the Applicant should notify the Recipient immediately as it completes each Large Project and when it completes its last Small Project.

Applicants should include the following information with its closeout request:

  • Certification that project is complete
  • Date of project completion
  • Copies of any Recipient time extensions

For detailed information on how to construct, maintain, and organize a project throughout the grant life cycle, please refer to the course, IS-1006 Documenting Disaster Damage and Developing Project Files.

Closeout for Large Projects (1 of 2)

FEMA closes Large Projects based on a final reconciliation of all actual eligible costs incurred to complete the approved scope of work. FEMA reviews all of the documentation associated with the project and verifies the accuracy of the costs incurred to complete the approved scope of work.

If the information is extensive, such as payroll records or trip tickets, FEMA will select and review a 10-20 percent random sample of the documents. If FEMA successfully validates the information in the sample, it considers all of the records to be correct. However, if FEMA identifies errors it will review a larger sample.

Public Assistance Program Policy Guide.

Closeout for Large Projects (2 of 2)

During the review process FEMA performs the following:

  • Validates compliance with all terms and conditions of the project
  • Evaluates and reconciles cost overruns or underruns
  • Reviews completed work records against the project and approved scope of work to validate that the work performed was consistent with the approved scope of work
  • Identifies any related projects to ensure no duplication of cost reimbursement
  • Determines whether the Recipient or FEMA approved any time extensions and whether the Applicant completed the work within the approved deadline
An individual reconciles data with the Data Processing Manager.
Recipient Certification for Large Projects

The Recipient must certify that all incurred costs are associated with the approved scope of work and that the Applicant completed all work in accordance with FEMA policy and regulations.

Public Assistance Coordinator looks over township maps reviewing damage incurred from recent flooding.
Closeout Documentation for Large Projects

With the exception of capped projects (e.g., improved or alternate), the final eligible amount for a Large Project is the actual documented cost of the completed approved scope of work. Therefore, upon completion of each Large Project which FEMA obligated funds based on an estimated amount, the Applicant should provide documentation to support the actual costs.

If actual costs significantly differ from estimated costs, the Applicant should provide an explanation for the significant difference.

Documentation to support costs claimed may include documentation regarding:

  • Labor (force account or prisoner)
  • Equipment (Applicant-owned, rented, or purchased)
  • Supplies (from stock or purchased)
  • Contracts
  • Mutual aid
  • Donated resources
  • Cost estimates
  • Cost reasonableness
  • Other documentation

For additional information regarding documenting costs claimed, participants may refer to the Public Assistance Program and Policy Guide.

Timeline for Submitting Closeout Documentation for Large Projects

The Recipient must submit its certification of the Applicant's completion of each Large Project with the final payment of claim and supporting documentation to FEMA within 180 days from the date that the Applicant completes each Large Project. If the Recipient cannot meet the certification deadline, they should contact FEMA and request an extension prior to the 180-day deadline expiration.

The Recipient must submit its certification of each of its own Large Projects within 180 days of the date of completion.

Financial Reconciliation for Large Projects

FEMA reviews the documentation submitted and, if necessary, obligates additional funds or reduces funding based on actual costs to complete the eligible scope of work.

For projects with funding changes, FEMA prepares a version ("amendment") of the original project to document its review and obligates additional funds or reduces funds as necessary.

For projects that do not have funding changes, FEMA notes the closeout action and date, closes the project, notifies the Recipient via letter correspondence, and adds a copy of the correspondence in the Public Assistance Grants Portal.

Grant Funding is discussed between two individuals at a Kick-Off Meeting
Final Reconciliation Reports for Large Projects

After FEMA reviews and adjusts funding, if necessary, FEMA prepares a final reconciliation report that includes the following information:

  • Final Inspection Report or line item reconciliation worksheet
  • Summary of expenditures
  • Related correspondence
  • Bid documents, if applicable
  • Contracts, if applicable
  • Identification of any costs claimed that are not eligible
  • Change orders, if applicable
  • Personnel pay policies, if applicable
  • Applicable codes and standards
  • Documentation of any required environmental compliance
  • Results of any representative sampling of documentation completed to support claimed costs
  • Mutual aid agreements, if applicable
  • Photos, if applicable
  • Other backup documentation, as needed
Closeout for Small Projects

Once FEMA obligates a Small Project, FEMA does not adjust the approved amount of an individual Small Project. This also applies when actual costs for completing the eligible scope of work differ from the estimated amount. Some Recipients may have additional required documents to close out small projects.

To close Small Projects, the Recipient must certify that the Applicant completed the approved scope of work for all of its Small Projects and complied with all requirements.

Closeout Documentation for Small Projects

To close a Small Project, the Recipient must provide

  • A letter signed by the Governor's Authorized Representative or designee; or
  • A Project Completion and Certification Report certifying the completion of all Small Projects, including:
    • The completion date
    • The payment of the Federal and non-Federal share to the Applicant
Timeline for Submitting Documentation for Small Projects

The Recipient must submit the Small Projects completion certification to FEMA within 180 days from the date that the Applicant completes its last Small Project.

Once FEMA receives the Recipient's certification, FEMA closes all of the Applicant's Small Projects.

FEMA Applicant Briefing with an individual in the foreground wearing a FEMA jacket.
Special Circumstances (1 of 2)

FEMA only adjusts the approved amount on individual Small Projects if one of the following conditions applies:

  • Applicant did not complete the approved scope of work
  • Applicant requests additional funds related to an eligible change in scope of work
  • Project contains inadvertent errors or omissions
  • Actual insurance proceeds differ from the amount deducted in the project

In these cases, FEMA only adjusts the specific cost item affected.

Special Circumstances (2 of 2)

If the Applicant completes the project at a cost greater than the approved estimate, FEMA does not obligate additional funds unless the Applicant submits, and FEMA approves, an appeal for a Net Small Project Overrun.

The Applicant must submit the Net Small Project Overrun, including all supporting documentation, within 60 days of completion of its last Small Project. The Recipient must forward the request to FEMA within 60 days of receipt from the Applicant.

If approved, FEMA prepares a new Category G Project Worksheet for the entire Net Small Project Overrun amount. FEMA does not version each of the Applicant's Small Projects.

For additional details on closeout for Small Projects and associated special circumstances, please refer to the Public Assistance Program and Policy Guide.

Lesson 5 Summary

In this lesson, participants learned how to:

  • Explain closeout requirements of the Applicant and Recipient

The next lesson provides an overview of the requirements associated with appeals.