PART 207—MANAGEMENT COSTS Authority: Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 through 5206; Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; Homeland Security Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 1979 Comp., p. 412; E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166. Source: 72 FR 57875, Oct. 11, 2007, unless otherwise noted. § 207.1 Purpose. The purpose of this part is to implement section 324 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), 42 U.S.C. 5165b. § 207.2 Definitions. Cap Chief Financial Officer (CFO) Cognizant Agency Grant Grantee(alternatively, Recipient) Hazard Mitigation Grant Program (HMGP) HMGP lock-in ceiling HMGP project narrative Indian tribal government Indirect Costs Lock-in Management Costs Project Project Worksheet (PW) Public Assistance (PA) Regional Administrator Stafford Act State Subgrantee (alternatively, Subrecipient) [72 FR 57875, Oct. 11, 2007, as amended at 82 FR 44, Jan. 3, 2017] § 207.3 Applicability and eligibility. Only PA and HMGP grantees with PA and HMGP grants awarded pursuant to major disasters and emergencies declared by the President on or after November 13, 2007 are eligible to apply to FEMA for management cost funding under this part. § 207.4 Responsibilities. (a) General. (b) FEMA. (1) Determining the lock-in amount for management costs in accordance with § 207.5. (2) Obligating funds for management costs in accordance with § 207.5(b). (3) Deobligating funds provided for management costs not disbursed in accordance with § 207.8(b). (4) Reviewing management cost rates not later than 3 years after this rule is in effect and periodically thereafter. (c) Grantee. (1) Administer management cost funds to ensure that PA and HMGP, as applicable, are properly implemented and closed out in accordance with program timeframes and guidance. (2) Determine the reasonable amount or percentage of management cost funding to be passed through to subgrantees for contributions to their costs for administering PA and HMGP projects and ensure that it provides such funds to subgrantees. (3) Address procedures for subgrantee management costs amount or percentage determination, pass through, closeout, and audit in the State administrative plan required in § 206.207(b) of this chapter for PA and § 206.437 of this chapter for HMGP. [72 FR 57875, Oct. 11, 2007, as amended at 79 FR 76086, Dec. 19, 2014] § 207.5 Determination of management cost funding. (a) General. (b) Lock-in. (1) Not earlier than 30 days and not later than 35 days from the date of declaration, FEMA will provide the grantee preliminary lock-in amount(s) for management costs based on the projections at that time of the Federal share for financial assistance for PA and HMGP, as applicable. In accordance with § 207.7(c), FEMA will obligate 25 percent of the estimated lock-in amount(s) to the grantee. (2) For planning purposes, FEMA will revise the lock-in amount(s) at 6 months after the date of the declaration. In accordance with § 207.7(e), FEMA may obligate interim amount(s) to the grantee. (3) FEMA will determine the final lock-in amount(s) 12 months after date of declaration or after determination of the final HMGP lock-in ceiling, whichever is later. FEMA will obligate the remainder of the lock-in amount(s) to the grantee in accordance with § 207.7(f). (4) Rates. (i) For major disaster declarations, FEMA will determine the lock-in for PA based on a flat percentage rate of the Federal share of projected eligible program costs for financial assistance pursuant to sections 403, 406, and 407 of the Stafford Act, 42 U.S.C. 5170b, 5172, and 5173, respectively, but not including direct Federal assistance. For major disaster declarations on or after November 13, 2007, the PA rate will be 3.34 percent. (ii) For major disaster declarations, FEMA will determine the lock-in for HMGP based on a flat percentage rate of the Federal share of projected eligible program costs under section 404 of the Stafford Act, 42 U.S.C. 5170c. For major disaster declarations on or after November 13, 2007, the HMGP rate will be 4.89 percent. (iii) For emergency declarations, FEMA will determine the lock-in for PA based on a flat percentage rate of the Federal share of projected eligible program costs for financial assistance (sections 502 and 503 of the Stafford Act, 42 U.S.C. 5192 and 5193, respectively), but not including direct Federal assistance. For emergency declarations on or after November 13, 2007 the rate will be 3.90 percent. (c) The dollar amount provided to a grantee for management cost funds for a single declaration will not exceed 20,000,000, except as described in paragraphs (d) and (e) of this section. (d) The grantee must justify in writing to the Regional Administrator any requests to change the amount of the lock-in or the cap, extend the time period before lock-in, or request an interim obligation of funding at the time of the 6-month lock-in adjustment. The Regional Administrator will recommend to the Chief Financial Officer whether to approve the extension, change, or interim obligation. Extensions, changes to the lock-in, or interim obligations will not be made without the approval of the Chief Financial Officer. (e) The Chief Financial Officer may change the amount of the lock-in or the cap, or extend the time before lock-in, if the Chief Financial Officer determines that the projections used to determine the lock-in were inaccurate to such a degree that the change to the lock-in would be material, or for other reasons in his or her discretion that may reasonably warrant such changes. The Chief Financial Officer will not make such changes without consultation with the grantee and the Regional Administrator. § 207.6 Use of funds. (a) The grantee or subgrantee must use management cost funds provided under this part in accordance with 2 CFR part 200, subpart E—Cost Principles, and only for costs related to administration of PA or HMGP, respectively. All charges must be properly documented in accordance with § 207.8(f). (b) Indirect costs may not be charged directly to a project or reimbursed separately, but rather are considered to be eligible management costs under this part. (c) Activities and costs that can be directly charged to a project with proper documentation are not eligible for funding under this part. [72 FR 57875, Oct. 11, 2007, as amended at 79 FR 76086, Dec. 19, 2014] § 207.7 Procedures for requesting management cost funding. (a) General. (b) State administrative plan requirements. (c) Initial funding request submission. (1) For PA management costs, funding requests shall be submitted using a PW. (2) For HMGP management costs, funding requests shall be submitted using an HMGP project narrative. (d) Request documentation. (1) A description of activities, personnel requirements, and other costs for which the grantee will use management cost funding provided under this part; (2) The grantee's plan for expending and monitoring the funds provided under this part and ensuring sufficient funds are budgeted for grant closeout; and (3) An estimate of the percentage or amount of pass-through funds for management costs provided under this part that the grantee will make available to subgrantees, and the basis, criteria, or formula for determining the subgrantee percentage or amount ( e.g. (e) Interim funding request. (f) Final funding request. § 207.8 Management cost funding oversight. (a) General. (b) Period of availability. (2) For emergency declarations, the grantee may expend management cost funds for allowable costs for a maximum of 2 years from the date of the emergency declaration or 180 days after the latest performance period of a non-management cost PA PW, whichever is sooner. (3) The period of availability may be extended only at the written request of the grantee, with the recommendation of the Regional Administrator, and with the approval of the Chief Financial Officer. The grantee must include a justification in its request for an extension, and must demonstrate that there is work in progress that can be completed within the extended period of availability. In no case will an extended period of availability allow more than 180 days after the expiration of any performance period extensions granted under PA or HMGP for project completion. FEMA will deobligate any funds not liquidated by the grantee in accordance with 2 CFR 200.309 and 200.343(b). (c) Reporting requirements. (d) Closeout. (e) Audit requirements. (f) Document retention. [72 FR 57875, Oct. 11, 2007, as amended at 79 FR 76086, Dec. 19, 2014] § 207.9 Declarations before November 13, 2007. (a) General. (b) Eligible direct costs. (1) Grantee Statutory administrative costs. (A) For the first 100,000 of total assistance provided (Federal share), 3 percent of such assistance. (B) For the next 900,000, 2 percent of such assistance. (C) For the next 4,000,000, 1 percent of such assistance. (D) For assistance over $5,000,000, one-half of 1 percent of such assistance. (ii) State management administrative costs. (2) Subgrantee. (i) For the first $100,000 of net eligible costs, 3 percent of such costs. (ii) For the next $900,000, 2 percent of such costs. (iii) For the next $4,000,000, 1 percent of such costs. (iv) For those costs over $5,000,000, one-half of 1 percent of such costs. (c) Eligible indirect costs: (1) Grantee. (2) Subgrantee. (d) Availability. (2) For emergency declarations, FEMA will reimburse grantee eligible costs as described in this section at (b)(1)(ii) and (c)(1) for a maximum of 2 years from the date of the emergency declaration or 180 days after the latest performance period of a non-management cost PA PW or predecessor form, whichever is sooner. (3) The reimbursement of grantee eligible costs as described in this section at (b)(1)(ii) and (c)(1) may be provided by FEMA after the periods of availability described in this section only at the written request of the grantee, with the recommendation of the Regional Administrator, and with the approval of the Chief Financial Officer. The grantee must include a justification in its request for further reimbursement, and must demonstrate that there is work in progress that can be completed within the extended period of reimbursement. In no case will reimbursement be provided after 180 days after the expiration of any performance period extensions granted under PA or HMGP for project completion. [72 FR 57875, Oct. 11, 2007, as amended at 79 FR 76087, Dec. 19, 2014] § 207.10 Review of management cost rates. (a) FEMA will review management cost rates not later than 3 years after this rule is in effect and periodically thereafter. (b) In order for FEMA to review the management cost rates established, and in accordance with 2 CFR parts 200 and 3002, the grantee and subgrantee must document all costs expended for management costs (including cost overruns). After review of this documentation, FEMA will determine whether the established management cost rates are adequate for the administration and closeout of the PA and HMGP programs. [72 FR 57875, Oct. 11, 2007, as amended at 79 FR 76087, Dec. 19, 2014]