Grants Management & Compliance FAQs Grants Management & Compliance How many major grant programs are managed by North Carolina Emergency Management (NCEM)? NCEM currently manages over 20 major recurring federal and state emergency management grant programs throughout the organization, the majority of which are multi-year grants. Some of these grants require a disaster declaration, and some do not. These grant programs encompass myriad individual grant awards across numerous years currently being managed by NCEM through hundreds of different cost centers and financial accounts in the North Carolina Accounting System (NCAS). For example, federal Homeland Security grants typically have a three-year period of performance. That means a Homeland Security grant awarded by the federal government to NCEM on behalf of the state of NC in 2021 closes three-years later in 2024, effectively providing 3 years to spend the money awarded in 2021. If/when another federal Homeland Security grant is awarded to NCEM in 2022, that grant will close in 2025. This creates a loop of overlapping federal Homeland Security grants that must be carefully managed by NCEM. What major grant programs are managed by North Carolina Emergency Management (NCEM)? The major emergency management grant programs currently managed by NCEM are summarized in the “NCEM Portfolio of Grants” table. This table is not intended to list every single grant program touching NCEM. Only the major recurring federal and state preparedness, recovery and mitigation grant programs currently being managed by NCEM are reflected in this table. As explained in FAQ # 1 above, these grant programs encompass myriad individual grant awards across numerous years currently being managed by NCEM. What are the compliance requirements for the major grant programs managed by North Carolina Emergency Management (NCEM)? Requirements can vary depending on the specific grant program and the respective authorizing laws; however, in general, the following federal and state legal requirements apply to all major grant programs managed by NCEM: 2 CFR Part 200 (Subparts A - F) (UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS), N.C.G.S. 143C-6-23 (STATE GRANT FUNDS: ADMINISTRATION; OVERSIGHT AND REPORTING REQUIREMENTS), and 09 NCAC 03M (UNIFORM ADMINISTRATION OF STATE AWARDS OF FINANCIAL ASSISTANCE). Refer to columns N - P (References) in the "NCEM Portfolio of Grants" table for more information regarding specific requirements for each major grant program. Recipients/subrecipients of grant funds through NCEM are required to comply with all applicable federal, state, local and tribal laws and regulations, as well as all terms & conditions of the grant award. For grants that have a published Notice of Funding Opportunity (NOFO) announcement, this includes all requirements contained in the applicable NOFO. Grants awarded by NCEM will include a Memorandum of Understanding (MOA) or other written grant agreement executed with the award specifying the terms and conditions of the award. For procurement with grant funds, state agencies are generally required to follow state of NC procurement policies and procedures, plus a few additional federal requirements when purchasing goods and services with federal grant funds. Local governments and non-profit organizations that receive grant funding through NCEM are generally required to follow the most restrictive of all federal, state of NC, and their own local procurement policies and procedures that allows for compliance with all applicable layers (federal, state & their own). What are the reporting and audit requirements for the major grant programs managed by North Carolina Emergency Management (NCEM)? Reporting Requirements North Carolina state law (N.C.G.S. 143C-6-23 and 09 NCAC 03M) requires every non-state entity (including non-profit organizations, counties and local governments) that receives state or federal pass-through grant funds from state agencies to file annual reports on how those grant funds were used no later than three months after the end of the non-state entity’s fiscal year. Reporting levels are based on the level of state financial assistance from all funding sources. All of the necessary reporting forms and instructions for NCEM grants, as well as a detailed explanation of the reporting requirements, are available on this website. Audit Requirements As specified in 09 NCAC 03M .0205, North Carolina state law requires every non-state entity (including non-profit organizations, counties and local governments) who “receives, holds, uses, or expends State financial assistance in an amount equal to or greater than five hundred thousand dollars ($500,000) within its fiscal year” to conduct an annual audit within 9 months of their fiscal year end. “State financial assistance” includes all state grant funding and federal pass through grant funding from state agencies to non-state entities. The $500,000 audit threshold is based on the combined level of state financial assistance from all funding sources. As specified in 2 CFR 200.501, there is also a federal law requirement for an annual audit, except in very limited circumstances, if any federal grant recipient or subrecipient expends $750,000 or more in federal funds (including federal grant funds passed through a state agency) within its fiscal year. The $750,000 audit threshold is based on the combined level of federal funding from all funding sources and specifically includes federal funding passed through state agencies. All audits required under state and federal law must be conducted in accordance with Generally Accepted Government Auditing Standards (gao.gov/yellowbook). Copies of all audits should be sent to: AuditGrantReports@ncdps.gov. Copies of any audits required if $750,000 or more in federal funds are expended in a year should also be submitted to the Federal Audit Clearinghouse. For additional information about federal audit requirements, see 2 CFR 200, Subpart F. What are the consequences of non-compliance with the requirements of the major grant programs managed by North Carolina Emergency Management (NCEM)? Recipients/subrecipients of grant funds through NCEM are required to comply with all applicable federal, state, local and tribal laws and regulations, as well as all terms & conditions of the grant award. Failure to comply may result in the return of funds and any other remedy for noncompliance specified in 2 CFR 200.339 and/or termination of the award per 2 CFR 200.340. This can also include disallowing reimbursement for any costs submitted by recipients/subrecipients that are not in compliance, withholding further awards for the project or program, and initiating suspension or debarment proceedings per 2 CFR Part 180. Additional conditions may also be placed upon non-compliant recipients/subrecipients for current and future grant awards, including additional monitoring. Fraud, waste and abuse of any federal or state funds can result in criminal prosecution through the U.S. Department of Justice and/or State Attorney General. Any suspected fraud, waste or abuse of NCEM grant funds should be reported to NC Department of Public Safety (NCDPS) Internal Audit: 1-844-208-4018. Public Assistance What is the difference between Applicant and Subrecipient? Applicant: State, Local, Tribal, Territorial governments, and certain types of private nonprofit organizations (PNPs) are eligible Applicants for Public Assistance. Subrecipient: An Applicant that receives a subaward from a pass-through entity (recipient) to carry out part of a Federal program. The Term Applicant and Subrecipient are often used interchangeably, but have different meanings: An eligible local government or PNP is an applicant until their Request for Public Assistance (RPA) is approved by FEMA. After an RPA is approved, an applicant becomes a subrecipient of FEMA funds. NCEM is the lead agency on behalf of the State of North Carolina – the state is the recipient of FEMA funds. Which Applicants are eligible for Public Assistance? Private Non-Profits (PNP) Community Center Houses of Worship Custodial Care Facility Emergency Services Educational or Arts Center Low Income Housing Emergency Care Facility Assisted Living Homeless Shelter Child Care Library Day Care (for individuals with disabilities or access and functional needs) Medical Care Facility Food Assistance Programs Rehabilitation Facility Health and Safety Services Senior Citizen Center Animal Control Services Shelter Workshop Domestic Violence Services Utilities Residential Services for Individuals with Disabilities Only certain PNPs are eligible Applicants. To be an eligible PNP Applicant, the PNP must show that it has: A ruling letter from the U.S. Internal Revenue Service that was in effect as of the declaration date and granted tax exemption under sections 501 (c), (d), or (e), of the Internal Revenue Code; or Documentation from the State substantiating it is a non-revenue producing, nonprofit entity organized or doing business under State law. What are the categories of work? Through the PA Program, FEMA provides grant funding for: Emergency protective measures and debris removal (Emergency Work); and Permanent restoration of damaged facilities, including cost-effective hazard mitigation to protect the facilities from future damage (Permanent Work) Emergency Work (Categories A & B) A (Debris Removal) B (Emergency Protective Measures) Permanent Work (Categories C, D, E, F, G) C (Roads/bridges) D (Water control facilities) E (Buildings/equipment) F (Utilities) G (Parks, Recreational, and other facilities) What are the Insurance Laws, Regulations and Policies for Public Assistance? The Federal Emergency Management Agency (FEMA) is a last resort funding source. If funding is available from an entity other than FEMA, those funds should be sought to cover costs associated with the project. A cost reduction in the amount of funding available from another source is applied to the project to prevent a duplication of benefits. The following are the Laws, Regulations, and Policies pertaining to insurance: Law: Stafford Act – Section 311 discusses the insurance requirements and section 312 discusses the duplication of benefits. Regulation: 44 C.F.R sections 206.250, 206.252, and 206.253 further discusses insurance requirements for facilities damaged by flood and damaged by disasters other than flood. Policies: Public Assistance and Program Policy Guide (PAPPG) and FP 206-086-1 Public assistance Insurance Policy discusses the requirements in more detail What are the required insurance documentation for Public Assistance? The following are the required insurance documentation: Policies Property Automobile Inland Marine Boiler and Machinery Flood Supporting Documents Declaration Page Endorsements Schedule of Values Building/Structure Automobile Equipment Settlement Information Adjuster Report and Estimate Statement of Loss Proof of Payment Settlement Letters Denial Letters Disbursement of Proceeds by Location Litigation/Dispute Documents What are the Obtain and Maintain (O&M) Insurance Requirements? Applicants receiving funding for permanent work to replace, repair, reconstruct, or construct a facility must obtain and maintain insurance to protect the facility against future loss. O&M requirements applies to insurable facilities and property only (buildings, contents, equipment, and vehicles). The requirements apply to insurable facilities and property with estimated costs of $5,000.00 or more. The requirements are based on eligible costs prior to any reductions. Facilities must be insured with the types and extent of insurance reasonably available, adequate, and necessary to protect against future loss to the property. Failure to O&M a facility when required will make that specific facility ineligible for funding. The Applicant as a whole or an entire project is not affected, only the specific facility. If a facility is located in a special flood area and does not have flood insurance, it will get a mandatory National Flood Insurance Program (NFIP) reduction if it’s a facility that NFIP would insure. If the facility is in a flood area, sustained damage, but did not have flood insurance, FEMA will apply reduction of $1,000,000; $500,000 for the contents and $500,000 for the structure. This will be a loss to the Applicant. If the Applicant’s improved project relocates outside of a flood zone, the O&M would follow as long as the facility is something the NFIP would insure. Applicant shall ensure damages they present to FEMA and their insurance carrier are the same. If Applicant signs the release, that’s where the claim stops. The Applicant needs to ensure all damages are captured before signing. What are common Insurance Reductions? Cost Reduction Codes 5900 - Actual insurance proceeds from other perils 5901 - Anticipated insurance proceeds from other perils 5902 - Mandatory NFIP maximum proceeds available 5903 - Prior disaster insurance purchase requirement 5904 - Actual non NFIP flood insurance proceeds 5905 - Anticipated non NFIP flood insurance proceeds 5906 - Ineligble amount failure to obtain and maintain insurance 5908 - Actual NFIP insurance proceeds 5909 - Anticipated NFIP insurance proceeds 5911 - Actual insurance proceeds from wind 5912 - Anticipated insurance proceeds from wind Hazard Mitigation Grants Hazard Mitigation Grant Program (HMGP) Information Cost Reduction Codes Information on the Hazard Mitigation Grant Program (HMGP), Flood Mitigation Assistance (FMA) grants, and the Pre-Disaster (PDM) / Building Resilient Infrastructure & Communities (BRIC) grants is available on the Disaster Grants page.