Instructional Memorandum Series for the 2018 Hurricane and Wildfire Supplemental and Department of the Interior and Bureau Governance and Reporting Policy and Guidelines

No: IM DRRA 2018-01

Issuance Date: July 13, 2018

Expiration Date: Retain Until Suspended 

Subject: Instructional Memorandum Series for the 2018 Hurricane and Wildfire Supplemental and Department of the Interior and Bureau Governance and Reporting Policy and Guidelines

1. Purpose.  This Instructional Memorandum (IM) establishes the policies and procedures which must be followed when utilizing supplemental funding from the Disaster Relief Requirements Act (DRRA).  The IM describes internal controls for bureau oversight and reporting.  In addition, it describes special overhead rates, limitations on expenditures, and special requirements for establishing accounts and awarding grants.

2. Background.  Public Law 115-123, Division B, Subdivision 1—Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (H.R. 1892 - Bipartisan Budget Act of 2018, signed into law by the President on February 9, 2018), appropriated $42,246,000 to the United States Geological Survey (USGS), for necessary expenses related to the consequences of Hurricanes Harvey, Irma, and Maria, and in those areas impacted by a major disaster declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) with respect to wildfires in 2017.

3. Timelines.

A. General.  The funds provided to the USGS by the DRRA are no-year.  In accordance with FOP Chapter 9, Section 1, subsection 3 Part B, the Period of Availability does not expire.  The no-year funds are available for incurring obligations for an indefinite period, usually until the objectives have been accomplished.  The Office of Management and Budget (OMB) or Department of the Interior (DOI) may cancel no-year authority under certain circumstances.

OMB and DOI have indicated that funds are expected to be obligated within periods specified by the approved work plans, which range from two to three years. Additional time may be requested by submitting a waiver request via email to the lead science coordinator for the USGS governance group (see next section).  The science coordinator will determine if additional approvals are required by DOI. Requests will not be automatically granted and clear justifications will be required.

B. Grants.  Per OMB, funds for grants provided by the DRRA must be fully expended by the grantees within the 24-month period following the agency’s obligation of those funds, unless waived by the Director of OMB (see Section 9 below).

C. Use of Funds for FY 2018.  All projects may use supplemental funds for approved spend plans on relevant work conducted after passage of the DRRA (i.e., for activities starting February 9, 2018).  In addition, funded centers may apply supplemental funds to relevant work activities conducted earlier in FY 2018 (i.e., activities that started October 1, 2017 or later), upon written approval from the USGS oversight body (see below).

4. Governance.  The Deputy Secretary of Department of the Interior (DOI) and the Office of Management and Budget (OMB) approved USGS project spend plans for supplemental funded projects indicated below in April 2018.  The Act requires agencies to submit monthly reports to the Committees on Appropriations of the House of Representatives and the Senate detailing the allocation and obligation of these funds by account.  The USGS will provide a list of accounts to DOI Office of Policy, Management and Budget (PMB), which will centrally pull financial updates from FBMS for this requirement, and coordinate with DOI on other reporting requirements as they are developed.  In addition, the USGS will develop other requirements for reporting on progress.

Within the USGS, the Hazard Response Executive Committee (HREC), chaired by the USGS Deputy Director and Associate Director for Natural Hazards, is responsible for oversight of projects conducted with supplemental funding.  The HREC will establish an oversight body, the 2018 Hurricane & Wildfire Supplemental Team (HWST), to maintain strong internal controls to oversee project work, coordinate communications, manage risk, monitor progress and meet all tracking and reporting requirements established by the USGS, DOI, OMB, or other Executive or Legislative authorities.

Members and roles for the HWST

A science coordinator will serve as the HWST lead and be detailed into the Natural Hazards Mission Area (NHMA) to work closely with senior level staff assigned by the Associate Director for Natural Hazards to provide briefings as necessary for DOI, OMB, other oversight agencies and partners, and Congress.  The HWST lead has the primary responsibility of organizing and managing the daily operations of the HWST to effectively achieve all its goals and objectives.  In addition, the lead will coordinate with: project leads to obtain science and administrative resources and support; Mission Areas to support Centers receiving supplemental funds; support staff to ensure that reporting is timely and accurate, and reaching appropriate stakeholders.

A senior analyst from NHMA will support the HWST lead to manage project tracking and reporting requirements, advise on financial, compliance and legal requirements, establish operational policies, and track BASIS+ and FBMS entries for the project work.  In addition, the senior analyst will coordinate with HWST representatives from the USGS Office of Budget, Planning and Integration (OBPI) and Office of Administration (OA) to ensure reporting requirements are completed and to establish and implement financial monitoring policies.

Each project will include an individual to serve as the point of contact (POC) for reporting on all activities, updates, and potential issues or concerns regarding projects falling within their boundaries.  POCs are responsible for monitoring projects from beginning to end and alerting the HWST lead, and identifying issues relating to project progress, timeliness of contract awards, reporting, communication with stakeholders, or other operational concerns.  The POC will identify any technical expertise needed for coordinating efforts between Science Centers.  HWST POCs will coordinate with each other and Regional Liaisons on identifying priority geographic areas for work, joint theme activities, and identifying products that span themes and geographic areas.  POCs will work with Science Centers to identify science implementers, provide staffing suggestions and other resources necessary to complete projects, and ensure that necessary products are being delivered in a timely manner.

Projects are expected to meet and report progress on milestones identified in their approved spend plans.  Achievements or anticipated delays should be reported through the project POC.  Changes in timelines or milestones for spending plans must be submitted to the HWST lead and project POC for notification and approval.  The HWST lead will determine if a change requires DOI notification. 
The HWST will establish reporting crosswalks, and track funding and costs for each project to meet DOI reporting requirements.  Financial reporting transparency and milestone tracking will determine reporting requirements throughout the duration of the projects.  In addition, the USGS will be required to provide updates to DOI and OMB on work progress and accomplishments.

The Office of Communications and Publishing (OCAP) liaisons will ensure bureau and departmental communication expectations are met.  HWST leads will identify what needs to be communicated and work with OCAP to ensure a coordinated and consistent message.  HWST leads will consult with project leads to ensure that projects are on track, monitor major milestones and report them on various timelines dependent on DOI and external oversight bodies, which may include weekly, monthly, quarterly, annual or ad hoc deadlines.  The HWST leads will work with the OA to ensure accountability for internal controls, reporting improper payments, and accounting for grant expenditures.  

5.  Recording and tracking costs in FBMS and BASIS+. Outlined below are details for tracking the supplemental funds in FBMS and in BASIS+.  This structure has been established to ensure that the detailed reporting requirements outlined by the Department can be met.

A. FBMS Allocation Organization and Cost Centers.  Supplemental funding will be distributed via the weekly allocation matrix.  Included in the matrix will be the name and project number of the funds being allocated so that detailed tracking can take place to determine which cost centers received funds within each project (see the BASIS+ Projects section below).  Program Coordinators or those responsible for allocating these funds shall use the allocation form located in Chapter 3.4 of the Financial Operating Procedures Handbook.  A separate allocation form shall be used for each project so that the initial allocations and changes of allocation can be tracked more efficiently.

(1) Treasury Account Symbol (TAS):14X0804

(2) FBMS Fund Code:18XG0804XH

B. BASIS+ Projects, Tasks and Subtasks.  Appendix A provides a breakdown of projects approved by DOI along with the appropriate tasks. The cost centers most likely to receive supplemental funding are also identified along with the tasks specific to these cost centers, as well as the accounts that have been created for DOI project tracking.  If additional accounts are necessary for cost centers, approval must be obtained from the project lead and HWST senior analyst. 

(1) Access to the projects will be given to appropriate project leads.  Leads are responsible for adding the appropriate Associate Project Chiefs and Task Leaders once they have been identified.  If a member of the USGS project team requires access to the project/task and does not have a BASIS+ account, he or she may submit a BASIS+ request form to gain access.  The form can be found on the BASIS+ homepage.

(2) Detailed budgets will be entered by the assigned Project Chief and must equal the amounts allocated via the allocation matrix each week.  Total funding must equal the amounts in the approved spend plans, or changes approved by the HWST lead.  All change requests must clearly identify the reason for the change (i.e., why extra funding is needed or not needed; how unexpended funds would be redirected; how a redirection would support overall supplemental efforts).  Additional details and processes for approvals will be developed at a later point.  Narratives must include specific project milestones identified in the USGS DRRA Program Plan.  The Geospatial location/footprint must be entered to track spending.

(3) BASIS+ Project Structure.  The BASIS+ project structure is outlined in Appendix A to this IM. 

(4) Establishment of WBS Elements.  Cost centers that receive supplemental funds shall use appropriate project and common services WBS elements. Project WBS elements will be linked to the BASIS+ projects/tasks, fund code, program element code, and ABC code as outlined above and other crosswalks for reporting purposes.  Appendix A identifies WBS elements that have been established.  Cost centers need to fund all supplemental accounts in line with the funding that has been provided to them via the weekly allocation matrix.

DOI will be tracking projects and reporting crosswalks by WBS.  To ensure accurate reporting at the USGS and DOI, centers must obtain approval from the HWST lead or senior analyst before establishing new WBS.

As with all no-year funds, the DRRA supplemental is being tracked by the source year of the appropriation (FY 2018).  Due to this requirement, all WBS elements for DRRA funds must be created in BASIS+ with a fiscal year of 2018 and an account number which starts with GX18 since digits 3 and 4 of the WBS element must match positions 1 and 2 of the fund.

6.  Bureau management assessment and cost center burden.

A. Bureau Assessment.  Projects will be assessed three percent of total funding to support bureau management of the DRRA supplemental.  Bureau management funds will be held in accounts administered by the Office of the Associate Director for Natural Hazards.  These funds will cover HWST oversight activities and support, and communication and outreach material that support all DRRA projects. 

B. Cost Center Burden.  Administrative and support activities are defined as temporary, discrete, unique, and severable costs associated with management, oversight, and execution of DRRA projects.  Applicable administrative costs are non-severable in support of the project activity.  These would include the following costs:

(1) Administrative support for: (a) contract management; (b) travel arrangements; (c) account management such as account creation, funding transfers, expenditure adjustments, reconciliation and tracking; (d) human resources related activities.

(2) Center management support for: (a) project and task management; (b) meeting with cooperators to discuss project activities and products.

C. Burden Rates.  Common service rates for cost centers will vary by project, based on the reduced rates in approved spend plans.  Assessment rates for repair and replacement of seismic and geomagnetic monitoring assets will be lower due to the existing presence of basic infrastructure, as will lidar which has a much larger portion of funds placed directly on contracts rather than internal labor costs.  Other projects, such as debris flow, determination of gage locations at gage locations and landslide areas, health hazards for water supply, or assessing coastal impacts would see substantial additional indirect costs for invoice processing and approvals, vendor relations, increased personnel and personnel actions, project related expense reconciliation, but will be restricted to a 20 percent maximum assessment.

In sum:

(1) For Lidar acquisition projects (i.e., all supplemental accounts funded by program code GE0300000), center rates will not be assessed.  Non-severable administrative costs and project operational costs must be directly charged to project accounts.

(2) For seismic and geomagnetic monitoring assets repairs and replacements (i.e., all supplemental accounts funded by program code GD0100000), centers are authorized to assess a six percent rate for cost center common services, and a lower rate of three percent for equipment purchases.

(3) For all other supplemental projects, centers are authorized to assess the lesser figure of their regular rate or 20 percent.  If a center’s normal rate is below this threshold, the standard rate should be utilized.  

If funded COM accounts are insufficient to cover indirect administrative costs associated with the funding received within a specific fund center, centers are authorized to direct charge the DRRA project accounts. Direct costs are defined as costs that are non-severable from the project activity and include administrative and cost center management support.  Centers must maintain sufficient documentation to justify administrative direct costs to respond to any inquiries from USGS, DOI, the Office of Inspector General, or others.  

D. COM Accounts.  As centers create their project WBS fund source records, they should choose the “Reduced Rate Yes” radio button and input a common services rate no greater than the amounts described above.  Centers must also identify the common services WBS Element the overhead will be funded to as outlined above.  It is important that the common services WBS Element schema above is followed to allow the Department to track all funds related to a specific DOI crosswalk.

To tie overhead funding to DOI reporting crosswalks, centers funded in multiple BASIS+ tasks will be required to create and maintain separate COM accounts for each funded task.  For these centers, task accounts should be funded with no burden.  Separate COM accounts must be set up under each applicable task (i.e., if a center has three tasks, they must have three COM accounts).  Each COM account should then be directly funded based on the percentages outlined above.  See Appendix A for required COMs.

7.  Projects – Direct Charging of Expenditures and Obligations.

A. Expenditure Transactions.  Cost centers authorized to receive DRRA funding will record payments (expenditures) against the specific account assigned to that project.  If cost centers are processing expenditure adjustments into or out of DRRA WBS elements, do not “lump” or consolidate multiple transactions into one transaction.  Separate expenditure adjustments must be entered at the 4-digit BOC. This will ensure accuracy in reporting with any potential audits related to these funds.

B. Requisition Preparation.  Cost centers involved with DRRA projects will prepare their requisitions for processing.  You must include the words “Disaster Recovery Requirements Act Funds” on the header of the requisition and “DRRA” in the line item short text field in FBMS.

C. New and Modified Obligations.  New and modified obligations can be direct charged to the assigned project account.  If obligations are established using both DRRA and non-DRRA funds, both lines of accounting must be referenced in the purchase request and the award, including modifications to existing contract awards.

D. Documentation.  As expenditures and obligations are made against DRRA funds, cost centers will need to keep detailed records of all transactions to support potential audits of these funds.  Supporting documentation may include details about salary-related costs and what was done to support the project, travel vouchers, details about why certain administrative costs were charged directly to the DRRA project, copies of contracts obligated under these funds, and details about expenditure movements made within the DRRA WBS elements.

E. Authorized Leave Costs.  Leave related to DRRA projects may be charged to center overhead assessments set aside in specific common services accounts. In general, no leave costs will be directly charged to the science project funding.  Exceptions include leave costs for new staff brought on specifically for supplemental project work, and for staff funded by and dedicated primarily to supplemental project work. In no instance should supplemental funds pay for leave hours earned through other funding sources.

F. Performance Awards.  Performance awards or incentives may not be paid using DRRA funds.

8.  Milestone Tracking.  Progress toward project completion will be tracked by the HWST.  It is important to enter detailed products, completion status, and outcomes in the BASIS+ project/task structure so that milestone reporting can be facilitated centrally as much as possible.  Periodic progress data calls may be required.  HWST POCs shall work with the Project and Task Leads as necessary to collect the requested information.

9.  Internal Controls and Grant Expenditures.  OMB guidance, Implementation of Internal Controls and Grant Expenditures for the Disaster – Related Appropriations, M-18-14, requires agencies to design internal control plans, and report improper payments and accounting for grant expenditures for applicable funding.  OMB guidance for disaster relief funding stipulates that agencies shall identify and document incremental risks and mitigating controls, implement improper payments controls, document linkages between risks related to disaster and emergency funding and efforts to address known internal control risks.

For grants, agencies must ensure that grantees expend all awarded disaster relief funds within the 24-month period following the agency’s obligation of those funds, unless waived by OMB.  To meet this statutory requirement, awards must specify criteria for approval of grant applications or proposed plans for the use of grant funds, and ensure each proposed grant activity has clear timelines for completion within the period available for grantee expenditure.  While OMB may waive or extend this period for certain programs and expenditures, requests will be limited to only those activities that are long-term by design or where it is impracticable to expend funds within the 24-month period and still achieve program missions.

Accordingly, the period of performance (POP) for grants funded by the DRRA may not exceed 24 months without approval from OMB.  Funds must be expended by the end of the POP or must be returned to the awarding agency.  Grant term and conditions funded by the DRRA must include the following statement: “Grant funds not expended by the end of the POP must be returned to the awarding agency.” OMB will grant waivers only on a case-by-case basis, where such requests are justified by compelling legal, policy, or operational challenges and consistent with applicable laws.  Projects should notify the HWST lead by July 1, 2018, if they expect to request waivers.  Requests to extend obligations beyond the 24-month period should be submitted to the HWST lead by email no later than 18 months beyond the start date of the grant.

/s/ Roseann Gonzales 
____________________________                                                July 13, 2018
Roseann Gonzales                                                                      Date
Associate Director for Administration

APPENDIX A – SUPPLEMENTAL ACCOUNTS