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<br />Preparedness Grants Manual <br />In the case of any potential or actual noncompliance, FEMA may place special conditions on an <br />award per 2 C.F.R. § 200.208 and § 200.339, FEMA may place a hold on funds until the matter is <br />corrected, or additional information is provided per 2 C.F.R. § 200.339, or it may do both. Similar <br />remedies for noncompliance with certain federal civil rights laws are authorized pursuant to 44 C.F.R <br />Parts 7 and 19. <br />In the event the noncompliance is not able to be corrected by imposing additional conditions or the <br />recipient or subrecipient refuses to correct the matter, FEMA might take other remedies allowed <br />under 2 C.F.R. § 200.339. These remedies include actions to disallow costs, recover funds, wholly or <br />partially suspend, or terminate the award, initiate suspension and debarment proceedings, withhold <br />further federal awards, or take other remedies that may be legally available. For further information <br />on termination due to noncompliance, see the section on Termination Provisions in the relevant <br />NOFO. <br />FEMA may discover and take action on noncompliance even after an award has been closed. The <br />closeout of an award does not affect FEMA’s right to disallow costs and recover funds if the action to <br />disallow costs takes place during the record retention period. See 2 C.F.R. § 200.334, § 200.345(a). <br />Closeout also does not affect the obligation of the non-federal entity to return any funds due as a <br />result of later refunds, corrections, or other transactions. See 2 C.F.R. § 200.345(a)(2). <br />The types of funds FEMA might attempt to recover include, but are not limited to, improper <br />payments, cost share reimbursements, program income, interest earned on advance payments, or <br />equipment disposition amounts. <br />FEMA may seek to recover disallowed costs through a Notice of Potential Debt Letter, a Remedy <br />Notification, or other letter. The document will describe the potential amount owed, the reason why <br />FEMA is recovering the funds, the recipient’s appeal rights, the requirement to retain records, how <br />the amount can be paid, and the consequences, including billing and collection, for not appealing or <br />paying the amount by the deadline. <br />If the recipient neither appeals nor pays the amount by the deadline, the amount owed will become <br />final. Potential consequences if the debt is not paid in full or otherwise resolved by the deadline <br />include the assessment of interest, administrative fees, and penalty charges; administratively <br />offsetting the debt against other payable federal funds; and transferring the debt to the U.S. <br />Department of the Treasury for collection. FEMA notes the following common areas of <br />noncompliance for the preparedness grant programs: <br />. <br />. <br />. <br />. <br />. <br />Insufficient documentation and lack of record retention; <br />Failure to follow the procurement under grants requirements; <br />Failure to submit closeout documents in a timely manner; <br />Failure to follow EHP requirements; and <br />Failure to comply with the POP deadline. <br />6.10. Audits <br />FEMA grant recipients are subject to audit oversight from multiple entities including DHS OIG, the <br />Government Accountability Office (GAO), the pass-through entity, or independent auditing firms for <br />48