FEMA and California Need to Assist CalRecycle, a California State Agency, to Improve Its Accounting of $230 Million in Disaster Costs

We reviewed two large projects totaling $198.9 million in expenditures that CalRecycle incurred for debris removal work. We recommended that the Regional Administrator, FEMA Region IX (1) disallow as ineligible $142.7 million ($107 million Federal share) CalRecycle has received in Federal funds for debris removal work, unless FEMA (a) grants an exception to this administrative requirement, or (b) determines that costs are fully documented and eligible; (2) direct California, as recipient, to continue providing CalRecycle with technical assistance and monitoring to ensure compliance with all applicable Federal regulations and FEMA guidelines, and avoid improperly funding any of the $87.3 million ($65.4 million Federal share) it expects to claim in costs overruns for the remaining debris removal work, for an approximate total of $230 million; and (3) direct California, as grantee, to ensure that all insurance recoveries are collected from private property owners, and accurately reports the amount of insurance proceeds to FEMA.