TO: Board of Supervisors
FROM: Tracy A. Schulze, Auditor-Controller
REPORT BY: Kaitlin Ager, Principal Grant Compliance Auditor
SUBJECT: Disaster Restricted Fund Balance Analysis and Planned Release
RECOMMENDATION
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Receive a presentation on the status of Federal Emergency Management Agency (FEMA)-funded emergencies in Napa County; approve the release of restricted fund balance; and approve related Budget Amendments to return the released funds to the subdivisions that originally funded the disaster-related projects. (Fiscal Impact: $4,345,895 Reclass Fund Balance Reserves from Restricted to Available; Various Funds; Not Budgeted; Discretionary)
[4/5 vote required]
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BACKGROUND
Since 2014, Napa County has received approximately $20 million in Public Assistance funding from the Federal Emergency Management Agency (FEMA) and the California Governor's Office of Emergency Services (CalOES) for federally declared disasters. These reimbursements have been recorded as restricted fund balance, meaning the funds cannot be used until they are deemed free from audit or claw-back risk. To date, approximately $7 million has been released from restriction, with about $13 million remaining restricted.
The most recent federally declared disasters prior to 2014 were the 2005-06 flood events, which have been fully closed out, with no remaining restricted funds. The Auditor-Controller's Office (ACO) currently tracks 127 disaster-related projects across ten separate emergency events. This includes detailed monitoring of claims, FEMA/CalOES payments, closeout statuses, and project-specific risk assessments.
Since 2014, the Board of Supervisors has supported the ACO policy of restricting FEMA/CalOES reimbursements until each disaster project is determined to be free of significant audit risk. Under the 2018 Disaster Recovery Reform Act (DRRA), FEMA's ability to recoup funds is generally limited to three years following CalOES' submission of the Final Inspection Report (FIR...
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