As the 2023 Hurricane season continues, the depleting Disaster Relief Fund isn’t the only thing that participants in FEMA’s programs should be concerned about. The increased focus on the rising costs of disasters and the falling balance of FEMA’s coffers has also brought intense pressure to close “legacy” disasters. FEMA is working to expedite final reviews and many states and applicants are noticing silent deobligations, retroactively taking back millions for unsuspecting subrecipients.

FEMA has the authority to retroactively take back (or deobligate) federal funding for a variety of reasons including:

  • Improper procurement;
  • Unreasonable costs;
  • Work performed outside of the scope of the contract or project;
  • Failure to comply with environmental and/or historical preservation laws and regulations;
  • Lack of Documentation; or
  • FEMA’s own mistakes!