Summary Paragraph On August 29, 2005, high winds and heavy rains from Hurricane Katrina damaged the Applicant’s facility, which was used for church and community outreach programs. The Applicant attempted to repair the facility, but later demolished and replaced it due to the substantial damage sustained. FEMA prepared Project Worksheet (PW) 20207, finding the facility eligible for replacement. FEMA determined that the facility was an eligible community center, with 62 percent used for eligible community center activities. The PW, however, obligated zero dollars after deducting Small Business Administration approved loan, proceeds from the Bush-Clinton Katrina fund, and insurance proceeds. FEMA later revised the PW and obligated $30,418.00. In its first appeal, the Applicant disputed the usage percentage and FEMA’s denial of a portion of architectural and engineering (A&E) costs, which FEMA deemed unreasonable. The Applicant requested $257,641.68. The Grantee also argued that actual A&E expenses were eligible and disputed FEMA’s usage calculation. The Grantee calculated eligible usage to be about 90 percent. The Grantee also sought reimbursement for demolition costs, costs of grass and sod to stabilize slopes, and costs for elective construction modifications, for a total of $600,167.67. FEMA Regional VI Regional Administrator partially granted the first appeal, recalculating the usage percentage to 62.92 percent and awarding an additional $25,189.00, based on the revised percentage as well as reasonable A&E fees and some sod replacement. Demolition costs were found ineligible. On second appeal, the Applicant alleges that potluck dinners were not religious in nature and FEMA should revise the usage percentage to 80.83 percent. The Grantee supports the appeal and adds that 100 percent of sod replacement is eligible for funding. Authorities Discussed 44 C.F.R. 206.221(e). Public Assistance Guide, FEMA 322, at 14-15 (June 1999). Response and Recovery Directorate Policy (RRDP) 9521.1, Community Center Eligibility (Aug. 11, 1998). Second Appeal Analysis, FEMA-1603-DR-LA, PA ID 071-ULNET-00, Philadelphia Ministries, Project Worksheets 20245, 20246, 20247, and 20248. Headnotes Eligible PNP facilities are defined in 44 C.F.R. § 206.221(e) and include facilities providing essential government type services such as community centers. RRDP 9521.1 and the PA Guide provide that a facility established or primarily used for religious activities is not an eligible community center. A facility primarily established or used as a religious institution or place of worship is ineligible. RRDP 9521.1 defines “established” as the purpose for which the facility was instituted, which is determined by a review of the articles of incorporation, charter, bylaws, and other documentation. In Philadelphia Ministries, FEMA found a facility established as a church ineligible. According to the Applicant’s bylaws, the facility was established as a “religious society” for the purpose of “practice and advance of free faith.” Admission is contingent on subscription to the “purpose of the church” and completion of a pre-membership religious education is required for persons between the ages of thirteen and sixteen. The articles of incorporation lists, among the purposes, the practice of the Unitarian-Universalist faith. Also, the letter from the IRS classifies the organization as a church.