This is in response to the letter dated July 24, 2017, which transmitted the referenced second appeal on behalf of the University of Texas Medical Branch (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $14,405.83 for PW 12571 in direct administrative costs (DAC) for labor and travel expenses. As explained in the enclosed analysis, I have determined that the Applicant has not demonstrated that it tracked costs for eligible repair work separately from the cost of improvements, nor has it substantiated the general eligibility of DAC for all claimed contractor labor costs. In addition, the Applicant’s claimed travel expenses constitute indirect costs because those costs were prorated across multiple PWs, and thus are ineligible for reimbursement as DAC. Accordingly, I am denying the appeal. In addition, consistent with FEMA’s second appeal determination in University of Texas Medical Branch, FEMA-1791-DR-TX (September 21, 2017), I am directing FEMA Region VI to assess whether funding awarded above the project’s capped amount should be deobligated. Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.