Article 35: Cost Share

(Category: eligibility-regulations)

Article Summary

Because Public Assistance funding is legally defined as supplementary in nature, the Stafford Act mandates an appropriate sharing of financial liabilities between the Federal Government and the State/Local entities. This percentage split, the Cost Share, is formally executed within the official FEMA-State Agreement.

While the cost-share ratio can be adjusted by the President to favor an applicant during extraordinarily catastrophic disasters, the statutory minimum Federal cost share is set at 75% of eligible project costs. The remaining non-Federal matching balance (typically up to 25%) must be satisfied by local sources. The State Grantee holds the explicit authority to determine how the non-Federal share is distributed—meaning the state may choose to contribute a portion of the match or pass the entire 25% liability directly down to the local subrecipient. Crucially, all public assistance applicants, including eligible Private Nonprofit (PNP) organizations, are fully subject to the exact cost-sharing provisions established in the FEMA-State Agreement.

Five Key Takeaways for CTA FEMA Compliance

1. Budget for a Minimum 25% Local Matching Share: Secure a dedicated local capital reserve matching at least 25% of your total disaster response and repair costs, assuming the standard statutory minimum federal split.
2. Review State-Specific Pass-Through Share Rules: Coordinate with your State Grantee immediately post-declaration to determine if the state will financially subsidize a portion of the non-Federal match or pass the full weight down to your agency.
3. Apply Cost-Sharing Globally Across All Project Categories: Ensure your financial ledger factors the cost-share split across both Emergency Work (Categories A and B) and all Permanent Work infrastructure repairs (Categories C through G).
4. Enforce Cost-Sharing Terms on PNP Subawards: If managing or operating as a Private Nonprofit entity, treat all approved project worksheets under the exact same matching terms as public governmental applicants.
5. Track Adjustments Based on Presidential Directives: Stay informed of executive updates; if the severity of the disaster prompts the President to elevate the federal cost share (e.g., to 90% or 100%), adjust your internal local matching accounts to reflect the reduction in local liability.

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