Final Reconciliation and Closeout

• Retention can be longer for real property and equipment disposition, open audits or litigation.
• State, local, tribal or territorial law may require longer retention.
• For small projects under simplified procedures, keep source records for 3 years after the recipient certifies your last small project.

A retention schedule by disaster and project, tied to the final expenditure report and SF-425 dates.

• The subrecipient closeout request includes a project completion certification report listing every project.
• FEMA closes the award once all appeals have final determinations, all eligible funds are obligated, all projects are closed, funds are passed through and reported, and administrative actions are complete.
• Recipients must liquidate all obligations within 120 days after the award’s period of performance ends, unless FEMA grants a written extension.

Project completion certification report, final expenditure report, and the final SF-425.

• The 3-year clock runs from the date the recipient submitted the certification of project completion to FEMA.
• Within 3 years, Section 705(c) bars recovery when the payment was authorized by an approved agreement, the costs were reasonable, and the purpose of the grant was accomplished.
• Details are in FEMA Recovery Policy FP 205-081-2, Stafford Act Section 705, Disaster Grant Closeout Procedures.
• Appeal deadlines still apply to Section 705 claims.

The completion certification date, the approved project documents, and evidence costs were reasonable and the work achieved its purpose.

• If work finished before obligation, the 90- and 180-day clocks start at obligation.
• Before closing, FEMA confirms there are no open appeals, audits or arbitrations; checks that work matched the approved scope (including mitigation) and finished within the deadline; rules out duplicate funding; and validates cost principles and award terms such as codes, environmental and historic compliance, civil rights and insurance.
• Reviews already done for projects obligated at 100 percent complete on actual costs aren’t repeated.
• Unfinished mitigation turns the project into an improved project, which may be capped or deobligated.
• Capped projects must show the funds were used as allowed.

• Final inspection report, scope and expenditure summaries, and cost backup (labor, equipment, materials and contracts).
• Procurement documents, mutual aid agreements, insurance final statement of loss, regulatory correspondence, change orders and pay policies.
• All codes and standards used, proof of compliance with award terms, and photos of completed permanent work (Categories C–G).

Source: PAPPG Table 34.

• FEMA adjusts an obligated small project only for: incomplete scope, approved scope changes (including added mitigation), insurance or other funds differing from what was deducted, errors or omissions, hidden damage, noncompliance, or fraud, waste or abuse. Only the affected items change.
• Overrun appeal: file within 60 days of the latest work completion date of all your small projects (or of the last small project’s obligation, if later), with actual cost documentation for every small project.
• Completion certification (if not filing an overrun appeal): due to the recipient within 90 days of the last small project’s completion or approved deadline, whichever is sooner; from obligation if work finished earlier.

Actual costs for all small projects (for an overrun), or the completion certification.