Chapter 6 › I. Eligibility Requirements

What makes a disaster cost eligible for FEMA reimbursement?

FEMA term

Cost eligibility

Short answer

Not every cost caused by the disaster is eligible. FEMA looks at cost last, after the applicant, facility and work are found eligible, and every cost must pass six tests. You must also keep all records for three years after the final expenditure is documented.

What FEMA requires

To be eligible, a cost must be:

Directly tied to the performance of eligible work;
Adequately documented, substantiated or certified;
Reduced by all applicable credits, such as insurance proceeds and salvage values;
Authorized and not prohibited under federal, state, local, tribal or territorial law;
Consistent with your internal policies that apply uniformly to federal awards and your other activities; and
Necessary and reasonable to accomplish the work properly and efficiently.

Documentation

Keep cost, financial, procurement, property, equipment and program records for three years from the date the final expenditure is documented. If litigation, an audit or another claim starts before then, keep them until it is resolved.

Watch out · Govstar practitioner advice

Records retention runs from the final expenditure, not the disaster date. Large projects can stay open for years, so set retention by project, not by incident.

Govstar summarizes FEMA’s Public Assistance Program and Policy Guide in plain language and links to the official text. Govstar is independent and not affiliated with FEMA. This is general guidance, not legal advice.