CHARLESTON \u2014 Who loses when agencies like FEMA aren\u2019t able to keep a careful eye on grant money as it flows to state and local governments?\r\nTo state the obvious, the taxpayer.\r\nThe federal Office of Inspector General cited billions of dollars in questioned costs over the years, regularly saying the Federal Emergency Management Agency should provide more vigorous oversight.\r\n\u201cWithout adequate documentation, FEMA has no assurance that costs are valid and eligible, thereby resulting in questioned costs,\u201d the Office of Inspector General wrote in a September report.\r\nWest Virginia legislators are gathering for a 10 a.m. Tuesday meeting to discuss the state\u2019s response to disaster relief, particularly its handling of federal dollars.\r\nThat issue was pushed to the forefront in West Virginia in recent weeks with the revelation that this state is under greater FEMA grant restrictions than any other state. Puerto Rico is in the same boat.\r\n\u201cThe federal action is the result of several years of DHSEM\u2019s inability to comply with grant requirements and failure to remedy identified issues,\u201d wrote the state\u2019s Performance Evaluation and Research Division.\r\nIn a letter dated Nov. 12, 2015, FEMA notified then-Emergency Management Director Jimmy Gianato that the federal agency was placing West Virginia\u2019s emergency management agency on manual reimbursement.\r\nThat meant additional requirements as West Virginia drew down federal dollars and passed the money to sub-recipients, which are usually local governments or school systems.\r\n\u201cIt is an unusual enforcement step the agency has in its toolbox to help applicants become compliant with our requirements,\u201d FEMA Region III Administrator MaryAnn Tierney said in a telephone interview.\r\nThe penalty affected the hazard mitigation grants program, public assistance grants, the community assistance program, cooperating technical partners and emergency management performance grants.\r\nExtra layers of documentation are required before FEMA signs off on reimbursement.\r\n\u201cWe felt the documentation collection and review process was inadequate, and it was a material weakness that created risk and the potential for deobligations in the future,\u201d Tierney said.\r\nDeobligation is when those who are initially approved for grant money have to give it up.\r\n\u201cWe felt that was a risk not worth taking,\u201d Tierney said. \u201cTo protect West Virginia and the applicants, we imposed this process to create more rigor in the system.\u201d\r\nThe state Legislative Auditor concluded, with guidance from other state officials, that the manual reimbursement may add up to 90 days of additional time for any reimbursement request exceeding $100,000.\r\nIn an interview this month, FEMA officials disputed that the lag is quite that long.\r\n\u201cIn our manual reimbursement procedure, we have up to 30 days to process a request,\u201d Tierney said. \u201cWe are doing it even faster than our protocol says we have time to.\u201d\r\nThe Office of Inspector General repeatedly scolded FEMA for not doing enough to oversee federal grant money as it trickles from the federal government to grant recipients and then to subrecipients.\r\nThat\u2019s the process where West Virginia has been found wanting.\r\n\u201cOur reports clearly point to ongoing failures by subrecipients to comply with federal procurement requirements,\u201d the federal Office of Inspector General wrote in a report from December 2017.\r\n\u201cWe also noted that grant recipients failed to provide subrecipients with adequate guidance and grant management.\u201d\r\nDuring fiscal years 2015-\u201817, the Office of Inspector General questioned more than $256 million in ineligible contract costs because subrecipients did not follow federal procurement regulations.\r\nMoreover, the Office of Inspector General identified more than $191 million in ineligible costs that subrecipients may have incurred had the problems not been identified prior to the grants being obligated.\r\nThe Office of Inspector General concluded FEMA needs to do a better job of being sure grant recipients like West Virginia and subrecipients are fully aware of all federal procurement requirements.\r\n\u201cThese failures can result in high-risk contracts that, in turn, may lead to excessive and ineligible costs,\u201d the office wrote.\r\nA separate report from the Office of Inspector General, released Dec. 20, 2017, was titled \u201cFEMA faces significant challenges ensuring recipients properly manage disaster funds.\u201d\r\nThat report notes from fiscal 2009-\u201817, the office provided more than 1,400 recommendations to disallow unsupported and ineligible costs, put funds to better use and improve grant management oversight.\r\n\u201cWe concluded these issues continue, in part, because FEMA does not adequately manage disaster funds or hold grant recipients accountable for properly managing disaster funds,\u201d wrote the Office of Inspector General.\r\nFEMA does not have effective policies, procedures and controls in place, according to the Office of Inspector General.\r\n\u201cThis finding shows that FEMA was aware of its grant management issues and did not take effective actions to strengthen its internal controls,\u201d wrote the Office Inspector General.\r\nOver a nine-year period, the Office of Inspector General recommended FEMA disallow $3.92 billion out of $14.31 billion the office audited because it was considered ineligible or unsupported by documentation.\r\nThat\u2019s about a quarter of the sample size.\r\n\u201cOur reports often attributed subrecipients\u2019 noncompliance with federal regulations to the recipient\u2019s lack of management and monitoring of subrecipients\u2019 grant activities,\u201d wrote the Office of Inspector General.\r\nWest Virginia has been improving, officials with FEMA Region III recently said.\r\nOf the original heightened requirements handed down in 2015, West Virginia has been whittling away.\r\nFEMA set up on-site visits in the past year to subrecipients such as the Division of Highways, to Logan, to Raleigh County and to the state School Building Authority.\r\n\u201cWe got to a point where we had a monitoring plan, where we identified who they were going to go visit,\u201d said Regeane Frederique, grants division director for FEMA Region III.\r\nBy the end of October, FEMA received documentation from West Virginia, which was in the review process.\r\n\u201cThere are improvements,\u201d Frederique said. \u201cThey\u2019ve hired more staff around the areas of grant management. They are very open with discussions, holding bi-weekly meetings. I can say I see improvement.\u201d\r\nTierney said she feels good about West Virginia\u2019s progress.\r\nFEMA just wants to be sure grant money is going where it should be, she said, toward eligible work that can be properly documented.\r\n\u201cThis is not something we\u2019re interested in keeping in perpetuity,\u201d Tierney said.