Funding and Cost Documentation for Oil Spill Response and NRDAR

TABLE OF CONTENTS

OVERVIEW

4.1 What is the purpose of this chapter? This chapter establishes the requirements and process for U.S. Fish and Wildlife Service (Service) employees to:

A. Use a Pollution Removal Funding Authorization (PRFA) to request funds from the Oil Spill Liability Trust Fund (OSLTF) to respond to oil discharges. It supplements 264 FW 3, Reimbursable Agreements for Spill Response Activities.

B. Request funds to conduct Natural Resource Damage Assessment and Restoration (NRDAR) activities under the Oil Pollution Act (OPA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); or the Clean Water Act (CWA).

C. Prepare cost documentation packages, recover costs, and distribute funds for Service activities associated with responding under the OPA to discharges of oil and implementing an NRDAR case under OPA, CERCLA, or the CWA.

4.2 What is the scope of this chapter?

A. This chapter applies to all Service employees preparing or submitting funding requests or claims to the National Pollution Funds Center (NPFC), the Department of the Interior’s Office of Restoration and Damage Assessment (ORDA), or responsible parties (RP) so that personnel may conduct oil spill response activities or NRDAR activities.

B. This chapter does not cover:

(1) Funding requests for response to releases of hazardous substances (see 264 FW 2, Reimbursable and Inter-/Intra-agency Agreements – Policy and Procedures, and 560 FW 6, Remediation, Abatement, and Environmental Compliance Funding); or

(2) Emergency Support Function #10 Mission Assignments issued by the Federal Emergency Management Agency (FEMA), the U.S. Environmental Protection Agency (EPA), the U.S. Coast Guard (USCG), or the Department of the Interior for emergency response activities related to oil discharges or other hazardous substance releases (see 264 FW 3).

4.3 What terms do you need to know to understand this chapter? See 573 FW 1, Exhibit 1 for a glossary of terms used in Part 573, Response to Discharges ofOil and Releases of Hazardous Substances and NRDAR.

OIL SPILL RESPONSE FUNDING REQUESTS AND MANAGEMENT

4.4 When does the Service request funds from the OSLTF? We are typically notified of an oil discharge by the Department’s Regional Environmental Officer (REO) within the Office of Environmental Policy and Compliance (OEPC), or by another means (e.g., a state incident report or directly from a response agency). After being notified, the Field Spill Response Coordinator (FSRC) or the Regional Spill Response Coordinator (RSRC) or their designee should request funds from the OSLTF when: 

A. A spill is “federalized;” 

B. The FSRC or RSRC reviews the existing data and information or conducts a reconnaissance visit and determines:

(1) The discharge or response action threatens or may threaten natural resources for which the Service has trusteeship, and

(2) Service spill response activities are warranted; and

C. The Federal On-Scene Coordinator (FOSC) requests assistance from the Service.

(1) For some incidents, we may not need to conduct response actions at the discharge site, but we may still play a key role in advising the FOSC regarding natural resource issues.

(2) For other incidents, we may determine, in coordination with the FOSC, that a field response or our participation in the incident command is appropriate.

4.5 How does the Service request authorization of funds from the OSLTF? We use the PRFA to request authorization of funds for direct and indirect costs associated with response activities from the OSLTF.

A. The FSRC or the RSRC, or both, prepares a scope of work and requests funds using the PRFA. See the USCG website for information related to the preparation and submission of a PRFA.

(1) The FSRC or the RSRC fills out the PRFA to request both direct and indirect response costs as estimated by using the Service’s Cost Estimation Tool (CET). The Department’s REO may help prepare, negotiate, get approval, and get reimbursement, especially when an FSRC or RSRC is not present or available.

(2) For PRFAs that provide funding for multiple bureaus within the Department, the Department’s REO may take the lead in filling out the PRFA.

B. The following information must be in a PRFA:

(1) Purpose of funding;

(2) Approved functions;

(3) Conditions (including any special conditions), scope of work (see USCG website for an example), and directions;

(4) Period of authorization;

(5) Reimbursement procedure;

(6) Reimbursement limit;

(7) Accounting data (provided by NPFC);

(8) Points of contact; and

(9) Authorizing official (i.e., the FOSC).

C. The FSRC, RSRC, or Department’s REO submits the PRFA to the FOSC for approval and signature. The FOSC is the only official authorized to sign and approve the PRFA and response-related expenditures from the OSLTF.

(1) The FOSC must approve the PRFA and statement of work in writing before the Service can conduct any response activities for which we expect reimbursement.

(2) In some circumstances, the FOSC may give us a verbal approval, allowing us to mobilize rapidly. The FSRC or RSRC should always document a verbal approval in an email and request email acknowledgement and a signed PRFA from the FOSC as soon as possible.

D. After the FOSC has provided a signed PRFA, the FSRC or RSRC should send it to the responsible Service office.

(1) The responsible Service office should send the PRFA and a signed Reimbursable Agreement Data Form (FWS Form 3-2058) to the servicing Regional Budget and Finance office. After the Regional Budget and Finance office staff have verified the package for accuracy and signed it, they will return it to the responsible Service office.

(2) The responsible Service office must then send the package to the Cost Accounting Section of the Division of Financial Management – Denver Operations (CAS DFM-DO) for entry into the Financial and Business Management System (FBMS). The agreement will be assessed an indirect rate (currently 26.5%) in FBMS each month as direct expenditures are posted to the reimbursable agreement, and will be manually adjusted to match the Cost Documentation Tool (CDT) reports.

(3) The responsible Service office provides funding guidance to those performing oil spill responses.

4.6 How much funding should the FSRC or RSRC request? Funding needs are incident-specific because the actions that will be performed depend on the circumstances of the spill. The initial funding request for direct and indirect costs should be sufficient and the statement of work broad enough so that the FSRC or RSRC does not have to request a PRFA amendment shortly after the initial mobilization of resources. The FSRC/RSRC should use the Service’s CET to determine the funding request.

4.7 When does the FSRC or RSRC need to amend the PRFA? The FSRC or RSRC must request a PRFA amendment when:

A. The expenditures/obligations (including both direct and indirect costs) reach 75% of the amount authorized in the approved PRFA, or

B. New activities outside the existing scope of work need to be implemented.

4.8 How does the Service request reimbursement for spill response costs authorized by the PRFA?

A. The field or Regional office Budget staff work with the FSRC or RSRC to prepare a cost documentation package using the CDT.

B. The Regional Director submits the package through the FOSC to the USCG NPFC for reimbursement. A copy of the Standard Form (SF) 1080, Voucher for Transfers Between Appropriations and/or Funds, and the CDT indirect split out report must also be sent to the CAS DFM-DO. The REO can assist with package submittal.

C. After the NPFC reviews and approves the cost documentation package, Regional office or field office Budget staff complete and submit the final SF 1080 to NPFC.

D. The NPFC initiates an Intra-Governmental Payment and Collection (IPAC) action to transfer the funds.

E. The CAS DFM-DO disperses the reimbursed funds based on the CDT reports.

4.9 What happens if the Service conducts response activities before the FOSC signs the PRFA? In general, the NPFC will not reimburse us for direct and indirect costs associated with activities conducted before we obtain a signed and approved PRFA from the FOSC. The office or field station that generated the costs is responsible for them. See section 4.5C(2) for more information about receiving verbal approval.  

4.10 What happens if the Service conducts activities outside of the PRFA’s scope of work? The NPFC will not reimburse us for direct and indirect costs associated with activities that fall outside of the PRFA’s scope of work. The office or field station that generated the costs is responsible for them.

4.11 What if the Service needs to respond to a spill that is not federalized? For spills that are not federalized, we may use Service field station funds to support spill response activities. It is important that responding personnel keep track of their time and charges as if the spill were federalized in case a funding source becomes available (e.g., spill becomes federalized). To help do this, responding staff should coordinate with the FSRC or the RSRC and Regional office or field office Budget staff to get a project number for the activities.

NRDAR FUNDING REQUESTS

From Responsible Parties:

4.12 For which activities may the Service request NRDAR funds from RPs? We may request funding from RPs to pursue a natural resource damage assessment and seek damages from RPs to compensate the public for the injury, destruction, or loss of natural resources and the services they provide (e.g., recreational fishing, reproductive productivity of lost wildlife species, etc.) when they are under Service management or control, including, but not limited to, natural resources located on, over, or under land the Service administers. Damages may include the reasonable costs of the assessment and the costs associated with restoration planning, implementation, and monitoring.

4.13 How does the Service request funds from RPs? 

A. In a cooperative assessment process, the RP will sign a Cooperative Assessment Agreement (CAA), Funding and Participation Agreement (FPA), or similar agreement with the trustees, including the Service. These agreements explain how the RP must pay trustee assessment costs in advance or in reimbursement, and participate in the cooperative assessment process. We should:

(1) Work with the Office of the Solicitor to draft the CAA, FPA, or other agreement, and present it to the RP;

(2) Request payment in advance of the work; and

(3) Send cost documentation packages to the RP through the Office of the Solicitor. The package must be prepared with the Service’s CET if requesting advanced funding or the CDT if requesting reimbursement.

B. If the RP does not choose to cooperate, when the assessment (under CERCLA) or restoration planning (under OPA) is complete, we work through the Office of the Solicitor to coordinate with the Department of Justice on a demand letter for natural resource damages, including the reasonable costs of assessment and restoration planning.

(1) The Office of the Solicitor and any other affected bureaus must concur with the demand letter before it is sent to the RP (see 521 DM 3).

(2) If the affected Regional Director is the Authorized Official (AO), the Regional Director signs the demand letter for the Department. Regional Directors may not redelegate this authority.

(3) If the Service is affected, but the Regional Director is not the AO, then the Regional Director must concur with the demand letter from the AO before it can be sent. Regional Directors may not redelegate this authority.

From the NPFC:

4.14 For which activities may the Service request NRDAR funds from the NPFC?

A. The Service may request funds from the NPFC for the following NRDAR activities implemented due to an oil spill:

(1) Preassessment activities using an interagency agreement (i.e., initiate funding). The NPFC can obligate funds for preassessment activities through an Initiate Interagency Agreement. The agreement identifies specific preassessment activities and a funding ceiling. The obligation is a budgetary resource immediately available to carry out the specified activities. NPFC reimburses the costs following review and approval of the cost documentation and report.

(2) Assessment and restoration activities using the NPFC natural resource damage claims process. The NPFC can provide advance funding to support assessment, restoration planning, and restoration implementation activities if we follow the process outlined in the OPA (33 U.S.C. 2713) and implementing regulations (33 CFR Part 136).

B. The NPFC does not provide funds for us to address NRDAR activities we implement due to a hazardous substance release or a mixture of oil and hazardous substances.

4.15 How does the Service request funds from the NPFC? For specific information on the process for requesting funds from the NPFC, see the guidance documents on the NPFC website.

From the Department’s Office of Restoration and Damage Assessment (ORDA):

4.16 For which activities may the Service request funds from the ORDA? The ORDA manages the Department’s NRDAR Fund and can provide money for a variety of NRDAR activities. Funds from various sources are deposited into case-specific accounts within the NRDAR Fund, which acts as a bank for the deposits. The NRDAR Fund is permanently authorized to hold receipts for damage assessment and restoration activities for availability without further appropriation until the money is expended. The AO may request funds from the ORDA for the following NRDAR activities:

A. Preassessment or assessment activities, including:

(1) Preassessment screening and assessments for new and ongoing cases submitted through the annual (calendar year cycle) application process.

(2) Supplemental funding for cases that received an annual allocation below the requested amount, and where ORDA informed the case manager that we may seek supplemental funding when certain conditions/needs are met.

(3) Emergency assessment activities when funding is required for an immediate need, including:

     (a) A traditional emergency situation or response (such as a mixed oil and hazardous substance release) where an AO has already been designated;

     (b) An ongoing case may be jeopardized in some manner unless new or additional funding is received quickly;

     (c) An opportunity for an early settlement or cooperative assessment that may be missed without immediate, adequate funding; or

     (d) Other unforeseen circumstances with an immediate funding need, such as support to develop and pursue a bankruptcy claim.

(4) Rapid assessment activities where funding is needed quickly to gather data or to verify if additional NRDAR activities are warranted.

(5) Funds that originated as Service base funds, and which were reimbursed by the RP for past assessment costs, can be requested to fund future assessment and assessment support-related activities not necessarily related to the original case.

(6) Funds deposited from RPs for assessment activities covered under a CAA, FPA, or other agreement.

(7) Funds received from the NPFC and deposited into the Department’s NRDAR Fund as reimbursement of initiate costs or a request for assessment and restoration planning costs.

(8) Litigation funding. If settlement negotiations to resolve a claim for damages are unsuccessful, we may request funding to support the litigation effort from the ORDA.

B. Restoration planning, implementation, and monitoring activities, including:

(1) Activities associated with a settlement or legal judgment, under which the RP has paid restoration planning and restoration implementation costs.

(2) Activities associated with a claim submitted to NPFC, under which the NPFC has paid restoration planning and restoration implementation costs.

C. For more information about when we can request funds from ORDA, contact the National NRDAR Coordinator.

4.17 How does the Service request funds from the ORDA?

A. For preassessment or assessment activities, excluding rapid assessment funding, the AO requests funds from ORDA or the NRDAR Fund through the application process or by memorandum to the ORDA Director, as appropriate. Employees must send requests for rapid assessment funding through the National NRDAR Coordinator for review and approval. See 521 DM 1-3.

B. For other money held in the NRDAR Fund, the AO requests disbursement from case-specific accounts via a memorandum to the ORDA Director.

(1) If the funds are associated with a settlement or legal judgement for restoration planning or implementation, the AO must ensure the memorandum to the ORDA Director incorporates relevant and applicable provisions from any trustee council memoranda of understanding (or similar agreements) related to decision making and use of funds.

(2) In some cases, the Lead Administrative Trustee (LAT) may be a non-Departmental entity, such as another Federal agency, state, or tribal co-trustee. The LAT may request funds from case-specific accounts within the NRDAR Fund.

C. Settlement funds may also be deposited in a Court Registry Investment System (CRIS) or other account. When this happens, the AO must work with the Office of the Solicitor and co-trustees (if applicable) to request that the court or other entity release the funds as stated in settlement or other agreements. Funds from CRIS accounts cannot be transferred directly to the Service. They must first be deposited into the NRDAR Fund and then requested following the process we describe in section 4.17B, above.

NRDAR FUNDS MANAGEMENT

4.18 How does the Service recover NRDAR funds?

A. We send the cost documentation and billing packages to RPs for reimbursement as follows (see section 4.20 for more information about cost documentation):

(1) The AO sends the packages through the Office of the Solicitor to the RP or the LAT. When the RP is negotiating a comprehensive settlement of a natural resource damage claim, we work with the Office of the Solicitor to negotiate the recovery of any unpaid assessment costs. In these cases, we document the recovery of the assessment costs in a settlement agreement or a consent decree entered by a court.

(2) The AO must also ensure that staff send a copy of the SF 1080, Voucher for Transfers Between Appropriations and/or Funds, and the CDT indirect split out report to the CAS DFM-DO. If an RP declines to pay our costs, we may litigate to seek reimbursement.

B. For NPFC claims, we submit the documentation and billing packages through the Federal LAT to the USCG. Current guidance for sending claims to the NPFC and telephone numbers for claim managers are available on the NPFC website.

C. If we need to file a claim in a bankruptcy court or a lawsuit in a Federal District Court to obtain a judgment for natural resource damages, including assessment costs and restoration, we work with the Office of the Solicitor and the Department of Justice.

4.19 How does the Service manage NRDAR funds? We must follow the appropriate statutory, regulatory, and policy requirements (see 521 DM 1-3) when managing NRDAR funds.

A. The AO has primary responsibility for managing NRDAR funds for each case.  

B. If a Regional Director is the AO, but multiple Service Regions are participating in the NRDAR case and receiving NRDAR funds, the non-AO Regions must also track the receipt and obligation of NRDAR funds in support of the AO.

C. If the Department assigns the AO responsibilities to the head of another bureau, and the Service is an "affected bureau" receiving NRDAR funds, the Regional Director of each participating Service Region must ensure the accurate accounting of both the assessment and restoration funds they receive. The participating Regional Directors must support the AO in their responsibility to account for any and all funds they receive that are obligated by the Department.

D. The AO may delegate financial management responsibilities to the case manager or the Regional or field office Budget staff. Some of these responsibilities include:

(1) Tracking funding related to the subject NRDAR case that is received, obligated, or expended, regardless of the source of funding or the source of the obligation or expenditure;

(2) Ensuring sound financial management of all funds used (see 521 DM 2); and 

(3) Using the CDT to recover direct and indirect costs associated with NRDAR activities.

COST DOCUMENTATION

4.20 What is the Service’s policy for documenting and recovering costs for oil spill response and NRDAR cases?

A. Our policy is to seek to fully recover our costs, both direct and indirect, for oil spill response and NRDAR activities in compliance with CERCLA, OPA, the CWA, and all case-specific settlement documents and court orders. To meet this objective, we must carefully track all costs associated with each matter and prepare a detailed cost documentation package.

B. Consistent with our policy, employees must prepare cost documentation packages using the Service’s CDT for all spill response and NRDAR costs incurred after October 1, 2010.

4.21 How does the Service document its oil spill response and NRDAR costs?

A. As soon as practical and before beginning any activities on a new oil spill response or NRDAR case, the Regional office or field office Budget staff (for the FSRC or case manager) will request a spill response or NRDAR project number from CAS DFM-DO to use in the CDT. We generally use the same project number for a damage assessment case and the corresponding restoration projects. On large cases, you may want to track individual restoration projects separately, or where assessment and restoration activities are occurring simultaneously, you may request a new project number(s).

B. The Budget staff in the Regional or field office, in coordination with the FSRC or case manager and RSRC or Regional NRDAR Coordinator, must prepare cost documentation. We use the information from the CDT, in combination with backup data, to prepare a cost documentation package. Failure to properly document costs may result in denial of claims.

4.22 What information should be included in a cost documentation package? The cost documentation package must include the following:

A. Cover letter.

B. Direct costs:

(1) Reports from the CDT (as appropriate), such as:

     (a) Summary costs,

     (b) Total direct costs,

     (c) Labor detail,

     (d) Travel detail,

     (e) Contracts detail,

     (f) Supplies and equipment detail,

     (g) Vehicles detail, and

     (h) Land and structures detail.

(2) Other direct costs from outside the Service that have been provided to the FSRC or case manager (e.g., Solicitors’ and Economists’ costs, costs from other bureaus contributing to the case).

C. Indirect costs:

(1) The CDT calculates our indirect costs. The indirect costs include field, Regional, and Headquarters indirect costs. You cannot adjust these costs to add individual indirect amounts or rates.

(2) NRDAR-related indirect costs for the Department are posted on the Department’s Restoration website and must be included in the cost documentation package as well.

4.23 What information should be maintained for backup documentation? In addition to the information pulled from our financial system, we must also maintain backup documentation so that we can provide it if we’re audited. Because we use the CDT to pull the actual costs from our financial system, and we maintain standard Service records for backup documentation, employees should never include other non-standard documentation in the cost documentation package. However, there may be exceptions, such as if there is a legal requirement under a CAA, FPA, or settlement agreement. Following are the typical categories of backup documentation we maintain:

A. Contracts/purchase orders: invoices, obligating documents, and modifications.

B. Supplies/equipment: receipts that clearly identify the purchased item and corresponding FOSC authorizations for equipment we purchase for spill response, copies of property receipts (Forms DI-102 or DI-104), and receipts for all incurred expenses for Service-owned equipment.

C. Vehicles: receipts for incurred expenses for Service-owned vehicles, and copies of leases and receipts for General Services Administration (GSA)-leased or rental vehicles.

D. Travel: copies of approved travel vouchers annotated with purpose of travel.

E. Time cards: hourly wage and time cards are maintained electronically within the Service’s time keeping system.

4.24 How is the Service allowed to spend recovered direct funds? We may only use recovered direct funds for direct expenses (e.g., labor, travel, contracts) related to the specific spill or case.

4.25 How is the Service allowed to spend recovered indirect funds?

A. Indirect costs are those costs that the Service incurs as part of providing a product or service, but that we cannot identify with producing a specific product or service.

B. We may use recovered indirect funds for spill response or NRDAR expenses related to:

(1) Space rental;

(2) Utilities(including telephone services);

(3) Postage;

(4) Unemployment compensation benefits;

(5) Data processing, management, and control;

(6) Equipment costs and rentals (excluding those recovered as direct costs);

(7) Miscellaneous supplies and materials (excluding those recovered as direct costs);

(8) Training, employee development, and personnel transfers (including time in transit and per diem);

(9)  Public information and inquiries (not reimbursed under the Freedom of Information Act);

(10) Safety management;

(11) Equal Employment Opportunity and other affirmative action programs;

(12) Senior management reviews not directly attributable to a specific NRDAR case; and

(13) Headquarters office and Regional office support and Headquarters and Regional spill response and NRDAR program management and case work.

SUMMARY OF RESPONSIBILITIES

4.26 Who is responsible for ensuring oil spill response and NRDAR funding is handled properly? See Table 4-1.

Table 4-1: Responsibilities for Handling Oil Spill Response and NRDAR Funding