THE OHIO FINANCIAL ASSURANCE FUND
Mandatory Cost Pre-Approvals
Why is cost pre-approval important?
Responsible persons will know what costs are reimbursable before money is spent. Also, it assists the Board in controlling costs, which helps to keep tank fees affordable. In addition, if a responsible person fails to submit costs for pending corrective actions to the Board when pre-approval is required, reimbursement will be limited to
50% of the usual, customary and reasonable costs of the least expensive remedial alternative as determined from the Fund’s experience.
When should costs be submitted for pre-approval?
A responsible person is required to submit the following program tasks to the Board for cost pre-approval at the same time they are required to be submitted to the Bureau of Underground Storage Tank Regulations
1) Interim Response Actions
When prior approval of the Fire Marshal must be obtained, a responsible person must submit an estimated cost and completion schedule for the corrective actions as set forth in the Interim Response Action Notification.
2) Remedial Action Plans
A responsible person must submit a copy of the Remedial Action Plan (RAP) with a brief description of the remedial action alternatives considered, including a discussion of the reliability, effectiveness, cost, and time needed for completion, and the rationale for the selected remedial alternative. An estimated cost and completion schedule for the remedial action alternative which is recommended must be submitted with the RAP.
3) Tier 3 Evaluation Plans
A responsible person must submit a copy of the Tier 3 evaluation plan with a description of the Tier 3 objective; the activities to be conducted; a discussion of the effectiveness, cost and rationale for selecting the Tier 3 evaluation; and an implementation schedule and projected completion date.
4) Tier Evaluation Monitoring Plans
A responsible person must submit an estimated cost and completion schedule for the corrective actions as set forth in a Monitoring Plan which is proposed in conjunction with a Tier evaluation report or a Tier 3 evaluation report.
5) Free Product Recovery
April 1, 2005 the Board will require that annual free product recovery costs
must be submitted for pre-approval. An Annual Free Product Recovery (FPR)
Evaluation and Cost Pre-Approval Form should be submitted, if required for your
site, to the Board following the schedule below:
1. Where FPR was in place on or before April
1, 2004, the first evaluation should be submitted by July 1, 2005 and each
successive year an annual evaluation should be submitted by the July 1
2. Where FPR was not in place until April 1,
2004, the first evaluation should be submitted within 90 days from the one-year
anniversary date of when FPR first began. Each successive annual evaluation
should be submitted within 90 days from the anniversary date of when FPR first
3. Where FPR is incorporated under a RAP, the annual free product evaluation
should be submitted in conjunction with the annual RAP cost pre-approval as
What information is required to be submitted for pre-approval in a RAP?
The RAP should include the estimated costs and completion schedule for each of the remedial alternatives described in the RAP.
The selected remedial alternative must be specified and detailed costs of the first-year of implementation should be provided for hourly labor rates, equipment and materials/supplies, report preparation, laboratory charges and any subcontractor charges.
What does the Board do with this information?
For all mandatory pre-approvals, costs are evaluated to determine if they are typical based upon the Board’s experience. For RAP pre-approvals a review will be made to determine if the least-cost alternative has been recommended. The least cost alternative is the most cost-effective alternative to achieve “No Further Action”
If the cost of the selected alternative exceeds what is typical, the owner will be notified in writing. Revised costs, or further explanation outlining the reason the costs exceed what is typical, may be submitted for further evaluation.
If the least-cost alternative is not being recommended, the Board will defer any action and will confer with
BUSTR during the RAP review process. The Board’s objective is to find the most cost-effective option to achieve
If unique site conditions exist which require more complicated corrective actions, the owner and consultant are encouraged to contact both
BUSTR and the Board while they are developing their corrective action plan.
What information is required to be submitted for pre-approval in an Interim Response Action?
As an example, if the Interim Response Action is for the removal of more than 800 cubic yards the following items should be submitted for review:
? Amount of soil to be removed;
? Scaled map showing proposed excavation area;
? Costs to
excavate, stockpile, load, haul and treat the soil broken down on a time & material basis; and
? Oversight, laboratory and reporting costs.
When and how does the Board report the results of its review?
The review process generally takes 30 to 45 days from the receipt of the request for cost pre-approval, if complete information has been submitted and there are no significant issues. When the review is complete, correspondence is sent to the owner and the consultant outlining the results of the review.
Does cost pre-approval guarantee payment?
Pre-approval of estimated costs does not guarantee that all future claimed costs will be reimbursed in full. Only the eligible costs which are documented in the claim and are typical based upon the Board’s experience will be reimbursed. Providing sufficient cost detail when submitting a program task for cost pre-approval will allow the Board to make a more complete evaluation. If additional work is required, or if the program task is revised in any way, the Board should be notified immediately so that any additional cost estimates can be evaluated and pre-approved.