We determined that the Columbia County Roads Department (Department) does not have written procurement policies and procedures that fully conform to Federal procurement standards; is not accounting for direct administrative costs properly; and cannot yet initiate large permanent work projects more than 9 months after the disaster. These findings occurred because Department officials were not familiar with applicable Federal regulations and FEMA guidelines adequately. In addition, the Oregon Office of Emergency Management (Oregon) is responsible for ensuring that its subrecipient,the Department, is aware of and complies with these requirements, as well as for providing technical assistance and monitoring grant activities. Because of our audit, the Department is revising its policies and procedures to comply with Federal requirements. However, the Department needs additional, ongoing assistance from Oregon and FEMA to ensure that it properly manages the $2 million FEMA grant it expects to receive. Therefore, we recommended that FEMA disallow contract costs that do not comply with applicable Federal procurement standards, unless FEMA grants an exception to the administrative requirements as 2 CFR 200.102 allows and determines the costs are reasonable. The OIG made three other recommendations to FEMA related to directing Oregon, as its grant recipient, to provide increased monitoring and technical assistance to the Department, to ensure the Department follows Federal regulations and FEMA guidelines and avoids misspending its $2 million grant award.