We determined that The County did not comply with Federal procurement standards in expending FEMA Public Assistance grant funds.  Specifically, the County used a shared services agreement with the Houston-Galveston Area Council (HGAC) to procure two contracts totaling $1.5 million.  The HGAC’s procurement practices unreasonably restricted competition by not allowing smaller contractors to compete for the work, and HGAC did not take the specific steps that Federal regulations require to provide opportunities for disadvantaged firms to bid on federally funded work when possible.  We recommended FEMA disallow those costs as ineligible and direct the state to better monitor the County’s grant subaward activities.