A municipality can only keep extra FEMA Small Project funds if the project is finished exactly as described in the FEMA project worksheet and all costs are documented. VTrans will inspect highway projects for the State. If the project is completed correctly, the Department of Public Safety will close it out. After that, the municipality may keep any remaining funds, but they could still be at risk.
It’s best practice for the municipality to wait until it receives a final closeout letter for the entire disaster grant before treating any money as excess.