09/13/07 GAO Reports On FEMA's Mangement and Payment Oversight to Insurance Company

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The Government Accountability Office reports that as much as two-thirds of the premiums collected by the National Flood Insurance Program in the last three years have gone to pay the private insurance companies who administer the policies. The report also found that FEMA doesn't enforce audit requirements of the private companies that participate in the program and has no system for reviewing what information it does collect. FEMA has no idea what it actually costs private companies to run the program, and uses an outdated standard in determining how much it pays them, the report says. In written comments on the report dated on the second anniversary of Hurricane Katrina, FEMA agreed to improve its oversight of the program, but called the GAO's comments on the flood program's expenses "inappropriate and misleading."

The title of the report, released this month by the government auditor, is "FEMA's Management and Oversight of Payment for Insurance Company Services Should Be Improved."

For more information:
http://blog.nola.com/tpmoney/2007/09/gao_report_says_fema_is_overpa.html