Weaknesses in the Financial Controls of the National Flood Insurance Program
CED-77-47: Published: Mar 21, 1977. Publicly Released: Mar 21, 1977.
- Full Report:
There are numerous weaknesses in the ability of the National Flood Insurers Association (NFIA) to generate accurate financial data on its operations relating to the National Flood Insurance Program.
These weaknesses could adversely affect the government's ability to: (1) determine reasonable amounts payable to NFIA under the program; (2) determine flood insurance premium rates; (3) prepare financial statements of the program's condition and results of its operations; and (4) make management decisions. Both accuracy of financial data and timeliness of such data are seriously lacking in the National Flood Insurance Program.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: Every effort should be made to ensure that adequate financial control over the National Flood Insurance Program is established as quickly as possible. The Secretary of Housing and Urban Development should: (1) direct the Federal Insurance Administration (FIA) to review financial control problems with NFIA with the objective of establishing a plan that will result in the receipt from NFIA of reliable financial and statistical data necessary to manage the program; (2) direct the Inspector General to review the plan developed to make sure such data will meet the needs of FIA; and (3) give consideration to a partial or full assumption by the government of necessary functions as permitted under part B of the National Flood Insurance Act of 1968, if adequate financial control cannot be established through arrangements with NFIA.