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Highlights

The Cerro Grande Fire Assistance Act mandated that GAO annually audit all claim payments made to compensate the victims of the Cerro Grande Fire in northern New Mexico. For this second report on this topic, GAO determined whether the Federal Emergency Management Agency (FEMA), which is now a part of the Department of Homeland Security, (1) had revised its policies and procedures to address prior GAO recommendations and processed and paid claims consistent with that guidance and (2) properly reported such payments to the Congress.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Directorate of Emergency Preparedness and Response The Secretary of the Department of Homeland Security should direct the Emergency Preparedness and Response Directorate to complete the reconciliation of the amounts approved for payment in its payment approval system to amounts actually paid in FEMA's accounting system and correct all identified errors in its payment approval system.
Closed - Implemented
On July 2, 2003, OCGFC provided its corrective action plan, which states that it had implemented an automated research of partial and final payments which resulted in successful reconciliation of approximately 90 percent of all payments from the program inception to the project target date of February 19, 2003. OCGFC staff manually researched claimant records and investigative items for those payments that could not be reconciled automatically. As of February 19, 2003, the reconciliation was complete for all but approximately $5,000 out of $426.3 million approved in the payment approval system and paid in FEMA's accounting system. As part of its fiscal year 2003 annual audit, GAO will perform testwork to follow-up on the status of the reconciliation.
Directorate of Emergency Preparedness and Response The Secretary of the Department of Homeland Security should direct the Emergency Preparedness and Response Directorate to perform monthly reconciliations of the approved claim amounts in its payment approval system with the actual amounts reported in its accounting system as paid by DFC for as long as both systems are used to track and report paid amounts or request additional funding.
Closed - Implemented
In OCGFC's action plan, submitted to GAO on July 2, 2003, OCGFC stated that due to the magnitude of the initial reconciliation (from program inception to February 19, 2003), reconciliation of claims approved and paid between February 19, 2003, and April 30, 2003, is in progress and is nearly complete. Reconciliation of claims approved and paid between May 1, 2003, and May 31, 2003, will occur in July. Monthly reconciliations will follow for each succeeding month until program closeout. As part of its fiscal year 2003 annual audit testwork, GAO will follow-up on the status of the monthly reconciliations.

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