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Member, Beacon International Group, Ltd.
WASHINGTON—The National Flood Insurance Program once again has made the Government Accountability Office’s list of high-risk federal operations.
In a report issued Wednesday, the GAO said the NFIP is not likely to generate enough revenue to repay the billions of dollars borrowed from the Treasury Department to cover claims from hurricanes in 2005 or future catastrophes. The lack of revenue underscores structural weakness in the program’s funding, according to the report.
Also, according to the GAO, “weakness in NFIP management and operations, including financial reporting processes and internal controls, and oversight of contractors put the program at risk.”
The report said the Federal Emergency Management Agency, which manages the NFIP, has taken some steps to address issues raised by the GAO, but “it continues to face complex challenges, and Congress needs to restructure the program.”
The GAO said it plans to issue a detailed report next month on management and operational challenges facing the NFIP, which has appeared on the GAO’s high-risk list for several years.
“High Risk Series: An Update” can be found at www.gao.gov/new.items/d11278.pdf.