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CED-78-122 1 (1978-05-31)

handle is hein.gao/gaobaaxia0001 and id is 1 raw text is: 



    C              UNITED STATES GENERAL ACCOUNTING OFFICE
                          WASHINGTON, D.C. 20548     IIIIII        11


COMMUNITY AND ECONOMIC
DEVELOPMENT DIVISION


       B-114860                          May 31, 1978



       The Honorable Thomas F. Eagleton

       United States Senate

       Dear Senator Eagleton:

            Your November 22, 1977, letter asked that we review
       certain aspects of the Department of Housing and Urban
       Development's (HUD's) determination to convert from an'
       industry operation (Part A) of the National Flood Insurance
       Program to a Government-operated (Part B) program. In
       accordance with your request, our examination considered
       whether

            --the Program had reached a last resort status where
              it could no longer be carried out under Part A and
              would be assisted materially by the Government's
              assumption of operational responsibility,

            --HUD's $15-million estimate of the cost savings rela-
              tive to the assumption was supportable,

            --the administrative and financial controls implemented
              by the Part B contractor are effective,

            --the Federal Insurance Administration (FIA) has the
              ability to effectively monitor the Part B contractor,
              and

            --centralized policy servicing and claims review will
              affect the level of services to policyholders.

            You also asked us to review certain legal questions
       concerning a November 4, 1977, contract between HUD and
       the Part B contractor, E.D.S. Federal Corporation (EDS).
       A separate March 15, 1978, letter provided our opinion
       on the legal questions raised. In particular, our letter



                                                         CED-78-122
                                                         (38659)

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