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CED-80-10 1 (1979-10-26)

handle is hein.gao/gaobaazwk0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES General RLEASED WASHINGTON. D.C. 105 e ~o RESTmCTED - Kot to be/ r of spe o ,tEexceptE , the bas'S B- 114860ACcountng office except, In .eRelations, s 1)y the Office of Congress 0~a October 26, 1979 The Honorable Norman Y. Mineta Chairman, Subcommittee on Overs ight and Review 0 Committee on Public Works and Transportation House of Representatives 110755 Dear Mr. Chairman: Subject: Hw Do Federal Agencies Assure That Disaster Loan Recipients Maintain Mandatory Flood Insurance? (CED-80-10) As you requested on May 23, 1979, we examined the procedures used by selected Federal agencies to assure that disaster loan recipients maintain flood insurance when re- quired as a condition for such loans. As your office agreed, ,O we limited our review to the disaster loan programs of the o Department of Agriculture's Farmers Home Administration (FmHAJc and the Small Business Administration (SBA). -ou expressed concern that if these agencies-dd not assure that borrowers maintained flood insurance, not only would the Government's interest be jeopardized should there be another flood but loan recipients would also be barred from receiving further loans under the Disaster Relief Act of 1974 (Public Law 93-288, as amended). FmHA has adequate procedures to protect the Government's interest and assure borrower maintenance of required flood insurance. On the other hand, SBA, hampered by what it says are serious understaffing problems, essentially relies on the borrower to renew the insurance after the first year. The agency does not follow up to assure that the borrower has renewed the insurance, and, unlike FmHA, it does not have contingency procedures which allow it to pay the renewal premium when the borrower does not. In addition, neither of these agencies nor the agency primarily responsible for coordinating disaster assistance and administering the national flood insurance program--the Federal Emergency Management Agency (FEMA)--had adequate pto /q/5 information on (068101) 376

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