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DCcURENT RBESUE
04051 - (B3154'409]
The Financial Control cover the rational Flood Insurance Progrm.
November 9, 1977. 4 pp
Testimony before the Senate Committee on Governmental Affairs:
Efficiency and the District of Columbia Subcommittee; by Henry
Eschwege, Director, Cossu'ity and Economic Development Dir.
Issue Area: Domestic Housinq and Community Development (2100).
Contact: Community and EcoDomic Development Div.
Budget Function: Community and Regional Develolment: Disaster
Belief and Insurance (453).
organization Concerned: Department of Housing and Urban
Developaert; National Flood Insurers Association.
Congressional Relevance: Senate Committee ca Governmental
Affairs: Efficiency and the District of Columbia
Subcommittee.
Authority: 42 U.S.C. 4071.
Previous reports have called attention to numerous
weakaesses in the accounting system of the Natio:&.. Flood
Insurers Association's ability to gererate accurate financial
data. These weaknesses, it was advised, could adversely affect
the Government's ability to determine azounts patable to the
Association, determint flcod insurancE premium ratss, prepare
financial statements, ard sake management decitiois. The
Inspector General of the Department of Housing and Uxban
Development (HUD) reviewed the financiai contrel prcblesm with
the Association and concluded that neither the Federal Insalance
Administration nor the Association pcssessed the nee9id
technical staff expertise to prc perly monitor and direct the
developaant and iplementation of an automated systen for tuhe
program. The two organizations were also -found to be involvtad in
frequent disagreements over their respective authorities. HUD,
in negotiations with the Association, tried tc assert additional
regulatory control over the national flood insurance pxcgram as
part of an attempt to renew the existing agreement. However# the
Assc-iation notified HOD that it did no-. intend to renew the
aqreement. A new contract has been granted to ids Federal
Corporation to opfarate the program as a fiscal agent. An audit
of the program will re conducted starting in December 1977. (3C)](ViewImageLocal?handle=hein.gao/gaobadxwt0001&div=1&collection=&method=preview&ext=.png&size=3)