Federal Emergency Management Agency: Weaknesses Exist in the Cerro Grande Fire Assistance Claim Validation Process, Report to Congressional Committees   [open pdf - 399KB]

"On July 13, 2000, the President signed into law the Cerro Grande Fire Assistance Act (CGFAA). The CGFAA established the Office of Cerro Grande Fire Claims (OCGFC) and directed the Federal Emergency Management Agency (FEMA) to expeditiously investigate victims' claims and to determine and compensate the victims of the Cerro Grande fire in northern New Mexico for injuries resulting from the fire. The CGFAA also mandated that we annually audit all claim payments made under the CGFAA, including reviewing all subrogation claims for which insurance companies have been paid or are seeking reimbursement as subrogees. As agreed with your offices, our report, the first required under the CGFAA, discusses whether OCGFC established a systematic process to ensure the validity and reasonableness of claim payments in accordance with the CGFAA. Our report also discusses one additional matter we believe may be of importance to the Congress as it oversees FEMA's response to the Cerro Grande fire--whether the funding currently appropriated will be sufficient to pay all approved claims. As indicated above, the CGFAA also requires that we review all subrogation claims for which insurance companies have been paid or are seeking payment as subrogees. We could not review any subrogated claim payments as part of our initial year audit because according to OCGFC officials as of June 2001, no subrogated claim payments had been made. The CGFAA specifies that nonsubrogee claims, to the maximum extent practicable, are to be paid before subrogee claims."

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