FEMA Continues to Phase Out Its Use of Alternative Contracting Methods to Administer the National Flood Insurance Program   [open pdf - 2MB]

From the Highlights: "The Federal Emergency Management Agency (FEMA) continues to phase out its use of alternative contracting methods to administer the National Flood Insurance Program (NFIP). FEMA used alternative contracting methods to pay NFIP Community Rating System (CRS), NFIP Direct servicing agent, and FEMA Bureau and Statistical Agent (BSA) contractors. Between fiscal year 2015 and FY 2021, FEMA used alternative contracts to pay about $263.9 million for certain NFIP services. FEMA used NFIP insurance premiums collected or advanced funds to pay the contractors. In using these alternative contracting methods, FEMA bypassed FAR contracting requirements and did not accurately report Federal dollars expended to procure and pay for NFIP services. As a result, taxpayers were unaware of the total cost of NFIP services. According to FEMA, by FY 2023 it will acquire NFIP CRS services through a FAR contract. Additionally, beginning in FY 2021, FEMA's new NFIP Direct and BSA contracts require its contractors to invoice FEMA for flood response services and reimbursable items, instead of using NFIP premiums collected or advanced funds. Unrelated to our audit objective, we found FEMA did not provide adequate oversight of the NFIP cash management process. Instead, FEMA relied heavily on self-certifications and external audits. As a result, FEMA was unaware why at least 2,000 policyholders' premium refund and claim payments remained uncashed."

Report Number:
Department of Homeland Security, Office of Inspector General, Report No. OIG-22-11
Public Domain
Retrieved From:
Department of Homeland Security Office of Inspector General: https://www.oig.dhs.gov/
Media Type:
Help with citations