Not always when it rained, it stopped: United States and a "not so solid" plan of flood management
<p style="text-align: justify;">This was qualified by the US Audit when incorporating the National Flood Insurance Program to its "high risk" list. It is that it does not have sufficient funds to cover the demands for climatic catastrophes. Even though it had to be financed by what insurers paid, it was supported by tax money.</p>
The US Audit (GAO) considers the National Flood Insurance Program (NFIP) dependent on the Federal Emergency Management Agency (FEMA) as a "high risk." What does it mean to be on this payroll? It is subject to vulnerabilities such as fraud, abuse or mismanagement and, therefore, has the greatest need for transformation.
In this situation is the Flood Program. It happens that the Plan "does not have sufficient income to pay the billions of dollars borrowed by the Treasury to cover the demands." The lack of income, according to the GAO, is evidence of the structural weaknesses around its financing.
In October of 2012, the well-known hurricane Sandy was unleashed that caused serious damages in the majority of the states of the east coast of the North American country; which resulted in millions of claims that the National Flood Insurance Program could not afford.
In this context, in January 2013, Congress passed a law to temporarily increase the indebtedness authority of the NFIP. The plan went from having $ 20.7 million to $ 30.4 million of the US currency to address the demands caused by Hurricane Sandy.
Irregularities
The audit called the program "unsound" because it was designed by Congress and the Federal Emergency Management Agency to be financed by what insurers charge, but in practice it is held up with tax dollars.
According to GAO, the malfunctioning of the NFIP is due to a number of weaknesses in its management, such as "irregularities in financial reporting processes, lack of internal control and inefficient supervision of contractors."
This situation adds that FEMA "did not develop an overall plan with goals, objectives and performance measures for the Plan."
As the cherry on top, in 2011 the United States Watchdog noted that the Federal Emergency Management Agency "is not authorized to account for erosion in the long term." It so happens that FEMA uses flood maps that do not accurately reflect the real risk of catastrophes because they do not take erosion factors into account.
Recommendations
While FEMA officials took some steps to improve the operations of the National Flood Insurance Program, they still have much to improve.
The US Audit suggested that the Federal Emergency Management Agency should "carry out actions that include efforts and strategic planning for the Flood Program." Likewise, "an insurance policy should be implemented that improves the supervision process."