Hurricane Florence flooding in Lumberton, N.C., on Sept. 20, 2018. (U.S. Army photo by Spc. Andrea Salgado Rivera)

OIG: Data Quality Needs Improvement in Modernization of National Flood Insurance Program System

In October 2019, the Federal Emergency Management Agency’s (FEMA) Federal Insurance and Mitigation Administration (FIMA) modernized the National Flood Insurance Program (NFIP) system. The NFIP system is expected to contain reliable policies and claims data to accurately track flood-affected properties and set flood insurance premiums.

The Department of Homeland Security’s Office of Inspector General conducted an audit to assess the extent to which FIMA has addressed data quality issues in its NFIP modernization effort.

FIMA’s recent transition from its legacy NFIP system to PIVOT (not an acronym) partly addressed data quality issues. The transition has improved FIMA’s ability to timely process policies and claims data, enhance reporting capabilities, and provide more reliable policyholder address validation. These improvements stemmed from FIMA’s pressing need to sunset the legacy system as well as from concerted efforts to address lessons learned from prior NFIP modernization failures. Although still in the deployment stage, PIVOT has increased customer satisfaction, improved tracking of properties, and led to better informed NFIP management.

Despite these improvements, the transition to PIVOT has not resolved longstanding data reliability issues, as FIMA migrated the vast majority of its historical legacy data, including errors, into the PIVOT system, OIG found. FIMA also deployed PIVOT without adequate controls to prevent potentially erroneous transactions from being recorded in the system. These issues remained unresolved because FIMA prioritized system modernization over time-consuming efforts to fix historical data errors. FIMA also transitioned to the new system before supporting vendor systems were ready to process all data changes. This may have hindered NFIP operations, given the high potential error rate during the initial months of PIVOT operation.

Prompt action to resolve these challenges will help FIMA improve data integrity and facilitate more informed management, thereby enabling NFIP stakeholders to more accurately track flood-affected properties and set flood insurance premiums, OIG said.

OIG made three recommendations to improve data quality in the new NFIP system and educate stakeholders about existing NFIP data quality issues limiting use of those data. FEMA concurred with all three recommendations.

Read the OIG report

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