FEMA is not adequately managing SRL properties covered by NFIP. FEMA has not established an effective program to reduce or eliminate damage to SRL properties and disruption to life caused by repeated flooding, according to the DHS Office of Inspector General.
Severe repetitive loss (SRL) properties are those that flood repeatedly, causing significant difficulties for property owners. The objective of this audit was to determine to what extent the Federal Emergency Management Agency (FEMA) is managing SRL properties covered by the National Flood Insurance Program (NFIP).
First, OIG found, FEMA does not have reliable, accurate information about SRL properties. This deficiency occurred because of ambiguous FEMA forms to request removal of SRL designation, poor organizational structure, and unassigned roles for ensuring SRL data integrity. As a result, FEMA is using inaccurate information to make funding-related decisions, including requesting appropriations from Congress, deciding where to implement large-scale mitigation projects, and determining which residential mitigation projects to fund through its Flood Mitigation Assistance grant program (FMA). Additionally, not all NFIP policyholders who have mitigated their SRL property have benefited from reduced policy premiums.
Second, FEMA’s FMA, which aims to mitigate flood damage for NFIP policyholders, provides neither equitable nor timely relief to SRL applicants. We attribute this inefficiency to decentralized FMA grant application requirements and inadequate enforcement of grant requirements. FEMA could strengthen its approach to mitigating risk to SRL properties by promoting the use of Increased Cost of Compliance coverage, which is included in NFIP flood policies to assist with mitigation, and could make mitigation relief funding more timely and equitable.
OIG made three recommendations to FEMA to ensure accuracy of the SRL list, as well as timely and equitable distribution of mitigation funding, and to promote the use of NFIP Increased Cost of Compliance coverage.
FEMA concurred with all three recommendations.