National Flood Insurance Program: FEMA Can Improve Community Oversight and Data Sharing

NFIP's effectiveness depends in part on communities implementing FEMA requirements on floodplain management and post-disaster rebuilding efforts. GAO was asked to undertake a comprehensive evaluation of federal disaster preparedness, response, and recovery efforts. This report examines (1) requirements NFIP communities must meet and challenges they face, (2) FEMA's use of community visits to ensure compliance, and (3) how FEMA oversees community implementation of NFIP requirements for conducting substantial damage assessments.

GAO analyzed FEMA data on oversight visits and substantial damage assessments from January 2008 through July 2019. GAO also interviewed floodplain managers in 19 communities in Texas, Florida, and Louisiana, and officials from FEMA and floodplain management organizations.

The Federal Emergency Management Agency (FEMA) requires communities participating in the National Flood Insurance Program (NFIP) to adopt FEMA floodplain maps; limit flooding caused by new development; and require that substantially damaged structures meet elevation requirements (see figure). Community floodplain officials cited challenges, including difficulty inspecting buildings after a flood, staff turnover, and adopting new NFIP flood maps.

FEMA primarily uses community assistance visits to monitor compliance with NFIP requirements. The visits include evaluations of recent construction. Until 2019, FEMA's goal was to visit all communities considered to be high-risk every 5 years. However, FEMA did not meet this goal in Texas or Florida in 2008–2019 because of a lack of resources. Many high-risk communities received only one visit in this period, and some were not visited at all. Without regular monitoring, FEMA's ability to ensure communities comply with requirements is limited. FEMA and state specialists also are to close out records of these visits in FEMA's tracking system if they find no deficiencies or violations, or when the community has resolved any issues. However, in Florida and Texas GAO found that records for many visits remained open for several years, and FEMA staff were unsure whether this indicated unresolved deficiencies or incomplete recordkeeping. Unreliable recordkeeping hinders FEMA's ability to assess community compliance with NFIP requirements.

After a flood, one key community responsibility is to assess whether flood damage on a property was substantial (50 percent or more of the property's value). In such cases, the community must ensure the properties are rebuilt to current NFIP standards. However, FEMA generally does not collect or analyze the results of these assessments, limiting its ability to ensure the process operates as intended. Furthermore, FEMA has not clarified how communities can access NFIP claims data. Such data would help communities target substantial damage assessments after a flood.

GAO is making four recommendations to FEMA: The agency should (1) assess different approaches for ensuring compliance with NFIP requirements, (2) ensure data on community visits are up-to-date and complete, (3) ensure communities collect data on substantial damage assessments, and (4) clarify policies on data sharing between FEMA and NFIP communities. FEMA concurred with the recommendations.

In 2017, Hurricanes Harvey and Irma, along with Hurricane Maria,  created an unprecedented demand for federal disaster response and  recovery resources. Hurricane Harvey was the most significant tropical  cyclone rainfall event in recorded U.S. history, and it caused an estimated  $125 billion in damage in Texas. Seventeen days later, Hurricane Irma  became the strongest storm on record in the Atlantic Ocean outside of the  Caribbean and Gulf of Mexico, and it caused an estimated $50 billion in  damage in Florida and other states. Homeowners with flood insurance  through the National Flood Insurance Program (NFIP) were able to file  claims and receive funds to aid in their rebuilding efforts after the storms.  NFIP is administered by the Federal Emergency Management Agency  (FEMA), a component of the Department of Homeland Security, and was  created to help reduce the cost of providing federal flood assistance to  repair damaged homes and businesses. The program relies on  participating communities to adopt and enforce floodplain management  requirements to minimize the damage and financial effect of flooding.

You requested that we undertake a comprehensive evaluation of federal  disaster preparedness, response, and recovery efforts. This report  addresses enforcement of key NFIP requirements for communities.  Specifically, it (1) describes the requirements that NFIP-participating  communities must meet and the challenges they face in doing so, (2)  examines the extent to which FEMA uses community visits to ensure  communities follow requirements, and (3) examines how FEMA oversees  community implementation of NFIP requirements for conducting  substantial damage assessments.

This report focuses on NFIP communities in Florida and Texas, where  residents and property owners purchased almost half of all NFIP policies  nationwide in 2017. For all three objectives, we reviewed FEMA guidance  documents and NFIP requirements for communities participating in NFIP  and in FEMA’s Community Rating System (CRS) and interviewed officials  in FEMA’s headquarters and regional offices in Texas and Georgia. We  visited 18 communities in Texas and Florida and an additional community  in Louisiana to learn about floodplain management after Hurricane  Harvey. We conducted structured interviews with community floodplain  managers and emergency management coordinators, among others. For  the first objective, we analyzed the results of our structured interviews to  identify the challenges that community officials cited most frequently. For  the second objective, we analyzed FEMA’s database of information from  its community assistance visits to determine the frequency of visits and to  understand unresolved deficiencies found during the visits. While these  data were sometimes incomplete, they generally were reliable for our  purposes of addressing frequency of visits and issues with deficiencies.  For the third objective, we analyzed our structured interviews and  interviews with agency officials to determine how FEMA oversees  community implementation of NFIP requirements for conducting  substantial damage assessments. Appendix I provides more detail on our  methodology.

We conducted this performance audit from October 2018 to May 2020 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

FEMA is the federal agency primarily responsible for assisting state and  local governments, private entities, and individuals to prepare for,  mitigate, respond to, and recover from natural disasters, including floods.  Floods are the most frequent natural disasters in the United States,  causing billions of dollars of damage annually.

In 1968, Congress passed the National Flood Insurance Act, which  created NFIP, to address the increasing amount of flood damage, the lack  of readily available insurance for property owners, and the cost to the  taxpayer for flood-related disaster relief. Since its inception, NFIP has  served as a key component of FEMA’s efforts to minimize or mitigate the  damage and financial impact of floods on the public, as well as to limit the  need for federal assistance after floods occur.

A primary goal of NFIP is to minimize flood-related property losses by  making flood insurance available on reasonable terms and encouraging  its purchase by commercial and residential property owners who need  flood insurance protection. The program focuses on areas in communities  that are at the highest risk of flooding, known as special flood hazard  areas. As of November 2019, 22,436 communities across the United  States and its territories voluntarily participated in NFIP by adopting and  agreeing to enforce flood-related building codes and floodplain  management requirements.

FEMA uses community assistance visits and community assistance  contacts to oversee community enforcement of NFIP requirements.  Community assistance visits are on-site assessments of a community’s  floodplain management program and its knowledge and understanding of  NFIP’s floodplain management requirements. During the visit, FEMA also  helps the community remedy any program deficiencies or violations.  Some visits are conducted by FEMA regional office staff and others by  state floodplain management personnel, through funding from FEMA’s  Community Assistance Program (State Support Services Element).

Community assistance contacts are usually done by telephone, and their  purpose is to establish or re-establish contact with an NFIP community  regarding any existing problems or issues and to offer assistance if  necessary. These contacts generally include a broad discussion of the  community’s floodplain management activities, as well as any outstanding  deficiencies and violations and community actions taken to resolve them.  NFIP regulations allow FEMA to place a community on probation or to  suspend the community from the program if it does not meet or enforce  NFIP requirements.

After a flood, local officials in communities that participate in NFIP must  determine whether the proposed repairs to a damaged building are above  or below FEMA’s threshold for substantial improvement or repair of  substantial damage. Substantial improvement refers to any  reconstruction, rehabilitation, addition, or other improvement of a  structure that equals or exceeds 50 percent of the market value of the  structure before the start of the construction. Repair of substantial  damage means that the cost of restoring the structure to its pre-damage  condition equals or exceeds 50 percent of the market value of the  structure before the damage occurred.

Substantially improved and substantially damaged buildings must be  brought into compliance with NFIP requirements for new construction,  including the requirement that lowest floors be elevated above the level  indicated by the current NFIP flood map. These requirements help reduce  future flood risk by elevating or otherwise mitigating properties at risk of  flooding. FEMA officials generally do not conduct substantial damage  assessments themselves but offer communities tools they can use to  collect information and perform damage assessments. When a building  insured under NFIP suffers a flood loss and is declared substantially  damaged, the owner of the building can apply to receive up to $30,000,  on top of any claim payment, to help rebuild according to current NFIP  requirements, under a program called Increased Cost of Compliance.

In 1990, FEMA implemented a voluntary rating system to recognize and  encourage community floodplain management activities that exceed the  minimum NFIP requirements. Communities may apply to join CRS if they  are in full compliance with the minimum NFIP floodplain management  requirements. As of June 2017, about 5 percent of NFIP communities  participated in CRS, and more than 69 percent of all flood insurance  policies were written in CRS communities.

Communities are grouped into classes based on their ratings and can  move up in ratings by earning CRS credits for activities such as  increasing public information about flood risks, preserving open space,  taking steps to reduce flood damage, and preparing residents for floods.  The three goals of the CRS program are to  reduce flood damage to insurable property by reducing existing  buildings’ risk of flood damage and by protecting new buildings from  current and future flood hazards;  strengthen and support the insurance aspects of NFIP, in particular by  encouraging communities to implement NFIP flood maps and  increasing residents’ awareness of flood risk so they purchase and  maintain flood insurance policies; and  foster a comprehensive approach to floodplain management, such as  by ensuring that new development does not cause adverse impacts  elsewhere in the watershed or on other properties.

As the community earns credits for additional flood-mitigation activities,  residents and property owners in special flood hazard areas become  eligible for increased NFIP policy premium discounts. Each CRS class  improvement produces a 5 percent greater discount on flood insurance  premiums for properties in the special flood hazard area, up to a  maximum of 45 percent. FEMA contracts with a private company to  administer many aspects of the CRS program. This contractor verifies the  activities of communities on a 5-year cycle, though some communities  may be visited on a 3-year cycle as their CRS class and discount  improve. Communities can lose discounts if they do not sustain their  activities.

Communities in Texas and Florida made up 2 percent and 6 percent,  respectively, of all NFIP communities nationwide, and their residents  purchased almost half of all NFIP policies in force in 2019 (see fig. 1).

After Hurricanes Harvey and Irma, property owners in Texas, Florida, and  other states made about 98,000 flood insurance claims to NFIP and  received a total of almost $10 billion. According to FEMA, Hurricane  Harvey required a disaster response that was the largest in Texas state  history. Nearly 80,000 homes had at least 18 inches of floodwater, and  23,000 of those had more than 5 feet. Older homes that were not built to  minimum NFIP standards sustained the greatest damage. In Florida,  Hurricane Irma caused widespread damage to residential and commercial  buildings and infrastructure, and flood damage occurred particularly in  low-lying areas.

NFIP’s Requirements Seek to Limit Future Flooding but Communities Described Implementation Challenges

Communities Must Meet Certain Floodplain Management Requirements

Community participation in NFIP is voluntary, but communities must join  NFIP for their residents to purchase flood insurance through the program.  To join NFIP, communities must adopt and enforce FEMA-approved  building standards, floodplain management strategies, and floodplain  management regulations to reduce future flood damage. FEMA relies on  the communities to notify it of changing flood hazards and help update  flood hazards on NFIP flood maps. (See figure 2 for an example of how  development can increase flood risk.) Communities designate a floodplain  administrator, who may be a local member of the community, such as a  building inspector, community zoning official, engineer, or planner, or an  entity contracted by the community, such as a county, regional planning  agency, another jurisdiction or authority, or a private firm.

44 C.F.R. § 60.2(h). base flood elevations, or the elevation to which FEMA anticipates  floodwater will rise during a flood (see fig. 3).

Communities must require permits for all development in special  flood hazard areas. The permit requirement includes both the  construction of buildings or other structures and other land operations,  such as mining, paving, excavation, or drilling, which can increase the risk  of flooding by obstructing floodwater flows.

Development must not increase the flood hazard on other  properties. NFIP requires communities to regulate development to  ensure that new development does not increase the risk of flooding for  surrounding properties.

44 C.F.R. § 60.3. elevated to or above the base flood elevation indicated on the NFIP flood  map. FEMA allows elevation on fill; elevation on posts, piers, or columns;  or elevation on walls or a crawlspace (see fig. 4).

Some communities set standards higher than what is required by NFIP.  For example, Harris County, Texas, and Key West, Florida, require new  or substantially improved construction to be elevated 2 feet and 1 foot,  respectively, above NFIP’s base flood elevation level. In addition, several  communities in Florida have cumulative substantial improvement rules.  The rules require property owners who make substantial improvements  over a period of time to a home built before the community implemented  NFIP flood maps to elevate or bring the home into NFIP compliance.  Several FEMA studies show that homes that are rebuilt above the base  flood elevation suffer less damage in subsequent floods.

Communities Cited Challenges in Implementing Requirements, Including Difficulty Inspecting Buildings after a Flood

Challenges expressed by some community officials whom we interviewed  included difficulty enforcing NFIP requirements after a storm, retaining  experienced floodplain management staff, and implementing updated  NFIP flood maps.

Difficulty inspecting buildings after a flood. Officials in several  communities discussed the challenges related to inspecting buildings for  substantial damage after a flood. In one community, inspectors had  difficulty assessing flood damage because officials allowed construction  to begin immediately and without a building permit. Floodplain officials in  two communities said insurance adjustors may pay claims before  inspectors have assessed damage, hindering inspectors’ ability to  determine if repairs will exceed 50 percent of the home’s value if the  homeowner begins to repair damage before the inspection.

Challenges retaining floodplain management staff. In eight of the 19  communities we visited, officials cited difficulties obtaining or retaining  sufficient staff to perform work such as conducting substantial damage  assessments or fulfilling CRS paperwork requirements. For example, one  floodplain official told us that after a major storm, the small floodplain  management office was overwhelmed with trying to inspect damaged  buildings to determine which would require rebuilding to current NFIP  standards. Another community we visited did not have a full-time  floodplain manager and relied on its building department, which is  responsible for issuing building permits, to implement NFIP requirements.  Officials said that retaining floodplain management staff is challenging  due to factors such as the overwhelming amount of work that had to be  performed after a hurricane and low prioritization of floodplain  management in noncoastal communities. Two officials said that floodplain  management is a difficult job, which can lead to high turnover of staff.

Difficulty adopting new NFIP flood maps. Officials in three  communities said the introduction of a new flood map can create  difficulties. For example, an official said a new flood map can increase the  size of the special flood hazard area and require more property owners to  buy flood insurance. Another official said that new maps also can raise  the base flood elevation, which can raise the cost of insurance  premiums. A community official said that his community has been  working with FEMA to revise a map for a few years and noted that some  property owners in the community planned to challenge the new maps,  further delaying adoption.

FEMA’s Oversight Is Hindered by Limited Community Visits and Incomplete Data

FEMA Uses Community Assistance Visits to Oversee NFIP Community Compliance

FEMA’s primary method of verifying community compliance with NFIP  requirements is through community assistance visits. These visits, along  with community assistance contacts—which are in-depth discussions that  can be conducted by telephone—are intended to help FEMA prevent,  identify, and mitigate deficiencies in a community’s floodplain  management.

According to FEMA’s guidance, FEMA or state specialists who conduct  these visits are to take the following steps (see fig. 5):

Prepare for the visit. Specialists prepare for the visit by learning  about the characteristics of the community and its prior history with  NFIP in order to identify potential issues.

Conduct the visit. Specialists tour the community, meet with local  officials, and inspect files, among other activities. During the tour,  specialists make observations, such as noting for later file inspection  whether new structures or structures undergoing major repair meet  permit documentation and base flood elevation requirements, and  whether major new developments will divert flood water from special  flood hazard areas. The specialists meet with local officials to assess  the community’s floodplain management program and to provide  technical assistance. Specialists also inspect the community’s files to  assess the documentation and activities of its floodplain management  program.

Document findings. Within 30 days of the visit, the specialists are to  enter information obtained from the visit, including specific information  on deficiencies and violations, into FEMA’s Community Information  System.

Follow up with the community. After completing the visit, the  specialists who conducted the visit are to ensure that the community  resolves deficiencies and violations found during the visit in a timely  manner. Specialists are to consider additional action, including  enforcement actions, if deficiencies remain.

In our visits to NFIP communities, officials told us that community  assistance visits generally were consistent with the process we found  documented in FEMA’s guidance. For example, community officials said  specialists toured the floodplains to observe structures (such as new  construction, renovations, and waterfront developments) and inspected  community files, including permits and elevation certificates. The  community officials said specialists generally spent from 1 to 7 days on  site performing their reviews.

Some High-Risk Communities Were Not Visited Between 2008 and 2019, and Many Were Visited Only Once

Until recently, FEMA’s guidance documents stated that its goal was to  visit all communities it considered to be high-risk every 5 years. FEMA  designated some communities as high-risk based on factors including the  community’s size, number of flood insurance policies, and number of  previously damaged structures. Lower-risk communities were designated  to receive a community assistance contact, training, or other contact  without regard to time frame. FEMA officials with whom we spoke noted  that the risk factors used to designate communities had not been updated  since 2010. As a result, according to FEMA officials, in 2019 FEMA  began developing a new selection tool that includes updated criteria and  focuses on the risk of flooding in a community, the opportunity for a  community to improve resilience, and the level of interest a community  has in improving its floodplain management. An early version of the tool  was released for testing in 2019.

FEMA officials said that they and the states started using the new tool to  select communities for the annual community visit cycle that began in July  2019. FEMA officials said that while they no longer have a goal of visiting  high-risk communities once every 5 years, they do not anticipate  conducting fewer visits than before. FEMA officials also noted that  communities requesting to participate in CRS will be prioritized for a  community assistance visit.

From January 2008 through July 2019, FEMA met the 5-year goal for 13  percent of high-risk communities in Florida and 5 percent of such  communities in Texas (see fig. 6). FEMA records also indicated that  approximately 13 percent of high-risk communities in Florida and 31  percent in Texas did not receive a community assistance visit in that  period. However, most high-risk communities in the two states were  visited at some point during the overall time period. About 87 percent of  high-risk communities in Florida and about 69 percent in Texas received  at least one visit during that period.

FEMA officials said that one reason for the limited number of visits to  some high-risk communities is that FEMA resources, including state  specialists, can be diverted to assist with disaster recovery efforts. FEMA  officials also said that it is a challenge to visit all high-risk communities in  states with a large number of NFIP communities, such as Texas and  Florida, but they generally do not have the same challenge in states with  fewer communities. FEMA officials said that in 2019 they employed about  120 specialists nationally, and that state grants allowed for another 130  state specialists to be divided among all states. Based on our analysis of  FEMA’s data for Florida and Texas, FEMA regional staff completed about  20 percent of the visits and state specialists and others completed the  remaining 80 percent.

A FEMA official told us that the agency has been considering using  methods other than community visits (such as checking in with  communities 12–18 months after a flood) to verify compliance with NFIP  requirements. However, as community assistance visits currently remain  FEMA’s primary tool for ensuring compliance, the limited number of visits  it has conducted in high-risk communities hinders its ability to provide  such oversight. For example, it hinders FEMA’s ability to prevent, identify,  and mitigate deficiencies in communities’ implementation of NFIP  requirements, which, in turn, can limit their ability to prevent or limit future  flood losses.

FEMA Officials Were Unsure Whether Open Records of Community Visits Indicated Unresolved Deficiencies or Incomplete Data

According to FEMA guidance, specialists should document their  community assistance visits, including information on any deficiencies  and violations found during the visit, in FEMA’s Community Information  System within 30 days of the visit. If a deficiency or violation is found, the  specialists are to close out the record of the community visit after any  deficiencies and violations have been addressed. The guidance further  states that during the course of the visit, specialists should collect  documentation that thoroughly supports their findings. Such  documentation helps monitor a community’s progress toward resolving its  floodplain management issues and, if needed, support any enforcement  actions.

Our review of FEMA records of community assistance visits in Florida and  Texas from 2008 through 2019 showed that about one-third of all records  remained open for a year or longer, and in some cases records stayed  open for 5 years or more (see fig. 7). For example, around 29 and 23  percent of community assistance visits conducted in Florida and Texas,  respectively, remained open for 3 or more years. In Florida, 4 percent  remained open for 8 years or more.

FEMA headquarters officials told us that they were unsure whether  individual records remained open due to unresolved deficiencies and  violations or because the specialist who conducted the visit failed to close  the record. The officials also noted that specialists who enter information  into the Community Information System about deficiencies and violations  may not understand the importance of noting specific details and, as a  result, may exclude details in many cases. As such, the level of detail can  vary from one visit record to another depending on the individual entering  the data.

FEMA officials told us that turnover of state floodplain specialists and  community floodplain managers could be a reason that many records  remained open for an extended period. For example, they said turnover  among state specialists could result in visit records remaining open  because the staff responsible for closing a visit record no longer worked  for the state. They also said that turnover among community floodplain  managers could result in deficiencies remaining open for extended  periods because there was no one in the community to address them.  Furthermore, they said that because of the high turnover of community  floodplain managers, they want to find other ways of monitoring  community compliance with NFIP requirements.

FEMA officials told us that another reason visit records can remain open  for longer periods of time is FEMA’s approach to community oversight.  The officials said that they would rather work with a community to resolve  any deficiencies and consider steps such as suspension and probation to  be a last resort. As a result, FEMA guidance does not include a maximum  number of days a deficiency can remain open before beginning  enforcement action, such as probation or suspension.

Standards for internal control in the federal government state that  management should use quality information to achieve the entity’s  objectives. Without appropriate steps to ensure that it has reliable and  timely information on community assistance visits, FEMA cannot readily  determine if open records indicate a recordkeeping problem, a community  deficiency that needs to be addressed, or something else. As a result,  FEMA’s ability to determine if communities have been following NFIP  requirements is hindered and the agency may miss opportunities to  prevent future flood losses.

FEMA and Communities Lack Access to Some Data That Would Be Useful in Overseeing and Implementing Post- Flood Requirements

NFIP Communities Assess Damage to Properties Following a Flood, Sometimes with FEMA Assistance

Immediately after a flood, local floodplain management officials may  assess the extent of damage to individual properties and determine  whether damage is substantial enough that certain structures must be  rebuilt to current NFIP requirements. As stated earlier, a substantially  damaged property is one requiring repair work that costs 50 percent or  more of a structure’s pre-flood market value. Local officials usually  assess substantial damage to a property in three stages.

Initial assessment. Local officials conduct initial assessments of  flood-damaged properties—typically by driving through affected  areas—to gauge the number of buildings affected and extent of  damage.

Preliminary damage assessments. These assessments are  performed by FEMA or state officials, along with community officials.  They are intended to broadly characterize the extent of damage. Local  officials charged with performing building inspections and making  substantial damage determinations may find the results of these  assessments useful for identifying areas where significant damage  has occurred and to coordinate their substantial damage inspections.

Substantial damage assessment. Local officials conduct substantial  damage assessments on the most severely damaged structures.  These assessments are more in depth than the initial review and  generally involve identifying damage to a property, estimating the cost  to fix that damage, and determining whether the damaged structure  can be classified as substantially damaged.

State and FEMA representatives can assist local officials in performing  these assessments, as they did after Hurricanes Harvey and Irma. FEMA  also recently began offering communities an updated version of its  substantial damage estimator tool, a software template designed to help  officials assess damage more quickly and consistently. Figure 8 illustrates  the process for declaring properties to be substantially damaged after a  flood.

While FEMA may provide assistance in conducting damage  assessments, NFIP guidance documents state that community floodplain  management officials are responsible for estimating the cost to repair and  the market value of the structure, determining which properties are  substantially damaged, and notifying property owners of their  determination. As noted earlier, NFIP requires property owners to bring  any substantially damaged buildings located in a special flood hazard  area into compliance with minimum NFIP requirements, if they choose to  rebuild. This could mean elevating their structure to reduce the risk of  future flood damage or losses. For example, several officials from NFIP  communities we visited commented that properties raised to or built at  higher elevations following floods prior to 2017 received less flood  damage during the events of 2017.

Commercial and residential property owners with NFIP flood insurance  who wish to rebuild a property that has been declared substantially  damaged must work with the insurance company through which they  purchased their NFIP policy to process their NFIP claim, and then must  obtain permits from their community for repair work. As noted previously,  these policy holders may be eligible to receive additional funding through  NFIP’s Increased Cost of Compliance program—currently up to $30,000  beyond the claim payment—to help with the cost of bringing their home  into compliance with current NFIP standards.

FEMA Does Not Have Ready Access to Community Data on Substantial Damage Assessments

FEMA does not have ready access to data on substantial damage  assessments outside of community assistance visits, which we noted  above are FEMA’s primary mechanism for NFIP community oversight.  For example, we requested data from FEMA on the number of substantial  damage assessments performed after Hurricane Harvey in Texas and  Hurricane Irma in Florida in 2017. FEMA headquarters officials said that  the data were not readily available and they would have to reach out to  the regional offices to provide the figure, which took several months.

In addition, FEMA regional officials said in August 2019 that they were  still assessing the total number of properties that were substantially  damaged in Texas in 2017 and that it would take approximately 12 to 24  months to collect these data. They estimated that local NFIP officials and  state contractors in Texas performed 27,000 substantial damage  assessments with FEMA assistance after Hurricane Harvey. FEMA  regional officials also said that following Hurricane Irma, FEMA floodplain  management specialists helped train local officials for, or assisted local  communities in conducting, 20,206 substantial damage assessments in  Florida. According to FEMA, as of December 2019, approximately 2,232  properties had been declared substantially damaged as a result of  Hurricane Irma, 86 percent of which had been brought into compliance  with NFIP regulation.

FEMA officials could not tell us how many substantial damage  assessments were conducted in Texas after Hurricane Harvey almost 2  years after the hurricane in part because FEMA does not have ready  access to community data on substantial damage assessments. To  access data on substantial damage assessments, FEMA headquarters  officials first need to ask FEMA regional officials to request data from  NFIP communities, and then wait for the communities to compile and  send the data to the regional offices. FEMA officials also can review data  on individual substantial damage assessments during community  assistance visits. FEMA officials said they have not centralized or  automated their collection of information on substantial damage  assessments for several reasons. FEMA officials said that, in their view,  the community is responsible for gathering and maintaining this  information as a condition of its NFIP participation, and they consider the  communities to be owners of those data. Furthermore, they said that  centralized collection of substantial damage data would involve data  privacy issues and be a drain on limited resources for disaster relief.  However, FEMA officials expressed concern that some communities  might not be consistently maintaining documentation of the substantial  damage assessments.

FEMA officials told us that they have two initiatives underway to help  NFIP communities and FEMA staff collect data on substantial damage  assessments:

Substantial damage estimator tool. Updates to the substantial  damage estimator tool, discussed earlier, should help communities  collect data more consistently and better document assessments,  according to FEMA officials. Community officials can use the tool to  evaluate flood damage to residential and nonresidential structures  and enter information such as structure type and address. The tool  also includes a square-footage calculator and now allows  photographs or other files to be attached to the completed  assessment.

Staff guidance. New staff guidance, which officials said will be  implemented sometime in 2020, explicitly outlines for NFIP floodplain  managers and FEMA staff the information NFIP communities should  collect and maintain when performing substantial damage  assessments. The guidance was created to address what FEMA  officials believed were shortcomings in existing guidance to  communities, which may have made some NFIP communities  reluctant to conduct substantial damage assessments and enforce the  requirements for those deemed substantially damaged. The new  guidance also establishes time frames for data collection at the NFIP  community level.

While these steps may improve the quality of FEMA’s data on substantial  damage assessments, federal internal control standards state that  management should obtain relevant data from reliable sources in a timely  manner based on the identified information requirements and obtain data  on a timely basis so that they can be used for effective monitoring.

If FEMA headquarters and regional offices do not have ready access to  such data beyond the data collected during community assistance visits,  they will be hindered in their ability to evaluate community compliance  with NFIP requirements. FEMA also may be hindered in its ability to  measure the effectiveness of substantial damage assessments, such as  the extent to which substantially damaged homes are rebuilt according to  NFIP requirements. It is especially important for FEMA to monitor  community compliance with the process for assessing substantially  damaged properties because this is the system FEMA uses to mitigate  flooded properties and reduce the risk of future losses. If FEMA does not  know how effectively this process operates, it could miss opportunities to  use the process to reduce the financial exposure of NFIP.

FEMA Has Not Clarified How Communities Can Access NFIP Claims Data That Could Help Them after a Flood

NFIP communities that we visited reported varying levels of access to  NFIP claims data and information. According to FEMA guidance, the  agency should provide local officials with information on their community  that includes the number of flood insurance policies in force, dollar  amount of coverage, and the number of claims. NFIP communities also  can access information on publicly available data on claims payouts.

Officials in some communities we visited were able to access claims data  while officials in other communities were not. Some officials with whom  we spoke were unsure whether access was permissible. For example, an  NFIP community official in Texas said that FEMA told his office they could  not provide him with the data when he asked for it. Another Texas official  said that typically the communities do not have access to data on flood  losses and claims paid. In Florida, an official said that she was able to  access some data on NFIP claims in her area as long as the community  did not use the data to make substantial damage determinations.

Community officials told us that it would be helpful for them to access  NFIP claims data after a flood. For example, a number of community  floodplain managers told us that having NFIP claims information from  FEMA would benefit their flood recovery efforts because it would allow  them to better target their substantial damage assessments and make  that process more efficient. Officials from other NFIP communities that we  visited stated that claims data could help them identify property owners  who were likely to start to rebuild and ensure they obtained permits,  which can be difficult to determine otherwise. Another group of  community officials said that claims data for their community indicated  NFIP paid out more than the community’s own estimated value of the  insured homes in their community, indicating there may have been more  substantially damaged homes than they identified.

FEMA officials acknowledged confusion among communities concerning  their access to NFIP claims data and said they have been working to  address it, noting that they must ensure compliance with the Privacy Act  of 1974, under which the agency can share certain data only with  organizations that have a programmatic need for the information.  Officials also said they have been working to streamline the process  through which NFIP communities can request claims data. For example,  they said they have been considering the most efficient methods for  sharing data with local communities that require post-disaster flood  information while protecting the privacy of the data. In addition, FEMA  officials said they have been drafting guidance—which they expect to be  issued in 2020—and a new form for community data requests. They said  their intent is that once communities are approved for access to a certain  type of data, they would not have to reapply for subsequent requests.  FEMA officials said the guidance will provide communities with access to  NFIP claims data on a property-by-property basis.

Federal standards for internal control state that management should  externally communicate necessary quality information to achieve the  agency’s objectives and address related risks. While FEMA has taken  positive steps toward reducing confusion surrounding communities’  access to claims data, at the time of our review FEMA had not yet  finalized new guidance. As a result, we were unable to evaluate the  potential of these tools to effectively resolve communities’ confusion over  appropriate access to claims information. Until FEMA clarifies the process  for communities to access claims data on properties within their  community, FEMA may be missing an opportunity to provide communities  with data that they would find helpful in the substantial damage  assessment process.

FEMA relies on communities participating in NFIP to follow its floodplain  management requirements, which are designed to reduce the risk of flood  damage and the resulting cost to taxpayers. Community assistance visits  are the agency’s primary tool for ensuring that communities implement  these requirements. However, in Texas and Florida FEMA often has not  conducted such visits to high-risk communities and lacks complete data  on the results. As a result, FEMA’s ability to ensure that the communities  follow NFIP requirements is limited. In addition, FEMA does not have  ready access to data on substantially damaged properties and the related  documentation, which hinders its ability to determine if an NFIP  community has followed NFIP substantial damage assessment  procedures and correctly identified all substantially damaged homes.  This, in turn, limits FEMA’s ability to evaluate NFIP’s effectiveness.  Finally, confusion exists among some NFIP communities regarding their  access to NFIP claims data, potentially limiting the benefit such data  could provide to those communities in identifying substantially damaged  properties and ensuring all repairs of flood damage are done to NFIP  community standards.

We are making a total of four recommendations to FEMA:  The Administrator of FEMA should assess different approaches, in  addition to community assistance visits, for using existing resources to  ensure communities’ compliance with NFIP requirements. This should  include analyzing alternatives to community assistance visits.  (Recommendation 1)

The Administrator of FEMA should identify appropriate steps to ensure it  has complete, up-to-date, and reliable records of community assistance  visits, including information on why some visit records remain open for a  significant period of time. (Recommendation 2)

The Administrator of FEMA should ensure that communities are  consistently collecting data on their substantial damage assessments and  that FEMA has a way to readily access those data to evaluate community  compliance with NFIP requirements for rebuilding substantially damaged  properties. (Recommendation 3)

The Administrator of FEMA should clarify with NFIP communities its  policies on sharing data on NFIP claims and provide such information to  those communities as needed. (Recommendation 4)

We provided a draft of this report to the Department of Homeland Security  for review and comment. In its comments, the Department of Homeland  Security concurred with our recommendations. FEMA also provided  technical comments, which we incorporated, as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Acting Secretary of Homeland Security, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-8678 or cackleya@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

This report (1) describes the requirements that communities participating  in the National Flood Insurance Program (NFIP) must meet and the  challenges they face in doing so, (2) examines the extent to which the  Federal Emergency Management Agency (FEMA) uses community visits  to ensure communities follow requirements, and (3) examines how FEMA  oversees community implementation of NFIP requirements for conducting  substantial damage assessments. This report focuses on NFIP  communities in Florida and Texas that were affected by Hurricanes Irma  and Harvey in 2017.

For all three objectives, we reviewed FEMA guidance and regulations for  communities participating in NFIP and in FEMA’s Community Rating  System. We interviewed officials from FEMA’s Federal Insurance and  Mitigation Administration, as well as officials in two FEMA regional offices  in Georgia and Texas. We also visited 18 communities in Texas and  Florida, and an additional community in Louisiana, that were affected by  flooding in the 2017 hurricanes. We conducted structured interviews with  officials in these communities. We selected these communities to  represent a mix of large and small communities and because they  participate in FEMA’s Community Rating System. The officials we  interviewed included floodplain managers, emergency management  coordinators, watershed managers, and representatives of homebuilder  associations. We also interviewed representatives of four national and  state floodplain associations, and three additional experts—two academic  experts and a city official—with significant knowledge of NFIP and  flooding issues. For our first objective, we analyzed the responses of  these officials to identify the most commonly cited challenges.

For our second objective, we analyzed data on community assistance  visits in Florida and Texas from FEMA’s Community Information System  from January 1, 2008, through July 30, 2019, and spoke with FEMA and  community officials. To determine whether FEMA carries out the  community assistance visits in accordance with its own guidance, we  reviewed FEMA’s guidance for specialists to prepare for, conduct, and  follow up on the visits. We also spoke with FEMA and other officials about  their experience with the visits to determine whether FEMA and state  specialists generally followed FEMA’s guidance. To determine the extent  to which FEMA met its goal of visiting high-risk communities once every 5  years, we compared the data in the Community Information System on  community visits against the lists of Tier 1 (high-risk) and Tier 2 (lower- risk) communities provided by FEMA. We also analyzed the data to  determine the length of time that records from the community visits were  left open, and whether the records were complete. While we noted that  the data in the Community Information System were at times incomplete,  we found the data reliable enough to identify the frequency of community  assistance visits and issues with data entry.

For our third objective, to examine how FEMA oversees community  implementation of NFIP requirements for conducting substantial damage  assessments, we reviewed FEMA policies and guidance, including NFIP  Floodplain Management Requirements outlined in 44 C.F.R. Parts 59 and  60. We also reviewed FEMA’s Substantial Improvements Substantial  Damage Desk Reference (FEMA 758-P) and FEMA flood-mitigation  requirements. We examined FEMA’s NFIP post-flood processes and  procedures related to substantial damage assessments. We reviewed  FEMA data on the number of substantial damage assessments  performed in Florida and Texas after Hurricanes Irma and Harvey as well  as the number of damaged properties that received increased cost of  compliance funding. We discussed with community officials their  experiences conducting substantial damage assessments and the  challenges they faced in doing so. We also reviewed literature to identify  actions taken by NFIP communities after a flood, and we reviewed FEMA  documentation to determine the actions taken by FEMA and NFIP  communities after a flood. We also compared FEMA’s practices for  collecting data for effective monitoring and communication against federal  standards for internal controls.

Appendix II: Comments from the U.S. Department of Homeland Security

Appendix III: GAO Contact and Staff Acknowledgments

Alicia Puente Cackley, (202) 512-8678 or cackleya@gao.gov.

In addition to the contact named above, Patrick Ward (Assistant Director),  Leah DeWolf (Analyst in Charge), Audrey Blumenfeld, Tarik Carter, Anar  Jessani, Angela Pun, Jessica Sandler, Jennifer Schwartz, and Jena  Sinkfield made key contributions to this report. William Chatlos and Yann  Panassie provided technical assistance.

The National Flood Insurance Program can be most effective when participating communities take steps to reduce the risk of flood damage. To do so, communities must adopt the Federal Emergency Management Agency’s (FEMA) floodplain management requirements. For example, participating communities must ensure that property owners rebuild substantially damaged structures to meet current elevation standards.

FEMA visits communities to ensure that they’re following the requirements, but didn’t visit some high-risk communities for over 10 years. We recommended ways to improve oversight, such as assessing additional approaches to ensuring compliance.