Facing continued negative publicity and pressure from Congress, the Federal Emergency Management Agency ("FEMA") created the Superstorm Sandy Claims Review Process (the "SCRP"). FEMA received 19,464 eligible requests for re-review through the SCRP.
As of December 1, 2017, the SCRP cost in excess of $196 million to perform and offered policyholders an additional $270 million for their claims.
The U.S. Department of Homeland Security's Office of Inspector General ("OIG") has audited the SCRP. Its stated objective was to determine whether FEMA had properly conducted its review of claims submitted through the SCRP.
Now, the OIG has issued a report and has concluded that:
- FEMA did not rely on certain legislatively mandated internal controls designed to ensure appropriate payments for flood victims.
- During the formation and operation of the SCRP, FEMA failed to establish contractor expectations or provide consistent guidance and oversight related to Superstorm Sandy claims.
- These omissions resulted in policyholders receiving "unsupported additional payments, excessive costs to operate the SCRP, and time delays processing the claims."
The OIG made seven recommendations to FEMA. FEMA concurred with all seven of the recommendations and already has begun "implementing corrective actions."
It should be noted that, more than five years after Superstorm Sandy, the SCRP continues.
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