Flood Program Lacks Funds to Face Future

A new report from the Government Accountability Office has found that the National Flood Insurance Program owes the federal treasury more than $17 billion – and it’s unlikely the program will be able to help with future flood catastrophes.

The Associated Press’ Becky Bohrer says the GAO wrote a letter to Senator Richard Shelby with the report, saying it is “unlikely” the program could cover expected future losses. The $17 billion is money it borrowed to cover the flood claims of the 2005 hurricanes.

Butch Kinerney, a spokesman for the flood insurance program, told Bohrer it still has about $3 billion in borrowing authority and that is enough to cover most future events. GAO, citing testimony by a FEMA official, said Katrina-related claims alone surpassed the aggregate amount of claims in the program's nearly 40-year history by more than $1 billion.

The GAO report also found that while the number of federal flood insurance policies nationally rose from 1997 to 2006, most homeowners at risk of flooding didn’t have such insurance. It questioned the Federal Emergency Management Agency’s ability to effectively oversee contractors it works with to implement the program.