Federal Disaster Assistance

Relief to 1985 Virginia Flood Victims--Process and Alternatives Gao ID: RCED-87-21BR October 3, 1986

Pursuant to a congressional request, GAO reviewed the adequacy and timeliness of federal disaster assistance provided to Virginia victims of a November 1985 flood, specifically: (1) the Federal Emergency Management Agency's (FEMA) public assistance; (2) the Small Business Administration's (SBA) disaster loans; (3) the FEMA National Flood Insurance Program; (4) the FEMA Temporary Housing Assistance Program; and (5) the Federal Highway Administration's highway repairs.

GAO found that: (1) FEMA promptly disbursed funds for the National Flood Insurance program, having paid 88 percent of the claims by March 1986; (2) FEMA quickly resolved concerns involving temporary housing assistance and highway repairs; (3) SBA approved 1,361 home loans, totalling $21.4 million, by April 1986; (4) SBA rejected loans to 370 applicants for lack of repayment ability or poor credit history; and (5) SBA approved 360 business loans and rejected 149 applications as of April 1986. GAO identified alternatives to improve the timeliness of SBA and FEMA assistance, including: (1) increased staffing to eliminate the SBA loan processing backlog; (2) increased assistance to applicants to ensure prompt and complete application information; (3) more use of the provision allowing advances to home-loan applicants; (4) revised inspection forms to reduce the loan-review processing time; (5) immediate consideration for those applicants whose incomes are less than the prescribed levels; and (6) merging verification and inspection functions within FEMA.

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