Audit of Gulf Coast Claims Facility Results in $64 Million in Additional Payments

Department of Justice-Ordered Audit Found the Gccf Marked a Significant Advance in Disaster Response

The Department of Justice released the executive summary of the report by an independent auditor of the Gulf Coast Claims Facility (GCCF), the facility set up to process claims in the wake of the April 20, 2010, Deepwater Horizon oil spill. The audit found that the GCCF claims process constituted a significant advance in disaster response. But the audit also identified significant errors that are now being corrected by sending more than $64 million in additional payments to approximately 7,300 individuals and businesses throughout the Gulf region.

“When the Attorney General visited the Gulf last summer, he heard concerns about the GCCF and ordered an independent auditor to evaluate it,” said Acting Associate Attorney General Tony West. “Approximately 7,300 individuals and businesses throughout the Gulf region will now see the benefits of that action, to the tune of over $64 million in additional payments. While there’s no question that the independent GCCF labored under extremely challenging circumstances to get a huge number of payments processed successfully, the fact that this audit has resulted in tens of millions of dollars being made available to claimants who were wrongfully denied or shortchanged underscores the importance of the audit.”

Last summer, the Attorney General visited the Gulf and met with individuals and small business owners whose lives were affected by the Deepwater Horizon oil spill. He acted on those concerns and ordered an independent auditor to evaluate the Gulf Coast Claims Facility. The evaluation is now complete, and the Department of Justice has released the Executive Summary of the auditor’s report.

As a result of the Attorney General’s acting on those concerns, checks totaling approximately $64 million are now being sent to approximately 7,300 claimants who received less than they were entitled to under the GCCF’s procedures.

The auditor also found claimants who were overpaid as a result of errors applying the GCCF’s procedures, but did not attempt to identify all the claimants who were overpaid or quantify those overpayments. The GCCF is not making any effort to recover those overpayments.

The report also noted the unprecedented nature of the spill and the context that surrounded the GCCF’s operations: intense pressure to pay claims quickly, a claimant community that was experiencing significant economic pressures after a very difficult post-spill tourist season, and over a million claims that included many with very complex economic losses. The GCCF paid out $6.2 billion to more than 220,000 claimants before it closed its doors as a result of the settlement between BP and the private plaintiffs.

The evaluation was conducted by BDO Consulting. BDO’s team was selected after interviews with the Department of Justice and the attorneys general from the five Gulf states, and drew on previous experience in the Gulf Coast area assisting clients with claims related to Hurricane Katrina, including in the hospitality, retail, commercial and residential properties, seafood processing, consumer products and transportation industries. As part of this evaluation, BDO evaluated tens of thousands of claims files and searched the GCCF’s entire database of over one million claims to identify other claims that may have suffered from the same errors. BDO is preparing a full report of its findings that will be published later this spring.

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Source: United States Department of Justice