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GAO-15-87R 1 (2014-12-09)

handle is hein.gao/gaobaaimb0001 and id is 1 raw text is: GAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 December 9, 2014 Congressional Addressees Improper Payments: Inspector General Reporting of Agency Compliance under the Improper Payments Elimination and Recovery Act Improper payments-such as duplicate or erroneous payments, payments to ineligible recipients, or payments for ineligible services-have been a long-standing challenge of the federal government and have annually totaled billions of dollars.1 For fiscal year 2013, federal agencies reported an estimated $105.8 billion in improper payments, a decrease of $1.3 billion from the prior year revised estimate of $107.1 billion.2 Based on our review of Office of Management and Budget (OMB) data, the $105.8 billion estimate was attributable to 84 programs across 18 agencies (see enc. 1).3 Five programs accounted for approximately $82.9 billion, or 78 percent of the total improper payments estimate in fiscal year 2013 (see enc. II for a list of the five programs with the largest estimates for fiscal years 2011 through 2013). Fiscal year 2013 marked the 10th year of implementation of the Improper Payments Information Act of 2002 (IPIA),4 as well as the 3rd year of implementation of the Improper Payments Elimination and Recovery Act of 2010 (IPERA).5 IPIA requires executive branch agencies to annually identify programs and activities susceptible to significant improper payments, estimate the amount of improper payments, and report these estimates along with actions planned or taken to reduce them. IPERA expanded on IPIA and added new requirements toward ensuring 1An improper payment is defined as any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. It includes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), and any payment that does not account for credit for applicable discounts. Office of Management and Budget guidance also instructs agencies to report as improper payments any payments for which insufficient or no documentation was found. It is important to note that reported improper payment estimates may or may not represent a loss to the government. 2In their fiscal year 2013 performance and accountability reports or agency financial reports, three federal agencies updated their fiscal year 2012 improper payment estimates to reflect changes since issuance of their fiscal year 2012 reports. These updates decreased the government-wide improper payment estimate for fiscal year 2012 from $107.7 billion to $107.1 billion. 3The1 8 agencies that reported improper payment estimates included 16 agencies covered by this review as well as the Federal Communications Commission and the Railroad Retirement Board. This $105.8 billion estimate does not include the Department of Defense's Defense Finance and Accounting Service Commercial Pay program because of concerns regarding the reliability of its improper payment estimate. See GAO, DOD Financial Management Significant Improvements Needed in Efforts to Address Improper Payment Requirements, GAO-i 3-227 (Washington, D.C.: May 13, 2013). The government-wide improper payment estimate for fiscal year 2013 including this program was $105.9 billion. 4pub. L. No. 107-300 (Nov. 26, 2002). 5pub. L. No. 111-204 (July 22, 2010). GAO-1 5-87R OIG Improper Payment Reporting Page 1

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