Sneak Preview: GAO Urges OMB To Update Improper Payment Guidance

Jerry Ashworth
December 28, 2018 at 07:20:08 ET
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(The following was excerpted from an article in the Single Audit Information Service.) The Government Accountability Office (GAO) recently recommended that the Office of Management and Budget (OMB) update its guidance to federal agencies to specify additional types of information that agencies should provide in their reports to Congress explaining the steps they are taking to reduce improper payments.

GAO estimated that governmentwide improper payments have increased over the years — from $35 billion in 27 programs for federal fiscal year (FY) 2003 to about $141 billion in 90 programs for FY 2017. The Improper Payments Elimination and Recovery Act of 2010 (IPERA) (Pub. L. 111-204) requires federal offices of inspector general (OIGs) to annually assess and report on whether their agencies’ complied with the following six criteria: (1) publish an agency financial report or performance accountability report; (2) conduct program-specific improper payment risk assessments; (3) publish improper payment estimates; (4) publish corrective action plans; (5) publish and meet annual improper payment reduction targets; and (6) report a gross improper payment rate of less than 10 percent.

In a recent report, GAO found that for FY 2017, OIGs from 14 out of 24 federal agencies stated that their agency was noncompliant with at least one of the six IPERA criteria. GAO also found that the OIGs from these 14 noncompliant agencies reported that 58 programs were responsible for the identified instances of noncompliance, and that 18 of the 58 programs (up from 15 programs in FY 2015) were reported as noncompliant for three or more consecutive years. Such programs included the Department of Health and Human Services’ (HHS) Medicaid and Temporary Assistance for Needy Families programs; the U.S. Department of Agriculture’s (USDA) National School Lunch and School Breakfast programs; and the Department of Housing and Urban Development’s Rental Housing Assistance program.

IPERA, which was later amended by the Improper Payments Elimination and Recovery Improvement Act of 2012 (Pub. L. 112-248), and OMB require agencies with any program reported as noncompliant under these criteria for three or more consecutive years to notify Congress about this status and submit a proposal for reauthorization or statutory change to bring that program into compliance. GAO found that three of the eight federal agencies with one or more programs reported as noncompliant for three or more consecutive years as of FY 2016 did not notify Congress or submit the required proposals.

The other five agencies notified Congress in FY 2016 as required, and included additional information in their reports that, although not specifically required, could be useful in updating Congress on their compliance efforts. These details included information on the root causes, risks, changes or issues affecting their efforts, and corrective actions or strategies to reduce improper payments. They also discussed steps to improve accountability, the designation of senior officials to oversee financial management and assurance, and the implementation of measurable milestones to address improper payments.

(The full version of this story has now been made available to all for a limited time here.)

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