Sneak Preview: NASA To Revise Improper Payment Review Procedures

December 15, 2017 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The National Aeronautics and Space Administration (NASA) plans to revise by September 2018 its procedures for conducting improper payment risk assessments to ensure all agency programs, including those of its Office of Inspector General (OIG), are evaluated every three years, in response to a recent recommendation from the Government Accountability Office (GAO).

From federal fiscal year (FY) 2003 through FY 2016, the federal government has spent an estimated $1.2 trillion in improper payments, which are defined as payments that should not have been made or that were made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative or other legally applicable requirements, according to GAO. These include payments to ineligible recipients, payments for ineligible goods or services, duplicate payments, payments for goods or services not received, and payments that do not account for credit for applicable discounts.

The Improper Payment Information Act of 2002 (IPIA) (Pub. L. 107-300), as amended by the Improper Payments Elimination and Recovery Act of 2010 (Pub. L. 11-204) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (Pub. L. 112-248), require that federal agencies review all programs and activities and identify those programs and activities that are susceptible to significant improper payments — a procedure referred to as an improper payment risk assessment. Agencies are required to conduct such assessments at least once every three years. Significant improper payments are defined as gross annual improper payments that may have exceeded: (1) both 1.5 percent of program outlays and $10 million of all program or activity payments made during the fiscal year reported, or (2) $100 million (regardless of the improper payment percentage of total program outlays).

In addition, Office of Management and Budget (OMB) guidance requires agencies to report certain improper payment information in their agency financial reports (AFRs) and performance and accountability reports (PARs). GAO evaluated compliance with the OMB guidance among 24 agencies subject to the Chief Financial Officers Act from FY 2014 through FY 2016, determining that agencies generally adhered to reporting requirements. These 24 agencies represent the largest federal funding agencies. However, GAO found two instances in FY 2014 in which agencies did not follow an OMB directive for agencies to report the basis for how they grouped programs and activities for improper payment risk assessments.

In addition, while IPIA, as amended, and OMB guidance instruct agencies to consider nine risk factors (e.g., whether the program reviewed is new to the agency; the volume of payments made annually; recent major changes in program funding, practices and procedures; etc.) when conducting risk assessments, GAO found that for FYs 2015 and 2016 reporting, six agencies did not report one or more of the nine risk factors in their AFRs or PARs. For example, the U.S. Agency for International Development (USAID) did not report its consideration of any of the nine risk factors, while the U.S. Department of Agriculture reported that it considered four of the risk factors, and the Social Security Administration reported that it considered six of the risk factors.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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