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CSB Complied With 

Reporting Requirements 

of the Improper Payments

Elimination and Recovery Act

for Fiscal Year 2014

Report No. 15-P-0153 May 1, 2015

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

U.S. Chemical Safety Board
Report Contributors: Cara Lindsey

Gloria Taylor-Upshaw

Michael D. Davis

Abbreviations

BFS Bureau of the Fiscal Service

CSB U.S. Chemical Safety and Hazard Investigation Board

FY Fiscal year

IBC Interior Business Center

IPERA Improper Payments Elimination and Recovery Act of 2010

IPERIA Improper Payments Elimination and Recovery Improvement Act of 2012

OIG Office of Inspector General

OMB Office of Management and Budget

PAR Performance and Accountability Report

Are you aware of fraud, waste or abuse in an

EPA or CSB program? 

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15-P-0153

May 1, 2015

Why We Did This Review

Office of Management and 

Budget guidance for 

implementation of the Improper 

Payments Elimination and 

Recovery Act of 2010 (IPERA) 

specifies responsibilities of 

agencies and Inspectors 

General. Agencies are required

to report on improper payments 

and Inspectors General are 

required to determine whether 

agencies comply with IPERA. 

As the Inspector General for 

the U.S. Chemical Safety and 

Hazard Investigations Board 

(CSB), the U.S. Environmental 

Protection Agency Office of 

Inspector General undertook 

this review of CSB’s 

compliance with IPERA.

This report addresses the 

following CSB goal:

 Preserve the public trust by 

maintaining and improving 

organizational excellence.

Send all inquiries to our public

affairs office at (202) 566-2391

or visit www.epa.gov/oig.

The full report is at:

www.epa.gov/oig/reports/2015/ 

20150501-15-P-0153.pdf

 

CSB Complied With Reporting Requirements of the 

Improper Payments Elimination and Recovery Act

for Fiscal Year 2014

 What We Found

CSB is fully compliant with the reporting 

requirements of IPERA. As required, CSB 

published its Performance and Accountability 

Report and posted that report and accompanying 

materials on the agency website. 

We determined that CSB does not meet the minimum dollar threshold that would 

require it to perform a risk assessment of its programs and activities that are 

susceptible to significant improper payments. Also, CSB determined that it is not 

cost effective to conduct a recapture audit. In addition, we found that CSB was 

not required to publish improper payment estimates because its program was not 

assessed to be at risk for improper payments. Further, CSB was not required to 

publish programmatic corrective action plans and therefore is not required to set 

reduction targets. Thus, this report contains no recommendations.

We reviewed the status of prior audit recommendations from our audit of CSB’s 

compliance with improper payment regulations during fiscal year 2013. That 

report contained three recommendations to CSB. We concluded that CSB took 

sufficient action for two of those recommendations, and CSB indicated it plans to 

take sufficient action for the remaining recommendation in fiscal year 2016. 

Consequently, we consider that remaining recommendation resolved and will 

review implementation of that recommendation during our next IPERA audit.

 Noteworthy Achievements

CSB improved oversight through its interagency agreement with the U.S. 

Department of the Treasury’s Bureau of the Fiscal Service. In fiscal year 2014, 

that bureau decided to increase its testing for improper payments to 25 percent 

of the total paid invoices. The bureau provides CSB with its monthly post-audit 

results and CSB reviews the monthly reports to ensure no errors are identified by 

the bureau.

U.S. Environmental Protection Agency

Office of Inspector General

At a Glance

CSB is fully compliant 

with the reporting 

requirements of IPERA.
May 1, 2015

The Honorable Mark Griffon

The Honorable Manuel Ehrlich Jr.

The Honorable Rick Engler

Board Members

U.S. Chemical Safety and Hazard Investigation Board

2175 K Street, NW, Suite 400

Washington, D.C. 20037-1809

Dear Board Members:

This is our report on an audit conducted by the Office of Inspector General (OIG) of the

U.S. Environmental Protection Agency. This report represents our final position on our audit of the

reporting of improper payments by the U.S. Chemical Safety and Hazard Investigation Board (CSB).

The report contains findings that describe our results. This report represents the opinion of the OIG and 

does not necessarily represent the final CSB position. CSB managers will make the final determinations 

on matters in this report.

The Improper Payments Elimination and Recovery Act of 2010 and Office of Management and Budget 

guidance require the Inspector General to distribute this report to the following individuals and 

organizations, to whom we will provide the report under a separate transmittal: 

 Office of Management and Budget.

 Senate Homeland Security and Government Affairs Committee.

 House Committee on Oversight and Government Reform.

 U.S. Comptroller General.

Because this report contains no recommendations, you are not required to respond to this report. 

However, if you submit a response, it will be posted on the OIG’s public website, along with our 

memorandum commenting on your response. Your response should be provided as an Adobe PDF file 

that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as 

amended. The final response should not contain data that you do not want to be released to the public; 

if your response contains such data, you should identify the data for redaction or removal along with 

corresponding justification. 

We will post this report to our website at http://www.epa.gov/oig. 

Sincerely,

Arthur A. Elkins Jr.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

THE INSPECTOR GENERAL
CSB Complied With Reporting Requirements of the 15-P-0153

Improper Payments Elimination and Recovery Act

for Fiscal Year 2014

Table of Contents

Purpose...................................................................................................................... 1

Background ............................................................................................................... 1

Scope and Methodology........................................................................................... 2

Noteworthy Achievements ....................................................................................... 3

Results of Audit......................................................................................................... 3

CSB Complies With PAR and Financial Statement Requirement for

Improper Payments.................................................................................... 3

CSB Programs Do Not Meet Risk Assessment Threshold Requirement

 for Improper Payments............................................................................... 4

CSB Determined It Is Not Cost Effective to Conduct a

 Payment Recapture Audit .......................................................................... 5

CSB Not Required to Publish Estimates, Report on Agency Actions,

 and Publish Annual Reduction Targets ...................................................... 5

Prior Year Recommendations Status....................................................................... 6

CSB Response and OIG Evaluation......................................................................... 7

Appendices

A CSB Response to Draft Report........................................................................... 8

B Distribution .......................................................................................................... 10
15-P-0153 1

Purpose

Our objective for this audit was to determine the U.S. Chemical Safety and 

Hazard Investigation Board’s (CSB’s) compliance with the improper payments 

legislation for fiscal year (FY) 2014 and to follow up on FY 2013 improper 

payments audit findings and recommendations.

Background

CSB is an independent federal agency charged with investigating industrial 

chemical accidents. Headquartered in Washington, D.C., the agency’s board 

members are appointed by the President and confirmed by the Senate. CSB is 

authorized by the Clean Air Act Amendments of 1990 and became operational in 

January 1998.

The Improper Payments Elimination and Recovery Act of 2010 (IPERA) was 

signed into law on July 22, 2010, amending the Improper Payments Information 

Act of 2002. Office of Management and Budget (OMB) guidance requires 

agencies to report on improper payments and Inspectors General to review agency 

reporting. The U.S. Environmental Protection Agency’s Office of Inspector 

General (OIG) is the Inspector General for CSB. 

IPERA requires that each agency periodically review and identify all programs 

and activities that may be susceptible to significant improper payments. The 

review should be performed for each program and activity that the agency 

administers at least once every 3 fiscal years. For agencies already performing a 

risk assessment every 3 years, agencies may apply to the OMB Director for a 

waiver from the requirement and continue their 3-year risk assessment cycle.

OMB Memorandum M-15-02, Appendix C to Circular A-123, Requirements for 

Effective Estimation and Remediation of Improper Payments, issued October 20, 

2014, defines an improper payment as:

...any payment that should not have been made or that was made 

in an incorrect amount under statutory, contractual, administrative 

or other legally applicable requirements. Incorrect amounts are 

overpayments or underpayments made to eligible recipients....

An improper payment may also include any payment made to an 

ineligible recipient or for an ineligible good or service, or 

payments for goods or services not received.... [W]hen an 

agency’s review is unable to discern whether a payment was 

proper as a result of insufficient or lack of documentation, this 

payment must also be considered an improper payment.

The Inspector General should determine whether the agency is in compliance 

under IPERA and submit its results to Congress. The Inspector General shall 
15-P-0153 2

evaluate the agency’s assessment of the level of risk associated with the highpriority programs and the quality of the improper payments estimates and 

methodology. The report should also clearly state the agency’s compliance status 

and indicate which of the six requirements the agency complied with and which 

requirements the agency did not comply with. Compliance means that the agency:

 Published a Performance and Accountability Report (PAR) for the most 

recent fiscal year and posted that report and any accompanying materials 

required by OMB on the agency website.

 Conducted a program-specific risk assessment for each program or 

activity (if required).

 Published improper payment estimates for all programs and activities 

identified as susceptible to significant improper payments under its risk 

assessment (if required).

 Published programmatic corrective action plans in the PAR (if required).

 Published and is meeting annual reduction targets for each program 

assessed to be at risk and estimated for improper payments (if required and 

applicable).

 Reported a gross improper payment rate of less than 10 percent for each 

program and activity for which an improper payment estimate was 

obtained and published in the PAR.

If an agency does not meet one or more of these requirements, it is not compliant 

under IPERA. 

Inspectors General may evaluate (1) the accuracy and completeness of agency 

reporting, and agency performance in reducing and recapturing improper 

payments; and (2) agency efforts to prevent and reduce improper payments and 

recommendations for actions to further improve the agency’s or program’s 

performance in reducing improper payments, including corrective actions and

internal controls.

Scope and Methodology

We conducted this compliance audit from November 2014 to March 2015 in

accordance with generally accepted government auditing standards, issued by the 

Comptroller General of the United States. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. 

We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objective.

To determine whether CSB is compliant with IPERA, we reviewed CSB’s 

FY 2014 PAR and accompanying materials. We interviewed, held discussions

with, and exchanged emails with CSB officials. We reviewed CSB’s analysis of 

the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS) reports 
15-P-0153 3

on its testing to ensure increased testing is implemented to reduce the risk that 

some improper payments go undetected. We also followed up on our prior-year 

audit recommendations.

Noteworthy Achievements

CSB has an interagency agreement with BFS. BFS decided to increase its testing 

for improper payments to 25 percent of the total CSB paid invoices. BFS provides 

CSB with its monthly post-audit results. CSB reviews BFS’s monthly reports to 

ensure no errors are identified by BFS in its sample. CSB has provided the OIG 

with BFS’s monthly post-payment audit results from April through October 2014. 

CSB also provided us with documentation that shows CSB reviews the monthly 

audits and tracks the results of those audits. The monthly audit reports provided to 

the OIG did not identify any improper payments. 

Results of Audit

CSB is fully compliant with IPERA reporting requirements, which require all 

agencies to periodically review all programs and activities that may be susceptible 

to significant improper payments. As required, CSB published its PAR on its 

website. We determined that CSB programs do not meet the minimum risk 

assessment threshold that would require CSB to perform a risk assessment or the 

related requirements. Also, CSB performed an analysis justifying that it would not 

be cost effective to perform a recovery audit on CSB’s programs and activities for 

which it expends $1 million or more annually.

In our FY 2013 improper payments report, we made three recommendations. 

We will close two of those recommendations because CSB has taken actions to 

comply. For the third recommendation—that CSB’s payroll and benefits go 

through the portal to comply with IPERA, and that CSB track and document 

reviews of improper payments to help prevent or eliminate future improper 

payments—CSB did not agree with this recommendation. After we received the 

formal response to our draft report, CSB provided an email with additional 

information that resolved this recommendation. CSB has completed part of the 

corrective action and plans to complete the remaining corrective actions next year. 

CSB Complies With PAR and Financial Statement Requirement for 

Improper Payments

IPERA Section 3(a)(3)(A) requires all agencies to publish and post on their website 

the PAR for their most recent fiscal year. The PAR, as described by OMB 

Circular A-11 Section 200.21, is an annual report of agency performance. The 

report contains the agency’s audited financial statements and information on efforts 

to achieve goals during the past fiscal year. In its FY 2014 PAR, CSB stated:
15-P-0153 4

[t]he CSB has not identified any significant risk with improper 

payments. However, we recognize the importance of maintaining 

adequate internal controls to ensure proper payments, and our 

commitment to the continuous improvement in the overall 

disbursement management process remains strong. In FY 2014, the 

CSB continued our agreement with the Bureau of the Fiscal Service 

(BFS) to process financial transactions, make administrative 

payments, and prepare various financial reports. This agreement 

promotes the accuracy of our financial records and payments.

Based on our audit, we determined that CSB is compliant with this IPERA 

requirement.

CSB Programs Do Not Meet Risk Assessment Threshold Requirement 

for Improper Payments

IPERA Section 2(a)(3)(A)(ii) requires that agencies conduct a specific risk 

assessment for each identified program and activity that is susceptible to significant 

improper payments in excess of $10 million of all program or activity payments 

made during the fiscal year reported and 1.5 percent of program outlays. IPERA 

Section 2(f)(2) defines a payment 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 

requirement; and (B) 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.

Our review of CSB’s FY 2014 payments determined that CSB does not meet the 

requirement for the risk assessment threshold of $10 million in improper 

payments and 1.5 percent of program outlays. As a result, CSB is not required to 

perform the risk assessment. We found that CSB’s estimated FY 2014 payments 

are $10,213,014, as shown in Table 1.

Table 1: CSB estimated payments

Activity Amount Percentage

FY 2014 estimated payments 

(includes salaries and benefits)

$10,213,014 92.85%

Interagency and unobligated balance $786,986 7.15%

Total $11,000,000 100.00%

Source: OIG analysis of CSB data.
15-P-0153 5

CSB Determined It Is Not Cost Effective to Conduct a

Payment Recapture Audit

IPERA Section 2(h)(2)(A) requires that each agency shall conduct recovery audits 

with respect to each program and activity of the agency that expends $1 million or 

more annually, if conducting such audits would be cost effective. OMB 

Memorandum M-15-02, Part I D, implements the requirements of Section 2(h) of 

IPERA. The OMB memorandum defines a payment recapture audit—also known 

as a recovery audit—as a review and analysis of an agency’s or program’s 

accounting and financial records, supporting documentation, and other pertinent 

information supporting its payments, that is specifically designed to identify 

overpayments. A payment recapture audit program is an agency’s overall plan for 

risk analysis and the performance of payment recapture audits and recovery 

activities. According to OMB, a cost-effective payment recapture audit is one in 

which the benefits (i.e., recaptured amounts) exceed the costs (e.g., staff time and 

resources, or payments to an audit contractor) associated with implementing and 

overseeing the program. Agencies should consider the following criteria in 

determining whether a payment recapture audit is cost effective: 

 The likelihood that identified overpayments will be recaptured.

 The likelihood that the expected recoveries will be greater than 

the costs incurred to identify the overpayments.

In February 2012, CSB provided an analysis to determine the cost effectiveness of

performing a recapture audit on all activities with annual outlays in excess of

$1 million. CSB concluded that a recapture audit program would not be cost

effective because the cost benefit of conducting a recovery audit would yield a 

negative return. CSB notified OMB, and OMB did not reply to CSB on its analysis. 

Since CSB made this determination in February 2012, CSB should perform 

another analysis in FY 2015; at such time, CSB should consider including payroll 

and benefits to its analysis.

CSB Not Required to Publish Estimates, Report on Agency Actions, 

and Publish Annual Reduction Targets

IPERA Section 3 (a)(3)(C) requires agencies to publish improper payment 

estimates for all programs and activities identified as susceptible to significant 

improper payments under its risk assessment in the accompanying materials to the 

annual financial statements of the agency. CSB did not have significant improper 

payments identified and therefore is not required to publish improper payment 

estimates. CSB did not meet the threshold of $10 million of all program or 

activity payments made during the fiscal year reported and 1.5 percent of program 

outlays—in fact, CSB’s improper payments amounted to $901. As a result, CSB 

was not required to report a gross improper payment rate of less than 10 percent.

When compiling plans to reduce improper payments, agencies are to set reduction

targets for future improper payment levels and a timeline within which the targets 
15-P-0153 6

will be reached. Reduction targets must be approved by the OMB Director. CSB 

was not required to implement a corrective action plan and therefore is not 

required to set reduction targets.

Prior Year Recommendations Status

The OIG had performed an audit of CSB’s compliance with the Improper 

Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) during 

FY 2014. Report No 14-P-0172, U.S. Chemical Safety and Hazard Investigation 

Board Did Not Comply With the Do Not Pay Requirements for Improper 

Payments, issued April 10, 2014, had three recommendations. 

In Recommendation 1, we recommended that CSB establish access to the Do Not 

Pay portal and use that portal. CSB agreed with this recommendation and has 

established access to the Do Not Pay portal and is using the portal. We will close 

this recommendation upon issuance of the final report.

In Recommendation 2, we recommended that CSB’s payroll and benefits go 

through the portal to comply with IPERIA, and that CSB track and document 

reviews of improper payments to help prevent or eliminate future improper 

payments. CSB did not agree with this recommendation. CSB stated in response 

to our request for the recommendation status that:

[a]ccording to OMB, CSB’s payroll and benefit payments comply 

with IPERIA. In addition, formal tracking of improper payments is 

not an efficient or effective manner to address the infrequent 

problems CSB has experienced.

CSB has an interagency agreement with the Department of the Interior’s 

Interior Business Center (IBC) to provide an array of payroll and personnel 

processing applications and services, and human resources and human capital 

services. In additional discussions with CSB on its review of IBC errors, CSB 

stated:

...[it] anticipates that IBC will make occasional errors that are 

outside of CSB’s control. Therefore, as part of our on-going budget 

tracking we reconcile IBC payroll data to our budget projections to 

ensure employees are properly paid. If a discrepancy is identified,

CSB follows up with IBC via phone or e-mail to resolve.

IPERIA Section 5(a)(1) requires each agency to review prepayment and preaward procedures and ensure that a thorough review of available databases with 

relevant information on eligibility occurs to determine program or award 

eligibility and prevent improper payments before the release of any federal funds.

We believe that payroll and benefits should go through the portal prior to the 

release of funds to prevent improper payments. In addition, CSB should track and 
15-P-0153 7

document improper payments for trends and estimates of potential improper 

payments. After we received the formal response to our draft report, CSB stated 

in an email that IBC system and payroll staff confirmed all IBC client salary 

payment files are run through Treasury’s Do Not Pay portal. IBC plans to modify 

the Service Level Agreement for FY 2016 to include language that describes 

responsibility for improper payments. Also, CSB informed us it will keep a log to 

track its improper payments. This recommendation is resolved based on 

information provided by CSB in response to our draft report. CSB has completed 

part of the corrective action and plans to complete the remaining corrective 

actions next year. We will review implementation during our next IPERA audit.

In Recommendation 3, we recommended that CSB document its analysis of 

BFS’s reports on its testing and ensure increased testing is implemented to reduce 

the risk that some improper payments go undetected. CSB partially agreed with 

this recommendation. CSB stated in response to our request for the 

recommendation status that:

BFS shifted to 25% post payment reviews of all invoices in 

March 2014, and began providing monthly post audit payment 

results in April 2014. CSB’s Director of financial operations 

reviews the reports each month to ensure no errors are identified 

by BFS in its sample, and that the total population of paid 

invoices are to CSB vendors in reasonable amounts.

CSB provided the OIG with BFS’s monthly post-payment audit results from 

April through October 2014 and documentation that shows CSB reviews the 

monthly audits and tracks the results of the monthly audits. The monthly audit 

reports provided to the OIG did not identify any improper payments and we 

believe this process to be adequate to address any potential improper payments.

We agree with the additional reviews performed by CSB and, therefore, will close 

this recommendation in our system upon issuance of this report.

CSB Response and OIG Evaluation

This report did not have any recommendations. As noted above, CSB responded 

to our statements in the report concerning the status of the Recommendation 2 in 

our prior IPERA report. We agree with CSB planned actions, as previously 

discussed, and therefore consider this recommendation resolved with the 

remaining corrective actions pending. We will review implementation during our 

next IPERA audit. CSB’s complete response to our draft report is in Appendix A.
15-P-0153 8

Appendix A

CSB Response to Draft Report

U.S. Chemical Safety and 

Hazard Investigation Board 

Rafael Moure-Eraso, Ph.D.

Board Member 

Manny Ehrlich, Jr.

Board Member

Rick Engler

Board Member

Mark Griffon

Board Member

March 27, 2015

Mr. Kevin Christensen

Assistant Inspector General for Audits

Office of Inspector General

U.S. Environmental Protection Agency

Dear Mr. Christensen:

Thank you for the opportunity to review and comment on the draft report on the CSB’s 

compliance with the improper payments legislation for fiscal year (FY) 2014 and to 

follow up on FY 2013 improper payment audit findings and recommendations. We are 

pleased that you found CSB fully compliant with FY 2014 reporting requirements, and 

that you are closing two of three FY 2013 year recommendations. 

We are disappointed that you consider the following FY 2013 recommendation 

unresolved:

Ensure CSB’s payroll and benefits go through the [Do Not Pay] portal to comply 

with IPERIA. Also track and review improper payments to help prevent or 

eliminate future improper payments.

As we informed your staff, according to OMB the CSB’s payroll and benefit payments 

comply with the Do Not Pay initiative. We believe no further action is needed on this 

point. However, in order to resolve this issue with your office we contacted our 

personnel and payroll service provider and requested written confirmation that payroll 

and benefit payments comply with the Do Not Pay initiative. We expect a response to 

our request in April 2015.

As the CSB explained to your staff, we anticipate that our personnel and payroll service 

provider will make occasional clerical errors that are outside of CSB’s control. These 

provider errors would not be caught by any database in the Do Not Pay portal. CSB 
15-P-0153 9

catches these minor and infrequent errors by reconciling payroll data to budget 

projections. The evidence that these errors are infrequent is the Treasury Report on 

Receivables. We provided your staff with the end of year report for FY 2014, which 

shows the following improper payments for FY 2014:

Name Description Amount

Employee 1 Wrong locality pay for step increase $ 56 

Employee 2 Inadvertent rate change by IBC 303 

Employee 3 Wrong step processed when hired 542 

Total $ 901

While CSB believes there is little value in establishing a new tracking system to further 

support that there are infrequent payment problems we will keep a log of improper 

payments to resolve this issue with your office. If you or your staff have any questions 

about this response, please feel free to contact me at 202-261-7639.

Sincerely,

/S/

Anna M. Brown

Audit Liaison
15-P-0153 10

Appendix B

Distribution

Board Members, U.S. Chemical Safety and Hazard Investigation Board

Managing Director, U.S. Chemical Safety and Hazard Investigation Board

General Counsel, U.S. Chemical Safety and Hazard Investigation Board

Finance Director, U.S. Chemical Safety and Hazard Investigation Board

Communications Manager, U.S. Chemical Safety and Hazard Investigation Board

Director of Administration and Audit Liaison, U.S. Chemical Safety and Hazard 

Investigation Board