Audit Report

OIG-20-035

FINANCIAL MANAGEMENT

Audit of the Gulf Coast Ecosystem 

Restoration Council's Compliance with IPERA 

for Fiscal Year 2019

May 15, 2020

Office of Inspector General

Department of the Treasury
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Contents

Audit Report

Results in Brief ...................................................................................................1

Background........................................................................................................2

Audit Results......................................................................................................6

Appendices

Appendix 1: Objectives, Scope, and Methodology...................................................9

Appendix 2: Management Response....................................................................12

Appendix 3: Major Contributors to This Report.....................................................13

Appendix 4: Report Distribution..........................................................................14

Abbreviations

ARC Bureau of Fiscal Service, Administrative Resource Center

AFR Agency Financial Report

Council Gulf Coast Ecosystem Restoration Council

EO Executive Order

IPERA Improper Payments Elimination and Recovery Act of 2010

IPERIA Improper Payments Elimination and Recovery Improvement 

Act of 2012

IPIA Improper Payments Information Act of 2002

OIG Treasury Office of Inspector General

OMB Office of Management and Budget
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Audit of the Gulf Coast Ecosystem Restoration Council's Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 1

May 15, 2020

Ben Scaggs

Executive Director

Gulf Coast Ecosystem Restoration Council

This report presents the results of our audit of the Gulf Coast 

Ecosystem Restoration Council’s (Council) compliance with 

improper payment reporting requirements for fiscal year 2019. 

The objective of our audit was to assess and report on the 

Council’s overall compliance with requirements contained in the 

Improper Payments Elimination and Recovery Act of 2010 

(IPERA)1, enacted to help Federal agencies strengthen the 

framework for reducing and reporting improper payments. As part 

of our audit, we also assessed the Council’s compliance with 

additional improper payment reporting requirements set forth in 

Executive Order (EO) 13520, Reducing Improper Payments and 

Eliminating Waste in Federal Programs, and the Improper Payments 

Elimination and Recovery Improvement Act of 2012 (IPERIA).2 We 

conducted our fieldwork from February 2020 through May 2020 in 

Washington, DC. Appendix 1 contains a more detailed description 

of our objective, scope, and methodology.

Results in Brief

The Council was in compliance with all applicable IPERA reporting 

requirements. We determined that the Council complied with the 

requirement to publish its Agency Financial Report (AFR) and any 

accompanying material required by the Office of Management and 

Budget (OMB) on its website for fiscal year 2019. Although the 

Council's total program and activity expenditures exceeded 

 

1 Pub. L. No. 111-204, 124 Stat. (July 22, 2010)

2 Pub. L. No. 112-248, 126 Stat. (January 10, 2013)
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 2

$10 million, its total estimate for improper payments was less than 

1.5 percent. In addition, the Council did not have any programs 

susceptible to significant improper payments or any OMBdesignated high priority programs.

We reviewed the Council’s IPERA reporting process, risk 

assessment process and payment recapture audit program to 

determine the accuracy and completeness of the Council's 

improper payment reporting and found no matters of concern. We 

determined that the Council used a systematic method to review all 

programs and activities to identify those susceptible to significant 

improper payments. The Council also conducted program specific 

risk assessments and considered numerous factors in determining 

its programs’ risk for improper payment. In addition, the Council’s 

total improper payment rate for fiscal year 2019 was .02 percent. 

The improper payments were recaptured and there were no 

outstanding improper payments at the end of fiscal year 2019.

We make no recommendations in this report. 

As part of our reporting process, we provided a draft of this report 

to Council management for review and comment. In a written 

response, management stated that the Council will continue its 

activities to comply with the requirements of IPERA in fiscal year 

2020. Management’s response to our report is provided in 

appendix 2.

Background

Improper Payments Compliance and Reporting 

Requirements

Under the Improper Payments Information Act of 2002 (IPIA),3

Federal agencies were required to review and identify programs and 

activities susceptible to improper payments on an annual basis and 

report estimates of improper payments to Congress along with 

actions to reduce estimated improper payments that exceeded 

$10 million. 

 

3 Pub. L. No. 107-300, 116 Stat. (November 26, 2002)
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 3

In 2009, EO 13520 required Federal agencies to intensify their 

efforts to eliminate payment error, waste, fraud, and abuse in 

major Federal programs while continuing to ensure that these 

programs serve and provide access to their intended beneficiaries. 

It increased Federal agencies’ accountability and required that 

Federal agencies provide their agency Inspector General with 

detailed information on efforts to identify and reduce the number of 

improper payments in Federal programs with the highest dollar 

value of improper payments.

Following EO 13520, on July 22, 2010, the President signed 

IPERA into law. IPERA amended IPIA, strengthening agencies’ 

program reviews and reporting requirements. IPERA expanded the 

types of payments to be reviewed and established the requirement 

for agencies to conduct recovery audits if cost-effective. IPERA 

also required Inspectors General to report on their respective 

agencies’ compliance with IPERA each fiscal year.

IPERIA further expanded agency improper payment requirements to 

foster greater agency accountability. IPERIA requires the Director of 

OMB to identify a list of high priority Federal programs for greater 

levels of oversight and review. For those high priority programs, 

IPERIA requires OMB to coordinate with agencies to establish

annual targets and semi-annual or quarterly actions for reducing 

improper payments. For fiscal year 2019, the Council did not have 

any OMB-identified high priority programs. Agencies are required to 

submit an annual report to the Inspector General on actions 

(1) taken or planned to recover improper payments and 

(2) intended to prevent future improper payments. The report is 

also required to be available to the public on a central website.

In accordance with IPERIA and EO 13520, Offices of Inspector 

General (OIG) are required to review and report on their respective 

agencies’ OMB-designated high priority programs, if any. 

Specifically, OIGs are to review management’s assessment of the 

level of risk, the quality of the improper payment estimates and 

methodology, and the oversight and financial controls in place to 

identify and prevent improper payments. Recommendations, if any, 

are to be provided for modifying agency plans related to its high 

priority programs to include improvements for determining and 

estimating improper payments.
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 4

In Memorandum 15-02 dated October 20, 2014, OMB issued 

revisions to OMB Circular No. A-123, Appendix C, to provide 

agencies guidance on implementing all improper payment 

compliance and reporting requirements. In June 2018, OMB further 

revised the OMB guidance (OMB M-18-20) in an effort to transform 

the improper payment compliance framework to create a more 

unified, comprehensive, and less burdensome set of requirements.

According to OMB M-18-20, all agencies should institute a 

systematic method of reviewing all programs once every three 

years to determine the programs’ improper payment risk. 

Additionally, agencies are required to take into account the 

following seven risk factors that are likely to contribute to a 

susceptibility of significant improper payments:

 whether the program or activity reviewed is new to the agency;

 the complexity of the program or activity reviewed, particularly 

with respect to determining correct payment amounts;

 the volume of payments made annually;

 whether payment eligibility decisions are made outside of the 

agency;

 recent major changes in program funding, authorities, practices, 

or procedures;

 the level, experience, and quality of training for personnel 

responsible for making program eligibility determination or 

certifying that payments are accurate; and

 significant deficiencies in the audit reports of the agency or 

other relevant management findings that might hinder accurate 

payment certification.

Improper Payment Risk Assessment

The Council used a systematic method to review all programs and 

activities to identify those susceptible to significant improper 

payments. The programs of the Council assessed for risk are the 

Council-Selected Projects and Programs and the Oil Spill Impact 

Program. The Council's financial service provider, the Bureau of 

Fiscal Service, Administrative Resource Center (ARC) performed a 

qualitative risk assessment for all payment types. The Qualitative 

Risk Assessment Questionnaire was used to assess the level of risk 
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 5

for each payment type, such as payroll, contract payments and 

invoices, purchase card, travel card, relocation, claims and 

vouchers, entitlements and benefits and grants.

The Council also performed additional risk assessments related to 

grants. It requires every recipient of financial assistance to 

complete an Organizational Assessment, which is then evaluated 

and rated by the Council. For those recipients determined to be 

high risk, a 100 percent pre-audit of all payment requests prior to 

disbursement is required. As part of the risk review of each 

recipient, past audit reports are reviewed for significant 

deficiencies, or relevant management findings. 

The Council considered other risk factors in determining if the 

programs were likely to exceed 1.5 percent of all payments. 

Among the factors considered were the number of payments the 

Council had and the total amounts of all payments made. For fiscal 

year 2019, the Council did not have any programs or activities 

susceptible to significant improper payments. 

Payment Recapture Audit

IPERA requires agencies to conduct recovery audits (also referred 

to as payment recapture audits) to prevent, detect, and recover 

overpayments, if conducting such audits would be cost-effective, 

for each program and activity that expends $1 million or more 

annually. A payment recapture audit is a review and analysis of an 

agency’s or program’s accounting and financial records, and other 

pertinent information supporting its payments that is specifically

designed to identify overpayments. The Council's payment 

recapture audit is performed by ARC and reviewed and certified by 

the Council. In addition, the Council reviews all grant payments to 

confirm validity and accuracy of payments made and performs

payment recapture of any improper payments identified.

Improper Payment Reporting

The Council published its fiscal year 2019 AFR and posted it to its 

website. The Payment Integrity section of the report included the 

required improper payments information with the following 

accompanying information:
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 6

 programs assessed for risk;

 risk assessment and results;

 discussion of annual payment recapture audit and results;

 improper payment reduction outlook, including the Council’s 

improper payment estimate;

 improper payment root cause category; and

 discussion of the Do Not Pay initiative. 

Audit Results

According to OMB Circular A-123, an agency is required to meet 

six specific requirements to be compliant with IPERA. The six 

requirements are (1) publishing an AFR; (2) conducting a risk 

assessment; (3) publishing an improper payment estimate; 

(4) publishing corrective action plans; (5) publishing and meeting 

reduction targets; and (6) reporting a gross improper payment rate 

of less than 10 percent. We found that the Council complied with

IPERA for fiscal year 2019 as outlined in Table 1. 

Table 1. The Council's Compliance with IPERA Requirements

IPERA Requirements

Council Selected 

Projects and 

Programs

Oil Spill Impact 

Program

Publish an AFR Complied Complied

Conduct risk assessment Complied Complied

Publish in improper payment 

estimate Not Required* Not Required*

Publish corrective action plans Not Required* Not Required*

Publish and meet reduction targets Not Required* Not Required*

Report an improper payment rate 

of less than 10 percent Complied Complied

Source: OIG’s assessment of Council’s compliance with IPERA requirements. 

* Not susceptible to significant improper payments
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 7

We reviewed the Council’s AFR and noted that the Council 

included the required improper payment disclosures and complied 

with the requirement to publish its AFR on its website. We also 

noted that the Council included a link to the paymentaccuracy.gov 

website for additional detailed information on improper payments.

We reviewed the procedures performed by the Council and the 

supporting documentation related to its improper payment 

reporting. We also reviewed procedures performed by ARC as part 

of its responsibilities in performing the risk assessment and 

payment recapture audit on behalf of the Council. Specifically, we 

reviewed the Council’s supporting documentation related to its risk 

assessment and payment recapture audit to determine if they were 

performed for fiscal year 2019. 

We noted that ARC performed the qualitative risk assessment that 

resulted in a low-risk rating for the Council’s overall fund group.

The Council also considered other factors in determining if 

programs were susceptible to improper payments. These factors 

include the number and amounts of payments made by the Council 

and the grant recipients’ risk rating. We also noted that Council 

officials reviewed and certified the risk assessment performed by 

ARC. 

ARC performed the payment recapture audit on behalf of the 

Council and identified 1 out of 404 payments as overpayments. In 

addition, the Council identified one grant overpayment that was 

immediately recaptured. The total dollar value of improper 

payments was $4,343.60, which is .02 percent of total payments 

made. The Council recaptured the full amount with no outstanding 

erroneous or improper payments at the end of fiscal year 2019.

The Council's total program and activity expenditures were less 

than the threshold4for significant improper payments and reporting 

requirements specified in OMB M-18-20. Additionally, the Council 

did not have any programs or activities susceptible to significant 

improper payments or OMB-designated high priority programs. 

Although the total amount of the Council expenditures for non-

 

4 The total amount of overpayments and underpayments in the program exceeding (1) both 

1.5 percent of program outlays and $10,000,000 of all program or activity payments made during 

the fiscal year reported or (2) $100,000,000 (regardless of the improper payment percentage of total 

program outlays).
Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 8

federal persons, non-federal entities, and federal employees totaled 

$27.2 million in fiscal year 2019, the total estimate for improper 

payments was .02 percent, which is significantly below the 

threshold for significant improper payment. As a result, the Council 

was not required to publish improper payments estimates or 

programmatic corrective action plans in the AFR. The Council was 

also not required to publish and meet annual reduction targets and 

estimates for improper payment. The Council did publish an 

improper payment rate of less than 10 percent for each program 

and activity in the AFR in compliance with the IPERA requirements.

The Council was in compliance with all applicable IPERA reporting 

requirements. Accordingly, we make no recommendations in this 

report.

We provided a draft of this report to Council management for 

review and comment. In a written response, management stated

that the Council will continue its activities to comply with the 

requirements of IPERA in fiscal year 2020. Management’s response 

is provided in its entirety in appendix 2.

* * * * * *

We appreciate the courtesies and cooperation extended by your 

staff during the audit. If you wish to discuss the report, you may 

contact me at (202) 927-0009 or Shiela Michel, Audit Manager, at 

(202) 927-5407. Major contributors to this report are listed in 

appendix 3. A distribution list for this report is provided as 

appendix 4.

/s/

James Hodge

Audit Director, Financial Audit 

Appendices
Audit of the Gulf Coast Ecosystem Restoration Council's Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 9

Appendix 1: Objectives, Scope, and Methodology

The overall objective of our audit was to determine whether the 

Gulf Coast Ecosystem Restoration Council (Council) complied with 

the improper payment reporting requirements for fiscal year 2019. 

We assessed the Council's compliance with the reporting 

requirements set forth in the Improper Payments Elimination and 

Recovery Act of 2010 (IPERA); Executive Order 13520, Reducing 

Improper Payments and Eliminating Waste in Federal Programs; and 

the Improper Payment Elimination and Recovery Improvement Act 

of 2012 (IPERIA). 

The scope of our audit covered the time period October 1, 2018 

through September 30, 2019. 

To accomplish our objective, we performed the following activities 

during audit fieldwork conducted from February 2020 through May 

2020:

 We reviewed applicable laws, regulations, and guidance issued 

by the Office of Management and Budget (OMB), and the 

Council's supporting documentation for its improper payment 

reporting. 

 We conducted interviews of the Council’s personnel responsible 

for the improper payments reporting.

 We reviewed the fiscal year 2019 Annual Financial Report (AFR)

and any accompanying information to assess whether the 

Council had:

o published an AFR for the most recent fiscal year and 

posted that report and any accompanying materials 

required by OMB on the Council's website;

o conducted a program specific risk assessment for each 

program or activity that conforms with IPERIA, if 

required;

o 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 

AFR, if required;
Appendix 1: Objectives, Scope, and Methodology

Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 10

o published, and is meeting, annual reduction targets for 

each program assessed to be at risk and estimated for 

improper payments, if required and applicable; and

o 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 AFR. 

 To assess the Council’s risk assessment process, we reviewed 

supporting documentation to determine the completeness and 

accuracy of the information reported and compliance with 

applicable guidance. We interviewed Council officials involved in 

the risk assessment and review process as well as provided

them with an Office of Inspector General questionnaire and 

used their responses to evaluate their risk assessment 

methodologies.

 To assess the Council’s payment recapture audit program, we 

reviewed the results of the Council’s payment recapture audit 

along with the supporting documentation to determine the 

completeness and accuracy of the information reported and 

compliance with applicable guidance. We also reviewed the 

audit results along with its supporting documentation to 

determine if the Council (1) had internal controls in place to 

prevent, detect, and recover overpayments; (2) performed 

payment recapture audit of all non-federal and federal employee 

payments administered; (3) recaptured all overpayments made; 

and (4) disposed of recovered funds in accordance with OMB 

guidance. In order to make this determination, we also obtained 

evidence through the Council’s responses to our questionnaire 

and our interviews with personnel. 

We assessed the reliability of the improper payment data by 

(1) performing electronic testing, (2) reviewing existing information 

about the data and the system that produced them, and 

(3) interviewing Council officials knowledgeable about the data. We 

determined that the data were sufficiently reliable for the purposes 

of this report. 

We assessed the Council's internal controls and compliance with 

policies and procedures necessary to satisfy the audit objective. In 

particular, we determined that the Council’s use of a financial 

services provider to perform risk assessment and payment 
Appendix 1: Objectives, Scope, and Methodology

Audit of the Gulf Coast Ecosystem Restoration Council’s Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 11

recapture audits and its monitoring and certification activities were 

significant to the Council’s improper payment reporting.

We assessed whether internal controls are properly designed and 

implemented through walkthroughs. In addition, we tested the 

operating effectiveness of the internal controls by reviewing and 

inspecting relevant documents and data. However, because our 

review was limited to these internal control components and 

underlying principles, it may not have disclosed all internal control 

deficiencies that may have existed at the time of this audit.

We conducted this performance audit in accordance with generally 

accepted government auditing standards. 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 objectives.
Audit of the Gulf Coast Ecosystem Restoration Council's Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 12

Appendix 2: Management Response
Audit of the Gulf Coast Ecosystem Restoration Council's Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 13

Appendix 3: Major Contributors to This Report

Shiela Michel, Audit Manager

Rufus Etienne, Auditor

Gerald Kelly, Referencer
Audit of the Gulf Coast Ecosystem Restoration Council's Compliance 

with IPERA for Fiscal Year 2019 (OIG-20-035) 14

Appendix 4: Report Distribution

Gulf Coast Ecosystem Restoration Council

Chairperson

Executive Director

Chief Financial Officer

Department of the Treasury

Deputy Secretary

Under Secretary for Domestic Finance

Fiscal Assistant Secretary

Deputy Assistant Secretary, Fiscal Operations and Policy

Office of Management and Budget

Controller, Office of Federal Financial Manager

OIG Budget Examiner

U.S. Senate 

Chairman and Ranking Member 

Committee on Homeland Security and Governmental Affairs

U.S. House of Representatives

Chairman and Ranking Member 

Committee on Oversight and Reform

U.S. Government Accountability Office

Comptroller General of the United States
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REPORT WASTE, FRAUD, AND ABUSE

Treasury OIG Hotline: 1-800-359-3898

Hotline@oig.treas.gov

Gulf Coast Restoration Hotline: 1-855-584.GULF (4853)

gulfcoastrestorationhotline@oig.treas.gov

Access Treasury OIG reports and other information online: 

www.treasury.gov/about/organizational-structure/ig