DISASTER RELIEF

Agencies Need to 

Improve Policies and 

Procedures for 

Estimating Improper 

Payments

Report to the Committee on 

Appropriations, House of 

Representatives

February 2015

GAO-15-209

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-209, a report to the 

Committee on Appropriations, House of 

Representatives

February 2015

DISASTER RELIEF

Agencies Need to Improve Policies and Procedures 

for Estimating Improper Payments

Why GAO Did This Study

DRAA provided approximately 

$50 billion in supplemental 

appropriations, before sequestration, to 

19 federal agencies for expenses 

related to Hurricane Sandy and other 

purposes. DRAA deemed all programs 

and activities receiving appropriations 

under the act as susceptible to 

significant improper payments, making 

such appropriations subject to 

improper payment estimation 

requirements established in law and 

through OMB guidance. 

GAO was asked to review agencies’ 

efforts to estimate improper payments 

for expenses related to Hurricane 

Sandy. For DRAA funds, this report 

(1) describes how selected agencies 

estimated and reported improper 

payments and (2) determines the 

extent to which selected agencies 

developed policies and procedures for 

estimating improper payments. GAO

reviewed the Departments of 

Homeland Security, Housing and 

Urban Development, and

Transportation; the U.S. Army Corps of 

Engineers; and the Small Business 

Administration, which collectively 

received most of the DRAA funds. 

GAO reviewed sampling plans, 

evaluated agencies' policies and 

procedures, and conducted interviews 

with officials at these agencies and 

OMB. 

What GAO Recommends

GAO is making recommendations to 

four of the five agencies to either 

develop or revise their policies and 

procedures for estimating improper 

payments for DRAA funds. These four 

agencies generally agreed with GAO’s 

recommendations and cited plans for 

implementing them.

What GAO Found

The five agencies GAO reviewed used a variety of approaches to estimate and 

report improper payments related to Disaster Relief Appropriations Act, 2013 

(DRAA) funding, in accordance with Office of Management and Budget (OMB) 

guidance. Specifically, these agencies, which received approximately 94 percent 

of the $50 billion provided by DRAA, used various approaches regarding the 

following:

• Estimate presentation. Some agencies reported separate estimates for 

DRAA funding, while others developed one combined improper payment 

estimate that also included non-DRAA funding. 

• Estimate methodology. Agencies used statistical sampling methodologies, 

used alternative (nonstatistical) sampling methodologies, or tested 100 

percent of DRAA-funded payments to estimate improper payments for DRAA 

funding. 

• Time period of estimate. Agencies used different time periods (or sampling 

windows) of the underlying transactions that were tested to develop improper 

payment estimates, such as October 2012 through September 2013 or April 

2013 through March 2014. 

The five agencies GAO reviewed had developed policies and procedures to 

guide their processes for estimating improper payments for 21 of 22 programs. 

However, GAO found that the agencies’ policies and procedures did not address 

all key requirements from relevant laws, guidance, and Standards for Internal 

Control in the Federal Government. For example, GAO found the following: 

• Ten of the 22 programs did not have policies and procedures that included 

key quality assurance procedures, such as reconciliations, to validate that 

the populations of transactions were complete and accurate before selecting 

the samples used to estimate improper payments. Standards for Internal 

Control in the Federal Government states that control activities, such as 

reconciliations, are an integral part of an entity’s planning, implementing, 

reviewing, and accountability for stewardship of government resources and 

achieving effective results. 

• Fourteen of the 22 programs did not have policies and procedures that

included a requirement to maintain sufficient documentation to support their 

improper payment estimates as required by OMB guidance. Standards for 

Internal Control in the Federal Government also states that internal controls 

and all transactions and other significant events need to be clearly 

documented, and that the documentation should be readily available for 

examination and properly managed and maintained. 

During the audit, one of the five agencies addressed the deficiencies that GAO 

identified. If key requirements for estimating improper payments are not 

documented in policies and procedures, agencies face an increased risk that 

their estimation processes as designed will not comply with the provisions of 

relevant laws and regulations or consistently produce reliable estimates that can 

View GAO help agencies improve stewardship of taxpayer dollars. -15-209. For more information, 

contact Beryl H. Davis at (202) 512-2623 or 

davisbh@gao.gov. 
Page i GAO-15-209 Hurricane Sandy Improper Payments

Letter 1 

Background 3

Agencies Used a Variety of Approaches for Estimating and 

Reporting Improper Payments for Disaster Relief Funding 9

Agencies’ Policies and Procedures Did Not Address All Key 

Requirements for Estimating Improper Payments for Disaster 

Relief Funding 11

Conclusions 28

Recommendations for Executive Action 28

Agency Comments and Our Evaluation 31

Appendix I Scope and Methodology 33

Appendix II Selected Agencies’ Fiscal Year 2014 Improper Payment Estimates 

for Disaster Relief Funds 36

Appendix III Full Text for Figure 4 38

Appendix IV Comments from the Department of Housing and Urban 

Development 48

Appendix V Comments from the Department of Transportation 50

Appendix VI Comments from the Department of Homeland Security 51

Appendix VII Comments from the U.S. Army Corps of Engineers 53

Appendix VIII Comments from the Small Business Administration 56

Contents
Page ii GAO-15-209 Hurricane Sandy Improper Payments

Appendix IX GAO Contact and Staff Acknowledgments 59

Tables

Table 1: Ten Key Requirements for Estimating Improper 

Payments 11

Table 2: Summary of Department of Housing and Urban 

Development Policies and Procedures for Estimating 

Improper Payments for Disaster Relief Funds 15

Table 3: Summary of Department of Transportation Policies and 

Procedures for Estimating Improper Payments for 

Disaster Relief Funds by Program 17

Table 4: Summary of Department of Homeland Security Policies 

and Procedures for Estimating Improper Payments for 

Disaster Relief Funds by Program 21

Table 5: Summary of U.S. Army Corps of Engineers Policies and 

Procedures for Estimating Improper Payments for 

Disaster Relief Funds by Program 24

Table 6: Summary of Small Business Administration Policies and 

Procedures for Estimating Improper Payments for 

Disaster Relief Funds by Program 26

Table 7: Selected Agencies’ Fiscal Year 2014 Improper Payment 

Estimates for Disaster Relief Funds 36

Figures

Figure 1: Distribution of Appropriations Provided by the Disaster 

Relief Appropriations Act, 2013 4

Figure 2: Improper Payment Estimation and Reporting Process 6

Figure 3: Agencies’ Approaches for Estimating Improper 

Payments Related to Disaster Relief Appropriations Act, 

2013, Funds in Their Fiscal Year 2014 Agency Financial 

Reports 10

Figure 4: Summary of the Selected Agencies’ Policies and 

Procedures for Estimating Disaster Relief Improper 

Payments 13

Figure 5: Full Text for Figure 4 – Key Requirement 1 38

Figure 6: Full Text for Figure 4 – Key Requirement 2 39

Figure 7: Full Text for Figure 4 – Key Requirement 3 40

Figure 8: Full Text for Figure 4 – Key Requirement 4 41
Page iii GAO-15-209 Hurricane Sandy Improper Payments

Figure 9: Full Text for Figure 4 – Key Requirement 5 42

Figure 10: Full Text for Figure 4 – Key Requirement 6 43

Figure 11: Full Text for Figure 4 – Key Requirement 7 44

Figure 12: Full Text for Figure 4 – Key Requirement 8 45

Figure 13: Full Text for Figure 4 – Key Requirement 9 46

Figure 14: Full Text for Figure 4 – Key Requirement 10 47

Abbreviations

AFR agency financial report

CBP Customs and Border Protection

CDBG-DR Community Disaster Block Grants – Disaster Recovery

DHS Department of Homeland Security

DOD Department of Defense

DOT Department of Transportation

DRAA Disaster Relief Appropriations Act, 2013

FAA Federal Aviation Administration

FEMA Federal Emergency Management Agency

FHWA Federal Highway Administration

FRA Federal Railroad Administration

FTA Federal Transit Administration

HUD Department of Housing and Urban Development

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

NPPD National Protection and Programs Directorate

OED Office of Entrepreneurial Development

OMB Office of Management and Budget

SBA Small Business Administration

SOP standard operating procedure

USACE U.S. Army Corps of Engineers

USCG U.S. Coast Guard

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-15-209 Hurricane Sandy Improper Payments

441 G St. N.W.

Washington, DC 20548

February 27, 2015

The Honorable Harold Rogers

Chairman

The Honorable Nita M. Lowey

Ranking Member

Committee on Appropriations

House of Representatives

In late October 2012, Hurricane Sandy devastated portions of the midAtlantic and northeastern United States, leaving victims of the storm and 

their communities in need of immediate disaster relief aid. On January 29, 

2013, the President signed the Disaster Relief Appropriations Act, 2013 

(DRAA),1 which included approximately $50 billion in supplemental 

appropriations to 19 federal agencies for expenses related to the 

consequences of Hurricane Sandy and other purposes.2 DRAA states 

that all funds received under the act are deemed “susceptible to 

significant improper payments” for purposes of the Improper Payments 

Information Act of 2002 (IPIA), as amended,3

You asked us to review agencies’ efforts to estimate improper payments 

for expenses related to Hurricane Sandy for fiscal year 2014 and beyond. 

Our objectives were to (1) describe how selected agencies estimated and 

which requires agencies to 

estimate improper payments for these funds.

 

1

Pub. L. No. 113-2, div. A, 127 Stat. 4 (Jan. 29, 2013). 

2

Some agencies received funding for disaster-related programs that could be used for 

expenses related to other disasters in addition to Hurricane Sandy.

3

IPIA, Pub. L. No. 107-300 (Nov. 26, 2002), as amended by the Improper Payments 

Elimination and Recovery Act of 2010, Pub. L. No. 111-204 (July 22, 2010), and the 

Improper Payments Elimination and Recovery Improvement Act of 2012, Pub. L. No. 112-

248 (Jan. 10, 2013) (IPIA, as amended), and codified as amended at 31 U.S.C. § 3321 

note. An improper payment is defined by statute 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.
 

Page 2 GAO-15-209 Hurricane Sandy Improper Payments

reported improper payments related to DRAA funding in their fiscal year 

2014 annual reporting and (2) determine the extent to which selected 

agencies developed policies and procedures that addressed key 

requirements for estimating improper payments. 

The five agencies we selected for our review included (1) the four 

agencies that received the most DRAA funding—the Departments of 

Housing and Urban Development (HUD), Transportation (DOT), and 

Homeland Security (DHS); and the U.S. Army Corps of Engineers 

(USACE)4

—and (2) the Small Business Administration (SBA) because of 

the amount of DRAA funds it received and the high improper payment 

error rate it reported for its Disaster Assistance Loans program.5

To address our objectives, we reviewed the agencies’ sampling plans; 

evaluated the agencies’ improper payment policies and procedures for 

disaster relief appropriations to determine whether they addressed key 

requirements for estimating improper payments; and interviewed officials 

at the selected agencies and the Office of Management and Budget 

(OMB), which provides guidance to executive agencies on the estimation 

and reporting of improper payments.

Collectively, these five agencies received approximately 94 percent of the 

total DRAA funding and planned to estimate improper payments related 

to these funds for 22 programs. 

6

 

4

USACE is a component of the Department of the Army. For purposes of this report, we 

treat USACE as an agency.

Our review assessed the design of 

5

SBA reported an error rate of 18.4 percent for the Disaster Assistance Loans program in 

fiscal year 2013, the latest year available when we began our review. For fiscal year 2014, 

SBA reported an error rate of 12.0 percent. 

6

We identified relevant key requirements for estimating improper payments by reviewing 

IPIA, as amended, and Appendix C to OMB Circular No. A-123, Requirements for 

Effective Measurement and Remediation of Improper Payments. See Office of 

Management and Budget, Issuance of Revised Parts I and II to Appendix C of OMB 

Circular A-123, OMB Memorandum M-11-16 (Washington, D.C.: Apr. 14, 2011) (M-11-16). 

M-11-16 has been superseded by Office of Management and Budget, Appendix C to 

Circular No. A-123, Requirements for Effective Estimation and Remediation of Improper 

Payments, OMB Memorandum M-15-02 (Washington, D.C.: Oct. 20, 2014) (M-15-02) but 

was the applicable guidance during the period examined in our audit. Hereinafter, all 

references to Appendix C pertain to M-11-16 unless specifically indicated otherwise. In 

addition, we reviewed GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999) (GAO/AIMD-00-21.3.1) to 

identify key controls necessary to help provide reasonable assurance that the reported 

improper payment information is reliable.
 

Page 3 GAO-15-209 Hurricane Sandy Improper Payments

the policies and procedures developed to guide the preparation of these 

estimates. We did not test the implementation of the agency policies and 

procedures and therefore cannot report whether the improper payment 

estimates reported in agencies’ fiscal year 2014 agency financial reports 

(AFR) are reliable.7

We conducted this performance audit from April 2014 to February 2015 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.

Appendix I provides further details on our scope and 

methodology.

DRAA included approximately $50 billion, prior to sequestration,8

 

7

An AFR is a report on an agency’s end of fiscal year financial position and financial 

activity for the year that includes, but is not limited to, financial statements, notes on the 

financial statements, and an independent auditor’s report.

in 

supplemental appropriations to 19 agencies for expenses related to the 

consequences of Hurricane Sandy and other purposes. Figure 1 shows 

the total distribution of disaster relief funding by agency, prior to 

sequestration.

8

Sequestration is the cancellation of budgetary resources provided by discretionary 

appropriations or direct spending laws. Under the authority granted by section 251A of the 

Balanced Budget and Emergency Deficit Control Act of 1985, as amended, OMB 

determined that DRAA appropriations were to be included in the fiscal year 2013 base 

subject to sequestration. See 2 U.S.C. § 901a; Office of Management and Budget, OMB 

Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013 

(Washington, D.C.: Mar. 1, 2013); and GAO, March 1 Joint Committee Sequestration for 

Fiscal Year 2013, B-324723 (Washington, D.C.: July 31, 2013). 

Background

Disaster Relief 

Appropriations Act, 2013
 

Page 4 GAO-15-209 Hurricane Sandy Improper Payments

Figure 1: Distribution of Appropriations Provided by the Disaster Relief 

Appropriations Act, 2013

According to Recovery.gov, agencies had paid out approximately 

$11.5 billion in DRAA funds as of September 30, 2014.9

DRAA included improper payment reporting requirements with respect to 

programs and activities receiving funds under the act. Specifically, DRAA 

states that all funds received under the act are deemed “susceptible to 

significant improper payments” for purposes of IPIA, which requires 

agencies to estimate improper payments for all funds that are determined 

to be susceptible. OMB also issued OMB Memorandum No. M-13-07 (M-

 

9

Recovery.gov displays information reported by agencies about federal funds distributed 

under the American Recovery and Reinvestment Act of 2009 and DRAA. Of the 

$11.5 billion, the five agencies we reviewed had paid out approximately $11.0 billion. See 

app. II for information on the improper payment estimates reported by these five agencies 

in their fiscal year 2014 reporting.
 

Page 5 GAO-15-209 Hurricane Sandy Improper Payments

13-07), Accountability for Funds Provided by the Disaster Relief 

Appropriations Act, in March 2013 to provide an overview of the 

requirements for all programs funded under DRAA, including the improper 

payment protocol agencies were to follow.10 M-13-07 states that agencies 

have several options when conducting their improper payment testing for 

DRAA-funded programs in order to implement improper payment 

measurements in a cost-effective manner. For example, M-13-07 

provides that after consultation with OMB, agencies may group DRAAfunded programs and activities together in a reasonable and appropriate 

manner to decrease the number of required improper payment 

measurements reported. In addition, M-13-07 states that agencies can 

leverage existing resources and processes already devoted to improper 

payment-related activities.

IPIA—as amended by the Improper Payments Elimination and Recovery 

Act of 2010 (IPERA) and the Improper Payments Elimination and 

Recovery Improvement Act of 2012 (IPERIA)—requires federal executive 

branch agencies to (1) review all programs and activities and identify 

those that may be susceptible to significant improper payments,11

 

10Office of Management and Budget, Accountability for Funds Provided by the Disaster 

Relief Appropriations Act, OMB Memorandum No. M-13-07 (Washington, D.C.: Mar. 12, 

2013). In November 2013, we reported that several weaknesses limited the effectiveness 

of OMB’s guidance in providing a comprehensive oversight mechanism for DRAA funds. 

See GAO, Hurricane Sandy Relief: Improved Guidance on Designing Internal Control 

Plans Could Enhance Oversight of Disaster Funding, 

 

(2) estimate the annual amount of improper payments for susceptible 

programs and activities, (3) implement actions to reduce improper 

payments and set reduction targets, and (4) report on the results of 

addressing the foregoing requirements. Improper payment estimates can 

be a critical program management tool for understanding and addressing 

financial vulnerabilities. Effective in January 2013, IPERIA amended the 

definition of “payment” in IPIA to explicitly include payments to federal 

employees, such as salary pay, locality pay, travel pay, and purchase 

GAO-14-58 (Washington, D.C.: 

Nov. 26, 2013). 

11For fiscal year 2014 and beyond, “significant improper payments” is defined as gross 

annual improper payments in the program that may have exceeded (1) both 1.5 percent of 

program outlays and $10 million of all program or activity payments during the fiscal year 

reported or (2) $100 million (regardless of the percentage of outlays).

Improper Payment 

Estimation Process and 

Legislative Requirements
 

Page 6 GAO-15-209 Hurricane Sandy Improper Payments

card use.12

Figure 2: Improper Payment Estimation and Reporting Process

Figure 2 shows the improper payment estimation and 

reporting process.

To carry out the improper payment estimation process, OMB’s 

government-wide improper payment guidance and Standards for Internal 

Control in the Federal Government provide government agencies with 

additional criteria they should follow to help ensure that the reported 

improper payment information is reliable.

On April 14, 2011, OMB issued government-wide guidance, OMB 

Memorandum M-11-16 (M-11-16), Issuance of Revised Parts I and II to 

Appendix C of OMB Circular A-123, that agencies were required to follow 

in implementing the improper payment requirements in IPIA, as amended 

by IPERA.13

• consult with a statistician to ensure the validity of sample design, 

sample size, and measurement methodology;

Among other things, OMB’s improper payment guidance 

clarified the definition of improper payments and required agencies to

 

12IPERIA, Pub. L. No. 112-248, 126 STAT. 2390, 2391 (Jan. 10, 2013); 31 U.S.C. § 3321 

note.

13See M-11-16. In October 2014, OMB issued a revision to its improper payment guidance 

(M-15-02), as required by IPERIA. Because M-15-02 was issued after fiscal year 2014, we 

used M-11-16 to evaluate agencies’ policies and procedures. However, the items we 

identify from M-11-16 remain in effect in M-15-02. 

Guidance for 

Implementing Improper 

Payment Requirements

OMB’s Improper 

Payment Guidance
 

Page 7 GAO-15-209 Hurricane Sandy Improper Payments

• meet certain precision requirements for programs using statistical 

sampling methodologies;14

• obtain OMB approval prior to the implementation of alternative 

(nonstatistical) sampling methodologies; and

• maintain sufficient documentation to support improper payment 

estimates.

OMB’s guidance also provided direction on other improper payment 

requirements, including conducting risk assessments, determining the 

root causes of improper payments, setting improper payment reduction 

targets, developing corrective action plans, and reporting on improper 

payments in the agency’s AFR.

Standards for Internal Control in the Federal Government provides the 

overall framework for establishing and maintaining internal control across 

the federal government and for identifying and addressing major 

performance and management challenges and areas at greatest risk of 

fraud, waste, abuse, and mismanagement.15

Standards for Internal Control in the Federal Government states that

Standards for Internal 

Control in the Federal Government states that internal controls comprise 

the plans, methods, and procedures used to meet missions, goals, and 

objectives. To achieve this, management is responsible for developing 

the detailed policies, procedures, and practices to fit the agency’s 

operations and to ensure that they are built into and are an integral part of 

operations.

• a good internal control environment requires that the agency’s 

organizational structure clearly define key areas of authority and 

responsibility;

• control activities, such as quality assurance processes and 

appropriate documentation of transactions and internal control, are an 

integral part of an entity’s planning, implementing, reviewing, and 

 

14Appendix C to OMB Circular No. A-123 requires the sample methodologies for the 

testing of improper payments to have a precision of (1) a 90 percent confidence interval of 

plus or minus 2.5 percentage points or (2) a 95 percent confidence internal of plus or 

minus 3 percentage points around the estimate of the percentage of improper payments.

15GAO/AIMD-00-21.3.1. 

Standards for Internal Control 

in the Federal Government
 

Page 8 GAO-15-209 Hurricane Sandy Improper Payments

accountability for stewardship of government resources, and 

achieving effective results;

• control activities help ensure that all transactions are completely and 

accurately recorded, and that only valid transactions and other events 

are initiated or entered into, in accordance with management’s 

decisions and directives; and

• internal controls need to be clearly documented, and the 

documentation should be readily available for examination and 

properly managed and maintained.

In this context, because DRAA funds were deemed to be susceptible to 

significant improper payments and the related procedures for testing and 

estimating improper payments are key steps to achieve desired results 

through effective stewardship of public resources, agencies should

• clearly identify roles and responsibilities of those involved in preparing 

and reviewing improper payment estimates;

• perform key quality assurance processes, such as reconciliations, to 

ensure that populations of transactions are accurate and complete 

prior to testing for improper payments;

• provide sufficient procedures for determining an error and what 

documentation is necessary to substantiate payment; and

• have procedures in place to collect and maintain key supporting 

documentation needed to substantiate the improper payment 

estimates.

For improper payment estimates, policies and procedures help ensure 

that program officials align their annual estimation processes with 

applicable laws and requirements, as noted above, and that the improper 

payment information and error rates that are reported are reliable.
 

Page 9 GAO-15-209 Hurricane Sandy Improper Payments

The five agencies we reviewed used a variety of approaches for 

estimating and reporting on improper payments related to DRAA funds in 

their fiscal year 2014 AFRs. M-13-07 allowed agencies several options for 

estimating and reporting improper payments for DRAA funding. 

Consequently, as demonstrated in figure 3, agencies used a variety of 

approaches across the 22 programs we reviewed with respect to the 

following attributes:

• Estimate presentation. The agencies we reviewed used two 

approaches for testing and reporting improper payments: (1) testing 

and reporting improper payments for DRAA funding as separate 

estimates or (2) grouping DRAA funding with other funding sources 

and developing one combined improper payment estimate.

• Estimate methodology. The agencies we reviewed used three 

different types of sampling methodologies to estimate DRAA improper 

payments: (1) statistical sampling methodologies, (2) alternative 

(nonstatistical) sampling methodologies approved by OMB, or 

(3) testing 100 percent of DRAA-funded payments.

• Time period of estimate. The agencies we reviewed used different 

time periods (or sampling windows) of the underlying transactions 

tested to develop improper payment estimates, such as October 2012 

through September 2013 or April 2013 through March 2014.

Agencies Used a 

Variety of Approaches 

for Estimating and 

Reporting Improper 

Payments for 

Disaster Relief 

Funding
 

Page 10 GAO-15-209 Hurricane Sandy Improper Payments

Figure 3: Agencies’ Approaches for Estimating Improper Payments Related to Disaster Relief Appropriations Act, 2013, 

Funds in Their Fiscal Year 2014 Agency Financial Reports
 

Page 11 GAO-15-209 Hurricane Sandy Improper Payments

Although agencies had several options for conducting improper payment 

testing for funding under DRAA, they were responsible for developing 

policies and procedures to guide the process they chose to use. We 

reviewed the criteria in IPIA, as amended; Appendix C to OMB Circular 

No. A-123; and Standards for Internal Control in the Federal Government

and identified 10 key requirements, as shown in table 1, that could affect 

the quality and reliability of improper payment estimates.16 

Table 1: Ten Key Requirements for Estimating Improper Payments

Key requirement Source of key requirement

The agency should develop policies and procedures for estimating improper payments related to 

the Disaster Relief Appropriations Act, 2013.

Federal internal control standards

Those policies and procedures should include the following:

Clearly identified roles and responsibilities for estimating improper payments. Federal internal control standards

A definition of improper payments consistent with the Improper Payments Information Act of 

2002 (IPIA), as amended, and Office of Management and Budget (OMB) Circular No. A-123, 

Appendix C (Appendix C).

IPIA, as amended, and 

Appendix C

A requirement for payments to federal employees to be included in populations for testing as 

required by IPIA, as amended.

IPIA, as amended

Steps to assess the completeness of the population of transactions used for selecting the 

samples to be tested.

Federal internal control standards

Sufficient procedures for determining an error and what documentation is necessary to 

substantiate payment.

Federal internal control standards

A requirement for the agency to maintain sufficient documentation to support improper payment

estimates.

Appendix C and federal internal 

control standards

If the agency is using a statistical methodology, a requirement that the sampling methodologies 

meet the precision requirements outlined in Appendix C.

Appendix C

If the agency is using a statistical methodology, a requirement for a consultation with a 

statistician to ensure the validity of sample design, sample size, and measurement methodology.

Appendix C

If the agency is using an alternative methodology, a requirement for the agency to obtain OMB 

approval prior to the implementation of its alternative sampling methodology.

Appendix C

Source: GAO analysis of IPIA, as amended; Appendix C to OMB Circular No. A-123; and federal internal control standards. | GAO-15-209

 

16This report uses “key requirements” to convey the criteria that we selected for evaluating 

the design of policies and procedures. For further details on our methodology, see app. I. 

Agencies’ Policies 

and Procedures Did 

Not Address All Key 

Requirements for 

Estimating Improper 

Payments for 

Disaster Relief 

Funding
 

Page 12 GAO-15-209 Hurricane Sandy Improper Payments

The agencies we reviewed had developed policies and procedures to 

guide their processes for estimating improper payments for most 

programs. However, we found that these policies and procedures did not 

address all of the key requirements.

The five agencies we reviewed had documented policies and procedures 

for estimating disaster relief improper payments for 21 of 22 programs. 

One program did not have policies and procedures for estimating 

improper payments for disaster relief funding, which is discussed later in 

this report. As shown in figure 4, an interactive graphic, none of these 

agencies had policies and procedures that sufficiently addressed all of the 

key requirements for estimating improper payments. See appendix III for 

the full text of figure 4.

Deficiencies Were 

Found across the 

Policies and Procedures 

at All Five Agencies
Page 13 GAO-15-209 Hurricane Sandy Improper Payments

Figure 4: Summary of Selected Agencies’ Policies and Procedures for Estimating Disaster Relief Improper Payments

Source: GAO analysis of agencies’ policies and procedures. | GAO-15-209

Responses by program

Roll over a number below to see Key requirement

key requirement, response totals,

and responses by program

1 2 3 4 5

6 7 8 9 10 Response totals (Number of programs)

Yes (Y)

No (N)

Partially (P)

Not applicable (N/A)

Department of

Transportation

Department of

Housing and Urban

Development

Department of

Homeland Security

U.S. Army

Corps of

Engineers

Small

Business

Administration

FEMA - Hurricane Sandy Payroll

FEMA - Government Charge Card

Travel Pay

Commercial Pay

Office of Entrepreneurial Development Grants

Disaster Assistance Loans

Federal Highway Administration (FHWA) - Emergency Relief - Hurricane Sandy

FHWA - Federal - Aid Grants

Federal Transit Administration - Public Transit

Federal Railroad Administration - Grants

 Emergency Relief - Disaster Relief Act

to the National Railroad Passenger Corporation - Disaster Relief Act

Federal Aviation Administration - Facilities and Equipment - Disaster Relief Act

Community Development Block Grants - Disaster Recovery

Customs and Border Protection -

Hurricane Sandy

FEMA - Hazard Mitigation Grants

FEMA - Urban Search and Rescue

FEMA - Public Assistance

FEMA - Individuals and Households -

Hurricane Sandy

U.S. Coast Guard - Hurricane Sandy

FEMA - Disaster Relief Fund Travel Payments

FEMA - Vendor Payments

National Protection and Programs

 Directorate - Hurricane Sandy

Federal Emergency Management Agency

 (FEMA) - Disaster Case Management
 

Page 14 GAO-15-209 Hurricane Sandy Improper Payments

The most common deficiencies we identified in the selected agencies’ 

policies and procedures for estimating improper payments included a lack 

of requirements for the programs to (1) validate the populations of 

transactions before selecting the samples used to estimate improper 

payments and (2) maintain supporting documentation. For example, we 

found that 10 of the 22 programs we reviewed did not have policies and 

procedures that included key quality assurance procedures, such as 

reconciliations, to validate that the populations of transactions were 

complete and accurate before selecting the samples used to estimate 

improper payments. In addition, 14 of the selected 22 programs did not 

have policies and procedures that included a requirement to maintain 

sufficient documentation to support the improper payment estimates as 

required by OMB guidance. If key requirements for estimating improper 

payments are not documented in policies and procedures, agencies face 

an increased risk that their estimation processes as designed will not 

comply with the provisions of relevant laws and regulations or consistently 

produce reliable estimates that can help agencies improve stewardship of 

taxpayer dollars. The following sections provide further details on our 

findings at each of the five agencies.

HUD documented its policies and procedures to estimate improper 

payments for the DRAA funds it received for its Community Development 

Block Grants – Disaster Recovery program (CDBG-DR), the only program 

it administered that received DRAA funds.17 However, as shown in table 

2, we found that HUD’s policies and procedures did not cover all key 

requirements.

 

17HUD reported two improper payment estimates for its CDBG-DR, one for fiscal year 

2013 and one for fiscal year 2014, that involved different levels of review. HUD plans to 

use the fiscal year 2014 methodology for estimating CDBG-DR improper payments in 

future years. Because of this, we evaluated only the policies and procedures related to 

HUD’s fiscal year 2014 improper payment estimate for CDBG-DR.

HUD’s Policies and 

Procedures Addressed 

Most, but Not All, Key 

Requirements for 

Estimating Improper 

Payments for Disaster 

Relief Funds
 

Page 15 GAO-15-209 Hurricane Sandy Improper Payments

Table 2: Summary of Department of Housing and Urban Development Policies and Procedures for Estimating Improper 

Payments for Disaster Relief Funds

Community Development 

Block Grants – 

Disaster Recovery

Had the agency developed policies and procedures for estimating improper payments related to the 

Disaster Relief Appropriations Act, 2013?

Y 

Did the policies and procedures:

Clearly identify roles and responsibilities for estimating improper payments? Y 

Define improper payments consistently with IPIA, as amended, and Appendix C? Y 

Require payments to federal employees to be included in populations for testing as required by IPIA, 

as amended? 

N 

Include steps to assess the completeness of the population used for selecting the samples to be 

tested?

N 

Provide sufficient procedures for determining an error and what documentation is necessary to 

substantiate payment?

Y 

Require the agency to maintain sufficient documentation to support improper payment estimates? Y 

If the agency is using a statistical methodology, did the policies and procedures:

Require that the sampling methodologies meet the precision requirements outlined in Appendix C? N/Aa

Require a consultation with a statistician to ensure the validity of sample design, sample size, and 

measurement methodology?

N/Aa

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of Management and Budget approval prior to the implementation 

of its alternative sampling methodology?

Y 

Legend: HUD = Department of Housing and Urban Development; IPIA = Improper Payments Information Act of 2002; N = No; N/A = Not applicable;

Y = Yes.

Source: GAO analysis of HUD policies and procedures. | GAO-15-209

a

N/A because HUD is not using a statistical methodology to estimate improper payments for this 

program.

HUD’s policies and procedures for estimating improper payments consist 

of its improper payment protocol for DRAA funds and its grantee 

monitoring exhibits, which are tools used in conducting grantee 

monitoring. These policies and procedures address most of the key 

requirements for estimating improper payments. For example, the grantee 

monitoring exhibits provide detailed guidance to the officials responsible

for performing the grantee reviews regarding the required testing steps. 

Further, HUD’s policies and procedures define roles and responsibilities 

for the officials responsible for performing grantee reviews; documenting, 

reviewing, and approving test results; and concurring with judgments and 

conclusions made by grantee reviewers. In addition, HUD’s protocol 

provides guidance on the procedures for identifying errors and lists 

examples of documentation required to substantiate payments.
 

Page 16 GAO-15-209 Hurricane Sandy Improper Payments

However, we identified areas where HUD’s improper payment policies 

and procedures could be improved. For example, HUD’s policies and 

procedures did not include key quality assurance procedures to assess 

the completeness of the population used for selecting transactions to be 

tested. In addition, HUD’s policies and procedures did not require the 

inclusion of payments to federal employees, such as travel pay, in the 

population of transactions subject to testing for the purpose of estimating 

improper payments. HUD officials acknowledged that the policies and 

procedures did not address payments to federal employees and stated 

that they considered their quality assurance procedures to be sufficient. 

By not including key quality assurance procedures, such as 

reconciliations to validate that the population of transactions is complete 

and accurate before selecting transactions to test, HUD is at an increased 

risk of excluding DRAA-funded transactions from its improper payment 

testing and estimation processes. Additionally, by not having

requirements in its policies and procedures to test payments to federal 

employees, HUD risks being noncompliant with IPIA, as amended, and 

HUD’s estimate of DRAA improper payments may be understated.

DOT documented its policies and procedures to estimate improper 

payments for each of the five programs that received DRAA funds. 

However, as shown in table 3, we found that these policies and 

procedures did not cover many key requirements for estimating improper 

payments.

DOT’s Policies and 

Procedures Did Not 

Address All Key

Requirements for 

Estimating Improper 

Payments for Disaster 

Relief Funds
 

Page 17 GAO-15-209 Hurricane Sandy Improper Payments

Table 3: Summary of Department of Transportation Policies and Procedures for Estimating Improper Payments for Disaster 

Relief Funds by Program

FAA – 

Facilities and 

Equipment 

Program – 

Disaster 

Relief Act

FHWA – 

Emergency 

Relief 

Program – 

Hurricane 

Sandy 

FHWA – 

Federal – 

Aid Grant 

Program

FTA – 

Public 

Transit 

Emergency 

Relief 

Program – 

Disaster 

Relief Act

FRA – 

Grants to 

the National 

Railroad 

Passenger 

Corporation 

Program – 

Disaster 

Relief Act

Had the agency developed policies 

and procedures for estimating 

improper payments related to the 

Disaster Relief Appropriations Act, 

2013?

Y Y Y Y Y 

Did the policies and procedures:

Clearly identify roles and 

responsibilities for estimating 

improper payments?

Partiallya Partiallyb Partiallyb N N 

Define improper payments 

consistently with IPIA, as amended 

and Appendix C?

Partiallyc Partiallyd Partiallyd N N 

Require payments to federal 

employees to be included in 

populations for testing as required by 

IPIA, as amended?

N N N N N 

Include steps to assess the 

completeness of the population used 

for selecting the samples to be 

tested?

N N N N N 

Provide sufficient procedures for 

determining an error and what 

documentation is necessary to 

substantiate payment?

Y Y Y Y Y 

Require the agency to maintain 

sufficient documentation to support 

improper payment estimates?

N Y Y N N 

If the agency is using a statistical methodology, did the policies and procedures:

Require that the sampling 

methodologies meet the precision 

requirements outlined in Appendix C?

N N N N N 

Require a consultation with a 

statistician to ensure the validity of 

sample design, sample size, and 

measurement methodology?

N N N N N 
 

Page 18 GAO-15-209 Hurricane Sandy Improper Payments

FAA – 

Facilities and 

Equipment 

Program – 

Disaster 

Relief Act

FHWA – 

Emergency 

Relief 

Program – 

Hurricane 

Sandy 

FHWA – 

Federal – 

Aid Grant 

Program

FTA – 

Public 

Transit 

Emergency 

Relief 

Program – 

Disaster 

Relief Act

FRA – 

Grants to 

the National 

Railroad 

Passenger 

Corporation 

Program – 

Disaster 

Relief Act

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of 

Management and Budget approval 

prior to the implementation of its 

alternative sampling methodology?

N/Ae N/Ae N/Ae N/Ae N/Ae

Legend: DOT = Department of Transportation; FAA = Federal Aviation Administration; FHWA = Federal Highway Administration; FRA = Federal 

Railroad Administration; FTA = Federal Transit Administration; IPIA = Improper Payments Information Act of 2002; N = No; N/A = Not applicable; Y = 

Yes.

Source: GAO analysis of DOT policies and procedures. | GAO-15-209

a

FAA policies and procedures indicated that FAA will test for improper payments under DOT 

guidance. FAA policies and procedures did not clearly identify roles and responsibilities for all 

involved, including who is to perform payment review or supervisory review procedures.

b

FHWA policies and procedures indicated that DOT uses a consultant to conduct improper payment 

testing and noted the consultant’s responsibilities. However, the policies and procedures did not 

identify the roles and responsibilities of FHWA or DOT officials.

c

FAA policies and procedures did not include underpayments or payments that lack sufficient 

supporting documentation in the definition of “improper payments.” 

d

FHWA policies and procedures did not include underpayments in the definition of “improper 

payments.” 

e

N/A because DOT is not using an alternative (nonstatistical) methodology to estimate improper 

payments for this program.

DOT developed a testing results workbook for each of the 5 programs 

that received DRAA funding. These workbooks provide information about 

improper payment testing objectives, program requirements, the process 

for determining an error, and guidance on calculating improper payment 

amounts. Further, the Federal Aviation Administration maintained a 

financial manual that described its internal control activities and 

programs. The Federal Highway Administration (FHWA) established a 

risk-based financial management oversight program that includes 

improper payment testing. FHWA developed guidance for implementing 

this oversight program, which included identifying roles and 

responsibilities for estimating improper payments, and FHWA officials 

stated that they used the guidance to estimate improper payments for its 

two programs that received DRAA funds (Emergency Relief and FederalAid). However, we found that the policies and procedures contained in the 

workbooks and guidance did not cover all of the key requirements for 

estimating improper payments. For example, these policies and 
 

Page 19 GAO-15-209 Hurricane Sandy Improper Payments

procedures did not require the inclusion of payments to federal 

employees in the populations of transactions that are subject to the 

improper payment testing, require a consultation with a statistician to 

ensure the validity of the sample and measurement methodologies, 

address the statistical precision requirements outlined in OMB Circular 

No. A-123, or include key quality assurance procedures to assess the 

completeness of the populations used for selecting transactions to be 

tested.

DOT officials stated that the department uses a contractor to develop the 

improper payment estimates for the five programs that received DRAA 

funding. The contract outlines the responsibilities of the contractor and 

does not provide direction to DOT officials regarding their roles and 

responsibilities and the procedures needed at the agency level for its endto-end improper payment estimation process. Although the organization 

may rely on an outsourced service provider to carry out processes, 

policies, and procedures on behalf of the entity, management retains 

ultimate responsibility for designing and maintaining effective internal 

control and ensuring that the contractor’s work meets legal and other 

requirements. Internal policies are therefore necessary to capture the 

agency’s end-to-end process for estimating improper payments and 

provide detailed directions to all parties involved in the improper payment 

estimation process, including the contracting officer’s technical 

representative responsible for reviewing, validating, and approving the 

work performed by the contractor.

DOT officials provided additional documents as further evidence of its 

policies and procedures. However, these were also insufficient, as 

discussed below.

• DOT officials provided a copy of slides used in training on estimating 

improper payments. However, training is used as a tool to educate 

and refresh staff on formal policies and procedures that have been 

previously developed and documented and is not a substitute for the 

policies themselves. Documented policies and procedures are 

necessary to ensure that the agency’s requirements are 

communicated to all staff and enforceable by management in 

achieving the agency’s objectives on an ongoing basis.

• Federal Railroad Administration officials provided us with a copy of its 

Grants Management Manual, which provided guidance for the 

processing and management of grants, including high-level 

responsibilities for the grant monitoring process and the recovery of 

improper payments. However, this document did not provide 
 

Page 20 GAO-15-209 Hurricane Sandy Improper Payments

information on the process the administration follows for estimating its 

improper payment rates.

• Federal Transit Administration officials provided us with a copy of its 

Grants Making and Grants Management Tool Kit. This document 

provided guidance regarding the management of the DRAA grants 

and the recipient requirements; however, it did not provide information 

about the administration’s improper payment estimation process.

DHS documented policies and procedures for estimating improper 

payments for its programs, including 12 that received DRAA funding. 

However, as shown in table 4, we found that DHS’s policies and 

procedures did not cover all key requirements for estimating improper 

payments.

DHS’s Policies and 

Procedures Addressed 

Most, but Not All, Key 

Requirements for 

Estimating Improper 

Payments for Disaster 

Relief Funds
 

Page 21 GAO-15-209 Hurricane Sandy Improper Payments

Table 4: Summary of Department of Homeland Security Policies and Procedures for Estimating Improper Payments for 

Disaster Relief Funds by Program

FEMA –

Disaster 

Case 

Management

FEMA –

Disaster 

Relief 

Fund 

Travel 

Payments 

FEMA –

Hazard 

Mitigation 

Grants

FEMA –

Public 

Assistance

FEMA – 

Urban 

Search and 

Rescue

FEMA –

Vendor 

Payments 

Had the agency developed policies and 

procedures for estimating improper payments 

related to the Disaster Relief Appropriations Act, 

2013?

Y Y Y Y Y Y 

Did the policies and procedures:

Clearly identify roles and responsibilities for 

estimating improper payments?

Y Y Y Y Y Y 

Define improper payments consistently with IPIA, 

as amended, and Appendix C?

Y Y Y Y Y Y 

Require payments to federal employees to be 

included in populations for testing as required by 

IPIA, as amended?

Y Y Y Y Y Y 

Include steps to assess the completeness of the 

population used for selecting the samples to be 

tested?

Y Y Y Y Y Y 

Provide sufficient procedures for determining an 

error and what documentation is necessary to 

substantiate payment?

Y Y Y Y Y Y 

Require the agency to maintain sufficient 

documentation to support improper payment 

estimates?

N N N N N N 

If the agency is using a statistical methodology, did the policies and procedures:

Require that the sampling methodologies meet 

the precision requirements outlined in Appendix 

C?

N/Aa Y N/Aa N/Aa N/Aa Y 

Require a consultation with a statistician to 

ensure the validity of sample design, sample 

size, and measurement methodology?

N/Aa Partiallyb N/Aa N/Aa N/Aa Partiallyb

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of 

Management and Budget approval prior to the 

implementation of its alternative sampling 

methodology?

N/Ac N/Ac N/Ac Y N/Ac N/Ac
 

Page 22 GAO-15-209 Hurricane Sandy Improper Payments

FEMA – 

Individuals 

and 

Households 

Program – 

Hurricane 

Sandy 

FEMA – 

Hurricane 

Sandy 

Payroll

FEMA – 

Government 

Charge Card

CBP – 

Hurricane 

Sandy 

NPPD – 

Hurricane 

Sandy 

USCG – 

Hurricane 

Sandy 

Had the agency developed policies and 

procedures for estimating improper payments 

related to the Disaster Relief Appropriations Act, 

2013?

Y Y Y Y Y Y 

Did the policies and procedures:

Clearly identify roles and responsibilities for 

estimating improper payments?

Y Y Y Y Y Y 

Define improper payments consistently with IPIA, 

as amended, and Appendix C?

Y Y Y Y Y Y 

Require payments to federal employees to be 

included in populations for testing as required by 

IPIA, as amended?

Y Y Y Y Y Y 

Include steps to assess the completeness of the 

population used for selecting the samples to be 

tested?

Y Y Y Y Y Y 

Provide sufficient procedures for determining an 

error and what documentation is necessary to 

substantiate payment?

Y Y Y Y Y Y 

Require the agency to maintain sufficient 

documentation to support improper payment 

estimates?

N Y N N Y Y 

If the agency is using a statistical methodology, did policies and procedures:

Require that the sampling methodologies meet 

the precision requirements outlined in Appendix 

C?

Y Y N/Aa N/Aa Y Y 

Require a consultation with a statistician to 

ensure the validity of sample design, sample 

size, and measurement methodology?

Partiallyb Partiallyb N/Aa N/Aa Partiallyb Partiallyb

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of 

Management and Budget approval prior to the 

implementation of its alternative sampling 

methodology?

N/Ac N/Ac Y N/Ac N/Ac N/Ac

Legend: CBP = Customs and Border Protection; DHS = Department of Homeland Security; FEMA = Federal Emergency Management Agency; IPIA = 

Improper Payments Information Act of 2002; N = No; N/A = Not applicable; NPPD = National Protection and Programs Directorate; USCG = U.S. Coast 

Guard; Y = Yes.

Source: GAO analysis of DHS policies and procedures. | GAO-15-209

a

N/A because DHS is not using a statistical methodology to estimate improper payments for this 

program.

b

DHS policies and procedures stated that DHS’s Office of the Chief Financial Officer will work with a 

statistician to perform a statistical analysis of DHS component test results, not to ensure the validity of 

sample design, size, or methodology.
 

Page 23 GAO-15-209 Hurricane Sandy Improper Payments

c

N/A because DHS is not using an alternative (nonstatistical) approach to estimate improper 

payments for this program.

DHS developed the Improper Payment Reduction Guidebook, which 

provides agency-wide policies and procedures for estimating and 

reporting on improper payments. This guidebook includes a section 

specific to Hurricane Sandy requirements. In addition, DHS’s guidebook 

requires programs to develop test plans for estimating improper 

payments. These policies and procedures address most of the key 

requirements for estimating improper payments. For example, DHS’s 

policies and procedures define improper payments consistently with 

IPERIA and OMB guidance, clearly identify roles and responsibilities for 

estimating improper payments, and require a reconciliation of the 

populations of transactions to ensure that they are complete. However, 

neither DHS’s agency-wide policies and procedures nor 9 of the 12 

program-level test plans we reviewed included a requirement for DHS 

officials to maintain sufficient documentation to support DHS’s improper 

payment estimates. In addition, DHS policies and procedures stated that 

statistical support will be provided to the programs; however, they did not 

require that the statistician validate the programs’ sample design, size, 

and methodology. DHS officials stated that these requirements were not 

explicitly stated in the Improper Payment Reduction Guidebook, but they 

considered them to be addressed either implicitly or by records retention 

guidance. However, after we discussed these issues with DHS officials, 

DHS subsequently revised the guidebook accordingly to include these 

requirements. DHS officials stated that they plan to implement the revised 

guidebook in fiscal year 2015.

USACE documented policies and procedures for estimating improper 

payments related to two programs: Commercial Pay and Travel Pay. The 

Department of Defense’s (DOD) Financial Management Regulation

provides the department-wide policy for estimating improper payments.18

 

18Department of Defense, “Improper Payments,” ch. 14 in Financial Management 

Regulation, 7000.14-R (FMR), vol. 4 (October 2012), 1-17.

In addition, USACE developed a standard operating procedure (SOP) 

and commercial pay program review procedures for improper payments. 

However, as shown in table 5, we found that these USACE policies and 

procedures did not cover all key requirements for estimating improper 

payments.

USACE’s Policies and 

Procedures Did Not 

Address All Key 

Requirements for 

Estimating Improper 

Payments for Disaster 

Relief Funds
 

Page 24 GAO-15-209 Hurricane Sandy Improper Payments

Table 5: Summary of U.S. Army Corps of Engineers Policies and Procedures for Estimating Improper Payments for Disaster 

Relief Funds by Program

Commercial Pay Travel Pay

Had the agency developed policies and procedures for estimating improper payments related to 

the Disaster Relief Appropriations Act, 2013?

Y Y 

Did the policies and procedures:

Clearly identify roles and responsibilities for estimating improper payments? Y Y 

Define improper payments consistently with IPIA, as amended, and Appendix C? Partiallya Partiallya

Require payments to federal employees to be included in populations for testing as required by 

IPIA, as amended?

N N 

Include steps to assess the completeness of the population used for selecting the samples to be 

tested?

N N 

Provide sufficient procedures for determining an error and what documentation is necessary to 

substantiate payment?

Y N 

Require the agency to maintain sufficient documentation to support improper payment estimates? Y Partiallyb

If the agency is using a statistical methodology, did the policies and procedures:

Require that the sampling methodologies meet the precision requirements outlined in Appendix C? Y Y 

Require a consultation with a statistician to ensure the validity of sample design, sample size, and 

measurement methodology?

Y Y 

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of Management and Budget approval prior to the 

implementation of its alternative sampling methodology?

N/Ac N/Ac

Legend: DOD = Department of Defense; IPIA = Improper Payments Information Act of 2002; N = No; N/A = Not applicable; USACE = U.S. Army Corps 

of Engineers Y = Yes.

Source: GAO analysis of USACE and DOD policies and procedures. | GAO-15-209

a

The DOD Financial Management Regulation did not fully define “improper payment” but clarified that 

the terms “improper” and “erroneous” are not interchangeable. USACE policies and procedures 

defined “improper payment” consistently with IPIA, as amended, and Appendix C to Office of 

Management and Budget Circular No. A-123, but were not consistent with the Financial Management 

Regulation. USACE policies and procedures referred to “erroneous payments” throughout the 

document.

b

DOD policies and procedures required the Improper Payment Project Officer to retain supporting 

documentation for the agency financial report and other reports. USACE policies and procedures 

required the agency to record the results of testing in a database but did not require USACE to 

maintain support for the results.

c

N/A because USACE is not using an alternative (nonstatistical) methodology to estimate improper 

payments for this program.

USACE’s policies and procedures clearly identified roles and 

responsibilities for estimating improper payments; required a consultation 

with a statistician to validate the sample design, sample size, and 

methodology; and provided sufficient procedures for determining an error 

for its Commercial Pay program. USACE officials stated that they 

considered the policies and procedures to be sufficient in addressing the 

key requirements. However, we found that the policies and procedures 
 

Page 25 GAO-15-209 Hurricane Sandy Improper Payments

did not include certain key quality assurance procedures, such as 

reconciliations, to validate that the populations were complete and 

accurate before selecting the samples used to estimate improper 

payments. USACE officials indicated that they reconcile the populations 

of commercial and travel pay transactions to a general ledger trial 

balance to ensure that the populations are complete. They acknowledged 

that their policies and procedures did not require this reconciliation to be 

performed. In addition, USACE’s policies did not provide sufficient 

procedures for identifying errors in its Travel Pay program. USACE’s 

improper payments SOP states that 100 percent of travel vouchers 

greater than $2,500 are to be audited, and travel vouchers less than 

$2,500 are randomly sampled for audit. However, USACE’s SOP did not 

include detailed procedures for testing these travel payments, such as 

procedures for identifying errors or the documentation necessary to 

substantiate payments. Further, USACE’s policies and procedures did not 

require including payments to federal employees in the population of 

transactions that are subject to the improper payment testing. Because its 

policies and procedures did not address all key requirements for 

estimating improper payments, USACE faces an increased risk that its 

estimation processes as designed will not comply with the provisions of 

relevant laws and regulations or consistently produce reliable estimates 

that can help improve stewardship of taxpayer dollars.

SBA only provided documented policies and procedures for estimating 

improper payments for the Disaster Assistance Loans program, one of its 

two programs that received DRAA funding. SBA officials explained that 

they did not have policies and procedures for estimating improper 

payments for the Office of Entrepreneurial Development (OED) Grants 

program, which also received DRAA funding, because it was the first time 

that this program was estimating improper payments, and thus SBA had 

not yet documented policies and procedures for this process. However, 

as shown in table 6, we found that SBA’s policies and procedures for its 

Disaster Assistance Loans program also did not cover many of the key 

requirements for estimating improper payments.

SBA Policies and 

Procedures Did Not 

Address All Key 

Requirements for 

Estimating Improper 

Payments for Disaster 

Relief Funds
 

Page 26 GAO-15-209 Hurricane Sandy Improper Payments

Table 6: Summary of Small Business Administration Policies and Procedures for Estimating Improper Payments for Disaster 

Relief Funds by Program

Disaster 

Assistance 

Loans

Office of 

Entrepreneurial 

Development 

Grants

Had the agency developed policies and procedures for estimating improper payments related to the 

Disaster Relief Appropriations Act, 2013?

Y N 

Did the policies and procedures:

Clearly identify roles and responsibilities for estimating improper payments? Y N 

Define improper payments consistently with IPIA, as amended, and Appendix C? N N 

Require payments to federal employees to be included in populations for testing as required by IPIA, as 

amended?

N N 

Include steps to assess the completeness of the population used for selecting the samples to be tested? N N 

Provide sufficient procedures for determining an error and what documentation is necessary to 

substantiate payment?

Partiallya N 

Require the agency to maintain sufficient documentation to support improper payment estimates? N N 

If the agency is using a statistical methodology, did the policies and procedures:

Require that the sampling methodologies meet the precision requirements outlined in Appendix C? N N 

Require a consultation with a statistician to ensure the validity of sample design, sample size, and 

measurement methodology?

Y N 

If the agency is using an alternative methodology, did the policies and procedures:

Require the agency to obtain Office of Management and Budget approval prior to the implementation of 

its alternative sampling methodology?

N/Ab N/Ab

Legend: IPIA = Improper Payments Information Act of 2002; N = No; N/A = Not applicable; SBA = Small Business Administration; Y = Yes.

Source: GAO analysis of SBA policies and procedures. | GAO-15-209

a

SBA policies and procedures covered only one type of improper payment: disaster assistance loans 

that do not meet underwriting or eligibility requirements.

b

N/A because SBA is not using an alternative (nonstatistical) methodology to estimate improper 

payments for this program.

For its Disaster Assistance Loans program, SBA developed the IPERA 

Testing and Estimating Procedures, which outlines roles and 

responsibilities for estimating improper payments. SBA has also issued 

an internal memorandum that provides a brief summary of procedures 

followed by SBA’s quality control reviewers for its loan program to resolve 

exceptions found by the quality control department. This memorandum 

refers to the eligibility requirements contained in SBA’s SOP 50-30-7. The 

SOP provides direction to staff for the management of SBA’s Disaster 

Assistance Loans program.

SBA’s IPERA Testing and Estimating Procedures requires consultation 

with a statistician to validate the sampling design and methodology. In 
 

Page 27 GAO-15-209 Hurricane Sandy Improper Payments

addition, SOP 50-30-7 provides direction to reviewers for determining 

whether loan payments are being made to eligible recipients. This SOP 

did not provide instructions for the quality control reviewers to follow in 

testing, evaluating, and quantifying other types of improper payments

such as underpayments, overpayments, and duplicative payments to loan 

recipients. Further, these SBA policies and procedures did not cover 

many of the key requirements for estimating improper payments. For 

example, they did not define improper payments consistent with Appendix 

C to OMB Circular No. A-123. SBA’s internal memorandum defines an 

improper payment as a loan approval that does not meet the eligibility 

requirements in the SOP. However, eligibility is only one aspect of 

determining whether a payment was proper. Specifically, Appendix C to 

OMB Circular No. A-123 clarifies that improper payments can include 

certain payments to eligible recipients, such as payments that are for the 

incorrect amount and duplicate payments. Such types of improper 

payments were not captured or addressed in SBA’s policies and 

procedures. Further, these policies and procedures (1) did not require the 

inclusion of payments to federal employees in the population of 

transactions that are subject to the improper payment testing; (2) did not 

include quality assurance procedures, such as reconciliations, to validate 

that the populations of transactions were complete and accurate; and 

(3) did not require SBA officials to maintain documentation to support 

SBA’s improper payment estimate.

SBA officials also indicated that its sampling plans reflect SBA 

procedures for estimating improper payments. The information in SBA’s 

fiscal year 2014 sampling plans is limited to the methodology used by 

SBA for that year to select the samples and did not reflect guidance to the 

responsible officials about the agency’s official process for estimating 

improper payments that needs to be followed on an ongoing basis. Thus, 

these documents neither ensure consistency in the agency’s improper 

payment estimating processes nor provide the necessary guidance to the 

responsible officials for how to carry out their responsibilities. Overall, 

SBA officials indicated that they did not consider it necessary to develop a 

separate policy for estimating improper payments because they 

considered the policies and procedures and sampling plans to be 

sufficient. However, as discussed above, the policies and procedures did 

not address several key requirements for estimating improper payments. 

Further, SOP 50-30-7 did not apply to the SBA’s OED Grants program, 

which as previously noted, did not have policies and procedures for 

estimating improper payments. Because SBA had not developed policies 

and procedures for the OED Grants program and its policies and 

procedures for the Disaster Assistance Loans program did not address all 
 

Page 28 GAO-15-209 Hurricane Sandy Improper Payments

key requirements for estimating improper payments, SBA faces an 

increased risk that its estimation processes as designed will not comply 

with the provisions of relevant laws and regulations or consistently 

produce reliable estimates that can help improve stewardship of taxpayer 

dollars.

DRAA included approximately $50 billion in supplemental appropriations 

for expenses related to the consequences of Hurricane Sandy and other 

purposes and required agencies to estimate improper payments for these 

funds. The five agencies we selected for review planned to estimate 

improper payments related to a total of 22 programs that received 

disaster relief appropriations for fiscal year 2014. These agencies used a 

variety of approaches to estimate improper payments for the DRAA 

funding. Improper payment estimates can be a critical program 

management tool for understanding and addressing financial 

vulnerabilities. While the five selected agencies have developed policies 

and procedures for estimating improper payments for all but one program 

that received DRAA funding, they did not address numerous key 

requirements for these estimates. If key requirements for estimating 

improper payments are not appropriately documented in policies and 

procedures, agencies face an increased risk that their estimation 

processes as designed will not comply with the provisions of relevant 

laws and regulations or consistently produce reliable estimates that can 

help agencies improve stewardship of taxpayer dollars.

To help reduce the risk that improper payment estimates related to DRAA 

funding developed and reported by selected agencies may not be 

accurate or reliable, we are making the following recommendations to 

four of the five agencies we reviewed.

To help ensure that HUD produces reliable estimates of its DRAA 

improper payments, the Secretary of Housing and Urban Development 

should direct appropriate officials to take the following two actions to 

revise its policies and procedures for estimating improper payments:

• require payments to federal employees to be included in populations 

for testing as required by IPIA, as amended, and

• include steps to assess the completeness of the population of 

transactions used for selecting the samples to be tested.

Conclusions

Recommendations for 

Executive Action
 

Page 29 GAO-15-209 Hurricane Sandy Improper Payments

To help ensure that DOT produces reliable estimates of its DRAA 

improper payments, the Secretary of Transportation should direct the 

Administrators of the Federal Aviation Administration, Federal Highway 

Administration, Federal Railroad Administration, and Federal Transit 

Administration to take the following seven actions, as applicable to each 

administration, to revise their policies and procedures for estimating 

improper payments:

• clearly identify roles and responsibilities for estimating improper 

payments;

• define improper payments consistently with IPIA, as amended, and 

OMB Circular No. A-123, Appendix C;

• require payments to federal employees to be included in populations 

for testing as required by IPIA, as amended;

• include steps to assess the completeness of the population of 

transactions used for selecting the samples to be tested;

• require the agency to maintain sufficient documentation to support 

improper payment estimates;

• require that the sampling methodologies meet the precision 

requirements outlined in OMB Circular No. A-123, Appendix C; and

• require a consultation with a statistician to ensure the validity of 

sample design, sample size, and measurement methodology.

To help ensure that USACE produces reliable estimates of its DRAA 

improper payments, the Secretary of the Army should direct the Chief of 

Engineers and Commanding General of USACE to take the following five 

actions to revise policies and procedures for estimating improper 

payments:

• define improper payments consistently with IPIA, as amended, and 

OMB Circular No. A-123, Appendix C;

• require payments to federal employees to be included in populations 

for testing as required by IPIA, as amended;

• include steps to assess the completeness of the population of 

transactions used for selecting the samples to be tested;

• provide sufficient procedures for determining an error and what 

documentation is necessary to substantiate payment; and

• require the agency to maintain sufficient documentation to support 

improper payment estimates.
 

Page 30 GAO-15-209 Hurricane Sandy Improper Payments

To help ensure that SBA produces reliable estimates of its DRAA 

improper payments, the Administrator of SBA should direct the 

appropriate officials to take the following eight actions to develop policies 

and procedures for the OED Grants program to estimate improper 

payments:

• clearly identify roles and responsibilities for estimating improper 

payments;

• define improper payments consistently with IPIA, as amended, and 

OMB Circular No. A-123, Appendix C;

• require payments to federal employees to be included in populations 

for testing as required by IPIA, as amended;

• include steps to assess the completeness of the population of 

transactions used for selecting the samples to be tested;

• provide sufficient procedures for determining an error and what 

documentation is necessary to substantiate a payment;

• require the agency to maintain sufficient documentation to support 

improper payment estimates;

• require that the sampling methodologies meet the precision 

requirements outlined in OMB Circular No. A-123, Appendix C; and

• require a consultation with a statistician to ensure the validity of 

sample design, sample size, and measurement methodology.

To help ensure that SBA produces reliable estimates of its DRAA 

improper payments, the Administrator of SBA should direct the 

appropriate officials to take the following six actions to revise its Disaster 

Assistance Loans program policies and procedures for estimating 

improper payments:

• define improper payments consistently with IPIA, as amended, and 

OMB Circular No. A-123, Appendix C;

• require payments to federal employees to be included in populations 

for testing as required by IPIA, as amended;

• include steps to assess the completeness of the population of 

transactions used for selecting the samples to be tested;

• provide sufficient procedures for determining an error and what 

documentation is necessary to substantiate payment;
 

Page 31 GAO-15-209 Hurricane Sandy Improper Payments

• require the agency to maintain sufficient documentation to support 

improper payment estimates; and

• require that the sampling methodologies meet the precision 

requirements outlined in OMB Circular No. A-123, Appendix C.

We provided a draft of this report to HUD, DOT, DHS, USACE, SBA, and 

OMB for comment. HUD, DOT, DHS, USACE, and SBA provided written 

comments, which are reprinted in appendixes IV through VIII, 

respectively. DOT also provided technical comments, which we 

incorporated as appropriate. OMB’s audit liaison provided an e-mailed 

response.

In their written comments, HUD and USACE concurred with our 

recommendations and noted actions either planned or already under way 

to address our recommendations. Although there were no 

recommendations made to DHS, the agency cited action it is taking to 

further reduce improper payments.

In its written comments, SBA stated that our findings may be misleading 

because we did not review SBA’s implementation of improper payment 

requirements but instead limited our review to a high-level assessment of 

the policies and procedures developed by agencies as guidance for 

preparation of their improper payment estimates. The scope and 

methodology section of our report clearly states that we only assessed 

the design of the policies and procedures and did not test agencies’ 

implementation of them. SBA did not explicitly concur with our 

recommendations but stated that it would address them by including a 

chapter on improper payments as it updates its standard operating 

procedures for internal controls. 

In its written comments, DOT stated that it had provided GAO with 

materials that, in its opinion, addressed all the key requirements for 

estimating improper payments. We discuss in our report why these 

materials did not constitute adequate policies and procedures. 

Nevertheless, DOT agreed with GAO’s recommendations and said it will 

consolidate its improper payment policies and procedures into a 

department-wide framework. 

On February 3, 2015, OMB’s audit liaison stated in an e-mail that OMB 

generally agreed with our report and will work with agencies to improve 

Agency Comments

and Our Evaluation
 

Page 32 GAO-15-209 Hurricane Sandy Improper Payments

documentation in their policies and procedures in estimating their 

improper payments.

We are sending copies of this report to interested congressional 

committees, the Secretary of Housing and Urban Development, the 

Secretary of Transportation, the Secretary of Homeland Security, the 

Secretary of Defense, the Administrator of the Small Business 

Administration, and the Director of the Office of Management and Budget. 

In addition, the report is available at no charge on the GAO website at 

http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-2623 or davisbh@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff members who made significant 

contributions to this report are listed in appendix IX. 

Beryl H. Davis

Director

Financial Management and Assurance
Appendix I: Scope and Methodology

Page 33 GAO-15-209 Hurricane Sandy Improper Payments

To address our objectives, we selected five agencies for review based on 

the amount of Disaster Relief Appropriations Act, 2013 (DRAA) funding 

received by each agency and any existing improper payment issues for 

programs receiving funding. Specifically, we selected for review the 

Departments of Housing and Urban Development (HUD), Transportation, 

and Homeland Security; and the Army Corps of Engineers (USACE)1

because of the amount of funding received, and we selected the Small 

Business Administration (SBA) because of the amount of DRAA funds it 

received and the high error rate currently reported for its Disaster 

Assistance Loans program.2

To determine the extent to which selected agencies had developed 

policies and procedures for estimating improper payments for DRAA, we 

identified relevant key requirements governing the process agencies are 

required to follow to estimate improper payments. We selected these 

requirements by reviewing the Improper Payments Information Act of 

2002 (IPIA), as amended by the Improper Payments Elimination and 

Recovery Act of 2010 (IPERA) and the Improper Payments Elimination 

and Recovery Improvement Act of 2012 (IPERIA).

Collectively, these five agencies received 

approximately 94 percent of the funding provided in DRAA and planned to 

estimate improper payments related to these funds for 22 programs. To 

determine how the selected agencies estimated improper payments for 

DRAA in their fiscal year 2014 annual reporting, we obtained and 

reviewed the agencies’ improper payment sampling plans, conducted 

interviews with agency officials, and reviewed agencies’ fiscal year 2014 

agency financial reports.

3

 

1

USACE is a component of the Department of the Army. For purposes of this report, we 

treat USACE as an agency.

We also reviewed 

Appendix C to Office of Management and Budget (OMB) Circular No. A123, Requirements for Effective Measurement and Remediation of 

2

In fiscal year 2013, SBA reported an error rate of 18.4 percent for the Disaster 

Assistance Loans program. For fiscal year 2014, SBA reported an error rate of 12.0 

percent.

3

IPIA, Pub. L. No. 107-300 (Nov. 26, 2002), as amended by IPERA, Pub. L. No. 111-204 

(July 22, 2010), and IPERIA, Pub. L. No. 112-248 (Jan. 10, 2013) (IPIA, as amended), 

and codified as amended at 31 U.S.C. § 3321 note.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 34 GAO-15-209 Hurricane Sandy Improper Payments

Improper Payments.

4 Appendix C provides government-wide guidance for 

complying with IPIA, as amended by IPERA, which requires agencies, 

among other things, to estimate improper payments based on a 

statistically valid sample or an alternative methodology with the approval 

of OMB. In addition, we reviewed Standards for Internal Control in the 

Federal Government to identify key controls necessary to help ensure 

that the reported improper payment information is reliable.5

We did not review DRAA funds provided to the inspectors general offices 

(IG) at any of the five agencies we selected for review. We also did not 

inquire whether the IGs planned to report estimates of any improper 

payments associated with these funds. The DRAA funds provided to the 

IGs are to be used for the oversight of the agencies’ use of the DRAA 

funding; in relation to the total amount of supplemental appropriations 

provided to agencies, these amounts were not significant. Therefore, we 

decided to exclude the IG programs and activities and any related 

improper payment estimates from the scope of our engagement. Further, 

HUD reported two improper payment estimates for its Community 

Development Block Grant – Disaster Recovery (CDBG-DR) program, one 

for fiscal year 2013 and one for fiscal year 2014, that involved different 

levels of review. HUD plans to use the fiscal year 2014 methodology for 

estimating CDBG-DR improper payments in future years. Because of this, 

Based on our 

review of these sources, we identified 10 key requirements that could 

affect the quality and reliability of improper payment estimates, including 

the definition of an improper payment, consistency in testing for improper 

payments, statistical precision, and quality assurance procedures. We 

interviewed OMB officials to confirm our understanding of the relevant 

sources from which we identified these key requirements. We then 

reviewed the selected agencies’ policies and procedures for estimating 

improper payments for DRAA funds to determine whether they addressed 

the key requirements.

 

4

Office of Management and Budget, Issuance of Revised Parts I and II to Appendix C of 

OMB Circular A-123, OMB Memorandum No. M-11-16 (Washington, D.C.: Apr. 14, 2011) 

(M-11-16). M-11-16 has been superseded by Office of Management and Budget, 

Appendix C to Circular No. A-123, Requirements for Effective Estimation and Remediation 

of Improper Payments, OMB Memorandum No. M-15-02 (Washington, D.C.: Oct. 20, 

2014) but was the applicable guidance during the period examined in our performance 

audit.

5

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
Appendix I: Scope and Methodology

Page 35 GAO-15-209 Hurricane Sandy Improper Payments

we evaluated only the policies and procedures related to HUD’s fiscal 

year 2014 improper payment estimate for CDBG-DR. We did not test the 

implementation of the agency policies and procedures and therefore 

cannot attest to whether the estimates reported in the agencies’ fiscal 

year 2014 agency financial reports were reliable. Our review only 

assessed the design of the policies and procedures developed to guide 

the preparation of these estimates.

We conducted this performance audit from April 2014 to February 2015 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.
Appendix II: Selected Agencies’ Fiscal Year 

2014 Improper Payment Estimates for Disaster 

Relief Funds

Page 36 GAO-15-209 Hurricane Sandy Improper Payments

Table 7 provides a summary of selected agencies’ fiscal year 2014 

improper payment estimates for disaster relief funds.

Table 7: Selected Agencies’ Fiscal Year 2014 Improper Payment Estimates for Disaster Relief Funds

Dollars in millions

Agency Program

Improper 

payment 

estimate 

Improper 

payment 

error rate

Program 

outlays

Department of 

Housing and 

Urban 

Developmenta

Community Development Block Grants – Disaster Recovery $19 1.1% $1,642

Department of 

Transportation

Federal Highway Administration (FHWA) Federal-Aid Grantsb 43 0.1% $42,933

Federal Railroad Administration – Grants to the National Railroad 

Passenger Corporation – Disaster Relief Act

1 0.4% 134

Federal Transit Administration – Public Transit Emergency Relief – 

Disaster Relief Act

0 0.0% 544

FHWA – Emergency Relief – Hurricane Sandy 0 0.0% 154

Federal Aviation Administration – Facilities and Equipment – 

Disaster Relief Act

0 0.0% 10

Department of 

Homeland 

Security 

Federal Emergency Management Agency (FEMA) – Public 

Assistanceb 64 1.3% 4,915

FEMA – Individuals and Households – Hurricane Sandy 57 3.7% 1,559

FEMA – Disaster Relief Fund Vendor Paymentsb 33 6.6% 503

FEMA – Hurricane Sandy Payroll 2 0.6% 249

U.S. Coast Guard – Hurricane Sandy 1 4.1% 19

FEMA – Disaster Relief Fund Travel Payments 0 0.2% 179

FEMA – Government Charge Cardb 0 8.0% 3 

FEMA – Urban Search and Rescue 0 0.0% 9 

National Protection and Programs Directorate – Hurricane Sandy 0 0.3% 8 

FEMA – Disaster Case Management 0 0.0% 4 

Customs and Border Protection – Hurricane Sandy 0 0.0% 0 

FEMA – Hazard Mitigation Grants 0 0.0% 0 

U.S. Army Corps 

of Engineers

Travel Payb 1 0.4% 150

Commercial Payb 0 0.0% 18,700

Small Business 

Administration

Disaster Assistance Loansb 70 12.0% 586

Office of Entrepreneurial Development Grants 0 3.0% 6 

Source: GAO analysis of agencies’ fiscal year 2014 improper payment reporting. | GAO-15-209

Note: For consistency, dollar amounts and percentages were rounded to the nearest million and 

hundredth, respectively.

Appendix II: Selected Agencies’ Fiscal Year 

2014 Improper Payment Estimates for 

Disaster Relief Funds
Appendix II: Selected Agencies’ Fiscal Year 

2014 Improper Payment Estimates for Disaster 

Relief Funds

Page 37 GAO-15-209 Hurricane Sandy Improper Payments

a

The Department of Housing and Urban Development received an extension on the issuance of its 

agency financial report to March 1, 2015. However, this extension did not apply to the improper 

payment section of the report.

b

The outlays and improper payment estimates for these programs include funding from the Disaster 

Relief Appropriations Act, 2013, and other sources.
Appendix III: Full Text for Figure 4

Page 38 GAO-15-209 Hurricane Sandy Improper Payments

Figure 5: Full Text for Figure 4 – Key Requirement 1

Appendix III: Full Text for Figure 4
Appendix III: Full Text for Figure 4

Page 39 GAO-15-209 Hurricane Sandy Improper Payments

Figure 6: Full Text for Figure 4 – Key Requirement 2
Appendix III: Full Text for Figure 4

Page 40 GAO-15-209 Hurricane Sandy Improper Payments

Figure 7: Full Text for Figure 4 – Key Requirement 3
Appendix III: Full Text for Figure 4

Page 41 GAO-15-209 Hurricane Sandy Improper Payments

Figure 8: Full Text for Figure 4 – Key Requirement 4
Appendix III: Full Text for Figure 4

Page 42 GAO-15-209 Hurricane Sandy Improper Payments

Figure 9: Full Text for Figure 4 – Key Requirement 5
Appendix III: Full Text for Figure 4

Page 43 GAO-15-209 Hurricane Sandy Improper Payments

Figure 10: Full Text for Figure 4 – Key Requirement 6
Appendix III: Full Text for Figure 4

Page 44 GAO-15-209 Hurricane Sandy Improper Payments

Figure 11: Full Text for Figure 4 – Key Requirement 7
Appendix III: Full Text for Figure 4

Page 45 GAO-15-209 Hurricane Sandy Improper Payments

Figure 12: Full Text for Figure 4 – Key Requirement 8
Appendix III: Full Text for Figure 4

Page 46 GAO-15-209 Hurricane Sandy Improper Payments

Figure 13: Full Text for Figure 4 – Key Requirement 9
Appendix III: Full Text for Figure 4

Page 47 GAO-15-209 Hurricane Sandy Improper Payments

Figure 14: Full Text for Figure 4 – Key Requirement 10
Appendix IV: Comments from the Department 

of Housing and

Urban Development

Page 48 GAO-15-209 Hurricane Sandy Improper Payments

Appendix IV: Comments from the 

Department of Housing and

Urban Development
Appendix IV: Comments from the Department 

of Housing and

Urban Development

Page 49 GAO-15-209 Hurricane Sandy Improper Payments
Appendix V: Comments from the 

Department of Transportation

Page 50 GAO-15-209 Hurricane Sandy Improper Payments

Appendix V: Comments from the 

Department of Transportation
Appendix VI: Comments from the Department 

of Homeland Security

Page 51 GAO-15-209 Hurricane Sandy Improper Payments

Appendix VI: Comments from the 

Department of Homeland Security
Appendix VI: Comments from the Department 

of Homeland Security

Page 52 GAO-15-209 Hurricane Sandy Improper Payments
Appendix VII: Comments from the 

U.S. Army Corps of Engineers

Page 53 GAO-15-209 Hurricane Sandy Improper Payments

Appendix VII: Comments from the

U.S. Army Corps of Engineers
Appendix VII: Comments from the 

U.S. Army Corps of Engineers

Page 54 GAO-15-209 Hurricane Sandy Improper Payments
Appendix VII: Comments from the 

U.S. Army Corps of Engineers

Page 55 GAO-15-209 Hurricane Sandy Improper Payments
Appendix VIII: Comments from the

Small Business Administration

Page 56 GAO-15-209 Hurricane Sandy Improper Payments

Appendix VIII: Comments from the

Small Business Administration
Appendix VIII: Comments from the

Small Business Administration

Page 57 GAO-15-209 Hurricane Sandy Improper Payments
Appendix VIII: Comments from the

Small Business Administration

Page 58 GAO-15-209 Hurricane Sandy Improper Payments
Appendix IX: GAO Contact and Staff 

Acknowledgments

Page 59 GAO-15-209 Hurricane Sandy Improper Payments

Beryl H. Davis, (202) 512-2623 or davisbh@gao.gov

In addition to the contact named above, Phillip McIntyre (Assistant 

Director), Omar V. Torres (Auditor-in-Charge), Sarah Florino, Maxine 

Hattery, James Healy, Jason Kelly, Diana Lee, Ricky A. Perry, Jr., and 

Cynthia Saunders made significant contributions to this report.

Appendix IX: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(197243)
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