1050 First Street NE Washington, DC 20463 | www.fec.gov/oig

MEMORANDUM

TO: The Commission 

FROM: Christopher Skinner 

Inspector General

SUBJECT: SR-22-02: The Federal Election Commission’s Compliance with Improper 

Payments Reporting for Fiscal Year 2021 

DATE: May 9, 2022 

Purpose. This report transmits the results of the Federal Election Commission (FEC) Office 

of Inspector General (OIG) fiscal year (FY) 2021 annual review of the FEC’s compliance 

with the Payment Integrity Information Act of 2019 (PIIA). The Office of Management and 

Budget (OMB) Circular A-123 requires that each agency’s OIG annually review and 

evaluate whether the agency has published the appropriate improper payments information 

with the annual Performance and Accountability Report (PAR) or Annual Financial Report 

(AFR) and accompanying materials for the most recent fiscal year. In addition, each OIG is 

to determine if the agency has complied with the PIIA and other applicable payment integrity 

guidance. 

Criteria. We conducted a special review to satisfy our FY 2021 annual compliance review 

using the requirements in OMB Circular A-123, Appendix C (March 2021), OMB Circular 

A-136 (August 10, 2021), OMB Annual Data Call Instructions, OMB Payment Integrity 

Question and Answer Platform, and the CIGIE Guide for PIIA. 

Results. For FY 2021, the OIG concludes the FEC complied with the following applicable 

requirements outlined in the PIIA and OMB guidance: 
Legal Requirements Compliance

1a. 

Published payment integrity information with the annual 

financial statement and in the accompanying materials 

to the annual financial statement of the agency for the 

most recent FY in accordance with OMB guidance. 

Yes

1b. 

Posted the annual financial statement and accompanying 

materials required under guidance of the OMB on the 

agency website.1

Yes

2a. 

Conducted improper payment risk assessments for each 

program with annual outlays greater than $10,000,000 at 

least once in the last three years.

Yes

2b. 

Adequately concluded whether the program is likely to 

make improper payments and unknown payments above 

or below the statutory threshold. 

Yes2

3. 

Published improper payments and unknown payment 

estimates for programs susceptible to significant improper 

payments and unknown payments in the accompanying 

materials to the annual financial statement. 

N/A3

4. 

Published corrective action plans for each program for which 

an estimate above the statutory threshold was published in the 

accompanying materials to the annual financial statement.

N/A

5a. 

Published an improper payment and unknown payment

reduction targets for each program for which an estimate 

above the statutory threshold was published in the 

accompanying materials to the annual financial 

statement. 

N/A

5b. 

Demonstrated improvements to payment integrity or 

reached a tolerable improper payment and unknown 

payment rate. 

N/A

5c. Developed a plan to meet the improper and unknown 

payment reduction target. N/A

6. 

Reported an improper payment and unknown payment

estimate of less than 10% for each program for which an 

estimate was published in the accompanying materials to 

the annual financial statement.

N/A

1 Availbale at FEC Independent Auditor's Report and Financial Statements FY 2021. 

2 The OIG determined the agency was compliant but identified a recommendation for improvement to better align 

the agency’s process with OMB guidance. See conclusions section for additional detail.

3 Requirement is not applicable because FEC determined in its most recent risk assessment that the agency’s 

programs are not susceptible to significant improper payments.
Background. The Improper Payments Elimination and Recovery Act of 2010 (IPERA) 

amended the Improper Payments Information Act of 2002 (IPIA) and required agencies to 

identify and review all programs and activities they administer that may be susceptible

to significant improper payments4 based on guidance provided by OMB. Additionally, 

section 3 of IPERA required Inspectors General to review each agency’s improper payment 

reporting and issue an annual report. On March 2, 2020, the PIIA repealed IPERA, IPIA, 

and the Improper Payments Elimination and the Recovery Improvement Act of 2012 

(IPERIA), but set forth similar improper reporting requirements including an annual report 

by Inspectors General.5 

The objective of the PIIA is to improve efforts to identify, reduce, and recover governmentwide improper payments. An improper payment is any payment that should not have been 

made or that was made in an incorrect amount. Incorrect amounts are overpayments or 

underpayments that are made to eligible recipients. An improper payment also includes any 

payment that was made to an ineligible recipient or for an ineligible good or service, or 

payments for goods or services not received (except for such payments authorized by law). 

In addition, when an agency’s review is unable to discern whether a payment was proper 

because of insufficient or lack of documentation, this payment must also be considered an 

improper payment. 

Beginning in FY 2021, OMB M-20-21 requires agencys to assess the likelihood of total 

annual improper payments (IPs) plus annual unknown payments (UPs) above the staturory 

threshold. In addition, agencies are required to report that they adequately concluded whether 

the program is likely to make IPs and UPs above or below the statutory threshold. 

Work Performed by FEC OIG. The OIG reviewed the agency’s payment integrity section 

and other improper payment disclosure sections of the FEC FY 2021 AFR posted on the 

agency’s website. The OIG also examined the most recent improper payment risk 

assessment and other relevant workpapers included in the FEC’s FY 2021 Financial 

Statement Audit. 

Conclusion. The OIG determined that the agency had no programs susceptible to significant 

improper payments. Based on our review of the IP risk assessment, the OIG concludes that 

the FEC’s efforts to detect, prevent, and/or reduce IPs and UPs either above or below the 

statutory thresholds are adequate considering that improper payment risk is low, there are no 

UPs, and the agency is not susceptible to significant improper payments. However, we did 

make one recommendation for improvement (see below).6

4

 Significant improper payments are gross annual improper payments (i.e., the total amount of overpayments 

and underpayments) in the program exceeding (1) both 1.5 percent of program outlays and $10 million of all 

program or activity payments made during the first year reported, or (2) $100 million (regardless of the 

improper payment percentage of total program outlays).

5 OMB A-123 Appendix C (as modified) implements requirements for the following: (1) IPIA; (2) IPERA; 

(3) IPERIA; (4) PIIA; and (5) Executive Order 13520 - Reducing Improper Payments, November 20, 2009.

6 A recommendation for improvement is not a finding. OMB A-123 Appendix C provides that a recommendation 

for improvement is an action that would improve the program as it relates to a specific evaluation criteria. 
FEC OIG 2022-05-001

Recommendation for Improvement. To ensure improper payment reporting is consistent with 

OMB A-123 Appendix C, we recommend that management include language in the IP risk 

assessment to expressly address both IPs and UPs and whether either may have occurred 

above or below the statutory threshold. We recognize that the agency did not expressly 

reference UPs because none were identified. However, doing so would better align with 

OMB’s standard language, which provides that the agency adequately concluded whether the 

program is not likely to make IPs and UPs above or below the statutory threshold. 

Management Response. The Agency maintains the highest level of payment integrity.

During the FY 2021 risk assessment, the Agency was identified as Phase 1, addressing both 

IPs and UPs. However, we plan to implement OIG’s recommendation to further clarify the 

assessment process and plan to expressly reference the term UPs in future assessments. We 

thank the OIG for its review of the Improper Payments Reporting process and look forward 

to continuing to work together.

The OIG is required to report these results to the Senate Committee on Homeland Security 

and Governmental Affairs; the House Committee on Oversight and Reform; the House and 

Senate Committee on Appropriations; the Comptroller General; and OMB. 

If I can provide you with any further information, please do not hesitate to contact me at 

(202) 694-1016 or via email at cskinner@fec.gov. 

cc: John Quinlan, Chief Financial Officer 

Alec Palmer, Staff Director/Chief Information Officer

Lisa Stevenson, Acting General Counsel