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U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5110

TO: Rostin Behnam, Chairman 

Kristin Johnson, Commissioner

Christy Goldsmith Romero, Commissioner 

Summer Mersinger, Commissioner 

Caroline Pham, Commissioner

FROM: Miguel A. Castillo, CPA, CISA, CRMA

DATE: May 12, 2023

SUBJECT: Management Letter: FY2022 Compliance with Payment Integrity 

Information Act of 2019

The Payment Integrity Information Act of 2019 (PIIA) requires federal agencies including 

the Commodity Futures Trading Commission (CFTC) to estimate the risk of improper 

payments (IP) and unknown payments (UP) for its programs. See Appendix A for PIIA 

background. Programs that are not likely to have an annual amount of IP plus UP above 

a statutory threshold (which is either (1) both 1.5 percent of program outlays and

$10,000,000 of all program payments made during the FY, or (2) $100,000,000) are 

referred to as being in “Phase 1.” CFTC historically has determined it is a “Phase 1” 

agency, and did so again this year. This makes sense as CFTC is a smaller agency, 

and does not administer a benefit program.

The PIIA requires the Inspector General of each executive agency to determine whether 

the agency is in compliance with the PIIA, and to submit a report on the determination to 

the head of the executive agency, the Senate Committee on Homeland Security and 

Governmental Affairs, the House Committee on Oversight and Accountability, and the 

Comptroller General of the United States.

To fulfill our obligations under the PIIA, the Office of the Inspector General (OIG) 

completed a review of the CFTC’s PIIA compliance for FY2022. The objectives of our 

review were to:

1. Determine whether CFTC was compliant with the PIIA for FY2022.

2. Perform an independent risk assessment of CFTC payments to determine 

whether CFTC improper payments remain below improper payment thresholds 

(Phase 1 agency).
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See Appendix B for scope and methodology.

To answer objective 1, we obtained and reviewed the CFTC’s FY2022 AFR. Our 

previous PIIA review had recommended inclusion of a discussion of PIIA compliance in 

the CFTC FY2021 AFR. CFTC has since included such discussion in the FY2022 AFR. 

We also closed an additional FY2021 recommendation based on CFTC performance 

and performed further actions to evaluate PIIA compliance during FY2022. See 

Appendix C for further details.

To answer objective 2, the OIG independently assessed CFTC’s improper payment risk 

for FY 2022 and concluded that the CFTC is a Phase 1 agency because payment risk is 

well below the established OMB threshold (i.e., improper payments are not greater than

$10 million or 1.5% of outlays). See Appendix D for further analysis.

We find that CFTC demonstrated compliance with PIIA for FY2022. Management concurs. 

See Appendix E for management’s comments in its entirety. The management letter will be 

posted on the Office of the Inspector General’s webpage and included in the September 

2023 Semiannual Report to Congress. 

Cc:

reports_@hsgac.senate.gov

oversight.democrats@mail.house.gov

IPcompliancereports@gao.gov. 

David Gillers, Chief of Staff 

Bruce Fekrat, Chief Counsel

Joseph R. Cisewski, Chief of Staff and Senior Counsel 

Christopher Lucas, Chief of Staff and Counsel

Meghan Tente, Chief of Staff

Robert Schwartz, General Counsel 

Jeffrey Sutton, Executive Director

Joel Mattingley, Chief Financial Officer 

Keith A. Ingram, Accounting Officer

John L. Rogers, Senior Advisor

A. Roy Lavik, Inspector General

Judith A. Ringle, Deputy Inspector General and Chief Counsel
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Appendix A 

Background

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

111-204) amended the Improper Payments Information Act of 2002 (Public Law 107- 

300) and required agencies to identify and review all programs and activities they 

administer that may be susceptible to significant improper payments (based on 

guidance provided by the Office of Management and Budget (OMB)). For programs or 

activities with estimated improper payments above a certain threshold, each agency 

was required to prepare a report on actions it has taken or plans to take to recover 

improper payments and prevent future improper payments. In addition, 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 Payment Integrity Information Act of 2019 (PIIA) (Public Law 

116-117) repealed IPERA (and other laws) but set forth similar improper payment 

reporting requirements, including an annual compliance report by Inspectors General.

One of the primary changes made by the PIIA relates to new risk factors that are to be 

embedded into federal entities’ improper payment risk assessments. These factors are:

• Similarities to other programs that have reported improper and unknown payment 

estimates or have been deemed susceptible to significant improper payments.

• Accuracy and reliability of improper and unknown payment estimates previously 

reported for the program or other indicators of potential susceptibility to improper 

payments.

• Whether the program lacks information or data systems to confirm eligibility or 

provide for other payment integrity needs.

• Risk of fraud as assessed by the federal entities under the Standards for Internal 

Control in the Federal Government issued by the Government Accountability 

Office, also referred to as the Green Book.

The PIIA established responsibilities for the Office of Management and Budget (OMB)

to issue guidance and to establish an interagency working group on payment integrity. 

OMB thereafter issued OMB M-21-19, Requirements for Payment Integrity Improvement 

(March 5, 2021), Appendix C to OMB Circular A-123. The goal of Appendix C is to 

transform the payment integrity compliance framework and create a more 

comprehensive and meaningful set of requirements to allow agencies to spend less

time complying with low-value activities and more time researching the underlying 

causes of improper payments, balancing payment integrity risks and controls, and 

building the capacity to help prevent future improper payments. We followed OMB and 

CIGIE guidance in the completion of this report.
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Appendix B 

Scope and Methodology

The objectives of our FY 2022 review were to:

1. Determine whether the CFTC is compliant with the PIIA; and

2. Perform an independent risk assessment of CFTC payments to determine 

whether CFTC improper payments remains below improper payment thresholds 

(Phase 1 agency).

To answer objective 1, we performed a follow-up evaluation to our FY 2021 report to 

determine FY 2022 compliance. We obtained and reviewed the CFTC’s 2022 Agency 

Financial Report (AFR). We also monitored the required audit of the FY2022 financial 

statements audits (payroll and nonpayroll) and Customer Protection Fund (for the 

whistleblower payments), both performed by an Independent Public Accounting firm. 

During our fieldwork we reviewed internal controls, looked at key cycle memos and 

reviewed tests of controls. We also met with relevant CFTC personnel to understand the 

business environment and key planning meetings. We evaluated payment risk reporting 

in CFTC’s 2022 AFR under OMB M-21-19 and under the Counsel of Inspectors 

Generals (CIGIE) Guidance for Payment Integrity Information Act Compliance Reviews, 

dated November 8, 2022.

To answer objective 2, we independently assessed improper payment risk for FY 2022. 

We obtained and analyzed payment/accounting data for quality; contracted analytic 

experts to perform tests of normality by object class and/or CT series using SAS and 

evaluated payment outliers set at 3z (standard deviations) from averages; and 

examined extreme values. See Appendix D for further analysis.
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Appendix C 

Previous Recommendations

Prior Year Recommendations Current Year Status

Include payment integrity analysis with 

relevant links and estimates in future 

AFRs as required by OMB M-21-19

Closed. This was added to the CFTC 

2022 AFR.

Seek counsel for interpreting general law 

matters such as PIIA compliance

Closed. A response was provided from 

OFM, that they seek and will continue to 

seek general law interpretations from 

OGC as deemed appropriate.
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Appendix D 

PIIA Checklist Table

Reference to where the

Requirementis published

ComplianceMet?

(Yes/No) Whistleblower Payroll NonPayroll

IG Evaluation of

Accuracy

IG Evaluation of

Completeness

Specific Recommendationsto

Meet Compliance Agency Response

1. (OMB M-21-19 Appendix C-IVA-1a) 1a. Published Payment

Integrity information with the

annual financialstatement.

Agency Financial Report Yes Yes Yes Yes See Tables See Tables

N/A

No Response Needed

2. (OMB M-21-19 Appendix C-IVA-1b) 1b. Posted the annual

financial statement and

accompanying materials on the

agency website.

Agency Financial Report Yes Yes Yes Yes See Tables See Tables

N/A

3. (OMB M-21-19 Appendix C-IVA-2a) 2a. Conducted IP risk

assessmentsfor each program

with annual outlays greaterthan

$10,000,000 at least once in the

last three years.

Agency Financial Report Yes Yes Yes Yes See Tables See Tables

N/A

4. (OMB M-21-19 Appendix C-IVA-2b) 2b. Adequately concluded

whether the program is likely to

make Improper Payments(IPs)

and Unknown Payments (UPs)

above or below the statutory

threshold.

Agency Financial Report Yes Yes Yes Yes See Tables See Tables

N/A

5. (OMB M-21-19 Appendix C-IVA-3) 3. Published IP and UP

estimatesfor programs

susceptible to significant IPs and

UPsin the accompanying

materials to the annual financial

statement.

Agency Financial Report N/A N/A N/A N/A N/A N/A

N/A

6. (OMB M-21-19 Appendix C-IVA-4) 4. Published corrective

action plans for each program for

which an estimate above the

statutory threshold was

published in the accompanying

materialsto the annual financial

statement.

N/A N/A N/A N/A N/A N/A N/A N/A

7. (OMB M-21-19 Appendix C-IVA-5a) 5a. Published an IP and UP

reduction targetfor each

program forwhich an estimate

above

the statutory threshold was

published in the accompanying

materials to the annual financial

statement.

N/A N/A N/A N/A N/A N/A N/A N/A

8. (OMB M-21-19 Appendix C-IVA-5b) 5b. Demonstrated

improvementsto payment

integrity or reached a tolerable

IP and UP rate.

N/A N/A N/A N/A N/A N/A N/A N/A

9. (OMB M-21-19 Appendix C-IVA-5c) 5c. Developed a plan to

meet the IP and UP reduction

target.

N/A N/A N/A N/A N/A N/A N/A N/A

10. (OMB M-21-19 Appendix C-IVA-6) 6. Reported an IP andUP

estimate of lessthan 10% for

each program forwhich an

estimate was published in the

accompanying materialsto the

annual financial statement.

N/A N/A N/A N/A N/A N/A N/A N/A
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Summary: FY 2022 Potential PIIA Anomalies (Absolute Values)

Je Category / Je Source

obj_desc

Payments

Payroll

Treasury Confirmation

Budgetary Transaction

Credit Card Interface Default $424,006

Federal Employees Group Life Insurance (FE.. $1,078

Federal Employees Retirement System (FERS) 192,899

Full-Time Permanent Appointments 1,073,760

Health Insurance – Federal Employees Health.. 75,911

Hospital Insurance Tax (HIT) 24,861

OASDI FICA – FERS – Full Contribution 47,371

Retention Allowance 11,081

Temporary Appointments 5,734

Thrift Savings Plan (TSP) Basic 10,737

Thrift Savings Plan (TSP) Matching 42,360

Time-Off Awards 19,875

Grand Total $1,505,668 $424,006

Under statutory thresholds ($10million and 1.5% of payments); therefore, no further 

action by CFTC required.
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Bubble Chart - FY 2022 Potential Payment Anomalies (Absolute Values)
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Appendix E

Management Response

TO: Miguel A. Castillo 

Assistant Inspector General for Audits 

Office of the Inspector General 

FROM: Jeffrey Sutton t~~i~ ~~~t,, 

·= 

Dllt:1"l!HJ.l00045~5 

Executive Director 

Division of Administration 

DATE: May 10, 2023 

SUBJECT: Management's Response to draft OIG Management Letter: FY2022 

Compliance Review with Payment Integrity Information Act of2019 (PIIA) 

Report 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone (202) 418-5000 

Facsimile (202) 418-5521 

www.cftc.gov 

MEMORANDUM

TI1ank you for the opportunity to comment on the Office of the Inspector General's (OIG) 

draft FY 2022 PIIA review report. We appreciate the opportunity to review the draft report 

that expresses the Commission's full compliance with PIIA. Management concurs with the 

report as written. 

We appreciate the dialogue we have had throughout this review. If you require further 

assistance, please contact Keith Ingram, Accounting Officer at (202) 418-5612. 

CC: 

Joel Mattingley 

Chief Financial Officer 

Division of Administration