FEDERAL MARITIME COMMISSION

800 North Capitol Street, N.W.

Washington, DC 20573 

Inspector General

TO: Chairman Khouri 

Commissioner Dye 

Commissioner Maffei 

Commissioner Sola 

Commissioner Bentzel 

FROM: Jon Hatfield

Inspector General 

DATE: March 4, 2021 

SUBJECT: Improper Payments Compliance Report for Fiscal Year 2020 

Results in Brief

This report communicates the results of the Federal Maritime Commission (FMC) Office 

of Inspector General’s (OIG) annual review of the FMC’s compliance with reporting and 

performance requirements regarding improper payments. For fiscal year (FY) 2020, the OIG 

concluded the FMC complied with all the requirements that are applicable to the agency for 

improper payment reporting. According to Office of Management and Budget (OMB) guidance, 

compliance with the Payment Integrity Information Act of 2019 (PIIA) means that the agency met 

the following six requirements, as appropriate: 

Requirements for PIIA Compliance Did the Agency 

Comply?

1 Published an Agency Financial Report (AFR) or Performance and 

Accountability Report (PAR) for the most recent fiscal year and posted 

that report and any accompanying materials required by OMB on the 

agency website.

Yes

2 Conducted a program specific risk assessment for each program that 

conforms with Section 3352(a) of Title 31 U.S.C.

Yes

3 Published improper payment estimates for all programs and activities

identified as susceptible to significant improper payments under its risk 

assessment.

N/A1

4 Published programmatic corrective action plans in AFR or PAR. N/A1

5 Published, and is meeting, annual reduction targets for each program 

assessed to be at risk and estimated for improper payments.

N/A1

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

each program for which an improper payment estimate was obtained 

and published in the AFR or PAR.

N/A1

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

programs are not susceptible to significant improper payments. 
2 

During our review, we noted two issues where the FMC could improve its improper 

payment reporting process. The OIG concluded that neither issue affected compliance nor 

significantly altered the payment integrity information reported by the FMC. The OIG has prepared 

a separate management letter with a suggestion to the Deputy Chief Financial Officer to address 

the issues for future reporting. 

Background 

The Improper Payments Elimination and Recovery Act of 2010 (IPERA) (Public Law 111-

204) 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 payments based on guidance provided by the Office of Management and 

Budget (OMB). 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. Because final OMB guidance related to PIIA was not expected to be 

issued until early 2021, we initiated our FY 2020 annual compliance review using a combination 

of the requirements in OMB Circular A-123, Appendix C (M-18-20, June 2018), OMB Circular 

A-136 (August 2020), OMB Annual Data Call Instructions, OMB Supplemental Data Call 

Questions, OMB Payment Integrity Question and Answer Platform, and the Council of the 

inspectors general on Integrity and Efficiency guidance required under PIIA. 

The purpose of IPIA, as amended, and the related requirements, are to improve the federal 

government’s efforts to reduce and recover 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. 

Each agency inspector general is required to review improper payment reporting in their 

agency’s annual PAR or AFR and any accompanying materials to determine if the agency is in 

compliance with PIIA. The OIG reviewed the agency’s Improper Payments Information Act 

section of FMC’s FY 2020 PAR posted on the agency’s website for compliance with PIIA, as well 

as, the PaymentAccuracy.gov Data Call, and the OMB 2020 Supplemental Data Call. The FMC

concluded that the agency has not identified any program that in and of itself constitutes a highrisk for improper payments. As a result, the FMC assessed all its payments to be low-risk for 

improper payments. 
3

Conclusion

The OIG concluded the FMC is compliant for FY 2020. Specifically, the FMC is compliant 

with requirements 1 and 2. Requirements 3 through 6 are not applicable to the agency. The OIG is 

required to report these results to the FMC Commission; the Senate Committee on Homeland 

Security and Governmental Affairs; the House of Representatives Committee on Oversight and 

Reform; the Comptroller General; and OMB. 

If you have any questions or comments, please contact me on (202) 523-5863 or 

jhatfield@fmc.gov. Thank you.

Cc: Office of the Managing Director

Office of Budget and Finance

Office of the General Counsel