Improper Payments: Additional Guidance Could Provide More Consistent Compliance Determinations and Reporting by Inspectors General
Published: 2017-05-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Fiscal year 2015 marked the fifth year of the implementation of IPERA, which requires IGs to annually assess and report on whether executive branch agencies complied with six IPERA criteria related to the estimation of improper payments. Improper payments have been estimated to total over $1.2 trillion government-wide from 2003 through 2016.
This report examines (1) the extent to which the 24 CFO Act agency IGs reported that agencies complied with the six IPERA criteria for fiscal years 2011 through 2015 and the programs reported as noncompliant for 3 or more consecutive years; (2) the extent to which the IGs reported that they performed optional procedures during their fiscal year 2015 reviews; and (3) the number and status of the IGs' fiscal years 2011 through 2015 IPERA compliance review recommendations. To conduct this work, GAO analyzed the IGs' fiscal years 2011 through 2015 IPERA compliance reports and corroborated the findings with OMB and all 24 CFO Act agencies and their IGs.
section_title: What GAO Found
paragraphs: Five years after the implementation of the Improper Payments Elimination and Recovery Act of 2010 (IPERA), 15 of the 24 Chief Financial Officers Act of 1990 (CFO Act) agencies were reported by their inspectors general (IG) as noncompliant under IPERA for fiscal year 2015. The programs associated with these 15 agencies accounted for $132 billion (or about 96 percent) of the reported $136.7 billion government-wide improper payment estimate for fiscal year 2015. In addition, the inconsistent IG compliance determinations in the IGs' fiscal year 2015 IPERA compliance reports may present potentially misleading information. Specifically, certain IGs reported compliance based on the presence or absence of the required analysis or reporting, regardless of whether the IGs identified flaws, whereas certain other IGs reported agencies as noncompliant based on their performance of some degree of evaluative procedures to determine whether the analysis or reporting that the agency produced was substantively adequate. While the severity of the IGs' findings may have resulted in the IGs reporting noncompliance for some agencies, similar findings were identified for both the compliant and noncompliant agencies. IPERA and Office of Management and Budget (OMB) guidance does not specify what, if any, evaluative procedures should be conducted as part of the IGs' compliance determinations. The Council of the Inspectors General on Integrity and Efficiency (CIGIE), which represents the IGs, has also not issued such guidance.
IGs reported programs at 7 agencies as noncompliant for 3 or more consecutive years as of the end of fiscal year 2015 and, as a result, were required to submit certain information to Congress. However, the Department of Agriculture had not submitted the required information, despite prior recommendations from its IG and GAO. When agencies do not submit the required information, Congress may lack the information necessary to effectively monitor the implementation of IPERA and take action to address problematic programs in a timely manner.
The IGs' IPERA compliance reviews serve a key function: to reasonably assure that federal dollars are not misspent and that improper payment estimates are accurate, reliable, and complete. To that end, 20 of the 24 IGs reported in their fiscal year 2015 IPERA compliance reports that they also performed one or more optional procedures, which included evaluating the accuracy and completeness of their agencies' reporting. The IGs made 425 recommendations in their fiscal years 2011 through 2015 IPERA compliance reports, and 320 of these recommendations were closed as of December 31, 2016.
section_title: What GAO Recommends
paragraphs: GAO recommends that the (1) Director of OMB coordinate with CIGIE to develop and issue guidance, either jointly or independently, to specify what procedures should be conducted as part of the IGs' IPERA compliance determinations and (2) Department of Agriculture submit a proposal to Congress, as required in response to 3 years of IPERA noncompliance. In response to the draft report, OMB had no comments and CIGIE stated that it would coordinate with OMB. Also, the Department of Agriculture concurred with the recommendation to it.

section_title: Letter
paragraphs: Improper payments—payments that should not have been made or were  made in incorrect amounts—have been estimated to total over $1.2 trillion  government-wide from fiscal year 2003 through fiscal year 2016.  Specifically, for fiscal year 2003, 27 agency programs reported estimated  improper payments totaling $35 billion, and by fiscal year 2016,  112 agency programs reported estimated improper payments totaling   $144.3 billion. The focus of this review is fiscal year 2015, and for that  year 122 agency programs reported estimated improper payments  totaling $136.7 billion. It is important to note that these estimates  themselves may not be accurate, reliable, or complete, as we have  reported that the federal government is unable to determine the full extent  of improper payments and to reasonably assure that actions are taken to  reduce them. In addition, certain inspectors general (IG) have reported  issues with agencies’ reported improper payment estimates because of  insufficient sampling methods and flawed estimation methodologies were  used to calculate and report improper payment estimates. Fiscal year  2015 marked the fifth year of the implementation of the Improper  Payments Elimination and Recovery Act of 2010 (IPERA), which, among  other things, requires federal agencies’ IGs to annually assess and report  on whether the agencies under their jurisdiction complied with the six  criteria listed in IPERA. The IGs’ annual IPERA compliance reports serve  a key function: to reasonably assure that federal dollars are not misspent  and that improper payment estimates are accurate, reliable, and  complete. The reports also provide Congress with information on  agencies’ efforts to address improper payments. These reports are the  focus of this review. We previously reported on agency compliance under  IPERA for fiscal years 2013 and 2014, as reported by the IGs.
This audit was conducted to summarize agencies’ compliance under  IPERA for fiscal year 2015, as reported by their IGs in fiscal year 2016, as  well as provide compliance trends for the past 5 years. Specifically, this  report discusses the following:  1.  A summary of IPERA compliance determinations by the IGs for the  24 agencies listed in the Chief Financial Officers Act of 1990, as  amended (CFO Act), including the extent to which the agencies  complied with the criteria listed in IPERA for fiscal years 2011 through  2015 as reported by their IGs; the criteria and programs the IGs  concluded were responsible for agency noncompliance and the  number of programs that were reported as noncompliant for 3 or more  consecutive years as of fiscal year 2015; and the extent to which the  responsible agencies submitted the required information to Congress.  2.  The extent to which the IGs reported that they performed optional  procedures during their fiscal year 2015 reviews, as outlined in Office  of Management and Budget (OMB) guidance.  3.  The extent to which the IGs’ fiscal years 2011 through 2015 IPERA  compliance reports included recommendations and the status of these  recommendations as of December 31, 2016, and for the open  recommendations associated with noncompliant agencies, the extent  to which the recommendations were designed to address agencies’  noncompliance with one or more of the six IPERA criteria.
To determine the number of CFO Act agencies (hereafter referred to as  agencies) and programs that were reported as compliant or noncompliant  under IPERA, including those reported as noncompliant for 3 or more  consecutive years as of fiscal year 2015, we reviewed the fiscal years  2011 through 2015 reports prepared by the IGs at the 24 agencies and  summarized their findings and conclusions. We selected these  24 agencies because they represented over 99 percent of the  government-wide improper payment estimate in fiscal year 2015. To  determine if agencies submitted the required information to Congress to  address consecutive reported noncompliance, we interviewed officials  from the Offices of Chief Financial Officer at relevant agencies and  reviewed supporting documentation. Additionally, we reviewed the  improper payments information reported in the agencies’ fiscal years  2015 and 2016 agency financial reports (AFR) or performance and  accountability reports (PAR) to determine the total improper payment  estimate reported for the 24 agencies. To determine the extent to which  the IGs performed any optional procedures as outlined in OMB guidance,  we reviewed the IGs’ fiscal year 2015 reports. In addition, to determine  the number and status of the IGs’ recommendations, we reviewed the  IGs’ fiscal years 2011 through 2015 IPERA compliance reports and  obtained recommendation status information from the IGs. Additionally,  we reviewed and categorized the IGs’ open recommendations, as of  December 31, 2016, to determine whether the IGs associated with the  15 noncompliant agencies had recommended actions designed to  address the agencies’ noncompliance with one or more of the six IPERA  criteria. Finally, we corroborated our findings with OMB and all 24 CFO  Act agencies and their IGs.
We conducted this performance audit from June 2016 to May 2017 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 additional  information on our scope and methodology.
subsections: section_title: Background
paragraphs: In November 2002, Congress passed and the President signed the  Improper Payments Information Act of 2002 (IPIA), which was later  amended by IPERA and the Improper Payments Elimination and  Recovery Improvement Act of 2012 (IPERIA). The amended legislation  requires executive branch agencies to (1) review all programs and  activities and identify those that may be susceptible to significant  improper payments (commonly referred to as a risk assessment),   (2) publish improper payment estimates for those programs and activities  that the agency identified as being susceptible to significant improper  payments, (3) implement corrective actions to reduce improper payments  and set reduction targets, and (4) report on the results of addressing the  foregoing requirements.
In addition to the agencies’ identifying programs and activities that are  susceptible to significant improper payments, OMB also designates as  high-priority the programs with the most egregious cases of improper  payments. Specifically, OMB is required by IPERIA to annually identify a  list of high-priority federal programs in need of greater oversight and  review. In general, OMB has implemented this requirement by  designating high-priority programs based on a threshold of $750 million in  estimated improper payments for a given fiscal year.
IPERA calls for executive agencies’ IGs to annually determine and report  on whether their respective agencies complied with the following six  criteria: publish a report in the form and content required by OMB—typically  an AFR or a PAR—for the most recent fiscal year, and post that report  on the agency website;  conduct a program-specific risk assessment for each program or  activity; publish improper payment estimates for all programs and activities  deemed susceptible to significant improper payments under the  agency’s risk assessment; publish corrective action plans for those programs and activities  assessed to be at risk for significant improper payments; publish and meet annual reduction targets for all programs and  activities assessed to be at risk for significant improper payments; and  report a gross improper payment rate of less than 10 percent for each  program and activity for which an improper payment estimate was  published.
IPERA states that if an IG reports that an agency is not in compliance  with any of the IPERA criteria for 1 fiscal year, the agency head must  submit a plan to appropriate congressional committees and OMB  describing the actions that the agency will take to come into compliance.  If an agency is found noncompliant with respect to the same program for  2 consecutive years, IPERA directs OMB to review the program and  determine if additional funding would help bring the program into  compliance and, if so, directs the agency to use any available  reprogramming or transfer authority, or request further reprogramming or  transfer authority from Congress, to aid in the program’s remediation  efforts. For programs determined to be noncompliant for more than  3 consecutive years, IPERA requires the agency to submit to Congress  within 30 days of the IG’s report either (1) a reauthorization proposal for  the program or (2) proposed statutory changes necessary to bring the  program or activity into compliance. Because the legal requirement to  report to Congress is triggered by the IG reporting noncompliance, rather  than the noncompliance itself, agencies are not subject to the  congressional reporting requirement until their IGs report their  determinations. In addition, as we previously reported, when agencies  determine that reauthorization or statutory changes are not considered  necessary to bring the programs into compliance, the agencies should  state so in their letters to Congress.
Furthermore, IPERIA requires the IGs at agencies with OMB-designated  high-priority programs to perform additional procedures. OMB also  provides guidance, in OMB Circular No. A-123, Appendix C (OMB M-15- 02), to the IGs regarding their annual IPERA compliance reports. This  guidance restates the statutory requirements and adds procedures that  the IGs are encouraged to adopt at their discretion during their annual  IPERA reviews (hereafter referred to as optional procedures). It is  important to note that some of the optional procedures outlined in OMB  guidance are similar to those required for programs designated by OMB  as high-priority; however, whether to perform such procedures for   non-high-priority programs is up to the IGs. Figure 1 details the IGs’  required and optional procedures.
section_title: Over Half of the CFO Act Agencies Continue to Be Reported as Noncompliant under IPERA, but the IGs’ Compliance Determinations for Fiscal Year 2015 Were Inconsistent
paragraphs: Five years after the implementation of IPERA, 15 of the 24 agencies were  reported as noncompliant under IPERA for fiscal year 2015. Although the  number of agencies reported as noncompliant improved in fiscal years  2012 and 2013, decreasing to 12 and 11 agencies, respectively, IGs  collectively reported an increase in agency noncompliance to 15 agencies  in fiscal years 2014 and 2015. However, as discussed later in this report,  we found that the IGs’ compliance determinations for fiscal year 2015  were not based on a consistent government-wide approach. Figure 2  summarizes the number of agencies noncompliant under IPERA each  year since fiscal year 2011, as reported by their IGs.
We found that noncompliance frequently stretched across multiple years.  For instance, 14 of the 15 agencies were noncompliant in fiscal years  2014 and 2015. In addition, 9 of the 15 noncompliant agencies in fiscal  year 2015 have been reported as noncompliant since IPERA was  implemented—for 5 consecutive years. Figure 3 details the 24 agencies’  overall compliance under IPERA, as reported by their IGs, for fiscal years  2011 through 2015.
The IGs associated with the 15 noncompliant agencies reported that a  total of 52 programs were responsible for identified instances of  noncompliance in fiscal year 2015. As shown in figure 4, the  noncompliant programs accounted for a reported $132 billion in fiscal  year 2015 estimated improper payments, which is approximately 96  percent of the $136.7 billion government-wide reported estimate.
subsections: section_title: Seven Agencies Were Reported as Noncompliant for 3 Consecutive Years or More, as of Fiscal Year 2015, and One Agency Did Not Provide Congress with the Required Information
paragraphs: Seven agencies were reported as noncompliant for 3 or more consecutive  years as of the end of fiscal year 2015, representing 12 programs. IPERA  requires agencies that have been deemed noncompliant for consecutive  years to take certain actions. Specifically, according to IPERA and OMB  guidance, if a program is found to be noncompliant by an agency’s IG for  3 or more consecutive years, the agency must submit to Congress within  30 days of such determination a reauthorization proposal for each  noncompliant program or any proposed statutory changes it deems  necessary to bring the program into compliance. OMB guidance also  states that agencies should share these proposals or plans with their  respective IGs.
For the 7 agencies that had noncompliant programs for 3 or more  consecutive years as of the end of fiscal year 2015, as reported by their  IGs, we found that 6 agencies submitted the required information to  Congress. The remaining agency, the U.S. Department of Agriculture  (USDA), had not submitted the required information to Congress, despite  our prior recommendation, as well as USDA IG recommendations, to do  so. Specifically, 5 USDA programs were reported as noncompliant for at  least 3 consecutive years as of fiscal year 2015. Four of these programs  were noncompliant for 5 consecutive years, and 1 was noncompliant for  3 consecutive years. Figure 5 lists the 7 agencies and the 12 programs  that were noncompliant for 3 or more consecutive years, as reported by  their IGs.
USDA’s Office of Chief Financial Officer (OCFO) informed us that some  of the delays for issuing the letter were caused by the office’s need to  meet with OMB to determine how best to satisfy the requirements. For  example, according to the USDA OCFO, OCFO met with OMB in June  2014, and OMB advised USDA OCFO that proposed statutory changes  were not needed and that a letter to Congress was acceptable to satisfy  the requirements. However, almost 3 years later, USDA has still not  issued the letter. The USDA OCFO stated that it plans to submit the  required information for all 5 programs by the end of fiscal year 2017.  However, IPERA and OMB guidance calls for the information to be  submitted within 30 days of the IG’s reported noncompliance. Therefore,  for the 4 programs that were noncompliant for 5 consecutive years, the  required information should have been submitted within 30 days of the  3 consecutive years noncompliance reporting, which occurred in April  2014. We also recommended in June 2016 that USDA take the required  actions for these 4 programs, and as of March 2017, our prior  recommendation remains open. For the 1 remaining program, which was  noncompliant for 3 consecutive years, the information was required to be  submitted in June 2016. When agencies do not report the required  information, Congress may lack the information necessary to monitor the  implementation of IPERA and take action to address problematic  programs in a timely manner.
section_title: IGs Reported Agencies’ Continued Noncompliance with Several IPERA Criteria
paragraphs: The IGs’ IPERA compliance reports showed areas where agency  compliance has remained a challenge throughout the past 5 years.  Specifically, as shown in figure 6, noncompliance with the IPERA criterion  to publish and meet annual improper payment reduction targets has been  the primary reason agencies were reported as noncompliant by their  respective IGs for 5 consecutive years. For instance, for fiscal years 2011  through 2015, IGs reported that 11 agencies did not comply with this  criterion. Of these 11 noncompliant agencies, 8 agencies have been  noncompliant with this criterion every year since fiscal year 2011. While  the IGs generally reported that agencies published reduction targets for  applicable programs, the targets were regularly not met as the actual  rates exceed the targets.
Although reported noncompliance for several IPERA criteria increased or  stayed the same in fiscal year 2015, as compared to fiscal year 2014, the  total instances of noncompliance (i.e., sum of all instances of IG-reported  agency noncompliance for all six IPERA criteria) has declined since  IPERA was first implemented in fiscal year 2011, as noted in figure 7.  Specifically, in fiscal year 2011, the IGs reported 38 total instances of  noncompliance for all six IPERA criteria, compared to 28 reported  instances of noncompliance in fiscal year 2015.
Although agencies’ continued noncompliance is concerning, we have  previously reported that an agency’s failure to meet reduction targets and  report improper payment rates below 10 percent may not necessarily  suggest that the agency failed to adequately monitor its programs’  improper payments. For example, certain IGs reported increases in improper payment rates because of factors such as improved sampling  and emphasis on training, which enhanced their agencies’ ability to detect  improper payments. Specifically, the Department of Veterans Affairs (VA)  IG reported in its fiscal year 2015 report that 2 VA programs—Community  Care and Purchased Long-Term Services and Support—reported  improper payment rates of 54.77 percent and 59.14 percent, respectively.  According to the VA IG, these rates were significantly higher than those in  the prior year when both programs reported improper payment rates  slightly below 10 percent. According to the VA IG, the dramatic increase  in improper payment rates for the 2 programs occurred primarily because  of improved sample evaluation procedures in fiscal year 2015, which  resulted in more improper payments being identified. Significant  improvements in sampling, training, and the ability to detect improper  payments could considerably reduce the likelihood that an agency will  meet a predetermined reduction target or report an improper payment  rate below 10 percent.
As previously discussed, for the past 5 years, IGs reported that there  were 11 agencies that did not meet the IPERA criterion that required  agencies to publish and meet reduction targets. For fiscal year 2015, 4 of  the 11 agencies—the Department of Defense (DOD), Department of  Education (Education), Department of Homeland Security (DHS), and  Social Security Administration (SSA)—that did not meet reduction targets  were compliant with the remaining five IPERA criteria. Therefore, once  these 4 agencies implement the necessary controls to prevent and detect  improper payments, they may be able to meet their reduction targets,  which in turn, could result in these 4 agencies becoming compliant under  IPERA overall in future years. Furthermore, 3 other agencies—the  Department of Labor (DOL), VA, and Small Business Administration  (SBA)—out of the 11 that did not meet reduction targets were reported by  their IGs as being noncompliant with only one other IPERA criterion (to  report improper payment rates below 10 percent). Therefore, these  3 agencies may also become compliant under IPERA once they  implement the necessary controls to prevent and detect improper  payments, as they may be able to meet their reduction targets and report  improper payment rates below 10 percent. Appendix III details the agency  programs that did not meet their reduction targets and that reported  improper payment rates above the 10 percent threshold for fiscal year  2015.
section_title: IGs Reported Fiscal Year 2015 Compliance Determinations Inconsistently
paragraphs: We reviewed the IGs’ fiscal year 2015 IPERA compliance reports and  found that the IGs were not consistent with one another regarding how  they determined and reported on compliance when issues were identified.  Some IGs reported compliance based on the presence or absence of the  required analysis or reporting (hereafter referred to as a pass/fail  determination by the IG), regardless of whether the IGs identified flaws,  whereas other IGs reported agencies as noncompliant based on the IGs  performing some degree of evaluative procedures to determine whether  the agencies’ analyses or reports were substantively adequate (hereafter  referred to as a determination based on evaluative procedures). IPERA  does not clearly indicate whether, for example, an IG should report an  agency as compliant under the criteria regarding publication of improper  payment estimates if the agency reports an improper payment estimate  that is based on a flawed methodology. While we recognize that the  severity of the issues may have resulted in the IGs’ reporting  noncompliance for some agencies, we found, as noted in some of the  examples below, the types of issues identified for both the compliant and  noncompliant agencies were similar.
IPERA criterion: Publish an AFR or PAR. One IG reported its  respective agency as noncompliant with this criterion. While this IG  reported the Department of Transportation (DOT) noncompliant as a  result of finding issues with improper payment information included in  the AFR (i.e., noncompliance based on evaluative procedures), six  other IGs reported their respective agencies—the Department of  Housing and Urban Development (HUD), Department of State (State),  Environmental Protection Agency (EPA), National Aeronautics and  Space Administration (NASA), General Services Administration  (GSA), and Office of Personnel Management (OPM)—as compliant  despite finding similar issues with the improper payment information  included in the agencies’ published AFRs or PARs (i.e., compliance  based on pass/fail determinations). For example, the DOT IG reported  noncompliance with this criterion as a result of identified issues with  the outlays reported in DOT’s AFR, which is the same issue that was  identified by another IG that reported its agency (GSA) as compliant.  As shown in table 1, if the IGs consistently determined compliance  with this IPERA criterion based on pass/fail determinations or based  on evaluative procedures, the number of agencies reported as  noncompliant with this IPERA criterion could have decreased by 1  (from 1 agency to none) or increased by 6 (from 1 to 7 agencies),  respectively.
IPERA criterion: Conduct program-specific risk assessments. Four  IGs reported their respective agencies as noncompliant with this  criterion. One of the 4 IGs reported its agency, the Department of the  Interior (DOI), as noncompliant because the agency did not prepare a  required risk assessment (i.e., compliance based on pass/fail  determinations). The remaining 3 IGs reported their respective  agencies—the Department of Health and Human Services (HHS),  HUD, and OPM—as noncompliant based on identified issues with the  risk assessments (i.e., noncompliance based on evaluative  procedures). However, 6 other IGs reported their respective  agencies—EPA, GSA, NASA, the National Science Foundation  (NSF), State, and the Department of the Treasury (Treasury)—as  compliant despite finding similar issues with the risk assessments  (i.e., compliance based on pass/fail determinations). For example, 2  IGs reported that their respective agencies (HUD and OPM) were  noncompliant with the IPERA risk assessment criterion as a result of  their agencies not considering all nine required risk factors, as  outlined in OMB guidance, during program-specific risk assessments,  whereas another IG reported its agency (NSF) as compliant with this  IPERA criterion, despite also finding issues with the agency’s  consideration of the nine required risk factors. In addition, although  the State IG reported that the qualitative risk assessments conducted  by State included an evaluation of the nine risk factors required by  OMB, the State IG also reported that the agency could have improved  its risk assessment process regarding one of the nine risk factors— significant increases in funding. Specifically, the State IG reported that  there was a deficiency with State’s process for identifying programs  with significant funding changes. The State IG recommended that  State expand its process to identify programs with significant funding  changes to consider additional factors that may increase the risk of  significant improper payments, including, at a minimum, the  percentage increase of the change. According to the State IG, if the  State’s risk assessment process does not consider the percentage  increase, then the agency may not identify all programs that had  increased risks of improper payments because of increased funding.  For example, the State IG stated that a program that had  expenditures of $101 million in year one and experienced an increase  in expenditures of $99 million (98 percent) in year two would not meet  the $100 million threshold and, as a result, would not be identified as  a program with significant funding changes, which would require a risk  assessment. As shown in table 1, if the IGs consistently determined  noncompliance with this IPERA criterion based on pass/fail  determinations or based on evaluative procedures, the number of  agencies reported as noncompliant with this IPERA criterion could  have decreased by 3 (from 4 to 1 agencies) or increased by 6 (from 4  to 10 agencies), respectively.
IPERA criterion: Publish improper payment estimates. This criterion  did not apply to 5 agencies. For the remaining 19 agencies, 5  agencies were reported as noncompliant with this criterion. Two of  these agencies (GSA and HHS) were reported as noncompliant  because the agencies did not publish required estimates (i.e.,  compliance based on pass/fail determinations), and the remaining  3 agencies (USDA, DOI, and OPM) were reported as noncompliant  because of identified issues with their estimates (i.e., noncompliance  based on evaluative procedures). While the IGs for these 3 agencies  reported noncompliance as a result of identified issues with the  estimates, there were 6 other IGs that reported their respective  agencies (DOD, DOL, Education, HUD, SBA, and VA) were compliant  despite finding similar issues with the estimates (i.e., compliance  based on pass/fail determinations). For example, 1 IG (USDA)  reported that its respective agency was noncompliant with the IPERA  improper payment estimate criterion because the agency was not  using sufficient sampling methods to report improper payment  estimates, whereas another IG (Education) reported its agency as  compliant with the same IPERA criterion, despite reporting that its  agency used flawed estimation methodologies to calculate its  estimates. As shown in table 1, if the IGs consistently determined  noncompliance with this IPERA criterion based on pass/fail  determinations or based on evaluative procedures, the number of  agencies reported as noncompliant with this IPERA criterion could  have decreased by 3 (from 5 to 2 agencies) or increased by 6 (from 5  to 11 agencies), respectively.
IPERA criterion: Publish corrective action plans. This criterion did not  apply to 9 agencies. Of the remaining 15 agencies, 1 (HHS) was  reported as noncompliant with this criterion because it did not publish  a corrective action plan for one of its eight risk-susceptible programs.  Although we did not find any instances of IGs reporting  noncompliance as a result of identified issues with the corrective  action plans, we identified 5 IGs that reported their respective  agencies (DOD, GSA, OPM, USDA, and HUD) as compliant despite  finding issues with the corrective action plans (i.e., compliance based  on pass/fail determinations). For example, 1 IG reported that its  respective agency was compliant with this IPERA criterion, but the IG  also reported that the agency’s corrective action plans did not explain  how it addressed the root causes identified and did not include  planned or actual completion dates of the actions. As shown in  table 1, if the IGs consistently determined noncompliance with this  IPERA criterion based on evaluative procedures, the number of  agencies reported as noncompliant with this IPERA criterion could  have increased by 5 (from 1 to 6 agencies). There would be no  changes to the number of agencies reported as noncompliant if such  determinations were made based on pass/fail basis, as the 1 IG would  have still reported its agency as noncompliant for failing to publish a  corrective action plan.
For the two remaining IPERA criteria, which required agencies to publish  and meet reduction targets and report improper payment rates below  10 percent, we found that the IGs consistently made pass/fail  determinations. Specifically, 11 agencies were reported as noncompliant  because they each had at least 1 program that did not meet its reduction  target, and 6 agencies were reported as noncompliant because they had  at least 1 program that did not report an improper payment rate below  10 percent. As a result, for these two IPERA criteria, table 1 shows no  differences between the original IG noncompliance determinations and  the potential noncompliance results if determinations were consistently  based on pass/fail or evaluative procedures.
We believe that the variations in the IGs’ determinations reduce their  usefulness for comparing compliance and progress across agencies. As  shown in table 1, compliance results could change significantly if the IGs  consistently determined compliance by performing either pass/fail determinations or the evaluative procedures that some IGs use, which we  describe in this report. Specifically, if the IGs had all performed IPERA  compliance determinations based on pass/fail determinations, the number  of noncompliant agencies could decrease by 1 agency (OPM), from 15 to  14 agencies. In addition, the total instances of noncompliance for all six  IPERA criteria could have been 21 as compared to 28 instances as  originally reported by the IGs. Alternatively, if the IGs had consistently  determined compliance based on the evaluative procedures some IGs  used, the number of noncompliant agencies could have been over   one-third higher—an increase of 4 noncompliant agencies (State, EPA,  NASA, and NSF), for a total 19 noncompliant agencies for fiscal year  2015. Also, the number of instances of noncompliance for all six IPERA  criteria could increase from the originally reported 28 instances to  51 instances.
Standards for Internal Control in the Federal Government states that  management should establish measurable objectives that are stated in a  form that permits reasonably consistent measurement. However, IPERA  and related guidance from OMB does not specify what, if any, evaluative  procedures should be conducted as part of the compliance determination,  beyond simply checking for the presence or absence of the required  analysis or report. In addition, there are no specific requirements for IGs  to be consistent with one another when determining agency compliance.  Lastly, the Council of the Inspectors General on Integrity and Efficiency  (CIGIE) stated that although it provided general guidance to the IGs in  fiscal year 2011, it has not provided the IGs with any guidance regarding  how compliance determinations should be made.
section_title: OMB Has Taken Steps to Coordinate with IGs on the IPERA Compliance Reporting Requirements
paragraphs: OMB issued OMB M-15-02, the latest iteration of its Circular No. A-123,  Appendix C, in October 2014, which was effective starting with the IGs’  fiscal year 2014 IPERA compliance reviews. The new OMB guidance  attempted to make IG determinations of compliance clearer and more  concise by instructing IGs to include in their reports a high-level summary  of compliance, both overall and by IPERA criteria. While our audit scope  did not include testing to determine if the IGs complied with all of the  IPERA requirements or whether the IGs followed OMB guidance, as  noted above we identified inconsistent reporting among the IGs during the  course of our audit work. We presented the inconsistencies we identified  to OMB staff, and they informed us that they had noticed similar  inconsistencies.
Although OMB held IPERA compliance town halls prior to the IGs’ fiscal  years 2015 and 2016 IPERA compliance reviews, the town hall briefing  slides did not state OMB’s position on whether the IGs should make  compliance determinations based on pass/fail determinations or  evaluative procedures. OMB staff confirmed that their guidance, as well  as IPERA, does not specify what, if any, evaluative procedures should be  conducted as part of the compliance determination, beyond simply  checking for the presence or absence of the required analysis or report.  Continuing inconsistent compliance determinations may result in  potentially misleading information regarding government-wide compliance  under IPERA.
section_title: Majority of CFO Act Agency IGs Reported Performing One or More Optional Procedures during Their Fiscal Year 2015 IPERA Compliance Reviews
paragraphs: We reviewed the IGs’ fiscal year 2015 IPERA compliance reports and  found that 20 of the 24 agencies’ IGs reported that they performed at  least one procedure beyond what is required by IPERA and IPIA, as  amended by IPERIA. Specifically, as shown in figure 8, we found that  the IGs reported that they performed optional procedures, which included  evaluations of the (1) agency’s assessment of the level of risk for   non-high-priority programs, (2) quality of the agency’s estimation  methodology for non-high-priority programs, (3) accuracy and  completeness of agency reporting, (4) agency’s performance in  recapturing improper payments, and (5) agency’s corrective action plans.  Appendix V lists the 20 IGs and the specific optional procedures  performed by each IG.
While current improper payment estimation laws and corresponding OMB  guidance require the IGs to conduct evaluative procedures of the  agencies’ risk assessments and estimation methodologies when  reviewing programs that OMB designated as high-priority, these types of  evaluative procedures are optional for non-high-priority programs. To put  this in perspective, in fiscal year 2015, there were 122 programs that  published improper payment estimates, and OMB designated 16 of those  programs as high-priority programs. Therefore, only those 16 programs  were required to undergo the IGs’ evaluations of their risk assessments  and improper payment estimates (two IPERA criteria). While $127 billion  of the $136.7 billion fiscal year 2015 government-wide improper payment  estimate was attributable to the 16 OMB-designated high-priority  programs, there was $9.7 billion in reported estimated improper payments  for the remaining programs that are not considered high-priority. Although  the IGs were not required to perform annual evaluative procedures to  identify issues with the agencies’ risk assessments and estimation  methodologies for the non-high-priority programs, as noted in figure 8,  some IGs elected to perform these evaluative procedures for such  programs. OMB staff stated that they believe that performing evaluative  procedures is beneficial to addressing government-wide improper  payments, and, for that reason, they encourage IGs to do more  substantive, in-depth work during their annual IPERA compliance  reviews.
The following examples provide additional details regarding the IGs’  performance of these optional procedures:
Evaluation of agency’s risk assessment(s) for non-high-priority  programs: As noted in figure 8, we found that 11 IGs reported that  they evaluated the agency’s program-specific risk assessment(s). Of  these 11 agencies, we identified 3 IGs (USDA, Treasury, and NASA)  that performed their own independent risk assessments and/or  analysis and, as a result, identified additional agency programs that  they believed should have been identified as susceptible to significant  improper payments during the agencies’ own risk assessments. As a  result of performing this optional procedure, certain IGs recommended that the agencies revise their program-specific risk assessment  processes to reduce the risk of the agencies not identifying all  programs susceptible to significant improper payments. The  recommended improvements included revising the processes to  include factors such as quantitative assessments in addition to (or  instead of) qualitative assessments.
Evaluation of agency’s estimation methodologies for non-high-priority  programs: As noted in figure 8, we found that 10 IGs reported that  they evaluated the quality of the agencies’ improper payment  estimates and methodologies for certain non-high-priority programs.  Specifically, we found that these IGs reported that the published  improper payment estimate for at least 1 agency program was  unreliable because the agencies used inaccurate data, incomplete  data, or insufficient sampling methodologies. As a result of performing  this optional procedure, certain IGs provided recommendations to  help the agencies improve the precision of their improper payment  estimates, such as using improved sampling methodology prepared  by a trained statistician.
Evaluation of the accuracy and completeness of agency reporting: As  noted in figure 8, this was the most frequently performed optional  procedure. Specifically, we found that 15 of the 24 IGs reported that  they evaluated the accuracy and completeness of their agencies’  reporting on improper payments. Specifically, we found most of these  IGs reported that they identified errors in improper payment-related  information in the agencies’ published AFRs. As a result of performing  this optional procedure, these IGs provided recommendations to help  the agencies improve the accuracy of the improper payment-related  information published in their reports, such as recommending that the  agencies implement additional internal controls.
Evaluation of agencies’ performance in recapturing improper  payments: As noted in figure 8, we found that 9 IGs reported that they  evaluated their agencies’ efforts to recapture improper payments and  in some cases found that more improper payments were actually  recaptured by the agencies than the agencies reported. Specifically,  certain agencies’ summaries of recaptured improper payments failed  to include all identified and recaptured improper payments identified  through sources outside of the agencies’ recapture audits, such as  those payments identified through IG audits. As a result of performing  this optional procedure, these IGs made recommendations to help the  agencies improve the accuracy and completeness in reporting of their  recaptured payments, such as recommending that the agencies  develop written policies and procedures detailing the process for  reporting overpayments identified and recaptured from sources  outside of payment recapture audits.
Evaluation of agency corrective action plans: As noted in figure 8, we  found that 6 IGs reported that they determined whether their agencies’  corrective action plans were (1) robust and focused on the appropriate  root causes of improper payments, (2) effectively implemented, and  (3) prioritized within the agency. Specifically, we found that certain IGs  reported that their agencies’ corrective action plans did not explain  how the corrective actions addressed the root causes identified,  lacked planned or actual completion dates of the actions, or had not  been updated to include more current root causes. Identifying the root  causes of improper payments enables the agencies to revise their  corrective action plans to better reflect the unique processes,  procedures, and risks involved with each agency program susceptible  to significant improper payments. As a result of performing this  optional procedure, 1 IG recommended that the agency revise its  corrective action plans to address the issues identified by the IG.
section_title: CFO Act Agency IGs Made About 400 Recommendations in Their Fiscal Years 2011 through 2015 IPERA Compliance Reports, and More Than 100 Recommendations Remain Open as of December 31, 2016
paragraphs: Although hundreds of IG recommendations were made, and over   two-thirds were closed (320 closed recommendations out of 425 total  recommendations) during the past 5 years of the IGs’ IPERA compliance  reviews, agencies’ overall noncompliance under IPERA continues to be at  its highest point—15 noncompliant agencies for both fiscal years 2014  and 2015. As detailed in figure 9, the total annual number of IG-reported  recommendations made by the 24 agencies’ IGs has stayed relatively  steady for the IGs’ fiscal years 2011 through 2015 IPERA compliance  reviews. There was a decrease in the number of IG-reported  recommendations related to the agencies’ compliance under IPERA  during fiscal years 2012 and 2013, which coincides with the 2 years that  the IGs’ reporting showed slight improvements in agencies’ compliance  under IPERA.
As detailed in appendix VI, the number of recommendations per agency  varied significantly from fiscal years 2011 through 2015. For instance, the  number of recommendations per agency fluctuated from as little as no  recommendations for one agency—the Nuclear Regulatory Commission  (NRC)—during this time period, to 49 recommendations for another  agency—HUD. One potential reason for the significant difference in the  number of recommendations per agency could be the extent to which the  agencies were compliant under IPERA over the past 5 years. For  example, NRC has been reported as compliant for the past 5 years,  whereas HUD has been reported as noncompliant for the past 3 years.
As noted in figure 10, there were 105 recommendations open as of  December 31, 2016. While the majority of the open recommendations  were made in the past 2 years, and the agencies may not have had  sufficient time to implement the necessary corrective actions, there was  1 recommendation from fiscal year 2011 that was still open at the time of  our review. Specifically, in the HHS IG’s fiscal year 2011 IPERA  compliance report issued in March 2012, the HHS IG recommended that  HHS develop an improper payment estimate (one of the six IPERA  criteria) for the Temporary Assistance for Needy Families (TANF)  program and, if necessary, seek statutory authority to require state  participation in such a measurement. In the HHS IG’s fiscal year 2015  IPERA compliance report issued in May 2016, the HHS IG made another  recommendation for HHS to publish an estimate for TANF. Specifically,  the IG recommended that HHS continue to work with OMB to implement  one of the OMB-suggested potential alternative approaches to reporting  on TANF improper payments in fiscal year 2016.
According to HHS’s fiscal year 2016 AFR, issued in November 2016,  HHS plans to encourage Congress to consider statutory modifications  that would affect the development of an improper payment estimate when  legislation is considered to reauthorize TANF. In addition, in a June 2016  letter to Congress, HHS stated that it wanted to work with Congress to  address a set of issues concerning the TANF program related to  accountability and how funds are used. Until HHS develops an improper  payment estimate for TANF, HHS will continue to be reported as  noncompliant with the IPERA criteria that agencies publish improper  payment estimates and corrective action plans for all susceptible  programs. Based on the HHS IG’s fiscal year 2015 compliance report,  HHS was noncompliant with five of the six IPERA criteria; however, its  noncompliance with the IPERA criteria to publish an improper payment  estimate and publish a corrective action plan was based on the TANF  program only.
The open recommendations address a number of improper payment  issues, including compliance under IPERA. We reviewed the open  recommendations for the 15 agencies reported as noncompliant for fiscal  year 2015, and as shown in figure 11, we found that agencies generally  had open recommendations for each of the IPERA criteria for which they  were reported as noncompliant. If the agencies take the necessary  corrective actions to address the IGs’ open recommendations, the  number of noncompliant agencies could decrease in future fiscal years, if  no new compliance issues arise. In addition, as shown in figure 11,  recommendations designed to address noncompliance with certain  IPERA criteria were closed by some of the IGs after their fiscal year 2015  IPERA compliance reports were issued. Although these agencies may  have taken corrective actions that resulted in the IGs closing the  recommendations, the compliance results for these agencies for fiscal  year 2016 were not published at the time of our review.
As noted in figure 11, the 3 agencies (DOL, SBA, and Treasury) that did  not report improper payment rates below 10 percent either submitted  plans to address noncompliance to Congress or submitted proposed  statutory changes. For example, in June 2015, Treasury submitted  proposed statutory changes to reduce the improper payment rate of the  Earned Income Tax Credit program, which reported an estimated  improper payment rate of 23.8 percent in fiscal year 2015. Specifically,  according to the Treasury IG’s fiscal year 2015 IPERA compliance report,  the proposed statutory change would help prevent the improper issuance  of billions of dollars in refunds as it would provide the Internal Revenue  Service (IRS) with expanded authority to systematically correct erroneous  claims that are identified when tax returns are processed, which,  according to Treasury, would allow the IRS to deny erroneous Earned  Income Tax Credit refund claims before they are paid. However, as of  March 2017, legislation had not been enacted to provide Treasury with  this authority.
Related to its noncompliance with the IPERA criterion to report an  improper payment rate below 10 percent, DOL submitted a legislative  proposal in October 2016 to make changes to the federal-state  unemployment compensation system to help reduce improper payments.  DOL’s Unemployment Insurance program was its only program that  reported an improper payment rate over 10 percent, and that program  was compliant with the remaining IPERA criteria. However, as of March  2017, legislation had not been enacted to make changes to the   federal-state unemployment compensation system. Related to SBA’s  fiscal year 2015 noncompliance with the IPERA criterion to report an  improper payment rate below 10 percent, its IG noted that the improper  payment rate for one program (Disbursements for Goods and Services)  increased from 8.46 percent in fiscal year 2014 to 13.52 percent in fiscal  year 2015. Although the IG did not issue a recommendation in its fiscal  year 2015 IPERA compliance report to address such noncompliance, the  IG reported that SBA submitted a letter to Congress and OMB detailing  how it would become compliant under IPERA. SBA’s March 2016 letter to  Congress included SBA’s corrective action plan for reducing improper  payments in its Disbursements for Goods and Services program.
section_title: Conclusions
paragraphs: The total amount of estimated improper payments reported government- wide has been estimated to total over $1.2 trillion from fiscal year 2003  through fiscal year 2016. Five years after the implementation of IPERA,  15 of the 24 CFO Act agencies were reported as noncompliant under  IPERA for fiscal year 2015. Although noncompliance under IPERA  continues to be at its highest point, the inconsistencies in IGs’  determinations of noncompliance that we found in the IGs’ fiscal year  2015 IPERA compliance reports may present potentially misleading  information to individuals and entities interested in comparative  government-wide compliance under IPERA. OMB guidance and IPERA  do not specify what, if any, evaluative procedures should be conducted as  part of the IGs’ compliance determinations. CIGIE, which represents the  IGs, has also not issued such guidance.
In addition, IGs reported programs at 7 agencies as noncompliant for 3 or  more consecutive years as of the end of fiscal year 2015, and as a result,  the agencies were required to submit certain information to Congress.  However, USDA had not submitted the required information despite prior  recommendations from its IG and GAO. When agencies do not submit the  required information, Congress may lack the information necessary to  effectively monitor the implementation of IPERA and take prompt action  to address problematic programs.
section_title: Recommendations for Executive Action
paragraphs: We are making the following two recommendations:  To help ensure that government-wide compliance under IPERA is  consistently determined and reported, we recommend that the Director of  OMB coordinate with CIGIE to develop and issue guidance, either jointly  or independently, to specify what procedures should be conducted as part  of the IGs’ IPERA compliance determinations.
To help fulfill USDA’s requirements under IPERA and OMB guidance— that agencies submit proposals to Congress when a program reaches  3 or more consecutive years of noncompliance with IPERA criteria—we  recommend that the Secretary of Agriculture submit a letter to Congress  detailing proposals for reauthorization or statutory changes in response to  3 consecutive years of noncompliance as of fiscal year 2015 for its Farm  Security and Rural Investment Act Program. To the extent that  reauthorization or statutory changes are not considered necessary to  bring a program into compliance, the Secretary or designee should state  so in the letter.
section_title: Agency Comments
paragraphs: We requested comments on a draft of this report from the 24 CFO Act  agencies and their IGs, OMB, and CIGIE. We received letters from  CIGIE, HUD, Treasury, and SSA, as well as from the IGs for DHS and  HUD. These letters are reprinted in appendixes VIII through XIII. In  addition, all of the other agencies and the IGs either notified us that they  had no comments or provided their comments via e-mail. Specifically,  OMB’s liaison to GAO stated in an e-mail that they had no comments on  the report or the recommendation to coordinate with CIGIE to develop  guidance. Similarly, USDA’s Acting Deputy Secretary concurred with  our recommendation to USDA by e-mail.
We also received technical comments from the Department of  Commerce, HHS, HUD, State, Treasury, EPA, NSF, SBA, and SSA,  which we incorporated in the report as appropriate. In addition, the IGs for  DHS, HUD, State, Treasury, VA, EPA, NASA, NSF, and SSA also  provided technical comments, which we also incorporated in the report as  appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretary of Agriculture, the Director of  the Office of Management and Budget, and other interested parties. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff 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 who made key contributions to this report  are listed in appendix XIV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to review the following:  1.  The extent to which the 24 agencies listed in the Chief Financial  Officers Act of 1990, as amended (CFO Act), complied with the  criteria listed in the Improper Payments Elimination and Recovery Act  of 2010 (IPERA), for fiscal years 2011 through 2015 as reported by  their inspectors general (IG); the criteria and programs that the IGs  concluded were responsible for instances of agency noncompliance  and the number of programs at the 24 CFO Act agencies that were  reported as noncompliant under IPERA criteria by their IGs for 3 or  more consecutive years as of fiscal year 2015: and the extent to  which the responsible agencies submitted the required information to  Congress.  2.  The extent to which CFO Act agency IGs reported that they performed  additional optional procedures during their fiscal year 2015 reviews,  as outlined in Office of Management and Budget (OMB) guidance  contained in OMB Circular No. A-123, Appendix C, OMB  Memorandum No. M-15-02 (OMB M-15-02).  3.  The extent to which the IGs’ fiscal years 2011 through 2015 IPERA  compliance reports included recommendations and the status of these  recommendations as of December 31, 2016, and for the open  recommendations associated with noncompliant agencies, the extent  to which the recommendations were designed to address agencies’  noncompliance with one or more of the six IPERA criteria.
Although the responsibility for complying with provisions of improper  payment-related statutes rests with the head of each executive agency,  we focused on those agencies designated as CFO Act agencies because  these agencies represented over 99 percent of the total government-wide  improper payments reported in fiscal year 2015. Our work did not include  validating or retesting the data or methodologies used by the IGs to  determine and report compliance. We corroborated our findings with OMB  and all 24 CFO Act agencies and IGs.
To address our first objective, we identified the requirements that  agencies must meet by reviewing the Improper Payments Information Act  of 2002 (IPIA), IPERA, the Improper Payments Elimination and Recovery  Improvement Act of 2012 (IPERIA), and OMB guidance. We analyzed  CFO Act agency IGs’ fiscal year 2015 IPERA reports, which were the  most current reports available at the time of our review; summarized  information related to agency compliance under IPERA criteria; and  identified common findings and related causes for improper payments, as  reported by the IGs. We also relied on and reviewed prior year supporting  documentation and analyses of CFO Act agencies’ IG IPERA reports for  fiscal years 2011 through 2014, as reported in our June 2016 report on  IPERA compliance reporting, and compared agencies’ compliance with  each IPERA criterion over fiscal years 2011 through 2015, as reported by  the IGs.
In addition, we identified the programs responsible for noncompliance  over this period by analyzing and summarizing the determinations made  in the IG reports. Further, we reviewed the fiscal years 2015 and 2016  improper payments information, which OMB provided to GAO during the  audit of the fiscal years 2016 and 2015 consolidated financial statements  of the U.S. Government, and compared such information to the agency  financial reports or performance and accountability reports to determine  the total improper payment estimate reported for the 24 agencies (see  apps. IV and VII, respectively). To determine the extent of  inconsistencies between the IGs’ fiscal year 2015 noncompliance  determinations, we summarized the noncompliance determinations by  “noncompliance based on pass/fail determinations” and “noncompliance  based on evaluative procedures.” To determine if agencies responsible  for the programs that were reported as noncompliant for 3 or more  consecutive years had submitted either proposals for reauthorization or statutory changes to Congress, we interviewed and requested information  from relevant agency offices of chief financial officer in coordination with  the agency IGs. We did not draw conclusions as to the sufficiency or  completeness of the information contained in proposals for  reauthorization or statutory changes submitted to Congress. Lastly, we  corroborated our findings with OMB and all 24 CFO Act agencies and  IGs.
To address our second objective, we identified procedures that agencies’  IGs were required to perform during their annual IPERA compliance  reviews, as required by IPIA, IPERA, IPERIA, and OMB M-15-02. We  also reviewed IPIA, IPERA, IPERIA, and OMB guidance to identify a list  of optional procedures. To verify that we had properly identified and  categorized the optional IG procedures, we interviewed and obtained  confirmation from OMB staff. We reviewed and summarized the CFO Act  agencies’ IGs’ fiscal year 2015 IPERA compliance reports to determine if  the IGs reported that they performed one or more of the optional  procedures. Given that some of the optional procedures were only  optional when the IGs were reviewing non-high-priority programs, we  determined the population of OMB designated high-priority programs for  fiscal year 2015 based on information from www.paymentaccuracy.gov.  To verify that this list was reported correctly on the website, we  interviewed OMB staff and corroborated the information. For each agency  responsible for a non-high-priority program, we reviewed the related IG’s  IPERA compliance report for fiscal year 2015 to determine whether the IG  reported that it performed one or more of the optional procedures for non- high-priority programs. We did not evaluate the sufficiency of the optional  procedures performed by the IGs nor did we determine whether the IGs  completed the required procedures, as outlined in IPIA, IPERA, IPERIA,  and OMB guidance. Lastly, we corroborated our findings with the 24 CFO  Act agencies’ IGs.
To address our third objective, we reviewed the 24 CFO Act agency IGs’  fiscal years 2011 through 2015 IPERA compliance reports to determine  the number of recommendations made by the IGs. To determine the  status of the recommendations as of December 31, 2016, we reviewed  the recommendation status information obtained from the IGs. To  determine whether the IGs associated with the 15 noncompliant agencies had open recommendations that were designed to address the agencies’  noncompliance with one or more of the six IPERA criteria, we reviewed  and categorized the IGs’ open recommendations, as of December 31,  2016. For those agencies that did not have open recommendations, as of  December 31, 2016, that addressed the agencies’ noncompliance with  the IPERA criteria, we determined whether any of the closed  recommendations addressed noncompliance with the IPERA criteria and  were closed after the IGs’ fiscal year 2015 IPERA compliance reports  were issued in May 2016. For the noncompliant agencies that did not  have any open recommendations or recommendations that were closed  after May 2016 that were designed to address the agencies’  noncompliance with one or more of the six IPERA criteria, we determined  whether those agencies submitted information to Congress to address  IPERA noncompliance, such as reauthorization proposals, proposed  statutory changes, or agency action plans. Lastly, we corroborated our  findings with the respective agencies and their IGs.
We conducted this performance audit from June 2016 to May 2017 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.
section_title: Appendix II: CFO Act Agencies Reported as Noncompliant under IPERA by IGs for Fiscal Year 2015
paragraphs: Figures 12 and 13 detail agencies’ compliance under Improper Payments  Elimination and Recovery Act of 2010 criteria, as reported by their  inspectors general, for fiscal year 2015.
section_title: Appendix III: CFO Act Agencies and Programs Reported as Noncompliant under IPERA by Their IGs for Fiscal Year 2015
paragraphs: Table 2 lists the Chief Financial Officers Act of 1990 agencies and their  programs that their inspectors general reported in fiscal year 2015 were  noncompliant under the Improper Payments Elimination and Recovery  Act of 2010.
section_title: Appendix IV: Reported Improper Payment Estimates by Agency and Program/Activity for Fiscal Year 2015
paragraphs: Table 3 lists the Office of Management and Budget (OMB)-reported  improper payment estimates by agency and program or activity for fiscal  year 2015, which relate to fiscal year 2015 compliance determinations of  the CFO Act agency inspectors general (IG) as discussed in this report.  As noted in table 3, excluding the Defense Finance Accounting Service  Commercial Pay program, there were 115 Chief Financial Officers Act of  1990 agency programs that reported an improper payment estimate  (either a zero estimate or higher) for fiscal year 2015. Appendix VII details  the fiscal year 2016 improper payment estimates, which OMB  provided  to GAO in December 2016 during the audit of the fiscal years 2016 and  2015 consolidated financial statements of the U.S. government; the IGs’  reports regarding such estimates are due in May 2017.
section_title: Appendix V: Optional Procedures Performed by the IGs during Their Fiscal Year 2015 IPERA Compliance Reviews
paragraphs: Table 4 summarizes the optional procedures the CFO Act agency  inspectors general reported that they performed during their fiscal year  2015 IPERA compliance reviews.
section_title: Appendix VI: Fiscal Years 2011 through 2015 Compliance Results and the Status of the IGs’ Recommendations
paragraphs: Table 5 details the status of the recommendations made in the Improper  Payments Elimination and Recovery Act of 2010 (IPERA) compliance  reports of the CFO Act agency inspectors general (IG) for fiscal years  2011 through 2015, as of December 31, 2016. The IGs’  recommendations address a number of improper payment issues,  including compliance under IPERA. The number of open and closed  recommendations, as well as the total number of recommendations,  excludes the same (or similar) recommendations that were repeated from  a prior year. Additional information regarding the status of the  recommendations can be found in the IGs’ annual IPERA compliance  reports.
section_title: Appendix VII: Reported Improper Payment Estimates by Agency and Program/Activity for Fiscal Year 2016
paragraphs: Table 6 lists Office of Management and Budget (OMB)-reported improper  payment estimates by agency and program or activity for fiscal year 2016,  which OMB provided to GAO in December 2016 during the audit of the  fiscal years 2016 and 2015 consolidated financial statements of the U.S.  government. The IGs’ reports regarding these estimates are due in May  2017. As noted in table 6, excluding the Defense Finance Accounting  Service Commercial Pay program, there were 105 Chief Financial  Officers Act of 1990 agency programs that reported an improper payment  estimate (either a zero estimate or higher) for fiscal year 2016. The total  government-wide improper payment estimate for fiscal year 2016 totaled  $144.3 billion for 112 federal entity programs that reported estimates.
section_title: Appendix VIII: Comments from the Council of the Inspectors General on Integrity and Efficiency
section_title: Appendix IX: Comments from the Department of Homeland Security Office of Inspector General
section_title: Appendix X: Comments from the Department of Housing and Urban Development
section_title: Appendix XI: Comments from the Department of Housing and Urban Development Office of Inspector General
section_title: Appendix XII: Comments from the Department of the Treasury
section_title: Appendix XIII: Comments from the Social Security Administration
section_title: Appendix XIV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Phillip McIntyre (Assistant  Director), Michelle Philpott (Auditor in Charge), John Craig, Melanie  Darnell, Sophie Geyer, Wilfred Holloway, Jason Kelly, Jason Kirwan,  Emily Matic, Brian Paige, Dacia Stewart, and Fabiola Torres made key       contributions to this report.