Federal Workers' Compensation: Better Data and Management Strategies Would Strengthen Efforts to Prevent and Address Improper Payments
Published: 2008-02-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2006, the Federal Employees' Compensation Act (FECA) program paid over $1.8 billion in wage loss compensation to federal employees who were unable to work after being injured on the job. Under the Comptroller General's authority to conduct evaluations on his own initiative, GAO examined (1) how effectively the Department of Labor's (Labor) Office of Workers' Compensation Programs (OWCP) manages the risk of improper FECA compensation payments; (2) what vulnerabilities to improper payments, if any, exist in OWCP's procedures for making FECA wage loss payments; and (3) how well OWCP ensures the recovery of identified FECA overpayments. To address these issues, GAO reviewed OWCP documents, analyzed data obtained from OWCP, reviewed a random and projectable sample of FECA claims files, visited five OWCP district offices, and interviewed OWCP headquarters and district officials.
section_title: What GAO Found
paragraphs: OWCP has not established an effective strategy for managing improper payments in the FECA program. The agency does not sufficiently emphasize preventing, detecting, and recovering improper payments. None of the performance goals for the program addresses improper payments. Further, OWCP does not collect the information it needs to accurately assess the FECA program's risk of improper payments, such as information on their magnitude and causes. Without such data, it cannot focus on the most vulnerable areas. The FECA program is vulnerable to improper payments for several reasons. First, OWCP relies on unverified, self-reported information from claimants that is not always timely or correct. From a review of a sample of claims files for overpayments identified by OWCP in 2006, GAO found that many occurred because claimants did not inform OWCP in a timely manner when they returned to work. Further, because OWCP generally does not require claimants' self-reported earnings to be verified and does not systemically match its data on FECA claimants with earnings data from other federal agencies, it may fail to identify cases of unreported earnings. An obstacle to conducting such matches, however, is that OWCP does not have the legal authority to access the database maintained by another federal agency with the most current earnings data. In addition, from GAO's file reviews, GAO found that both overpayments and underpayments were caused by OWCP errors and that many overpayments occurred when OWCP's payment-processing deadlines prevented payments from being quickly canceled when claimants returned to work or died. Finally, OWCP does not ensure that overpayments are collected in a timely manner and misses some opportunities for recovering overpayments, such as deducting them from claimants' subsequent FECA payments.

section_title: Letter
paragraphs: In fiscal year 2006, the Federal Employees’ Compensation Act (FECA)  program paid over $1.8 billion in wage loss compensation to federal  employees who were unable to work because of injuries sustained while  performing their federal duties. Administered by the Department of Labor’s  (Labor) Office of Workers’ Compensation Programs (OWCP), FECA covers  over 2.7 million civilian federal employees in more than 70 different agencies,  such as the U.S. Postal Service (USPS) and the Department of Homeland  Security. OWCP bills the agencies that employ the injured workers for these  wage loss compensation costs. The Improper Payments Information Act of  2002 defines an improper payment as any payment that should not have been  made or was made in the wrong amount (including both overpayments and  underpayments). According to Labor, the FECA program experienced a low  rate of improper payments in fiscal year 2006—0.04 percent. However, recent  reports from several federal agencies’ Offices of Inspectors General have  found weaknesses in OWCP’s internal controls that suggest the actual  percentage of improper payments may be much higher.
We addressed the following questions under the Comptroller General’s  authority to conduct evaluations on his own initiative as part of a continued  effort to assist Congress in assessing OWCP’s strategies for preventing,  detecting, and recovering improper payments: (1) How effectively does OWCP  manage the risks of improper compensation payments? (2) What vulnerabilities  to improper payments, if any, exist in OWCP’s procedures for making wage- loss-compensation payments under FECA? (3) How well does OWCP ensure  the recovery of identified FECA overpayments?
To respond to these questions, we reviewed Labor’s annual performance  and accountability reports, the FECA procedures manual and internal  controls, OWCP’s accountability reviews, relevant agencies’ Office of  Inspector General reports, and applicable laws and regulations as well as  interviewed officials at OWCP headquarters. We also reviewed the  methodology used by Labor to estimate its risk of improper FECA  payments and interviewed audit contractor staff who were involved in  developing these estimates. In addition, we requested data from OWCP on  the magnitude and causes of overpayments and underpayments. OWCP  did not have data on causes or the number of improper payments that  occurred in specific years, but it created a unique report for us that  included all debts, including overpayments, that OWCP identified in fiscal  year 2006. To assess the reliability of these data, we (1) reviewed existing  documentation related to the data sources; (2) electronically tested the  data to identify obvious problems with completeness or accuracy, such as  missing or inconsistent data; and (3) interviewed knowledgeable agency  officials about the data. We determined that the data were sufficiently  reliable for the purposes of this report. We removed all debts that were not  in final determination or terminated status and that were not related to  wage-loss-compensation payments. We analyzed these data and reviewed  the claims files for a random, projectable sample of these overpayments,  as well as the 10 largest, to confirm whether they represented improper  payments and to determine their causes and final outcomes. Because we  discovered after reviewing these data that some of the debts included in  OWCP’s report either (1) were not improper payments or (2) were  identified prior to fiscal year 2006, we excluded these debts from our  analysis. We used the results from our file review to estimate the total  dollar amount of improper overpayments identified by OWCP in 2006, and  the percentage that were attributable to different causes. Although OWCP  could not identify underpayments, it identified a subset of payments that  included underpayments. We reviewed the claims files for a random  sample of these payments for fiscal year 2006 to identify underpayments,  estimate their dollar value, and obtain general information on their causes.  However, because of limitations in the data, we could not develop  estimates of the percentage of underpayments attributable to different  causes for all 2006 underpayments. Estimates based on our claims file  reviews are accurate to within plus or minus 10 percentage points at the 95  percent confidence level, unless otherwise noted. We also conducted site  visits at 5 of OWCP’s 12 district offices: Boston, Cleveland, Dallas, San  Francisco, and Washington, D.C. We selected these offices based on  variation in office size, internal audit results, organizational structure, and  geographic location. Finally, we interviewed officials responsible for  managing the FECA program at 10 federal agencies with varying FECA  caseload sizes. We conducted our work between September 2006 and  January 2008 in accordance with generally accepted government auditing  standards. See appendix I for more detailed information on our scope and  methodology.
subsections: section_title: Background
paragraphs: The FECA program provides wage loss compensation and payments for  medical treatment to federal employees who are injured in the  performance of their federal duties. During fiscal year 2006, OWCP made  over $1.8 billion in wage-loss-compensation payments to injured federal  employees (“claimants”) and processed approximately 20,000 new wage  loss claims. At the end of fiscal year 2006, over 55,000 claimants were  receiving regular monthly wage-loss-compensation payments from OWCP.
Federal agencies use their own annual appropriations to reimburse Labor  for wage-loss-compensation payments made to their employees each year,  while most of the program’s administrative costs are covered by direct  appropriations from the Congress. For fiscal year 2008, Labor requested  that the Congress provide $93.4 million in administrative funding for the  FECA program and sought an additional $52.3 million from certain federal  agencies for administrative purposes. In total, this funding would provide  895 full-time equivalent positions for the FECA program.
USPS pays more in FECA compensation than any other federal agency. In  2004, USPS paid approximately $852 million in wage loss compensation.  During this same period, the Departments of Navy and Army paid the  second and third highest amounts in FECA wage loss compensation to  injured civilian employees of their agencies, approximately $245 and $177  million dollars, respectively.
subsections: section_title: Claims Management
paragraphs: Claims examiners at OWCP’s 12 district offices determine applicants’  eligibility for FECA benefits and process claims for wage loss payments.  FECA divides work-related injuries into two categories: “traumatic  injuries” and “occupational illnesses or diseases.” Traumatic injuries are  wounds or other conditions that occur within a single day or work shift,  such as when an employee slips at work and sprains his ankle. An  occupational illness or disease is a physical condition produced by the  work environment over a period longer than one workday or shift, such as  carpal tunnel syndrome. In this report, we use the term “injuries” to refer  to both workers who have sustained traumatic injuries and workers who  have experienced an occupational illness or disease.
FECA regulations specify complex criteria for computing compensation  payments. Using information provided by the employing agency and the  claimant on a claims form, OWCP calculates compensation based on a  number of factors, including the claimant’s rate of pay, deductions for  health and life insurance benefits, the claimant’s marital status, and  whether or not the claimant has dependents. In addition, claimants cannot  receive FECA benefits at the same time they receive certain other federal  disability or retirement benefits. For example, claimants cannot receive  both FECA wage-loss-compensation payments and disability payments  from the Department of Veterans Affairs (VA) for the same injury. Further,  claimants cannot receive federal retirement benefits paid through the  Office of Personnel Management (OPM) concurrently with FECA benefits  and must elect to receive one or the other. However, a claimant can  receive both FECA and SSA retirement benefits, although the claimant’s  FECA wage-loss-compensation payments should be reduced by the  amount of SSA retirement benefits attributable to federal service.  Similarly, a claimant can receive both FECA and SSA disability benefits,  although SSA is required to reduce the level of disability benefits it pays by  the amount of FECA wage loss compensation received by the claimant.  Figure 1 details the process for filing and calculating claims for wage loss  compensation under the FECA program.
Based on various eligibility factors, the amount of wage loss compensation  OWCP pays claimants varies widely. For example, a claimant who earned  $2,500 per month ($30,000 a year), paid $67 a month for health insurance  benefits, and had no dependents would receive approximately $1,600 a  month in FECA wage loss compensation. A married claimant who earned  $8,500 per month ($102,000 a year) and paid $150 a month for health  insurance benefits would receive approximately $6,050 a month in FECA  compensation.
Compensation payments are issued on a monthly or weekly basis.  Claimants who are expected to experience wage loss for longer than 3  months receive automatic monthly payments as long as their eligibility for  wage loss compensation continues. Alternatively, claimants who are  expected to recover more quickly and return to work within 3 months are  required to file new claims forms each payment cycle in order to prove  that they were off work and receive manually generated payments. OWCP  provides wage loss compensation until claimants can return to work in  either their original positions or other suitable positions that meet medical  work restrictions. If claimants return to work but do not receive wages  equal to that of their prior positions—such as claimants who return to  work part-time—FECA benefits cover the difference between their current  and previous salaries.
FECA regulations require claims examiners to verify annually that  claimants who are receiving automatic monthly compensation payments  remain eligible for compensation. This verification process relies almost  entirely on information provided by claimants on a form that OWCP mails  them each year. Claims examiners are responsible for following up and  taking necessary action to ensure that the forms are completed and  returned, and can suspend compensation payments if a claimant fails to  submit the form within the specified time period. Once returned, claims  examiners review the forms for indications that a claimant’s eligibility has  changed and adjust the compensation payments accordingly. For example,  if a married claimant indicates that he divorced his wife and does not have  any other dependents, the claims examiner should reduce his wage-loss- compensation payment from three-quarters of his salary to two-thirds of  his salary.
section_title: Improper Payments
paragraphs: The Improper Payment Information Act enacted in 2002 requires the heads  of federal agencies to annually review all programs and activities they  administer, identify those that may be susceptible to significant improper  payments, and estimate and report the annual amount of improper  payments in those programs and activities. The Office of Management and  Budget (OMB) defines significant improper payments as payments in any  program that exceed both 2.5 percent of total payments and $10 million  annually. In addition, OMB has previously identified other programs,  including the FECA program, as being at a high risk of improper  payments because its total payments exceed $2 billion annually. Because  of this high risk designation, Labor must annually estimate the improper  payment rate for the FECA program and report this rate in its  Performance and Accountability Report, as well as identify the causes of  improper payments and report the corrective actions it plans to take to  address them.
section_title: Overpayment Recovery
paragraphs: Once an overpayment has been identified by OWCP, the actions taken to  recover it depend on the amount of the overpayment. Because of the  administrative costs associated with recovering overpayments, OWCP  allows claims examiners to waive overpayments less than $200 without  taking any action to recover them. For overpayments $200 or greater,  claims examiners must send a notice of the overpayment (called a  “preliminary notice”) to the claimant within 30 days. The claimant then has  30 days to respond to the preliminary notice and contest the overpayment.  If a claimant does not repay the overpayment or appeal the overpayment  decision within 30 days of the preliminary notice, claims examiners must  issue an additional notice (called the “final notice”) that provides a  recovery strategy to the claimant, such as a suggested repayment  schedule. As shown in figure 2, the recovery options available to claims  examiners depend on whether the claimant continues to receive FECA or  other federal compensation payments, the amount of the overpayment,  and whether the claimant was found to be at fault in the creation of the  overpayment. If the debt is delinquent for 180 days and the claimant has  not responded to two additional letters from OWCP demanding  repayment, the claims examiner is required to refer the debt to the  Department of the Treasury (Treasury) for recovery.
section_title: OWCP Lacks an Effective Strategy for Managing the Risks of Improper FECA Compensation Payments
paragraphs: OWCP has not established an effective strategy for managing improper  FECA payments. The agency does not sufficiently emphasize preventing,  detecting, and recovering improper payments. Program staff reported that  they focused on the aspects of the claims process that are regularly  tracked and measured by managers and said preventing, detecting, and  recovering improper payments are often lower priorities. In addition,  OWCP lacks the data needed to accurately assess the program’s risk of  improper payments. The agency does not collect data on the magnitude or  causes of improper payments, making it difficult to identify vulnerabilities  that lead to payment errors, implement procedures to prevent them, or  evaluate their effectiveness.
subsections: section_title: OWCP Does Not Emphasize Preventing, Detecting, or Recovering Improper Payments
paragraphs: For the past 5 years, none of the national goals established for the FECA program  have addressed improper payments but have focused primarily on improving  service delivery. Two of the five national goals set time frames for returning  claimants to work; two focus on minimizing medical and compensation costs,  and the fifth goal addresses improving customer service by quickly responding to  claimant and agency inquiries. Past GAO work has shown that emphasizing the  prevention, detection, and recovery of improper payments at the managerial level  by establishing goals for reducing improper payments is a key aspect of an  effective strategy for managing improper payments.
Similarly to the national goals, OWCP’s performance goals for its district offices  emphasize timely case management, but do not focus on payment accuracy.  None of the 21 performance goals for district offices contained in OWCP’s fiscal  year 2007 operational plan address preventing or detecting improper payments,  although one focuses on recovering delinquent overpayments. As table 1  illustrates, the majority of OWCP’s performance goals for district offices either  support the national goals for the program or focus on quickly adjudicating  claims and processing payments. While one goal requires district offices to  quickly process wage-loss-compensation payments, OWCP has not established  a corresponding goal to ensure that these payments are accurate. Although  quickly processing claims and payments are important goals, previous GAO  work has shown that the risk of improper payments increases when these goals  are not balanced with an emphasis on payment accuracy. In commenting on  this report, Labor reported that it has included a new measure on the  timeliness of processing overpayments in its 2008 operational plan for the  FECA program.
Several district office staff we interviewed reported that they focused most  of their attention on aspects of the claims process that are regularly  tracked and measured by OWCP, whereas tasks such as identifying and  processing improper payments are given lower priority. In a recent report  by Labor’s Inspector General, officials in one district office stated that  claims examiners’ primary focus was to process claims and that time  constraints prevented examiners from focusing on efforts to prevent and  detect improper payments, such as confirming claimant eligibility  information on a regular basis.
While OWCP officials monitor payment accuracy as part of their biennial  reviews of the district offices, the results are not incorporated into Labor’s  annual assessment of the FECA program’s risk of improper payments, nor  are they considered by outside auditors when they evaluate the program’s  internal controls. Each OWCP district office undergoes a review every  other year, during which OWCP officials review a sample of claims files to  evaluate a comprehensive range of district office operations—such as the  appropriateness of decisions to accept or deny claims and the accuracy of  payments—against program-wide performance standards. For example, a  sample of initial payments is reviewed to ensure that they are accurate,  based on the appropriate pay rate from the employing agency, and are  properly certified by a second claims examiner.
However, permissible error rates are high—the permissible error rate for  payment accuracy is 20 percent—and district offices with error rates that  exceed the acceptable rate are not always required to implement  corrective actions to address the identified deficiencies. Five of the six  district offices OWCP reviewed in fiscal year 2006 failed to meet the  standard because over 20 percent of their payments were either inaccurate  or lacked documentation to support the amount paid; one office had an  error rate of 43 percent. However, only three of the offices were required  to take corrective action to ensure that their future payment calculations  are accurate. OWCP officials told us that offices with error rates slightly  below the standard may not be required to develop corrective action plans  if they have already taken steps to address the particular issue.  They  noted, however, that a corrective action plan is required whenever an  office misses the performance standard by a large margin.  Further, in  commenting on this report, Labor also noted that findings from several  review items may be combined into a single corrective action plan; as a  result, formal remedies for payment accuracy may be in place even though  they were not specifically cited in the reports reviewed by GAO.
section_title: OWCP Lacks the Information Needed to Accurately Assess the FECA Program’s Risk of Improper Payments
paragraphs: OWCP lacks the information that it needs to accurately assess the FECA  program’s risk of improper payments. Previous GAO work has shown that  agencies must know the magnitude of improper payments and the causes  of these errors in order to assess program risks and take actions to  address them. A risk assessment entails a comprehensive review and  analysis of program operations to determine where vulnerabilities exist  and what those vulnerabilities are and to measure their potential or actual  impact on program operations. Information on the magnitude and causes  of improper payments form the foundation upon which management can  determine the nature and type of corrections needed and give  management baseline information for measuring progress in reducing  improper payments. Without this information, a program is vulnerable to  improper payments because managers may not be taking all of the  precautions necessary to ensure that payments are accurate.
First, OWCP does not collect or use available data to determine the  magnitude of improper payments or their causes, making it difficult to  identify vulnerabilities that lead to payment errors and determine their  impact on program operations. For example, although the reports OWCP  uses to manage the program list the amount of debts—including potential  overpayments—for collection purposes, OWCP does not analyze the data  to identify the magnitude of improper overpayments that occur during a  particular year or whether they are increasing or decreasing over time. In  addition, OWCP does not collect data on the magnitude of underpayments  identified each year because of limitations in its data systems. Further,  although agency officials cited several potential causes for improper  payments, the agency does not collect aggregate information on how  frequently these errors occur. As a result, the only way to determine why  an overpayment or underpayment occurred is to review the information in  each claims file. While OWCP began using a new data system in 2005 that  has increased the amount and quality of data available on improper  payments, program officials told us that they have no plans to collect data  on the causes of improper payments. Without accurate data on improper  payment risks, OWCP cannot target its resources towards preventing or  reducing the errors that are the most prevalent or costly, nor can it  monitor the effectiveness of its efforts to prevent such errors. In  commenting on this report, Labor stated that it is (1) developing codes to  track the reasons for overpayments and (2) considering a method to  collect information on the reasons for underpayments.
Further, while Labor is required to annually estimate the magnitude of  improper payments in the FECA program, its estimate provides OWCP  with limited information to identify and address program vulnerabilities.  Labor estimated that the FECA program made $703,000 in improper  payments in fiscal year 2006 based on a review of claims files for a sample  of all payments made during the year and determined that the program  had a low risk of improper payments because this estimate did not exceed  $10 million and 2.5 percent of program payments—the threshold that  federal guidance defines as high risk. While Labor followed the required  guidance in developing this estimate, it may be understated because it  does not include certain types of improper payments that recent audits  suggest may be fairly prevalent in the program. For example, Labor’s  estimate would fail to catch improper payments that occurred because the  information in the claims files that it reviewed—such as information on a  claimant’s work status—was inaccurate. If a claimant returned to work  but failed to notify OWCP, this information would not be reflected in the  claims file. A 2007 SSA Inspector General audit of the FECA program  found that claimants failed to report approximately $12.6 million in wages  to OWCP in 2004, suggesting that they had returned to work and were no  longer eligible for wage loss compensation—but had not notified OWCP.
Labor is not required to include the amount of improper payments that  OWCP identified during the fiscal year in its estimate and OWCP does not  track these data. However, these data provide comprehensive  information on the FECA program’s risk of improper payments that is  useful in managing the program.  From our analysis of potential  overpayments and underpayments, we estimated that OWCP identified  $13.3 million in improper payments in fiscal year 2006 ($7.1 million in  overpayments and $6.2 million in underpayments), some of which  occurred in prior fiscal years. From our review of the claims files, we  found that many of the improper payments spanned multiple fiscal years  and some were not identified until several years after they occurred.  Without comprehensive information on improper payments identified each  year or trends in these payments over time, it is difficult for OWCP to  identify vulnerabilities in the program that can lead to improper payments.
section_title: OWCP’s Dependence on Unverified Information, Internal Errors, and System Limitations Leaves FECA Vulnerable to Improper Payments
paragraphs: The FECA program is vulnerable to improper payments because OWCP  relies on unverified self-reported eligibility information from claimants,  makes internal payment errors, cannot stop certain payments, and  receives inaccurate wage and benefits information from claimants’  employing agencies. To identify the causes of improper payments and to  estimate the total dollar values of improper overpayments and  underpayments identified by OWCP in fiscal year 2006, we selected a  sample of overpayments and another sample of potential underpayments  and reviewed the selected claims files. Based on our overpayment file  review, we estimated the causes of all overpayments identified by OWCP  in 2006. We also collected information on the causes of underpayments,  but were unable to estimate their prevalence because of limitations in  OWCP’s data. We found that overpayments commonly occurred when  claimants failed to notify OWCP in a timely manner when they returned to  work, or when family members did not quickly notify OWCP that a  claimant had died. In other instances, overpayments occurred because  claimants did not report earnings to OWCP. Claims examiners created  improper overpayments and underpayments when they made payment  calculation errors. They also overpaid claimants when they did not  promptly stop payments after being notified that a claimant had returned  to work or died. In addition, overpayments occurred because OWCP’s  administrative payment processing deadlines prevented claims examiners  from quickly canceling some payments after being notified of changes in  claimants’ eligibility status. Finally, both overpayments and  underpayments occurred when claimants’ employing agencies provided  inaccurate wage and benefits data to OWCP. Figure 3 shows the causes we  identified from our review of the claims files for overpayments.
subsections: section_title: OWCP Relies on Claimants to Provide Key Eligibility Information
paragraphs: The FECA program is vulnerable to improper payments because it relies  on claimants to report key eligibility information, such as when they  return to work at their agencies or earn wages from other employment,  and does not verify that the data are timely or accurate.
subsections: section_title: Late or No Notice When Claimants Return to Work
paragraphs: Some overpayments occur because OWCP relies on claimants—rather  than their employing agencies—to inform it when they return to work, and  claimants do not always do so in a timely manner. From our review of  claims files from a sample of the overpayments identified by OWCP in  2006, we estimated that about 11 percent of all of OWCP’s 2006  overpayments occurred because claimants did not immediately notify  OWCP when they returned to work. In some of these instances, claimants  did not notify OWCP that they had returned to work at all—instead, their  employing agencies notified OWCP. Until 1999, OWCP required employing  agencies to submit a notification form when claimants returned to work.  However, OWCP discontinued use of this form, and agencies are no longer  required to notify OWCP when a claimant returns to work. Officials from  one employing agency told us that they would like OWCP to reinstate use  of the notification form in order to better ensure that wage-loss- compensation payments are terminated when claimants return to work.   In commenting on this report, Labor noted that it is working to allow  agencies to use its online system to notify OWCP electronically when a  claimant returns to work.
section_title: Late or No Notice When Claimants or Their Survivors Die
paragraphs: OWCP is also not always notified in a timely manner of the death of  claimants or their survivors who were receiving survivor benefits. From  our review of the claims files for OWCP’s 2006 overpayments, we  estimated that about 6 percent of all overpayments occurred when a  claimant or survivor died but OWCP was not quickly notified. OWCP relies  on claimants’ survivors to inform the agency when claimants die. Among  the overpayments we reviewed, survivors usually notified OWCP within a  few months of a claimant’s death. However, in a few situations, the claims  examiners were never informed of the death but became aware of it  through other means, such as when the annual forms they sent to the  claimant were returned to OWCP as undeliverable or after an investigation  by the claimant’s employing agency. In one claim we reviewed, OWCP paid  a claimant for more than a year after he died, until a U.S. Postal Service  investigation uncovered that the claimant was dead, and the claimant’s  cousin had fraudulently accessed his bank account and withdrawn the  funds. In addition, OWCP is not always notified in a timely manner of the  death of survivors—such as a spouse or eligible dependent of a deceased  claimant—who received survivor benefits. One of the 10 largest  overpayments identified in 2006, which totaled over $130,000, occurred  when the widow of a FECA claimant died and OWCP was not notified.  OWCP continued to automatically deposit her FECA survivor benefit  payments to her bank account every month for more than 2 ½ years after  her death.
A recent report by SSA’s Inspector General found that nearly $2 million in  wage-loss-compensation payments were made in 2004 to claimants who  died in 2003 or earlier. OWCP headquarters officials told us the agency  conducts monthly data matches for all FECA claimants with SSA’s death  records to prevent long-term overpayments to claimants who died.  However, they acknowledged that there had been a recent 8-month lapse  in these monthly data matches because OWCP’s contract with SSA for  data matching services had temporarily expired. In addition, OWCP  officials told us that, because they do not collect the social security  numbers (SSNs) of claimants’ spouses or other eligible dependents who  collect survivor benefits, they cannot conduct matches of their records  against SSA’s death records for these individuals. Because OWCP does not  conduct death matches for claimants’ spouses or other dependents, it  cannot use this information to identify overpayments that occur when it is  not notified that (1) a deceased claimant’s spouse or other dependent who  was receiving survivor benefits died or (2) when a claimant’s spouse or  dependents died—making the claimant ineligible to receive a higher wage- loss-compensation payment based on having a spouse or other eligible  dependents.
section_title: Unverified Self-Reported Data on Earnings and Other Federal Benefits
paragraphs: OWCP also relies on claimants to report whether they earn wages, which  may affect their eligibility for wage loss compensation, but claims  examiners generally do not verify this information. Unlike other federal  agencies such as SSA and the Department of Veterans Affairs, OWCP does  not conduct a systemic data match of its records against SSA’s wage  records to identify unreported earnings. Instead, OWCP conducts these  matches on an ad-hoc basis for individual claimants if a claims examiner  suspects that a claimant has unreported earnings. Among claims in our  sample of 212 overpayments, claims examiners only verified about 22  percent of claimants’ annual earnings statements by comparing them to  SSA’s data between 2002 and 2007. Four of the seven cases of unreported  earnings included in our review were not uncovered by OWCP, but by  fraud investigations undertaken by the claimants’ employing agencies.  Further, a recent report by SSA’s Inspector General found that, in 2004,  about 7 percent of the approximately 1,800 claimants that OWCP  determined to be unable to work at all actually had earnings that were  reported to SSA.
Beyond the limitations associated with OWCP’s ad-hoc verification of  individual claimants’ earnings, the effectiveness of OWCP’s verification  process is undermined by the fact that the data are not current. OWCP  officials told us that SSA’s earnings data are about 2 years old. More  current earnings data are available from another federal database, the  National Directory of New Hires, a database maintained by the  Department of Health and Human Services (HHS) to assist states in  locating parents and enforcing child support orders. The database includes  quarterly wage data for up to eight quarters, which can be compiled into  annual data for matching purposes. OWCP could use these data to conduct  systematic data matches with all of its claimants to identify those with  unreported earnings. Before implementing such a match, OWCP and HHS  would have to ensure that claimants’ privacy and personal information  were protected. At present, OWCP does not have legislative authority to  access the database. In the last several years, the Congress has authorized  some expanded use of this database, allowing other benefit programs to  obtain the data. For example, it has allowed SSA to use the database to  establish individuals’ eligibility for Supplemental Security Income and the  Department of Education to use it to collect student loan repayments.  OWCP officials told us they have sought access to the National Directory  of New Hires, but did not provide us with any formal legislative proposals  requesting such authority.
Some overpayments also occur because OWCP does not regularly verify  whether claimants are receiving SSA retirement benefits. For FECA  claimants in the current federal retirement system (those hired after 1983)  who are also collecting SSA retirement benefits, OWCP is required to  reduce their FECA payments by the amount of their SSA payments  attributable to their federal service. However, during our interviews,  some claims examiners reported that identifying these claimants is  difficult. The Department of Defense, which has undertaken an initiative to  ensure that FECA payments made to its former employees are correctly  reduced by the amount of their SSA retirement benefits, has helped OWCP  institute 230 of these reductions. However, in 2006, fewer than 30 FECA  claimants from all other employing agencies had their payments reduced  because of SSA retirement benefits. This small number suggests that  OWCP has not undertaken a serious effort to identify and reduce the  wage-loss-compensation payments of claimants receiving SSA retirement  payments as required. Because the number of FECA claimants covered by  the current federal retirement system will substantially increase as time  goes on, it is likely that the risk of these improper payments will also  substantially increase.
section_title: Errors by OWCP Claims Examiners Caused Overpayments and Underpayments
paragraphs: OWCP does not sufficiently ensure that its claims examiners correctly  calculate payment amounts to claimants; promptly stop payments after  they have been notified that a claimant has returned to work or died; make  accurate decisions to deny, reduce, or terminate claimants’ wage loss  payments; or ensure that claimants file their annual eligibility and earnings  statements.
subsections: section_title: Inaccurate Payment Calculations by Claims Examiners
paragraphs: While OWCP requires an experienced claims examiner to certify the  accuracy of the first payment made on each claim before it is issued, many  errors are still undetected. According to a 2006 internal audit by OWCP,  about 14 percent of the initial payments sampled had calculation errors,  and an additional 14 percent could not be verified because the claims file  contained insufficient information to support the calculations made by the  claims examiner. From our review of the claims files for OWCP’s 2006  overpayments, we estimated that about 15 percent of all overpayments  occurred because claims examiners made payment calculation errors; we  also found that some underpayments were caused by incorrect payment  calculations.
Calculation errors we found in our reviews of overpayments and  underpayments included situations in which claims examiners incorrectly  withheld health or life insurance premiums, paid claimants for the wrong  amount of hours of lost wages, or paid claimants at the wrong rate. For  example, several overpayments we reviewed occurred when claims  examiners paid claimants twice for the same period. In addition, both  overpayments and underpayments resulted when claims examiners  withheld incorrect insurance premium amounts. For example, one  underpaid claimant spent 4 years trying to get OWCP to stop incorrectly  deducting premiums for family health insurance from the claimant’s wage- loss-compensation payments. The claims examiner then reimbursed this  claimant for the error twice—effectively overpaying the claim by more  than $14,000.
section_title: Untimely Termination of Payments to Claimants Who Return to Work or Die
paragraphs: Claims examiners do not always promptly stop payments when they are  notified that claimants have returned to work or died. From our review of  OWCP’s 2006 overpayments, we estimated that about 17 percent occurred  when claimants returned to work or died but claims examiners did not  stop payments quickly after they were notified of these events. We  estimated that it took claims examiners an average of more than 5 weeks  to stop these payments. In some cases we reviewed, claims examiners  had to be notified several times before finally halting payments. For  example, a $106,000 overpayment resulted when a claimant continued to  be paid wage loss compensation for nearly 13 years after returning to  work, despite numerous notifications. In another case, it took OWCP more  than 2 ½ years after a claimant’s death to cancel wage-loss-compensation  payments, even though the claims file contained more than 20 letters from  OWCP to the claimant that had been returned as undeliverable.
section_title: Incorrect Decisions to Deny, Reduce, or Terminate Wage Loss Payments
paragraphs: From our review of the claims files for potential underpayments, we  estimated that OWCP identified about $6.2 million in underpayments in  fiscal year 2006. Many large underpayments occurred because claims  examiners either inappropriately determined that compensation should be  denied, reduced, or terminated, or did not follow proper procedures when  decreasing benefits. In one case we reviewed, for example, OWCP was  required to pay one claimant over $29,000 in back compensation because  it did not provide a notice explaining the claimant’s due process rights  when it proposed to terminate benefits. In another case, OWCP underpaid  a claimant by over $83,000 because a claims examiner inappropriately  terminated the claimant’s benefits for refusing a job offer from an  employing agency. After the claimant appealed the termination, it was  determined that the claimant was justified in refusing the job because it  did not meet the physical restrictions required by the injury.
section_title: Failure to Ensure That Claimants Submit Annual Eligibility Forms or Follow Up on the Information on the Forms
paragraphs: Finally, OWCP does not consistently ensure that claimants return their  annual eligibility forms or adjust benefits when the information reported  by claimants indicates a change in their eligibility. According to OWCP’s  internal audits, 14 percent of the claims files the agency sampled in fiscal  year 2006 were either missing annual eligibility forms entirely or contained  forms with incomplete information on which claims examiners failed to  follow up. In addition, 4 percent of the sampled claims files contained  information from claimants indicating that they may have been collecting  dual benefits, had outside earnings, or had changes in their dependent  status that affected their payments, but the claims examiners did not  follow up on this information. In one claims file we reviewed, a claimant  reported the death of a spouse on two separate annual eligibility forms,  but the claims examiner never reduced the wage loss payments.
section_title: Some Overpayments Occur because of Limitations in OWCP’s Payment System
paragraphs: Based on our review of the claims files, we estimated that about 26  percent of all of 2006 overpayments occurred because OWCP had already  processed payments or mailed checks before claims examiners were  notified of events affecting claimants’ eligibility for wage loss payments,  such as a claimant’s return to work or death. Because of payment system  limitations, claims examiners cannot cancel or make changes to  automated monthly payments for a 10-day period prior to the end of each  pay period. Therefore, if a claims examiner is informed during this period  that a claimant has returned to work or died, the examiner cannot prevent  an overpayment from being issued. Many OWCP claims examiners we  interviewed cited the payment processing deadline as a frequent cause of  overpayments in their caseloads. These overpayments are for relatively  short periods and tend to be smaller than other overpayments; according  to our estimates, these overpayments averaged about $900 each in 2006.  Although they tended to be small, they occurred frequently and took time  for claims examiners to process.
section_title: Inaccurate Data from Employing Agencies also Lead to Improper Payments
paragraphs: Some improper payments occur because claimants’ employing agencies  provide inaccurate or incomplete wage and benefits data to OWCP. While  OWCP relies on these agencies to report claimants’ wage and benefits data  on initial claims forms so that claims examiners can calculate wage-loss- compensation payments, it does not require them to provide evidence of  their accuracy, such as by submitting copies of claimants’ pay stubs. In  fact, claims examiners in each of the five district offices we visited  reported that the information provided by employing agencies on claims  forms was frequently incomplete or incorrect. They also said that  obtaining corrected information from employing agencies could be  difficult. In our reviews of OWCP’s 2006 improper payments, we found  that both overpayments and underpayments were caused by inaccurate  pay rate information provided by claimants’ employing agencies.  Underpayments also occurred because employing agencies failed to  provide complete data on claimants’ pay rates. For instance, several  underpayments we reviewed occurred because employing agencies failed  to indicate that claimants were entitled to extra pay for working at night or  on Sundays.
While OWCP depends on employing agencies to help identify payment  errors, it does not provide them with sufficient tools to easily do so. Some  employing agency officials told us that they are less able to monitor the  accuracy of payments because they do not have ready access to detailed  compensation data needed to verify OWCP’s payment calculations.  Employing agencies can track the total amount being paid to a claimant by  OWCP in an online system maintained by OWCP; however, they are unable  to view details used to calculate payments, such as base and premium pay  rates, the amount withheld for health and life insurance premiums, and  whether claimants have dependents. If the employing agencies want to  audit their employees’ claims and identify potential improper payments,  they have to send representatives to OWCP’s district offices to review the  claims files. One of the ten largest overpayments identified in fiscal year  2006, totaling nearly $127,000, was uncovered when an employing agency  sent a representative to OWCP to review claims files. The agency had  previously informed OWCP that it was paying the claimant based on an  incorrect pay rate. However, it was only during its claims file review nearly  4 years later that the agency discovered that the correct pay rate was still  not being used. Recently, OWCP officials told us that OWCP was revising  its online system to include more detailed payment information, which  should be available by the spring of 2008.
section_title: OWCP Does Not Ensure the Recovery of FECA Overpayments
paragraphs: OWCP does not sufficiently ensure the timely recovery of FECA  overpayments and misses some opportunities for recovering them.  Further, OWCP cannot identify how many overpayments are waived each  year or what percentage of overpaid dollars are repaid. As a result, it  cannot assess the success of its recovery efforts.
subsections: section_title: OWCP Does Not Ensure Timely Processing of Overpayments
paragraphs: OWCP does not ensure that its claims examiners process overpayments of  wage loss compensation in a timely manner, which delays their recovery.  Before seeking recovery of an overpayment, OWCP requires a claims  examiner to (1) issue a preliminary notice within 30 days of identifying the  overpayment to explain the circumstances of the overpayment and give  the claimant an opportunity provide additional information or contest the  decision and (2) issue a final notice within 30 days of the preliminary  notice.
Timely processing of overpayments is critical to recovering the amounts  owed. First, OWCP cannot attempt to recover overpayments until both the  preliminary and final notices have been sent to the claimants. Second,  prior GAO work has shown that successful recovery of overpayments is  directly related to the time it takes to confirm and process the  overpayment. Specifically, the longer it takes to process an overpayment,  the less likely it will be that a claimant will still be receiving FECA benefits  from which the overpayment can be recouped. Finally, an overpayment  that OWCP is unable to recover cannot be transferred to Treasury for  additional recovery efforts until a final overpayment notice has been  issued to the claimant. Treasury has recovery tools not available to OWCP,  such as deducting overpayments from a claimant’s federal tax refund or  other federal payments. When OWCP does not issue a final overpayment  notice promptly, it results in delays in transferring debts to Treasury and  in applying these additional tools.
Available data indicate that OWCP does not ensure that overpayments are  confirmed and processed within its required time frames. As shown in  figure 4, OWCP’s September 2007 debt-aging report indicates many delays  in processing overpayments. Almost half of the identified overpayments  were more than 6 months old, and OWCP had not yet issued preliminary  overpayment notices to the claimants. Similar delays were evident when  OWCP assessed overpayment processing during its internal reviews of the  district offices. For the six district offices reviewed in 2006, the district  office had not issued a preliminary notice to claimants for over one-third  of the overpayments OWCP reviewed. Further, based on our review of the  2006 overpayments, we estimated that, on average, OWCP issued the final  overpayment notice to claimants 64 days after the preliminary notice, with  a range of 26 days to 470 days. In several district offices we visited,  claims examiners or district office officials told us that they sometimes  delayed issuing required overpayment notices to claimants because their  first priority is to pay claims. A claims examiner in one district office, for  example, told us about a backlog of overpayment cases for which  preliminary or final overpayment notices had not been sent to the  claimant.
We also found that some OWCP district offices experienced more delays  in processing overpayments than others. OWCP’s fiscal year 2006  overpayments, for example, showed that most district offices had issued  preliminary notices by March 2007 for at least 90 percent of pending  overpayments. However, four offices had issued preliminary overpayment  notices for a lower percentage of overpayments, with one office issuing  preliminary notices for less than half of its pending overpayments.
While some cases we reviewed involved complicated issues and may have  required extra time for OWCP to confirm the existence and amount of the  overpayment before sending a preliminary overpayment notice to the  claimants, other claims files we reviewed had no readily apparent reasons  for the delays. In one case, for example, a postal worker aggravated a pre- existing knee injury as a result of prolonged bending and walking while  delivering mail. The claimant subsequently returned to work and was  overpaid almost $700. However, the claims examiner did not send out the  preliminary overpayment notice for nearly a year after being notified that  the claimant had returned to work.
OWCP officials acknowledged that implementation of OWCP’s new data  system had resulted in some unreliable data on the debt-aging report and  disrupted the program’s ability to track overpayments for the past few  years. They told us that they are taking steps to improve the reliability of  the debt-aging report and to ensure that overpayments are processed  within OWCP’s required time frames. For example, in 2007 OWCP directed  its district offices to review the debt-aging report in order to identify  inaccurate data and outstanding overpayments that required action. OWCP  officials told us that the reliability of the data has improved since this  review, and the number of potential overpayments listed on the report has  been significantly reduced. They confirmed that the data we analyzed from  the September 2007 debt-aging report should be reasonably reliable.
section_title: About 70 Percent of Overpayments Are Repaid, but OWCP Overlooks Opportunities to Recover Overpayments
paragraphs: While OWCP does not track the recovery status of overpayments, our  review of claims files for 2006 overpayments indicated that an estimated  71 percent were repaid or being collected at the time of our review. An  additional 19 percent of the overpayments were waived by OWCP, in most  cases because the overpayment was less than $700 and the cost of trying  to recover the overpayment was expected to be greater than the amount  actually recovered. See figure 5 for the recovery outcomes for our claims  file sample.  OWCP officials told us that they planned to collect more  information on the outcome of OWCP’s recovery efforts—such as whether  overpayments are waived or repaid—by the end of fiscal year 2008.
We estimated that about half of the overpayments that were repaid or  being collected were repaid directly by the claimant, while 21 percent  were withheld from the claimant’s FECA payments (see fig. 6).
Based on our review of the 2006 overpayments, we estimated that OWCP  waived about $118,000 (about 2 percent) of all 2006 overpaid dollars at the  time of our review. Given the potential costs of recovering an  overpayment, OWCP claims examiners may immediately waive any FECA  overpayments under $200 without notifying the claimant that an  overpayment has occurred. Claims examiners can also waive  overpayments under $700 after sending the claimant a preliminary  overpayment notice if the additional recovery costs are expected to  exceed the amount to be recovered. From our review of the 2006  overpayments, we estimated that 77 percent of the overpayments $200 or  under were waived, compared with 38 percent of the overpayments  between $200 and $700, and 1 percent of the overpayments that were $700  or greater.
Other benefit programs GAO has reviewed have established lower  minimum thresholds below which they will not seek recovery; in other  words, they seek to recover more overpayments than OWCP does. For  example, SSA’s Supplemental Security Income program, which provides  cash assistance to certain categories of people who have limited income  and resources, waives overpayments of $500 or less if the recipient was  not at fault in the creation of the overpayment and cannot afford to repay  it. An SSA program official told us that, because most of its overpayments  are automatically generated, the program attempts to recover most  overpayments over $1. In addition, according to the Director of the  Veterans Affairs’ (VA) Debt Management Center, the VA’s pension and  disability compensation programs have totally automated overpayment - processing systems, making it cost effective to attempt recovery on small  overpayments. The VA attempts to recover any overpayment over $5.  Because OWCP’s data system does not automatically generate  overpayment notices, these waiver thresholds may not be cost-effective  for FECA at this time. However, OWCP implemented a new data system in  2005 and is continuing to add new capabilities related to tracking improper  payments. As its overpayment processing capabilities improve, OWCP may  be able to reduce its waiver thresholds and seek to recover more  overpayments.
We found two cases during our review of the 2006 overpayments in which  the claims examiners waived the overpayments even when the claimant  indicated a willingness to pay back the amount. In one case, a claimant  had incurred a $430 overpayment and was sent a preliminary overpayment  notice. The claimant sent a letter to OWCP indicating that he wanted to  repay the overpayment in four installments. Instead, however, the claims  examiner waived the overpayment. Similarly, a claimant called OWCP to  establish a payment plan for her $575 overpayment, but the claims  examiner told her that the overpayment would be waived because it was  less than $700. For waivers of overpayments under $700, OWCP  procedures state that the claims examiner should consider such factors as  whether the claimant can be located, the likelihood of recovery, and the  potential costs of pursuing the case.
We also found instances when claims examiners missed opportunities to  deduct overpayments from other FECA payments, including wage loss  compensation and other types of payments from OWCP. In one case, for  example, a claims examiner made a $29,000 payment to a claimant with an  outstanding potential overpayment of almost $10,000. While the claimant’s  FECA payments were stopped, the claims examiner did not issue a  preliminary overpayment notice to the claimant for over a year. The claims  examiner issued the final overpayment notice 2 months later, in the same  month that the $29,000 payment was made. At the time of our review, the  $9,940 debt had not been repaid and was considered delinquent. In another  case, the claimant incurred a $660 overpayment because health and life  insurance premiums had not been deducted from his FECA payments. The  overpayment was waived in July 2006 despite the fact that the claimant  continued to receive manually generated FECA wage-loss-compensation  payments until September 2006 and began receiving automatic monthly  payments in October 2006. These missed opportunities may have  occurred, in part, because OWCP’s data system does not easily identify  when a claimant with an overpayment is also receiving FECA payments.  For example, one district office official pointed out that when a claims  examiner processes a new payment, the system does not notify the claims  examiner if the claimant has any outstanding overpayments. Further, the  debt-aging report does not include a claimant’s payment status, which  could alert claims examiners when a claimant with an outstanding  overpayment begins receiving FECA payments.  In commenting on this  report, Labor noted that it is planning to create an automated prompt that  will alert claims examiners preparing a FECA payment that a claimant has  an existing overpayment.
OWCP’s relatively infrequent use of wage garnishment may also represent  a missed opportunity to recover overpayments, especially given the large  number of overpayments that occur when claimants return to work at a  federal agency. OWCP procedures identify wage garnishment as a  recovery option but do not include any detailed instructions on how to  implement it. Instead, claims examiners are encouraged to transfer  overpayments for which garnishment is an option to Treasury and have  that agency garnish the claimant’s wages. Most claims examiners we  interviewed did not mention wage garnishment as a recovery option.  Further, none of the overpayments in the claims files we reviewed were  recovered through wage garnishment. Many overpayments created when  claimants return to work are small and may not be worth the effort of  arranging for wage garnishment with the employing agency. However,  some overpayments are large and could be recovered in this manner.  OWCP headquarters officials told us that wage garnishment is a viable  recovery option, but noted that it may be difficult for claims examiners to  identify the correct employing agency official who can arrange for the  claimant’s wages to be garnished.
Claims examiners may miss these recovery opportunities for several  reasons. As noted earlier, they may be more focused on paying initial wage  loss claims than recovering overpayments. In addition, some claims  examiners we interviewed were not completely familiar with FECA’s  overpayment recovery process, usually because they did not process  overpayments very often. For example, some claims examiners were  unsure about which overpayments were eligible to be waived; however,  they said they reviewed the FECA procedures manual when they had to  process an overpayment. While some claims examiners reported that they  aggressively pursued the recovery of overpayments from available  recovery sources, others said they were more limited in what they could  do. For example, one claims examiner told us that he could not recover  overpayments from a claimant’s wage-loss-compensation payments, even  though the FECA procedures manual recommends that overpayments  over $200 be finalized and recovered from ongoing wage-loss- compensation payments as quickly as possible. In one district office, two  claims examiners also told us that they were not allowed to use wage  garnishment to recover overpayments, although OWCP headquarters  officials told us that claims examiners can garnish wages to collect  overpayments.
Several claims examiners told us that it would be more effective to assign  responsibility to one person for recovering overpayments, rather than  expecting claims examiners to focus on recoveries in addition to all their  other responsibilities. Such an approach could reduce instances when a  claims examiner overlooks a potential recovery source or unnecessarily  waives an overpayment. One district office we visited had recently  implemented this approach, giving responsibility to a staff person in the  fiscal office to recover all overpayments once the final overpayment notice  was sent to the claimant. In dividing the overpayment process, the district  office manager said he hoped that claims examiners would focus on  processing overpayments more quickly, while the fiscal staff member  would specialize in the recovery process. In another district office, a fiscal  staff member provided assistance to claims examiners by pointing out  potential recovery sources for overpayments, such as OPM retirement  benefits. Fiscal staff in the other three district offices we visited were not  involved in the recovery of overpayments.
section_title: Conclusions
paragraphs: OWCP appropriately places a high priority on making timely wage-loss- compensation payments to injured federal workers who might otherwise  face financial hardship while, at the same time, helping them return to  work when their injuries have been resolved. However, without a  counterbalancing emphasis on preventing and identifying improper  payments as well as recovering overpayments, claimants may not receive  all of the compensation to which they are entitled and program dollars  may be spent on ineligible claimants, threatening the overall integrity of  the program. To effectively address program vulnerabilities, OWCP must  first identify those vulnerabilities. The current process for assessing  FECA’s risk of improper payments does not provide sufficient information  on the extent of improper payments. Further, because OWCP lacks data  on the causes of improper payments, it cannot focus its efforts on  preventing them before they occur or addressing those areas that are at  the highest risk for errors. It is unlikely that the vulnerabilities we have  identified will be addressed without a change in OWCP’s current  management strategies with respect to improper payments.
We recognize that determining eligibility for FECA wage-loss benefits and  calculating wage-loss payments is complicated and depends on employing  agencies to provide accurate information to OWCP, which leaves the  process at risk for errors. However, OWCP’s own errors and reliance on  self-reported data with respect to when claimants return to work and their  earnings also contributes to the risk of improper payments. Taking more  proactive steps to reduce the number of improper payments would allow  OWCP to provide better customer service to claimants because such  action would decrease the considerable time it takes to document,  process, and recover overpayments. While OWCP can do much on its own  to reduce the risk of improper payments, its ability to detect improper  payments related to unreported earnings is hindered by the cumbersome  process it must use to verify claimants’ earnings through SSA and the  outdated data produced by this process. While OWCP does not have the  legislative authority to access the more timely and accurate earnings data  available in the National Directory of New Hires, Congress has recently  expanded access to these data for other programs to use in verifying  individuals’ eligibility for federal benefits.
Similarly, OWCP can do more to focus on the recovery of overpayments.  With little data on the recovery status of overpayments, OWCP cannot  monitor the effectiveness of its recovery efforts or use this information to  improve these efforts. While our review indicates that OWCP is recovering  many overpayments, it also suggests that recoveries could be increased if  OWCP acts on the missed recovery opportunities we identified.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Labor direct OWCP to develop a  management strategy to ensure that the program’s emphasis on quickly  processing and paying FECA claims is balanced with the need for payment  accuracy. Specifically, the agency should take the following two actions  revise its program performance measures to ensure increased  emphasis on payment accuracy, adequate internal controls, and  overpayment recoveries and    collect more detailed information on improper payments, such as the  causes of overpayments and underpayments, and use these data to  better identify improper payment risks and to address areas of high  risk.
We also recommend that the Secretary direct OWCP to take steps to  reduce common causes of improper payments, such as  requiring agencies to report to OWCP when a FECA claimant returns to  work and provide incentives for agencies to notify OWCP quickly;    ensuring that its data match with SSA’s death records is conducted  regularly and consistently and that it includes individuals who are  receiving survivor death benefits;  taking steps to ensure that wage-loss-compensation payments for  claimants covered by the current federal retirement system are  appropriately reduced by the amount of their SSA benefits that are  attributable to their federal service;    considering ways to reduce the time it takes to process automated    determining what additional training claims examiners may need to  improve payment accuracy; and    exploring options for improving information sharing between OWCP  and employing agencies so that OWCP can make accurate payments  and agencies can help identify payment errors.
To allow OWCP to more effectively verify the earnings information  reported by FECA recipients and identify instances in which a claimant  receiving wage loss compensation has unreported earnings, we  recommend that the Secretary of Labor direct OWCP to develop a  legislative proposal seeking legal authority to enter into a data-matching  agreement with the Department of Health and Human Services to identify  FECA claimants who have earnings reported in the National Directory of  New Hires. Any such data-matching agreement would need to include  appropriate safeguards for protecting claimants’ privacy and personal  information.
We further recommend that the Secretary direct OWCP to take steps to  focus attention on the recovery of FECA overpayments, such as    collecting more detailed information on how overpayments are  resolved in order to monitor the effectiveness of OWCP’s recovery  efforts;    holding staff accountable to ensure that overpayments are processed in    considering reducing the dollar threshold for waiving overpayments as  OWCP’s overpayment processing data system develops additional  capabilities;    determining whether having fiscal staff dedicated to recovering  overpayments would increase their recovery; and    developing system modifications that would automatically identify  claimants who have outstanding overpayments in order to ensure that  debts are repaid from future benefit payments.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Labor for review and comment. The  agency provided comments, which are reproduced in appendix II. Labor  expressed some concerns about our findings and conclusions but did not  specifically comment on our recommendations. However, Labor also  indicated that it is taking a number of steps that are consistent with our  recommendations. In its comments, Labor stated that FECA overpayments  and underpayments should not be considered improper because Labor  adjusts them once additional information becomes available. We used the  definition of improper payments from the Improper Payments Information  Act: “any payment that should not have been made or that was made in an  incorrect amount.” In addition, Labor stated that our analysis of improper  payments identified in 2006 does not accurately reflect its performance in  terms of managing improper payments because it includes payments that  occurred in previous years. We determined, however, that using currently  available data on improper payments that occurred in 2006 would not have  provided an accurate assessment of the risk of the FECA program to  improper payments because OWCP does not identify some improper  payments until a year or more after they occur. As a result, we based our  analysis on improper payments that were identified in 2006 without  respect to when they occurred and describe in the report how our  measure of improper payments differs from Labor’s. This analysis allowed  us to demonstrate the type of information that OWCP could collect to  identify and address the largest risks that lead to improper payments.  Labor also stated that system improvements and staff training have  improved its data and processing of overpayments. We acknowledge in  our report that Labor’s data on improper payments have recently  improved. We believe that the improvements in Labor’s performance in  addressing improper payments have resulted from its efforts to focus more  attention on these payments since our review began. This supports our  assertion that the risks of improper payments are reduced when agencies  strike an appropriate balance between service delivery and payment  accuracy. We continue to believe that our findings, conclusions, and  recommendations are sound. Labor’s comments and our responses are  reproduced in their entirety in appendix II. In addition, we incorporated  clarifications in the report as appropriate.
We are sending copies of this report to the Secretary of Labor, relevant  congressional committees, and other interested parties. We will make  copies available to others upon request. In addition, the report will be  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions or wish to discuss this report  further, please contact me at (202) 512-7215 or at bertonid@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. The major  contributors are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To address our objectives, we requested data from OWCP on the volume,  causes, and recovery outcomes of improper payments it identified.  However, OWCP was only able to provide us with limited information on  overpayments, and could not provide us with any data on underpayments  because it could not separate them from other payment types. As a result,  we decided to review a sample of claims files containing identified  overpayments to learn more about their characteristics and reviewed a  sample of other claims files to look for underpayments and estimate the  total dollar value of underpayments OWCP identified in fiscal year 2006.  We used the data gathered through these file reviews to estimate the  magnitude of OWCP’s improper payments. We also reviewed results from  OWCP’s internal audits, called accountability reviews, to learn more about  risks OWCP identified. Additional information on how we conducted our  claims file reviews and other analyses are discussed below. We conducted  our review between September 2006 and January 2008 in accordance with  generally accepted government auditing standards.
subsections: section_title: Review of Overpayments Identified by OWCP in Fiscal Year 2006
paragraphs: OWCP collects limited information on overpayments, but was able to  create a report for us listing all FECA debts identified in fiscal year 2006.  This data extract was run on March 13, 2007, and included basic data on  all 2006 FECA debts as of that date, including type, processing status, and  initial and current balances. This data source contained records of both  wage loss compensation overpayments and other types of debts, such as  medical provider debts and debts associated with legal settlements. To  assess the reliability of these data, we (1) reviewed existing  documentation related to the data sources, (2) electronically tested the  data to identify obvious problems with completeness or accuracy, and (3)  interviewed knowledgeable agency officials about the data. We  determined that the data extract was sufficiently reliable for our purposes.  Before selecting our sample, we removed all debt records that did not  appear to be related to wage-loss-compensation payments. In addition, we  removed all debts that had been voided. As shown in table 2, the large  majority of the remaining debt balance was due to wage loss  compensation overpayments, with smaller amounts related to benefits  fraud, employing agency overpayments, and miscellaneous situations.  Their initial balances totaled just over $14.7 million.
Before selecting our sample, we removed pending, preliminary  determination, and suspended overpayments from the universe in order to  avoid analyzing characteristics of overpayments that might later be voided  or overturned. All remaining overpayments were either in final  determination or terminated status. Final determination overpayments had  neither been waived nor overturned on appeal and were being collected as  of the date of the data run. Once final determination overpayments are  collected in full, they become terminated. Overpayments may also be  terminated if they are waived or referred to Treasury because of non- repayment. OWCP groups all of these overpayments together because it  does not track how overpayments are resolved.
The initial balances of the nearly 2,800 remaining final and terminated  overpayments totaled about $9.9 million. As seen in figure 7, terminated  overpayments made up the bulk of the universe; they represented 82  percent of all records. Final determination overpayments accounted for 18  percent of the universe and had a higher median dollar amount—about  $2,600 as compared to just over $600 for terminated overpayments.
We selected a random sample of 331 overpayment records, stratified by  initial dollar value, from the universe of almost 2,800 final and terminated  overpayments. Some claims had multiple overpayment records, but OWCP  officials informed us that some claims examiners may have incorrectly  created separate overpayment records each time a claimant submitted a  repayment on a preexisting debt. As a result, we sampled cases with  multiple overpayments in separate strata and reviewed all overpayments  listed under each claim to better estimate the prevalence of incorrectly  recorded overpayments.
Once we selected our sample, we requested the electronic file for each  claim that had a sampled overpayment. We reviewed these files to collect  information including what caused overpayments, how long they lasted,  how long it took claims examiners to process them, whether they were  appealed or waived, whether they were repaid, and whether claims files  contained annual eligibility updates. A second person verified the  information collected. We only included overpayments that we considered  to be improper in our analysis. Debts that were not due to improper  payments, such as debts for copying expenses or overpayments that  occurred when claimants retroactively elected to join other benefits  programs, were excluded from our analysis. We also excluded cases that  should not have been included in the universe of 2006 debts. (Some debt  records were actually repayments on debts identified in previous fiscal  years.)
Using only the 212 overpayments records that remained after these  exclusions, we analyzed data on overpayment characteristics and made  projectable estimates to the universe of final determination and  terminated fiscal year 2006 overpayments. Unless otherwise noted,  estimates are accurate to within plus or minus 10 percentage points, at the  95 percent confidence level. For instance, our estimate of the total dollar  value of improper payments has a much wider confidence interval.
While OWCP’s debt database was sufficiently reliable for our purposes,  there are some limitations to our analysis. First, because we excluded  overpayments that were in pending, preliminary, and suspended statues  from our analysis, our results are only projectable to the universe of  overpayments identified in fiscal year 2006 and placed in final  determination or terminated status by March 13, 2007. As a result, our  estimate of the dollar value of improper overpayments identified by OWCP  is low. Additionally, our estimates may capture characteristics that are not  representative of all overpayments. Since the overpayments we reviewed  had already been finalized or terminated, they could have been processed  faster by claims examiners, have fewer appeals by claimants, or exhibit  quicker repayment than the pending, preliminary, and suspended  overpayments we excluded from the universe. Further, since we were only  able to analyze recovery outcomes of overpayments that had been  terminated as of March of 2007, the proportions of all 2006 overpayments  that were repaid, waived, or referred to Treasury for recoupment may  differ from our estimates.
section_title: Review of Potential Underpayments Identified by OWCP in Fiscal Year 2006
paragraphs: OWCP does not track underpayments and was therefore unable to provide  us with data on the volume, dollar value, or causes of underpayments it  identified in fiscal year 2006. However, it was able to provide us with an  extract of all payments made through its payment override system, called  the “direct payment” system, which includes some underpayments. The  direct payment system allows claims examiners to issue payments in  special circumstances, such as when a claimant has already been paid for  a particular period, but is owed additional compensation. Underpayment  reimbursements are issued via direct payment if a claimant was previously  compensated for a particular period and was underpaid. If a claimant was  not originally compensated for a period, but should have been, the  underpayment reimbursement would then be issued through OWCP’s  standard payment process—not the direct payment system. Other  instances in which payments must be issued through the override system  include when payments cover periods extending far into the future, when  payments are very large, and when payments are issued to nonclaimants,  such as survivors of deceased federal workers.
We used the data set provided to create an estimate of the total dollar  value of underpayments OWCP identified in fiscal year 2006. We limited  the universe to the type of payments most likely to contain  underpayments. First, we excluded payments to individuals other than  claimants because these payments must be made via direct payment. Then  we excluded payments coded as schedule awards because lump sum  schedule awards, whose payment periods extend into the future, must be  issued as direct payments. Finally, we excluded payments that had been  canceled. All remaining payments were coded as wage-loss compensation  payments to claimants.
We selected a random sample of the remaining records that was stratified  by dollar value. We selected the 90 claims with the highest total dollar  value of direct payments, and 110 additional claims for review. These 200  claims had a total of 344 direct payment records because some claims had  multiple direct payments. We then reviewed each payment in these claims  files and collected information on whether the direct payments listed were  issued as reimbursement for improper underpayments or whether they  were issued for other reasons. We also collected information on what  caused each underpayment, who was responsible for it, and who identified  it. When OWCP made a direct payment because a decision to deny or  terminate payment was overturned on appeal, we did not consider it an  underpayment if the decision was overturned based on new information  that was not available when the original decision was made. We did  consider it an underpayment when the denial or termination was  overturned because of an error in judgment or because a claims examiner  did not follow appropriate FECA procedures.  A second person verified  the information collected, as well as the judgments made by the original  reviewer. From our review, we determined that 172 of the 344 payment  records represented improper underpayments.
The key limitation of this data set was the fact that an unknown number of  underpayments were not included in the universe. However, because  sampling the direct payment universe was the only available way to  identify underpayments, we determined that it was sufficiently reliable for  our purposes. Since the universe does not include all underpayment  reimbursements, our estimate of the total dollar value of underpayments  identified in fiscal year 2006 is understated. Additionally, because we  designed our sampling methodology primarily for the purposes of  developing an estimate of the total dollar value of underpayments, we  were unable to estimate the prevalence of causes of underpayments with  sufficient precision.
section_title: Analysis of Labor’s Improper Payment Risk Estimate
paragraphs: We relied on the results from our claims file reviews of potential  overpayments and underpayments to develop an estimate of improper  payments identified by OWCP in 2006.  As noted above, OWCP’s data  systems do not collect information on improper underpayments. OWCP  did provide data on overpayments identified in 2006, including $9.9 million  for overpayments that were finalized or terminated by March 2007.  In  reviewing a sample of these claims files, we found that not all  overpayments included on the list represented improper payments.   Consequently, we developed our own estimate of improper overpayments  based on the results from our file review.  We estimated that OWCP  identified $13.3 million in improper payments in fiscal year 2006 ($7.1  million in improper overpayments and $6.2 million in improper  underpayments). The 95 percent confidence interval for this estimate  ranged from approximately $10.4 million to $16.2 million. This is an  estimate of the magnitude of improper payments that OWCP identified in  fiscal year 2006, not the magnitude of improper payments that OWCP  made in fiscal year 2006. Our estimate of $13.3 million includes some  payments made to claimants in previous fiscal years (such as fiscal year  2004 or 2005) that OWCP discovered were improper in 2006. Table 3  provides information on the proportion of the sample of improper  payments we reviewed that were made in fiscal year 2006 and the  proportion made in prior fiscal years.
As previously discussed, this estimate likely understates the amount of  overpayments identified during the fiscal year for two reasons. First, our  estimate only includes overpayments that were finalized by March 2007,  when OWCP provided us with its 2006 debt universe. An additional $4.7  million in debts that had been declared by OWCP, but not yet finalized,  were not included in our universe. Additionally, our estimate of improper  underpayments is likely to be understated because not all underpayments  are issued as direct payments.
section_title: Analysis of OWCP’s Accountability Reviews
paragraphs: We used OWCP’s biennial internal program audits, called accountability  reviews, to provide additional evidence about OWCP vulnerability to  improper payments. These reviews are conducted on a district office basis,  with samples drawn from each office’s universe of claims files. To  aggregate these results across all six district offices evaluated in fiscal  year 2006, we weighted the errors that were identified in each office to  account for differences in the size of universes across district offices.  Specifically, we used the following formula to weight the results in each  district office: (number of errors in the district office/sample size for  district office) multiplied by (universe of items reviewed for district office  /universe of items reviewed across all district offices).
section_title: Appendix II: Comments from the Department of Labor
subsections: section_title: GAO’s Response to Labor’s Comments
paragraphs: The following are GAO’s responses to the Department of Labor’s  comments on our draft report as outlined in Labor’s February 8, 2008,  letter.  1.  Labor commented that FECA’s mission is to promptly pay wage loss  and medical benefits to injured federal employees to minimize  hardship, noting that accurate payments are essential. Labor also  noted that, while payments can result in overpayments or  underpayments, they should not be considered improper because  adjustments are made once additional information becomes available.  As stated our report, we used the definition of improper payment in  the Improper Payment Information Act: any payment that should not  have been made or was made in the wrong amount. We continue to  believe that Labor needs to ensure that it strikes the appropriate  balance between processing claims quickly and preventing improper  payments.  2.  Labor asserted that its ability to comment on or verify the accuracy of  GAO’s findings with respect to specific cases was limited because we  did not provide the case names and numbers associated with specific  categories of improper payments. Because it is GAO’s policy not to  release our work papers before a review is completed, we did not  provide the requested information to Labor. The previous review cited  in Labor’s comments involved a different set of circumstances in  which GAO identified errors during its review of case files and worked  with OWCP to confirm the errors. GAO also did not provide its work  papers to Labor for that study. To verify the findings of our current  report, OWCP could have reviewed the case files it provided to us for  our review.  3.  Labor stated that we reviewed all improper payments identified in 2006  without regard to when they actually occurred, describing our  methodology as an inaccurate measure of the program’s performance  with regard to improper payments. In conducting our analysis, we  determined that reviewing available data on improper payments that  occurred in 2006 would not provide an accurate assessment of the risk  of the program to improper payments because OWCP does not identify  some improper payments for a year or more after they occur. As a  result, we focused on improper payments that were identified in 2006  without respect to when they occurred. We described the specific  methodology we used in the report and detailed how our measurement  of improper payments differs from Labor’s. Further, while Labor’s  random sample of payments is consistent with OMB’s guidance for  developing an improper payment rate, it provides little information on  the magnitude and causes of improper payments. Our review of  improper payments identified by Labor in a particular year provides  much more qualitative information on the magnitude and causes of  improper payments that the agency can use to reduce the incidence of  improper payments. We continue to believe that Labor should use its  existing data and collect additional data on the causes of improper  payments to use in identifying and addressing the most common  causes of FECA improper payments.  4.  While OWCP has payment procedures, provides training to staff, and  conducts biennial reviews to determine how well district offices follow  established procedures, the lack of performance measures for payment  accuracy leaves the FECA program at risk of improper payments. As  we noted in the report, previous GAO work has shown that the risk of  improper payments increases when payment timeliness goals are not  balanced with an emphasis on payment accuracy. Further, some  OWCP staff told us that they focused more on claims processing tasks  that are tracked by OWCP, while placing a lower priority on processing  improper payments. We continue to believe that the agency should  establish performance goals related to payment accuracy.  5.  Labor did not provide us with its fiscal year 2008 Division of Federal  Employees’ Compensation (DFEC) Operational Plan during our  review.  In response to this comment, we asked for a copy of the plan  and Labor provided it. We added the information about the new  performance measure to the report.   6.  Labor’s Office of Inspector General’s (OIG) SAS-70 audit for 2006  assessed the FECA program’s internal controls. As part of this audit,  the OIG inspected OWCP’s accountability reviews with respect to  payment accuracy and determined that the reviews were properly  conducted. However, the OIG’s SAS-70 audit and Labor’s A-123 review  did not incorporate the results of the accountability reviews with  respect to payment accuracy into their findings.  7.  We added language to the report to recognize that OWCP’s  accountability reviews include procedural errors that may not result in  an improper payment. We separately reviewed payment and  procedural errors and found that 14 percent of the payments sampled  in OWCP’s 2006 accountability reviews had calculation errors rather  than procedural errors. Further, if district offices are not following the  agency’s payment procedures in over 20 percent of its cases, the  program is still at risk of improper payments, even if some procedural  errors do not create an improper payment.  8.  During our review, OWCP officials did not tell us that findings from  several review items could be combined into a single corrective action  plan. We added this information to our report.  9.  Labor’s statistical sampling is intended to develop an improper  payment rate and provides little useful information about the  program’s risks of improper payments. While the results from its  accountability reviews could potentially provide data on program  risks, OWCP officials gave us no indication that that they using the  results for this purpose. While OWCP officials did not share with us  during our review their plans to develop reason codes for improper  payments, we support the steps they are proposing to better track  improper payments, steps that are consistent with our  recommendations. We also encourage OWCP to develop performance  goals for reducing improper payments based on these improved data.  10. While the SSA OIG did not review individual cases to verify that an  improper payment occurred, it focused on a specific population of  FECA payment recipients who should not be earning any wages— individuals who were totally disabled for the entire year. Conducting  automated data matches is an important internal control for means- tested benefit programs and a critical first step in the process of  identifying potential improper payments that should be further  investigated. Without such data matches, Labor cannot begin to  identify overpayments made when claimants do not report earnings. In  addition, if the information that the SSA OIG reviewed was inaccurate  because OWCP improperly coded some of its claims, OWCP should  take steps to ensure that all claims are properly coded.  11. In our report, we note that OWCP’s new data system provides better  data for tracking the status of overpayments and that OWCP has taken  steps to address data reliability issues that arose during the initial  implementation of the new system. We agree that the new system  should more quickly identify some overpayments, such as those that  occur when claimants return to work. However, from our reviews of  the claims files, we found other types of overpayments that can take a  long time to identify—such as errors in the wage rates provided by the  claimants’ agencies to OWCP—that will not be identified by the new  system. Further, OWCP data and interviews with some claims  examiners indicated that significant delays occurred in processing  overpayments after they were identified. As noted in our report,  managing overpayments has not been a priority for OWCP in the past.
However, we believe that improvements in OWCP’s performance are  the result of its recent increased emphasis on improper payments.  12. We clarified in the report that nurses and vocational rehabilitation staff  can also notify OWCP that a FECA claimant returned to work.  However, because nurses or vocational rehabilitation staff are not  assigned to every claim, we believe the employing agency is in the best  position to notify OWCP when a claimant returns to work, and OWCP  should require agencies to do so in a timely manner.  13. Although, during our review, OWCP officials did not tell us about their  plan to be notified electronically when claimants return to work, we  support OWCP’s efforts to develop systems to facilitate timely  notification when claimants return to work. We recognize, however,  that agencies may not always provide this information promptly to  OWCP. As a result, we recommended that OWCP provide incentives  for agencies to notify it quickly. For example, OWCP tracks how  quickly agencies submit required claims forms and could similarly  track how quickly agencies notify it when claimants return to work.  14. While we recognize that the SSA OIG did not review individual cases to  verify that an improper payment occurred, some of these cases may  represent actual overpayments. However, without conducting regular  data matches with SSA’s death records for all individuals receiving  FECA payments, OWCP cannot easily identify such overpayments. As  with matches of earnings data, conducting automated data matches  with death records is an important internal control and a critical first  step in the process of identifying potential improper payments that  should be further investigated. In addition, if the information that the  SSA OIG reviewed was inaccurate because OWCP improperly coded  some of its claims, OWCP should take steps to ensure that all claims  are properly coded.  15. Because OWCP officials told us during our review that the FECA  program does not collect the SSNs of individuals receiving survivor  death benefits, we contacted an OWCP official to discuss this  comment. He clarified that the form survivors use to apply for death  benefits does not request their SSNs. As a result, OWCP cannot  currently include survivors in its data match with SSA’s death records.  However, the official also stated that, when the death benefit  application form expires in 2010, OWCP plans to propose that the form  be revised to include the survivor’s SSN, a proposal subject to OMB  approval. We continue to believe that OWCP should take all needed  steps to include survivors who claim death benefits in its monthly data  matches with SSA’s death records.  16. OWCP officials told us the agency is taking steps to improve the  number of FERS offset deductions being made for Social Security  benefits but the specific steps being taken were not completely clear.  We requested a copy of a letter that the officials told us they had  prepared related to this initiative, but OWCP did not provide it to us, so  we could not confirm the steps being taken. OWCP officials also  mentioned that the agency was taking steps to obtain FERS  information more quickly from SSA. While this is a useful step, our  concern is that some claims examiners may not be aware of this issue  or how to implement a FERS offset deduction.  17. We agree that making determinations about claims files requires some  judgment and interpretation. To ensure that appropriate and consistent  interpretations were used, GAO took the following steps in reviewing  case files. First, we established case file review protocols with specific  criteria about how to treat different types of circumstances. For  example, in reviewing underpayments created when a denied claim  was overturned on appeal, the protocol instructed reviewers not to  consider it an underpayment if the decision was overturned based on  new information that was not available when the original decision was  made. We pretested the protocol and revised it in response to the  pretest results. Our protocol also called for a second GAO analyst to  independently verify the case file responses recorded by the initial  analyst. If the two analysts did not agree, they discussed the case until  they came to consensus on the appropriate response. In addition, GAO  supervisors and technical staff reviewed the results of the analysts’  work. Finally, we support OWCP’s plans to develop a training program  to improve payment accuracy, plans that are consistent with our  recommendations.  18. We based our findings on the most recent data and reports available at  the time of our review. We believe that Labor’s efforts to ensure that  claimants submit annual eligibility forms will help decrease the risk of  improper payments.  19. Given the large number of overpayments created by the current  payment schedule established by OWCP, we continue to believe that  OWCP should look for opportunities to reduce the time needed to  process its automated monthly FECA payments.  20. In our report, we describe OWCP’s plans to provide employing  agencies with more detailed FECA payment information. We support  OWCP’s efforts in this area, which are consistent with our  recommendations.  21. We used data from OWCP’s September 2007 debt aging report, which  was the most recent data we could incorporate into our report and that  OWCP officials told us was reasonably reliable. If more recent data  indicate that OWCP’s performance in processing overpayments is  improving, we commend OWCP for its efforts. As stated previously, we  believe that OWCP’s performance may be improving because of its  increased emphasis on managing improper payments, and we  encourage the agency to continue these efforts.  22. We recognize that agencies use different computer systems and that  the FECA program has different requirements from the programs  administered by SSA and VA. However, as OWCP continues to improve  its overpayment processing capabilities, we believe that it should  review the thresholds used by these and other agencies to identify  potential opportunities to reduce its waiver thresholds.  23. OWCP officials did not inform us of these planned enhancements to  their data system during our review. We added this information to our  report. We support the steps OWCP is proposing to improve its debt  collection activities, steps that are consistent with our  recommendations.  24. In our report, we describe OWCP’s policy and procedures with respect  to wage garnishment. We agree that Treasury may be better equipped  to garnish the wages of FECA claimants with overpayments, especially  if claims examiners process claims quickly and refer them to Treasury  as soon as possible. However, if OWCP does not process and finalize  overpayments quickly, opportunities to garnish wages may be lost  since a claimant may no longer be working at a federal agency by the  time the overpayment is referred to Treasury. We encourage OWCP to  continue its efforts to process overpayments more promptly and refer  uncollected overpayments to Treasury as quickly as possible.
section_title: Appendix III: GAO Contact and Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: Revae Moran, Assistant Director, and Michelle St. Pierre, Analyst-in- Charge, managed this assignment, and Jordan H. Holt and M. Ellen Phelps  Ranen made key contributions throughout the assignment. In addition,  Carla Craddock and Keith Howey assisted with the audit work; Carla  Lewis provided advice on financial audit requirements and improper  payment issues; Daniel Schwimer provided legal assistance; Charles  Willson provided writing assistance; and Laurie Hamilton, Jean McSween,  Karen O’Conor, and Beverly Ross assisted with the methodology and  statistical analyses.