Section 3 of IPERA also calls for executive agencies’ IGs to annually  determine and report on whether their respective agencies complied with  the following six criteria: publish a report in the form and content required by OMB—typically  an AFR or a PAR—for the most recent fiscal year, and post that report  on the agency website;  conduct a program-specific risk assessment for each program or  activity that conforms with IPIA as amended; publish improper payment estimates for all programs and activities  deemed susceptible to significant improper payments under the  agency’s risk assessment; publish corrective action plans for those programs and activities  assessed to be at risk for significant improper payments; publish and meet annual reduction targets for all programs and  activities assessed to be at risk for significant improper payments; and  report a gross improper payment rate of less than 10 percent for each  program and activity for which an improper payment estimate was  published. This is the largest number of agencies deemed noncompliant  under IPERA since IGs began reporting on their agencies’ compliance  with these criteria in fiscal year 2011. Further, this represents an increase  of 4 agencies reported to be noncompliant compared to fiscal year 2013. A total of 38 programs accounting for a reported $100.6 billion in  estimated improper payments were responsible for identified instances of  noncompliance in fiscal year 2014. Had these programs decreased their reported  error rates to 10 percent, the government-wide improper payment  estimate would have been $23.1 billion, or 18.6 percent, lower. Eighteen Programs Were Noncompliant with IPERA Criteria for 3 Consecutive Years or More, as of Fiscal Year 2014, and Some Agencies Did Not Submit Information Required to Address Consecutive Noncompliance

IGs at nine CFO Act agencies determined that 18 programs were  noncompliant with IPERA criteria for at least 3 consecutive years as of  fiscal year 2014. When a program is reported as noncompliant by its IG  for 3 or more consecutive years, the responsible agency is required to  submit proposals to Congress within 30 days to reauthorize the program  or change the statute that established it. However, we found that only  three of the nine agencies submitted the required information to Congress  in response to 3 or more years of consecutive noncompliance in fiscal  year 2014. Although officials at some of the agencies maintain that reauthorization or  statutory change will not achieve compliance under IPERA, by not  reporting to Congress as required when an agency does not comply for 3  consecutive years and informing Congress of the agency’s challenges  with achieving compliance under IPERA, Congress is limited in its ability  to monitor the law’s implementation and ensure that its intent is being  fulfilled. Certain IGs Did Not Fully Adhere to Statutory Requirements and OMB Guidance for IPERA Reporting for Fiscal Year 2014

We found that in conducting their IPERA compliance reviews for fiscal  year 2014, certain IGs did not consistently adhere to the requirements  contained in IPERA and other applicable laws, such as the Disaster Relief  Appropriations Act, 2013 as well as the guidance provided by OMB to  clarify IPERA criteria and establish reporting requirements for OMB- designated high-priority programs. We verified that  these deficiencies have been corrected for fiscal year 2015 reporting and  therefore determined that no recommendations to these IGs are  warranted. Conclusions

Estimated improper payments across the federal government have  increased by over $30 billion in the last 2 fiscal years. Appendix I: Objectives, Scope, and Methodology

Our objectives were to review (1) the number of agencies, among those  listed in the Chief Financial Officers Act of 1990, as amended (CFO Act),  that complied with the criteria listed in the Improper Payments Elimination  and Recovery Act of 2010 (IPERA), as reported by their inspectors  general (IG), for fiscal years 2011 through 2014, and what criteria and  programs the IGs concluded were primarily responsible for instances of  agency noncompliance; (2) the number of programs at the 24 CFO Act  agencies that were determined noncompliant with IPERA criteria by their  IGs for 3 or more consecutive years, as of fiscal year 2014, and the  extent to which the responsible agencies submitted the required  information to Congress; and (3) the extent to which CFO Act agency IGs  have adhered to certain IPERA requirements and the related Office of  Management and Budget (OMB) guidance contained in OMB Circular No. To  determine if certain IGs corrected deficiencies identified in preliminary  GAO findings shared with them and followed OMB guidance for fiscal  year 2015 reporting, we reviewed the fiscal year 2015 IPERA reports  issued in May 2016 by the seven IGs in whose fiscal year 2014 reports  we identified deficiencies.
Why GAO Did This Study

IPERA calls for executive branch agencies' IGs to annually determine whether their agencies complied with six criteria related to the estimation of improper payments, including conducting risk assessments, publishing corrective action plans, and meeting annual reduction targets. In the last 2 fiscal years, total estimated improper payments reported by federal agencies have increased considerably. Specifically, improper payment estimates across the government for fiscal year 2015 totaled $136.7 billion, over $30 billion higher than the estimated total for fiscal year 2013.
GAO was asked to review compliance under IPERA as reported by IGs for fiscal year 2014. This report examines to what extent the 24 CFO Act agency IGs (1) reported that agencies complied with the IPERA criteria for fiscal years 2011 through 2014, and what criteria and programs were responsible for agency noncompliance; (2) reported programs to be noncompliant for 3 consecutive years as of fiscal year 2014, and whether agencies submitted the required information to Congress; and (3) adhered to statutory requirements and OMB guidance for reporting on fiscal year 2014 IPERA compliance reviews.

What GAO Found

For fiscal year 2014, 15 of the 24 Chief Financial Officers Act (CFO Act) agency inspectors general (IG) determined that their agencies did not comply with criteria in the Improper Payments Elimination and Recovery Act of 2010 (IPERA). This is the largest number of CFO Act agencies reported as noncompliant under IPERA since the requirement for IGs to report on their agencies' compliance was implemented in fiscal year 2011, and represents an increase of 4 agencies from fiscal year 2013. In fiscal year 2014, IGs reported 38 programs accounting for $100.6 billion in estimated improper payments as responsible for instances of noncompliance. Agency noncompliance for fiscal year 2014 was largely due to agencies failing to meet improper payment reduction targets or to report improper payment error rates at less than 10 percent for all programs. If the 5 agencies with programs exceeding 10 percent error rates had reported error rates under the threshold set in IPERA, the government-wide improper payment estimate would have been $23.1 billion, or 18.6 percent, lower.
In addition, 18 programs at 9 agencies were reported as noncompliant with IPERA criteria by their agencies' IGs for at least 3 consecutive years as of fiscal year 2014. Agencies with programs reported as noncompliant for 3 consecutive years are required to submit proposals to Congress to reauthorize the programs or change the statutes that established them. However, GAO found that only 3 agencies submitted such information to Congress. When agencies do not report to Congress as required, Congress is limited in its ability to monitor the implementation of IPERA and ensure that its intent is being fulfilled.
Certain IGs also did not fully adhere to Office of Management and Budget (OMB) guidance or statutory requirements for IPERA reporting for fiscal year 2014 by either failing to (1) clearly state the agency's compliance status overall and with each of the six criteria, (2) report on programs designated high priority by OMB as necessary, or (3) report compliance determinations for disaster relief programs. In the past year, OMB has made efforts to clarify its guidance to IGs. To determine if IGs made changes in response to OMB's efforts and deficiencies identified in GAO's preliminary findings shared with them, GAO reviewed select fiscal year 2015 IPERA reports issued by IGs in May 2016. GAO concluded that the IGs corrected the issues identified during this review in their fiscal year 2015 IPERA reports, and no recommendations to IGs are warranted.

What GAO Recommends

GAO recommends that four agencies submit proposals as required to Congress in response to 3 years of noncompliance with IPERA criteria. The Departments of Defense and Transportation concurred with GAO's recommendations and the Department of Agriculture and the Small Business Administration stated that they had no comments on the draft report.