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Audit Reports


DOT’s Fiscal Year 2016 Improper Payment Reporting Does Not Comply With IPERA Requirements

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Required by the Improper Payment Elimination and Recovery Act of 2010
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In July 2010, Congress enacted the Improper Payments Elimination and Recovery Act (IPERA to encourage the elimination of payment errors, waste, fraud, and abuse in Federal programs. The Federal Government intensified its efforts to eliminate improper payments made from Federal program funds, including wrong amounts, duplicate payments, and payments with insufficient documentation, by issuing Executive Order 13520.
IPERA requires Federal agencies to limit improper payments to less than 10 percent of their total program payments. It requires agencies to test annually for improper payments in their programs and to publish the results in the Agency Financial Report (AFR). The act also calls for inspectors general to review their agencies’ compliance with IPERA and to submit reports to their agency heads. Finally, agencies must comply with regulations the Office of Management and Budget developed to implement the act.
For fiscal year 2016, the Department of Transportation (DOT) reported approximately $55.5 billion in payments in programs or activities susceptible to significant improper payments. In addition, DOT estimated $207.4 million as improper payments in these programs or activities. The Department’s AFR accurately reflects and includes all of the required reporting elements in its IPERA section; however, DOT is not in compliance with IPERA requirements because three programs did not meet their improper payment reduction targets in fiscal year 2016. Specifically, the Federal Aviation Administration (FAA) program funded by the Facilities and Equipment—Disaster Relief Appropriations Act (F&E-DRAA), the Federal Railroad Administration’s (FRA) High-Speed Intercity Passenger Rail (HSIPR) program, and the Federal Transit Administration’s (FTA) Formula Grants and Passenger Rail Investment and Improvement Act (FG-PRIIA) program did not achieve their own targets to reduce improper payments. This occurred due to administrative or procedural errors, such as incorrect labor rates; as a result DOT estimated that it exceeded its target reduction goals by $140,000, $5.6 million, and $83.9 million for F&E-DRAA, HSIPR and FG-PRIIA, respectively. The Department concurred with our three recommendations to improve its ability to meet improper payment reduction targets for these programs.


Closed on
No. 1 to OST
Implement procedures to ensure selected Federal Aviation Administration employees receive additional guidance on procure-to-pay procedures needed to support Facilities and Equipment - Disaster Relief Appropriation Act program payments as proper.
Closed on
No. 2 to OST
Implement procedures to ensure the Federal Railroad Administration provides training to select grant recipients regarding the root causes of administrative errors and the identification and retention of required documentation to support a payment as proper in the High-Speed Intercity Passenger Rail program.
Closed on
No. 3 to OST
Implement procedures to ensure the Federal Transit Administration distributes guidance to grant recipients on the proper procedure for submitting payments that adhere to the grant agreement terms in the Formula Grants and Passenger Rail Investment and Improvement Act program.