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May 14, 2018

DOT’s Fiscal Year 2017 IPERA Compliance Review

Mandated by the Improper Payments Elimination and Recovery Act of 2010
Project ID: 
FI2018055
View PDF Document
What We Looked At
The Improper Payments Elimination and Recovery Act (IPERA) requires Federal agencies to report improper payment estimates for all programs identified as susceptible to significant improper payments. It requires agencies to limit improper payments to less than 10 percent of their total program payments, publish their results in the Agency Financial Report (AFR), and comply with regulations the Office of Management and Budget (OMB) developed to implement the act. IPERA also requires inspectors general to submit reports on IPERA compliance to their agency heads. For fiscal year (FY) 2017, the Department of Transportation (DOT) reported approximately $46.6 billion in payments in programs or activities susceptible to significant improper payments. DOT estimated $141.4 million of those payments were improper payments. We reviewed DOT’s improper payment testing results for FY 2017 to determine whether DOT complied with IPERA’s requirements as implemented by OMB.
 
What We Found
While DOT completed most of its FY 2017 requirements, it did not meet two reduction targets, and thus did not comply with IPERA. Specifically, the Federal Transit Administration’s (FTA) Emergency Relief Program–Disaster Relief Appropriations Act (ERP-DRAA) did not achieve its goal to reduce improper payments to 0.27 percent. The Office of Inspector General (OIG)-DRAA also did not achieve its goal to reduce improper payments to 0.41 percent. The Department did comply with the remaining IPERA requirements; for example, it appropriately designed sampling plans for the four programs it tested. However, we found that OIG-DRAA was improperly billed approximately $1,177 in travel expenses—in part because the travel guidance lacked instructions on how employees on DRAA-related travel should allocate their costs. Until the Department reduces its improper payment rate and improves the accuracy of its cost-allocation process, it will remain noncompliant with IPERA.
 
Our Recommendations
DOT concurred with all three of our recommendations to help the Department achieve full compliance with IPERA and proposed appropriate completion dates. Accordingly, we consider all recommendations as resolved but open pending completion of the planned actions.

Recommendations

Open

Closed

Closed on 05.31.2018
No. 1 to OST

Implement procedures to ensure the Federal Transit Administration distributes guidance to selected grantee recipients on the importance of accurate submission and proper review of timesheets to improve proper allocation of labor efforts and the identification and retention of required documentation to support a payment as proper in the Emergency Relief Program-Disaster Relief Appropriations Act program.

Closed on 05.31.2018
No. 2 to OST

Work with the Office of Inspector General (OIG) to ensure it provides additional, clear, and precise travel guidance to employees and approving officials on the preparation and proper review of travel vouchers to improve the allocation of travel expenses in OIG-DRAA fund activity.

Closed on 11.02.2018
No. 3 to OST

Work with OIG to ensure it updates its travel guidance to add instructions on how to split or allocate DRAA-related travel expenses to the appropriate accounting codes including codes for indirect costs and trains employees how to use this guidance.