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DOT’s Fiscal Year 2018 IPERA Compliance Review

Mandated by the Improper Payments Elimination and Recovery Act of 2010
Project ID: 
FI2019054
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 2018, the Department of Transportation (DOT) reported approximately $46 billion in payments in programs or activities susceptible to significant improper payments. In addition, DOT estimated that about $1 billion of those payments were improper payments. We reviewed DOT’s improper payment testing results for FY 2018 to determine whether DOT complied with IPERA’s requirements as implemented by OMB.
 
What We Found
While DOT completed most of its FY 2018 requirements, it did not meet one reduction target, and thus did not comply with IPERA. Specifically, the Federal Highway Administration’s (FHWA) Highway Planning and Construction (HPC) program did not meet its reduction target. FHWA projected the amount of HPC improper payments to be approximately $997 million, or 2.22 percent—1.72 percent higher than FHWA’s reduction target of 0.5 percent. The Department did comply with the remaining IPERA requirements; for example, it published an AFR that included improper payment estimates for all programs and activities identified as susceptible to significant improper payments, as well as programmatic corrective action plans. Overall, DOT has taken steps and implemented internal controls to prevent, reduce, and recapture improper payments, and the payment integrity information in DOT’s AFR was accurate and complete.
 
Our Recommendations
DOT concurred with our recommendation and provided an appropriate action and completion date. Accordingly, we consider the recommendation resolved but open pending completion of the planned action.

Recommendations

Open

Closed

No. 1 to OST

Implement procedures to ensure FHWA provides additional guidance to State and local agencies that receive Highway Planning and Construction funds on the importance of eliminating administrative or process errors and maintaining adequate documentation to support payments requests.