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DOT’s Fiscal Year 2019 IPERA Compliance Review

Mandated by the Improper Payments Elimination and Recovery Act of 2010
Project ID: 
FS2020029
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 2019, the Department of Transportation (DOT) reported approximately $45 billion in payments in programs or activities susceptible to significant improper payments. DOT estimated that $396 million of those payments were improper payments. We reviewed DOT’s improper payment testing results for fiscal year 2019 to determine whether DOT complied with IPERA’s requirements as implemented by OMB.
 
What We Found
DOT complied with IPERA and included all required reporting elements in its 2019 AFR. Specifically, DOT reported improper payment estimates for the Federal Highway Administration’s (FHWA) Highway Planning and Construction program (HPC)—the only program the Department identified as susceptible to significant improper payments. In addition, the payment integrity information in the AFR was accurate and complete. Furthermore, DOT reported an improper payment rate of less than 10 percent and published corrective action plans for FHWA HPC. However, the corrective action plan has not helped one HPC grantee prevent improper payments for the last 3 years. In fiscal year 2019, FHWA projected the amount of improper payments to be approximately $169 million for this grantee only and categorized these funds as monetary losses or overpayments. The lack of an effective corrective action for this HPC grantee jeopardizes DOT’s efforts to prevent improper payments and remain compliant with IPERA.
 
Our Recommendations
DOT concurred with both of our recommendations and provided an appropriate action and completion dates. Accordingly, we consider all recommendations as resolved but open pending completion of the planned actions.

Recommendations

Open

Closed

$28,000
No. 1 to OST

Implement procedures to require Federal Highway Administration to review about $28,000 identified as improper payments and recover as appropriate.

$169,000,000
No. 2 to OST

Implement procedures to require that Federal Highway Administration develop a process to: a. detect grantees that have not reduced improper payments for 3 consecutive fiscal years or over the 3-year risk assessment cycle, and b. review those grantees' root causes to implement robust/individual corrective actions. Implementation of this recommendation could put approximately $169 million in funds to better use.