Legislation passed in 2002 requires agencies that enter into contracts worth more than $500 million in a FY to complete a cost-effective program for identifying errors made in paying contractors and recovering any improper payments. For FY 2011's audit, we performed a sample review of $8,243 million (out of $8,459 million total) administrative payments. As shown in the chart below, we identified 0.07 percent ($5.602 million) of administrative payments as improper and collected 73 percent ($4.073 million) in FY 2011. This validated the agency's current processes for prevention, detection, and collection of improper payments.
|FY 2011 Payment Recapture Audit Reporting Administrative Payments (dollars in millions)|
|Type of Payment||Payroll and Benefits||Vendor and Travel|
|Amount Subject to Review for Current Year (CY) Reporting||$6,764||$1,695|
|Actual Amount Reviewed and Reported CY||$6,764||$1,479|
|Amount Identified for Recovery CY||$2.761||$2.841|
|Amount Recovered CY||$1.489||$2.584|
|Percent of Amount Recovered out of Amount Identified CY||54%||91%|
|Amount Outstanding CY||$1.272||$0.257|
|Percent of Amount Outstanding out of Amount Identified CY||46%||9%|
|Amount Determined Not to be collectable CY||$0.250||$0.0|
|Percent of Amount Determined Not to be Collectable out of Amount Identified CY||9%||0.0%|
|Amounts Identified for Recovery Prior Years (PY)||$2.983||$9.088|
|Amounts Recovered PYs||$1.465||$9.040|
|Cumulative Amounts Identified for Recovery (CY + PYs)||$5.744||$11.929|
|Cumulative Amounts Recovered (CY + PYs)||$2.954||$11.624|
|Cumulative Amounts Outstanding (CY + PYs)||$2.790||$0.305|
|Cumulative Amounts Determined Not to be Collectable (CY + PYs)||$0.428||$0.0|
We achieve these results by maintaining our commitment to not only identify and recover improper payments, but to avoid them as well. A memorandum from President Obama (Presidential Memorandum Regarding Finding and Recapturing Improper Payments, issued on March 10, 2010) speaks to these efforts, challenging agencies to continue working along the path toward developing stronger practices. Furthermore, on July 22, 2010, President Obama strengthened this challenge by signing the Improper Payments Elimination and Recovery Act (IPERA) into law, which:
- Amends the Improper Payments Information Act of 2002 (IPIA);
- Requires agency heads to conduct recovery audits for agency programs that expend $1 million or more annually, if such audits would be cost-effective;
- Reinforces many of the initiatives we are currently implementing to address improper payments; and
- Further increases our transparency, accountability, and reporting for improper payments from the existing requirements of the IPIA and Executive Order 13520.
We support this legislation and began reporting on the IPERA legislative requirements in the FY 2011 Performance and Accountability Report.