An Office of the Inspector General (OIG) enquiry has found that the Department of Homeland Security (DHS) did not comply with the Improper Payments Elimination and Recovery Act of 2010 (IPERA) in fiscal 2018 because the Department did not meet two of the six requirements.
Specifically, DHS omitted the percent of recaptured amounts from the Other Information section in its Agency Financial Report (AFR) and did not meet its annual reduction target established for one of eight programs deemed susceptible to significant improper payments.
DHS also failed to comply with Executive Order 13520, Reducing Improper Payments, because the Department did not make available to the public its Quarterly High-Dollar Overpayment report for the second quarter of fiscal year 2018. Although DHS published reduction targets for each program assessed to be at risk, it did not meet the reduction target for one of eight programs deemed susceptible to improper payments. It was the FEMA Homeland Security Grant Program that did not meet the improper payment reduction target.
Additionally, DHS’ third quarter report posted on its website erroneously excluded information on actions the agency has taken to recover high-dollar overpayments.
OIG reviewed DHS’ processes and procedures for estimating its annual improper payment rates. Based on this review, OIG determined that DHS did not adequately oversee the components’ testing and reporting supporting their improper payment rates.
OIG is making seven recommendations to the Chief Financial Officer at DHS:
- Properly correct disclosure errors in the AFR to comply with requirements of Office of Management and Budget (OMB) Circular A-136, Financial Reporting Requirements.
- Ensure that the Risk Management and Assurance Division follows OMB requirements for agencies not compliant with IPERA, as stated in Appendix C of OMB Circular No. A-123. DHS should also focus its resources on corrective actions that will help meet the OMB-approved reduction targets.
- Ensure that the Risk Management and Assurance Division correctly publishes its High-Dollar Overpayment Reports in accordance with Executive Order 13520, Reducing Improper Payments.
- Ensure that the Risk Management and Assurance Division strengthens its oversight to ensure proper documentation of its review of the components’ risk assessments.
- Ensure that the Risk Management and Assurance Division properly follows existing DHS IPERA Guidance.
- Ensure that the Risk Management and Assurance Division strengthens its enforcement of requirements of the DHS Improper Payment Reduction Guidebook.
- Ensure that the Risk Management and Assurance Division has adequate personnel to bring the Department into compliance with IPERA requirements.
DHS concurred with all seven recommendations and has already begun implementing corrective actions. For example, the Risk Management and Assurance Division has enhanced the component submission process to collect documentation and responses in a more automated fashion, thus supporting enhanced verification and validation procedures earlier in the review process. For each DHS component, the staff will review component submitted risk assessments to ensure adequate documentation for all questions raised during the review process.