DoD failed to adequately implement key provisions of the Improper Payments Information Act of 2002 and of the Improper Payments Elimination and Recovery Act of 2010 as well as OMB requirements for fiscal 2011, GAO has said in calling for significant improvements to address these requirements.
GAO says it found that DoD’s improper payment estimates reported in its fiscal 2011 agency financial report were neither reliable nor statistically valid because of long-standing and pervasive financial management weaknesses and significant deficiencies in the department’s procedures to estimate improper payments.
According to GAO-13-227, DoD did not have key quality assurance procedures in place or appropriate sampling methodologies, and it did not maintain key documentation supporting its reported improper payment estimates.
DoD also failed to perform a required risk assessment to identify those programs susceptible to significant improper payments, and did not have procedures to identify root causes of improper payments and develop related corrective actions, GAO said.
DoD has taken some actions since fiscal 2011, such as reporting a statistical estimate for Defense Finance and Accounting Service commercial pay and issuing revised Financial Management Regulation chapters on improper payments and recovery audits, but GAO said it must take action to correct these and other deficiencies related to identifying, estimating, reducing, recovering, and reporting improper payments, amounting to over $1 billion for fiscal 2011.