Federal Manager's Daily Report

In a review of five programs across three departments that had been designated as at relatively low risk of major improper payments, GAO found a lack of documentation to support that conclusion.

Under the Improper Payments Information Act, significant” improper payments are defined as those that may have exceeded either 1.5 percent of program outlays and $10 million, or 100 million regardless of the rate. The law and OMB guidance set out a list of risk factors to be considered in weighing whether a program fits that category.

However, GAO found in a review of five programs at HHS, Agriculture and Justice that the departments “did not document or effectively demonstrate how these factors affected their programs’ susceptibility to significant improper payments. These programs’ risk assessments did not contain sufficient documentation to determine how the agencies arrived at their risk determinations for each risk factor, or how the total scores for all risk factors led to low-risk determinations.”

For example, HHS did not document how it concluded that its Head Start program was not susceptible to significant improper payments despite having several potential high-risk factors including complexity per transaction and volume of payments. Further, the agencies did not have documentation to demonstrate how they determined the weighting of each risk factor or the risk level ranges and did not assess all pertinent programs at least once every three years as required, GAO said.

However, the departments disagreed with GAO’s recommendations on those issues; GAO said it stands by them.