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Improper Payments Information Act (IPIA) Reporting Details

I. Describe the risk assessment(s), performed subsequent to completing its full program inventory. List the risk susceptible programs (i.e., programs that have a significant risk of improper payments based on Office of Management and Budget [OMB] guidance thresholds) identified through its risk assessments. Be sure to include the programs previously identified in the former Section 57 of Circular A-11 (now located in A-123, Appendix C).

The Office of the Chief Financial Officer (OCFO) developed its 2007 IPIA program review and risk assessment strategy by extracting the Agency’s worldwide payment data files from its financial system, Phoenix, from October 2006 to September 2007. The process of retrieving and compiling financial data by program and/or activity was greatly enhanced and simplified this year since the entire Agency was on a single consolidated financial system for all of FY 2007. Once the data were sorted by payment streams the OCFO performed an initial risk assessment. The OCFO’s risk assessment methodology consisted of weighting and scoring each of USAID’s payment streams by assigning a rating of low, moderate, or high. These ratings were based on the following risk factors:

• Dollar amount of program
• Type of program activity
• Internal controls
• Interviews with stakeholders
• Activities identified as risk susceptible through testing and review
• Review of Treasury disbursement and Agency ad-hoc reports.

Although the OCFO’s initial assessment indicated that the payment streams did not meet and/or exceed both of OMB’s threshold requirements ($10 million and an error rate of 2.5 percent) for “significant erroneous payments,” the OCFO determined that the Contracts/Grants/Cooperative Agreements and Cash Transfers were susceptible to erroneous payments due to their high dollar value and volume of transactions. Both these payment streams total $9.3 billion and represent 79 percent of the Agency’s total outlays of $11.7 billion for FY 2007. The remaining 10 payment streams did not meet OMB’s threshold for reporting improper payments nor pose a significant concern; however, the Agency reviewed and evaluated each payment stream. The OCFO elected to proceed to the next step in the risk assessment process and obtain a statistically valid sample that would subject all USAID programs and outlays to a higher level of improper payment review.

The OCFO met with the OIG in July 2007 to obtain information and guidance on conducting a statistically valid sample. The OIG offered to analyze the data the OCFO had extracted from its financial system. The extracted data were forwarded to the OIG for analysis and generation of a stratified, statistically valid sample. The OIG conducted a risk assessment and provided the OCFO with a sample by payment stream.

The OIG sampling consisted of 980 transactions worldwide, 570 USAID/Washington and 410 overseas mission transactions. The OCFO disseminated the sampling and instruction to the responsible Financial Management Office (FMO) individuals in the overseas Mission and in USAID/Washington. The sampling results revealed that only one of the 980 transactions sampled and reviewed was deemed an improper payment. The Mission responsible for this improper payment had previously recognized this error and had fully recovered the funds.

Contracts, Grants, and Cooperative Agreements/Cash Transfers Discussion

Contracts, Grants, and Cooperative Agreements

This payment stream constitutes about 67 percent of the Agency’s outlays and has been identified as highly susceptible to improper payments, i.e., estimated improper payments exceed 2.5 percent of program outlays and $10 million. The OCFO requested each of the 50 USAID Missions to perform a comprehensive review and risk analysis of the payment streams and report back to Washington the results of their review of the statistical sample size provided to them. Forty-three of the 50 Missions identified no improper payments from the sample that they reviewed. One Mission identified one improper payment which resulted in an overpayment but has since recovered the funds. The remaining six Missions had no transactions in the OIG stratified sample universe. However, the six Missions reviewed their outlays that were not included in the sample universe and reported no improper payments. USAID/Washington performed an in-depth review of 570 USAID/Washington transactions from the OIG sample universe. In addition to the sample universe, the Agency staff reviewed approximately 200,000 transactions totaling more than $7.8 billion to determine if overpayments and underpayments occurred under this payment stream. The review consisted of tracing the amount of each transaction to the related invoice, checking for proper signatures, and ensuring that the payments were in compliance with governing agreements and Agency polices. Approximately $96.7 million representing 1.23 percent of the total outlays of $7.8 billion for this payment stream were identified as improper payments which consisted of late payments $74.1 million or 0.94 percent of $7.8 billion, interest payments of $56.7 thousand; and Treasury returned payments of $22.6 million or 0.29 percent of $7.8 billion. The Agency has fully recovered these funds and impacted vendors have been fully paid. Because all USAID funding and disbursement activities under the Contract, Grants, Cooperative Agreements and Cash Transfer are assigned to alpha-numeric obligation numbers, the risk of significant erroneous payments is minimized. Over and underpayments are identified timely through daily reconciliation processes.

Cash Transfers¹

Although the OCFO has high confidence in the internal controls in place for making cash transfers to foreign governments and foreign bank accounts, it has included this payment activity as risk-susceptible due to the large-dollar volume of these activities. These activities are subject to a series of monthly internal reviews conducted by OCFO staff that analyze and compare data outputs/reports, cross-reference and compare this data to ensure that payment data are accurate, and monitor the improper payment rate on an ongoing basis. Cash Transfers represent 12 percent of the Agency’s total outlays of $11.7 billion and have been identified as moderately susceptible to improper payments. Due to the high dollar volume associated with this payment stream, the Cash Management and Payment Division (CMP) performed an in-depth review of the 606 payment documents totaling $1.4 billion to determine if improper payments were made. After a review and analysis of Treasury disbursement reports and the Agency’s accounting system, Phoenix, CMP identified improper payments totaling $2.6 million. The majority of these improper payments were due to recipients changing their banking information without informing the Agency of the change. However, through the OCFO’s own internal recovery process 100 percent of the improper payments identified were recovered and properly re-issued to the recipients. The improper payments of 2.6 million represent 0.18 percent of the cash transfer outlays of $1.4 billion. The rate was calculated by dividing the improper payment dollars by the total cash transfer paid. Results indicate that this payment stream is far below OMB’s improper payment threshold of $10 million and 2.5 percent rate.

Other Payment Streams

The remaining 10 payment streams totaling $2.4 billion represent 21 percent of the Agency’s total outlays of $11.7 billion for FY 2007. These payment streams are subjected to rigorous reviews by multiple layers of staff members to ensure that payments are proper, legal, and correct. In addition, Agency staff members perform pre- and post-audit reviews of claims, which give the assurance that improper payments are unlikely. However, in the event that improper payments are made they are identified through the various systems reconciliations, and timely and appropriate action is taken to recoup these funds for proper re-issuance. Also, the CMP staff interviewed several stakeholders in order to determine the risk susceptibility of these payment streams. The results of its interview indicated that adequate internal controls are in place to address potential payment deficiencies. Because the results of these actions do not indicate improper payments, the Agency has assessed the risk susceptibility of these payment streams as low. This assessment is reflected in Table 1.

II. Describe the statistical sampling process conducted to estimate the improper payments rate for each program identified.

The OCFO collaborated with the OIG and obtained a statistically valid sample and subjected all of USAID’s programs to a higher level of improper payment review. The scope of the statistical sampling constituted generating a sample universe that clearly defined and identified the dollar outlays that were susceptible to significant erroneous payments. Each of the payment streams was analyzed separately and organized into stratifications, based on the volume of the activity. Samples were then selected among the different stratifications until an acceptable statistical sample size was achieved.

A statistically valid sample size of 980 transactions was selected from a payment universe by OIG’s statistician. A sample size of 470 transactions was disseminated to USAID Missions with instructions on how to perform the review and analysis. The remaining 510 transactions were reviewed and analyzed by USAID/Washington to determine if any of the transactions were underpayments or overpayments. Upon further review of the payment streams, the Agency determined that additional outlays not included in the OIG’s sample size may be susceptible to significant improper payments. As a result, USAID/Washington selected approximately 600 cash transfer transactions for review and analysis. The analytical process was conducted by tracing each transaction to the voucher to determine its susceptibility to improper payments. Also, USAID/Washington and the Missions checked for proper signatures and compliance of each invoice with the governing agreement. USAID/Washington conducted an interview of the stakeholders and the results were reviewed and analyzed by the USAID/Washington staff to determine vulnerability of the stakeholders’ programs. The OCFO review and analysis of the interviews, OIG’s statistical sample, and the additional selected sample by USAID/Washington resulted in improper payments of $2.6 million representing 0.18 percent of a total universe of $1.4 billion for the Cash Transfers for FY 2007. Improper payments for contracts, grants, and cooperative agreements totaled $96.7 million and represent 1.23 percent of a payment universe of approximately 200,000 transactions totaling $7.8 billion. Results of the review indicate that the improper payments were due to interest payments and associated principal amounts; Treasury returned payments due to Agency vendor recipients changing their banking accounts without relaying such information to the Agency and audit findings. However, 100 percent of the improper payments have been fully recovered and properly re-issued during FY 2007.

III. Describe the corrective action plans for the following:

1. Reducing the estimate rate and amount of improper payments for each type of category of error. This discussion must include the corrective action(s) for each different type or cause of error, and the corresponding steps necessary to prevent future recurrence. If efforts are ongoing, it is important to include that information in this section.

Contracts, Grants, and Cooperative Agreements and Cash Transfers

USAID contracts, grants, and cooperative agreement program payment activities have been labeled risk-susceptible due to the high-dollar value of these programs and they continue to be analyzed, reconciled, and closely monitored by the Chief Financial Officer’s (CFO) staff to ensure compliance with the provisions of the IPIA, Agency policies, and governing agreements. As a result of this effort the error rate for Contracts, Grants, and Cooperative Agreements and Cash Transfers continues to be less than OMB’s error rate of 2.5 percent. Also, the Agency has revamped its internal controls and developed strict guidelines and measures for payments in an effort to eliminate improper payments. The Agency continues to provide funding for training of its staff. In addition, the Agency has in place multiple layers of skilled and experienced staff who are tasked with performing a risk assessment of all the programs under their domain to determine their susceptibility to improper payments and have adopted a more consistent and reliable tool for assessing and evaluating improper payments.

The Iraq Reconstruction and the Afghanistan Assistance and Reconstruction programs continue to be a challenge for USAID. These activities are often high profile and large dollar value and are located in high threat environments where travel to projects sites for inspection may be limited due to safety concerns. During 2007, Missions in these countries took steps within their management control to strengthen monitoring and field reporting capabilities. Also in 2007, the Agency completed design concept work for a spatially enabled management information system which will allow USAID Missions to remotely monitor progress of construction activities.

To further enhance transparency, the OCFO compiles the data related to these financial activities into financial reports for the reconstruction and assistance program activities in both Afghanistan and Iraq. This information is consolidated into monthly reports which are distributed to stakeholders and internal and external clients, including USAID Missions and Bureaus, as a tool to monitor their program and payment activities and to increase overall transparency of these high-profile programs.

In a continuing effort to reduce improper payments, CFO staff members were actively engaged in the ongoing review, sampling, identification, and implementation of the necessary internal controls. In addition, training was provided to staff on meeting the President’s goal to eliminate improper payments. CMP staff within the OCFO submitted reports on a regular basis to the CMP Division Chief who monitors progress on the reduction and recovery of improper payments and report results to the Deputy CFO and CFO. Agency managers worked closely with the professional recovery auditors on reducing and recovering improper payments. Additionally, work objectives related to reducing improper payments have been incorporated in relevant CMP staff 2007 work plans to further ensure compliance with IPIA.

Interest Payments

In FY 2007, the Agency paid $56,749.35 in late payment interest disbursed under the Contract, Grants, and Cooperative Agreements. As a corrective action the Agency has taken a proactive stand in ensuring that all vendor invoices submitted to the Agency for payment are processed timely and in accordance with the Prompt Pay Act (PPA). Interest payment status reports are generated on a regular basis to enable managers to address the root cause of late payments and take corrective action. The OCFO also documents all processes to ensure consistent application of procedures and corrective action plans. To achieve the goal of eliminating interest payments, the OCFO will be addressing participants at the USAID Controllers’ conference in November 2007 and similar conferences in the future about the importance of paying invoices on a timely basis.

Treasury Returned Payments

In FY 2007, Treasury returned payments to USAID totaled $22,581,794.71 and represent 0.29 percent of $7.8 billion that was disbursed under the Contracts, Grants, and Cooperative Agreements. The Agency’s review indicated that the payments were returned due to incorrect vendor banking information. Recipients would change their banking information with banking institutions without updating their information with USAID. As a corrective action plan the Agency has developed internal controls which require its staff to validate vendor information before issuing a payment. Also, training is offered to staff members on account payable issues that include validation of vendor information and ensuring a claim is valid for payment in accordance with the PPA. The OCFO reviews daily Treasury disbursements reports for returned payments. If returned payments are found the OCFO addresses the issue with the appropriate staff. Corrective action is then taken by contacting the vendor for current information and re-issuance of the payment.

Other Payment Streams

Although the FY 2007 risk assessment concluded that 10 out of its 12 payment streams and programs are at a low risk for improper payment and the error rate remains far below OMB guidance thresholds, the Agency continues to conduct various levels of internal improper payment reviews and samplings for all programs and payment activities throughout the year. Additionally, all new programs, high profile programs, and high dollar programs are considered risk-susceptible and subject to further analysis, review, and scrutiny.

Accruals

The accruals exercise has been an effective tool in helping to reduce improper payments as responsible officers review relevant historical information for assurance that related payments have been properly made. Accruals are accounting estimates of services or goods rendered which have not yet been paid. OMB’s Core Financial System Requirements stipulate that an agency’s core financial system must be able to provide timely and useful financial information to support management’s fiduciary role, budget formulation and execution functions, fiscal management of program delivery and program decision-making, and internal and external reporting requirements. External reporting requirements include the requirements for financial statements prepared in accordance with the form and content prescribed by OMB; reporting requirements prescribed by Treasury; and legal, regulatory, and other special management requirements of the Agency. The core financial system must provide complete, reliable, consistent, timely, and useful financial management information on operations.

According to USAID’s Automated Directives System (ADS) 631, financial documentation represents any documentation that impacts on or results in financial activity. It is not limited to documentation within the financial management operations but includes any source material resulting in a financial transaction. CTOs, loan officers, grants officers, strategic objective teams, and others are responsible for retaining financial documentation and ensuring its availability for audit. ADS 631 states that these individuals must gather cost data—such as supporting project documentation, activity reports, delivery reports, or fixed reoccurring expenses—for the accruals exercise and then compare the data to payment histories and advances to estimate quarterly accruals.

2. Grant-making agencies with risk susceptible grant programs, discuss what the Agency has accomplished in the area of funds stewardship past the primary recipient. Include the status on projects and results of any reviews.

The Agency’s Contract Audit Management (CAM) team within the Office of Acquisition and Assistance (OAA) reviews audit reports relating to audits of grantees and sub-grantees for resolution of audit findings. The audits are performed by external auditors and the ensuing reports are submitted to the OIG, grantees, and sub-grantees.

OMB Circular A-133, Sub-part C, Section 310(1)(2)(3) Financial Statements, states:

1. List individual federal programs by federal agency. For federal programs included in a cluster of programs, list individual federal programs within a cluster of programs. For research and development (R&D), total federal awards expended shall be shown either by individual award or by federal agency and major subdivision within the federal agency. For example, the National Institutes of Health (NIH) is a major subdivision in the Department of Health and Human Services (HHS).
   
   
2. For federal awards received as a sub-recipient, the name of the pass-through entity and identifying number assigned by the pass-through entity shall be included.
   
   
3. Provide total federal awards expended for each individual program and Catalog of Federal Domestic Assistance (CFDA) number or other identifying number when the CFDA information is not available.
   

OMB Circular A-133 requires the auditor to audit the entire universe of federal awards, including sub-awards. Therefore, any excess billing or amount that is unallowable will be questioned by the auditor. The auditor’s report is sent to the clearinghouse for submission to the OIG. Upon review, the audit report is sent to the Agency’s procurement office for follow up.

Upon receiving the A-133 audit reports from the from the Agency’s OIG, grantees, or sub-grantees, the Agency’s procurement office sends a letter to the recipient and, if the recommendation involves questioned costs, the Agency requests payment. If the findings are procedural, the Agency asks the recipient to provide a corrective action plan with a time line for correcting the deficiencies. The Agency follows up on the action plan until the deficiencies are corrected and asks the audit firm to include a follow-up on the implementation of the corrective action plan to ascertain if the deficiencies were corrected appropriately.

OIG’s Pre- and Post-audit reviews

The OIG post-audit reviews are one of the primary methods of sampling and estimating the improper payment rate for the Contracts, Grants, and Cooperative Agreements programs. All nonprofit U.S.-based organizations that expend $500,000 or more in federal awards are subject to an OMB Circular A-133 financial audit which is reviewed by the Agency’s OIG. All foreign nonprofit organizations that expend $300,000 during their fiscal year in USAID awards are subject to a recipient-contracted audit (RCA) performed by approved Certified Public Accountant (CPA) firms which are reviewed by the respective USAID Regional Inspector General (RIG) overseas. All USAID commercial vendor contracts with incurred-cost submissions are subject to an annual Defense Contract Audit Agency (DCAA) audit. The Agency’s procurement office also reviews the OIG recommendations for ongoing audits to ensure payments to recipients are accurate and proper. The OIG tracks audit review activities in the Consolidated Audit Tracking System (CATS) while the OCFO reviews and calculates the improper payment rate for these programs. In 2007, the cumulative audited amount recorded by the OIG in CATS totaled $5.5 billion. Upon further investigation $4.4 million of the total audited amount was identified as excess billing which was fully recovered during this same period. Currently, the OCFO and the OIG are reviewing Web-based audit tracking and reporting systems to replace the existing CATS. The new system will enhance the capturing of all audit activities, formulation of questioned costs and error and recovery rates to ensure that there is an effective tool in place for capturing improper payment activity.

Additionally, all payments processed through the Agency’s financial and accounting system, Phoenix, are subject to a series of monthly internal reviews by CFO staff members who analyze and compare data outputs/reports, cross-reference, and compare this data to ensure that payment data are accurate, and monitor the improper payment rate on an ongoing basis. The sampling of the financial systems review includes setting report parameters to identify all potential duplicate payments by vendor, invoice number, and dollar value. Each potential improper payment that is identified is investigated regardless of the dollar value.

IV. Program improper payment reporting for the following:

The table below is required for each reporting Agency. Agencies must include the following information:

1. all risk susceptible programs must be listed in this chart whether or not an error measurement is being reported;
2. where no measurement is provided, Agency should indicate the date by which a measurement is expected;
3. if the Current Year (CY) is the baseline measurement year, indicate by either note or by “n/a” in the Prior Year (PY) column;
4. if any dollar amount(s) included in the estimate correspond to newly established measurement components in addition to previously established measurement components, separate the two amounts to the extent possible;
5. include outlay estimates for CY+1, CY+2, and CY+3; and
6. agencies are expected to report on CY activity, and if possible, then PY activity is acceptable. ( future year outlay estimates (CY+1, +2 and +3) should match the outlay estimates for those years as reported in the most recent President’s Budget.)

Table 1 reflects the total voucher count, disbursements, risk assessed, and improper payment rates for USAID’s payment streams for FY 2007. The overpayment rate is calculated by dividing the overpayment dollars by the dollars paid.

* Total amount does not include overpayments or underpayments.

2. Discuss your Agency’s recovery of improper payments, if applicable. Include in your discussion the dollar amount of cumulative recoveries collected beginning with FY 2004.

The cumulative amounts recovered from FY 2005 to FY 2007 amount to approximately $112 million for Contracts, Grants, and Cooperative Agreements and $10.5 million for Cash Transfers. The total cumulative amounts identified as erroneous during this period were fully recovered. The OCFO is committed to proactively identifying and pursuing the recovery of all Agency payments identified through its financial system and close out reviews.

V. Recovery auditing reporting for the following:

Discuss recovery auditing effort, if applicable, including any contract types excluded from review and the justification for doing so; actions taken to recoup improper payments, and the business process changes and internal controls instituted and/or strengthened to prevent further occurrences.

During FY 2007, Horn & Associates external/independent recovery auditors performed a Recovery Audit of USAID for FYs 2003-2005 with the primary focus of the audit on 2005 due to the worldwide availability of information in the Agency’s financial system, Phoenix. The recovery auditors reviewed over 60,000 transactions for both duplicate and overpayments (funds paid above the obligated amounts) totaling over $3 billion. They initially flagged approximately $42 million as potential overpayments but through further investigation and inquiry reduced the amount by $3 million which was referred to USAID staff for review and analysis. Further review by USAID staff resulted in approximately $11,310 in missed discount claims that have been approved for collection from the contractor. Horn & Associates issued their final management report in September 2007 stating, “With over 30 years of history, the rate of recoveries is well below industry standards of .1 percent to .3 percent of total payment and certainly is below the requirements of the Erroneous Payment Act. The results of the audit were compelling enough for us to terminate further work on the recovery audit for USAID.”

Horn & Associates made many numerous recommendations to safeguard against potential improper payments, stating, “We recommend that USAID continue to develop their routines and run the routines on their payment data periodically to search for duplicate payments.”

The OCFO continues to sample and estimate the level of improper payments for all payment streams to determine if there are costs and overpayments identified for recovery. The OCFO will continue its work in developing and implementing and effective recovery audit system to ensure that all Agency overpayments are identified and recovered.

Complete the table below.

VI. Describe the steps the Agency has taken and plans to take (including time line) to ensure that Agency managers (including the Agency head) are held accountable for reducing and recovering improper payments.

Existing control process and the implementation of the revised OMB Circular A-123 requirements continue to ensure that the Agency‘s internal control over financial reporting and systems are well documented, sufficiently tested, and properly assessed. In turn, improved internal controls enhance safeguards against improper payments, fraud, and waste and better ensure that the Agency’s resources continue to be used effectively and efficiently to meet the intended program objectives. Toward this end, the OCFO engaged the services of external contractors to assess the internal control structure of the Agency in accordance with OMB Circular A-123, Managements Responsibility for Internal Controls, to review critical operations within USAID that may be vulnerable to risk. In 2007, the A-123 assessment team reviewed AID/Washington’s CMP’s Accounts Payable process. The purpose of the review was to ensure compliance with the A-123 Appendix A of Accounts Payable and for compliance with related federal regulations such as the PPA and the IPIA. The scope of the review covered July to September in FY 2006 and October to June in FY 2007. The A-123 team concluded in their final report that was issued on August 27, 2007 that “both the design and operating of internal controls over Accounts Payable are overall deemed to be effective. We found the controls and tools utilized to ensure compliance with the PPA to be effective with no excessive interest paid during our testing period. We found no instances where an improper or duplicate payment remained outstanding.”

The OCFO and the OIG continue with the yearly financial management reviews and certifications of financial statements for the Agency. The primary objectives of these reviews and certifications are to obtain assurances of the Agency’s compliance with the Federal Managers’ Financial Integrity Act of 1982 (FMFIA), the Federal Financial Management Improvement Act of 1996 (FFMIA), and the IPIA, to enhance the Agency’s internal financial controls, and to resolve financial management issues in a more efficient and timely manner.

VII. Agency information systems and other infrastructure.

1. Describe whether the Agency has the information systems and other infrastructures it needs to reduce improper payments to the levels the Agency has targeted.
2. If the Agency does not have such systems and infrastructure, describe the resources the Agency requested in its most recent budget submission to Congress to obtain the necessary information systems and infrastructure.

Information Systems and Infrastructure

Phoenix

In FY 2006, the Agency completed the worldwide deployment of its financial and accounting system, Phoenix. Agency staff members with authorized access to the worldwide financial and payment activity are now able to continuously monitor, review, analyze, and reconcile financial data. Now that USAID/Washington has the capability to access and review the financial payments activities worldwide through Phoenix, future IPIA review efforts to minimize the risk of making erroneous or improper payments will be more streamlined, yielding enhanced effectiveness, efficiency, and results.

Global Acquisition System (GLAS)

The Agency has acquired GLAS to enable the Agency to improve acquisition and assistance systems. GLAS is currently in its testing and implementation phase. Upon its rollout worldwide, it is expected that GLAS will meet the unique functional and technical procurement requirements of the Agency and will be fully interfaced with Phoenix. In addition, GLAS will support E-Government initiatives.

VIII. Describe any statutory or regulatory barriers which may limit the Agency’s corrective actions in reducing improper payments and actions taken by the Agency to mitigate the barriers’ effects.

Staff shortage may limit the Agency’s corrective actions in reducing improper payments in the future. The Agency’s senior management staff has identified the staff shortage as a reportable condition and is considering remedial steps that would mitigate the effects of the staff shortage in reducing improper payments.

IX. Additional comments, if any, on overall Agency efforts, specific programs, best practices, or common challenges identified as a result of IPIA implementation.

Additional Comments

• USAID worldwide payments were processed in a single unified financial system, Phoenix, in 2007. The availability of the Agency’s financial data in Phoenix has greatly enhanced internal controls and transparency of the entire Agency’s financial activities. Implemented procedures where current financial data are subject to various monthly reviews and cross referenced with other internal and external reports.
  • Funds returned from Treasury.
  • Late payment interest abstracted from Phoenix for the entire Agency.
  • Developed several other systems reports and tools to aid in the identification and review of possible worldwide erroneous/duplicate payments.
• Independent payable reviews and consultations:
  • External recovery auditors. Horn & Associates cited the following for USAID “… the rate of recoveries is well below industry standards of.1 percent to .3 percent of total payment and certainly is below the requirements of the Erroneous Payment Act. The results of the audit were compelling enough for us to terminate further work on the recovery audit for USAID.”
  • External A-123 compliance review.
  • GAO IPIA 2004-2006 audit. Great opportunity for independent review of prior IPIA review process and submissions.
  • Interactions enriching. The OCFO IPIA review team expanded approach after being exposed to independent reviews and other agencies’ best practices.
• Re-evaluated existing IPIA review processes and further defined IPIA approach and strategy for 2007.
  • OCFO staff are documenting Agency’s overall IPIA strategy and review practices.
  • Shared proposed strategy with counterparts at OMB and the OIG. Feedback and support beneficial.
  • The OIG provided the Agency sample of transactions based on their independent review and analysis of the payment stream data provided by the OCFO.
  • Learned the value of extending reviews to other internal and external reports. This allowed the Agency to leverage from work/actions previously completed by individuals with expert knowledge leading to less duplication of effort and greater independence and transparency.

¹Cash Transfers are cash disbursements to a foreign country or organization based on Cash Transfer authorizations in the form of official Department of State cables from USAID overseas Missions or an official agreement from USAID/Washington. The cables and agreements are received, accepted, and processed in the OCFO and transmitted to the recipient’s bank account via the U.S. Treasury and Federal Reserve Bank. (back to text)

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