Improving Internal Control to Enhance Accountability and Reduce Improper Payments
The federal government has yet to establish effective internal control needed to maintain effective accountability over federal resources, including serving as the front-line defense in identifying, reporting, and reducing improper payments. With the growing projected imbalance between revenues and outlays across the federal government, the need for effective internal controls to support accountability and effective and efficient federal operations, becomes even more critical.
- Our annual audits of the U.S. government's consolidated financial statements highlighted material internal control weaknesses, including those that adversely impacted federal government's ability to effectively manage its tax collection activities and safeguard assets.
- 22 federal agencies reported estimated improper payments of about $72 billion, involving over 70 programs, for fiscal year 2008; yet, the full extent of federal improper payments may not yet be fully identified and reported.
- Designing and implementing policies and procedures to effectively address existing federal material internal control weaknesses, including those needed to comprehensively measure the extent of the federal government’s improper payments and implement actions to reduce them, are not tasks that will be easily or quickly accomplished.
- The continuing diligence and sustained commitment of top leaders and managers throughout the federal government will be essential to effectively strengthening the federal government's front-line internal controls.
^ Back to topWhat Needs to Be Done
To help establish effective internal controls needed to maintain accountability over federal resources, including serving as the front-line defense in such areas as identifying, reporting, and reducing improper payments, OMB needs to improve its guidance with respect to federal agencies' consideration of
- factors such as program complexity, operational changes, findings from
investigative reports, and financial statement and performance audit reports
when conducting annual internal control (including improper payment) risk
assessments;
Highlights of GAO-07-92 (PDF) - whether additional disclosures (particularly with respect to improper payments)
should be required in agencies' annual performance and accountability reports,
such as (1) requiring baseline data on improper payment causes, corrective
actions, and manager accountability, and (2) identifying specific laws or
regulations that may provide barriers or limits on the extent of agencies’ ability
to take corrective actions to reduce improper payments; and
Highlights of GAO-07-92 (PDF) - providing additional accountability incentives to federal agency heads, including (1) requiring the designation of an official to be personally accountable for reducing improper payments, (2) more directly linking improper payment reduction with performance evaluations, and (3) requiring reporting to congressional oversight bodies on actions to address improper payment compliance deficiencies.
^ Back to topKey Reports
- Improper Payments: Responses to Posthearing Questions Related to Status of Agencies' Efforts to Address Improper Payment and Recovery Auditing Requirements
- GAO-08-819R, June 20, 2008
- Summary (HTML) Full Report (PDF, 18 pages) Accessible Text
- Improper Payments: Status of Agencies' Efforts to Address Improper Payment and Recovery Auditing Requirements
- GAO-08-438T, January 31, 2008
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 37 pages) Accessible Text
- Improper Payments: Agencies' Fiscal Year 2005 Reporting under the Improper Payments Information Act Remains Incomplete
- GAO-07-92, November 14, 2006
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 83 pages) Accessible Text Recommendations (HTML)
- Financial Management: Effective Internal Control Is Key to Accountability
- GAO-05-321T, February 16, 2005
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 20 pages) Accessible Text
