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Summary

The Improper Payments Elimination and Recovery Act of 2010 (IPERA) encourages the elimination of payment error, waste, fraud, and abuse in Federal programs. IPERA requires that agencies annually test for and report on improper payments in their programs and that inspectors general review their agencies’ IPERA compliance. DOT contracted with a consulting firm to assist in its fiscal year 2014 implementation of IPERA’s requirements.

In its fiscal year 2014 Agency Financial Report, DOT included all reporting elements required by the Office of Management and Budget’s implementing regulations, including its assessments of programs’ risks for significant improper payments; improper payment estimates; the Federal Transit Administration’s (FTA) corrective action plans to reduce future improper payments; and annual improper payment reduction targets for the nine tested programs. DOT also included a description and evaluation of its payment recovery audit programs and the amounts collected from these programs.

In fiscal year 2014, DOT also improved the accuracy of its improper payment testing by better screening payment data files and implementing procedures to ensure its reporting was complete. However, an employee at the Federal Highway Administration and DOT’s contractor did not perform sufficient work for us to determine that DOT’s conclusions were accurate for two of the nine programs we retested.

According to DOT, its programs met IPERA’s requirement that less than 10 percent of total payments be improper. However, FTA’s Formula Grants and Federal Railroad Administration’s (FRA) High Speed Intercity Passenger Railroad programs did not achieve their own fiscal year 2014 targets to reduce improper payments to 0.50 percent or less and 0.25 percent or less, respectively. In fiscal year 2013, FTA reported four planned corrective actions to reduce the risk of future improper payments but did not complete them.

We made four recommendations to improve the reliability of DOT’s improper payment reporting and the effectiveness of corrective actions in FTA’s and FRA’s programs. DOT concurred with our recommendations.