Reducing Improper Payments / Administrative Payments / Recovery Auditing

Recovery Auditing

Legislation passed in 2002 requires agencies that enter into contracts worth more than $500 million in a FY to complete a cost-effective program for identifying errors made in paying contractors and recovering any improper payments. For FY 2016’s audit, we performed a sample review of our administrative payments. As shown in the chart below, we identified $8.09 million administrative payments as improper and collected approximately 82 percent ($6.61 million) in FY 2016. This validated the agency’s current processes for prevention, detection, and collection of improper payments.

FY 2016 Payment Recapture Audit Reporting
Administrative Payments
(dollars in millions)

Program or Activity

Administrative

Total

Payroll and Benefits

Vendor and Travel

 

Amount Identified

$3.86

$4.23

$8.09

Amount Recaptured

$2.42

$4.19

$6.61

FY 2016 Recapture Rate

63%

99%

82%

Notes:

  1. Totals for Amount Identified and Amount Recaptured are from our internal payment recapture audit.  Overpayments identified or recaptured in FY 2016 include debt established in prior years.

We achieve these results by maintaining our commitment to not only identify and recover improper payments, but to avoid them as well. A memorandum from President Obama (Presidential Memorandum Regarding Finding and Recapturing Improper Payments, issued on March 10, 2010) speaks to these efforts, challenging agencies to continue working along the path toward developing stronger practices. Furthermore, on July 22, 2010, President Obama strengthened this challenge by signing the Improper Payments Elimination and Recovery Act (IPERA) into law, which:

  • Amends the Improper Payments Information Act of 2002 (IPIA);
  • Requires agency heads to conduct recovery audits for agency programs that expend $1 million or more annually, if such audits would be cost-effective;
  • Reinforces many of the initiatives we are currently implementing to address improper payments; and
  • Further increases our transparency, accountability, and reporting for improper payments from the existing requirements of the IPIA and Executive Order 13520.

We support this legislation and began reporting on the IPERA legislative requirements in the FY 2011 Performance and Accountability Report.