June 24, 2022
The Department of Energy’s Payment Integrity Reporting in the Fiscal Year 2021 Agency Financial Report
The Improper Payments Elimination and Recovery Act of 2010 required agencies to identify and review all programs and activities they administer that may be susceptible to significant improper payments based on guidance provided by the Office of Management and Budget (OMB). In March 2020, the Payment Integrity Information Act of 2019 repealed the Improper Payments Elimination and Recovery Act of 2010 and other laws but established similar reporting requirements, including an annual compliance report by the Office of Inspector General. In June 2021, the Department of Energy’s Office of Finance and Accounting, a component of the Office of the Chief Financial Officer, communicated instructions to its 47 payment reporting sites for meeting improper payment and payment recovery audit requirements prescribed by OMB.
We conducted this audit to determine whether the Department met OMB criteria for compliance with the Payment Integrity Information Act of 2019.
The Department’s fiscal year 2021 improper payment reporting was aligned with OMB criteria. However, we found that enhancements to the payment integrity process related to technically improper payments could result in more consistent and transparent reporting. We also determined that the payment reporting sites we reviewed were reporting improper payments to the Department in groups by the identified root cause.
The issues we identified occurred, in part, because the Department and its payment reporting sites were unsure of how improper payments should be reported, particularly as they related to the OMB’s new requirement for reporting technically improper payments.
We made one recommendation and one suggestion in our report designed to improve the management of the payment integrity process. Management concurred with our findings and recommendation, and its proposed corrective actions are consistent with our recommendation.