Audit Report: DOE-OIG-18-32

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May 24, 2018

The Department of Energy’s Improper Payment Reporting in the Fiscal Year 2017 Agency Financial Report

The Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) was signed into law on January 10, 2013, amending the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Information Act of 2002.  In response to IPERIA, the Office of Management and Budget (OMB) issued Memorandum M-15-02, Appendix C to Circular Number A-123, Requirements for Effective Estimation and Remediation of Improper Payments (A-123), as implementation guidance to Federal agencies for IPERIA in October 2014.  The Department of Energy’s Office of Finance and Accounting, a component of the Office of the Chief Financial Officer (OCFO), communicated instructions for meeting improper payment and payment recapture audit requirements, prescribed by OMB A-123, to its 48 payment reporting sites.  The Department’s guidance indicated that the OCFO elected to implement a 3-year risk assessment review cycle, as allowed for by OMB Memorandum M-15-02.  Consistent with this guidance, the Department performed an improper payment risk assessment in fiscal year (FY) 2015 but did not perform a risk assessment in FY 2017.  

OMB requires the Office of Inspector General to perform an annual review of the Department’s improper payment reporting in its Agency Financial Report (AFR), and accompanying materials, to determine whether the Department was compliant with IPERA.  The objective of this audit was to determine whether the Department met the OMB criteria for compliance with IPERA.

We found that the Department’s FY 2017 improper payment reporting was in accordance with OMB criteria.  Specifically, the Department published an AFR for FY 2017 and posted that report, as well as accompanying materials, on its website.  While we found that the Department met the criteria for compliance with OMB, we also noted opportunities for the Department to enhance internal controls relative to the payment sites’ improper payment reporting certifications.

Topic: Management & Administration