Audit Report: DOE-OIG-19-33

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May 28, 2019

The Department of Energy’s Improper Payment Reporting in the Fiscal Year 2018 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.  The Office of Management and Budget (OMB) issued Memorandum M-18-20, Appendix C to Circular A-123, Requirements for Payment Integrity Improvement, as implementation guidance to Federal agencies for IPERIA in June 2018.  While all three laws are still in effect, the agency Inspector General guidance included in OMB Memorandum M-18-20 focuses on compliance with IPERA. 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 Circular A-123, to its 48 payment reporting sites.  Consistent with this guidance, the Department’s reporting sites performed an improper payment risk assessment in fiscal year 2018 that was consolidated at the Department level for reporting.  OMB requires the Office of Inspector General to perform an annual review of the Department’s improper payment reporting in its Agency Financial Report, 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 fiscal year 2018 improper payment reporting was in accordance with OMB criteria.  Specifically, the Department published an Agency Financial Report for fiscal year 2018 and posted that report, as well as accompanying materials, on its website.  While we determined that the Department met the criteria for compliance with OMB, we found that one OCFO process improvement related to our prior year’s report was still ongoing.  Our current review found that the Department may benefit from more transparency with reporting site improper payment percentage data.  We suggested that all OCFO planned process improvements are implemented in a timely manner.

Topic: Management & Administration