August 5, 2026
The Department of Energy’s Payment Integrity Reporting in the Fiscal Year 2025 Agency Financial Report
We conducted this audit to determine whether the Department of Energy met Office of Management and Budget (OMB) criteria for compliance with the Payment Integrity Information Act of 2019 (PIIA).
The PIIA was signed into law in March 2020 and requires 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 OMB. The PIIA and OMB also require the Office of Inspector General to conduct an annual review of improper payments identified in the Department’s Agency Financial Report.
In fiscal year 2025, the Department identified $53.6 million of improper payments and unknown payments, which resulted in an improper payment rate of 0.08 percent.
The Department’s fiscal year 2025 improper payment reporting met OMB criteria for compliance with the PIIA. Specifically, the Department published its fiscal year 2025 Agency Financial Report and posted that report, and the accompanying materials, on its website. The Department also conducted improper payment risk assessments for all applicable payment reporting sites, as required.
However, we found other internal control deficiencies with its payment integrity reporting process. Specifically, the Department: (1) did not ensure that complete and accurate information was reported in its Agency Financial Report; (2) omitted payment reporting sites from its consolidated risk assessment; (3) did not fully complete implementation of suggested root cause determination process improvements; and (4) did not ensure reporting sites were aware of associations between improper payments and mandatory disclosures.
As a result of the deficiencies we identified, the Department is at risk of misreporting its improper payments, miscalculating its improper payment rate, and misunderstanding its susceptibility to improper payments.
We recommended that the Department implement additional controls to address the risk of errors due to system functionality issues; develop enhanced guidance and train personnel to ensure root causes are identified; further develop and deploy the Root Cause Dashboard; and update its payment integrity reporting guidance to ensure the proper identification, coordination, and reporting of mandatory disclosures that may constitute an improper payment.