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Highlights

The federal government is accountable for how its agencies and grantees spend more than $2 trillion of taxpayer dollars and is responsible for safeguarding those funds against improper payments as well as for recouping those funds when improper payments occur. The Congress enacted the Improper Payments Information Act of 2002 (IPIA) and the Recovery Auditing Act to address these issues. Fiscal year 2006 marked the third year that agencies were required to report improper payment and recovery audit information in their Performance and Accountability Reports. The Department of Homeland Security (DHS) reported limited information during these 3 years. GAO was asked to (1) determine the extent to which DHS has implemented the requirements of IPIA, (2) identify actions DHS has under way to improve IPIA compliance and reporting, and (3) determine what efforts DHS has in place to recover improper payments. To accomplish this, GAO analyzed DHS's internal guidance and action plans, and reviewed information reported in its Performance and Accountability Reports.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Homeland Security To help improve its efforts to implement IPIA and recover improper payments, the Secretary of Homeland Security should direct the Chief Financial Officer to maintain oversight and control over critical milestones identified in the DHS corrective action plan for IPIA compliance so that DHS components stay on track, specifically in regard to identifying programs and performing risk assessments and any related testing.
Closed - Implemented
During fiscal year 2008, the Department of Homeland Security's (DHS) Office of the Chief Financial Officer (OCFO) revised its Improper Payments Reduction Guidebook to include procedures for the OCFO to oversee and monitor DHS components' compliance with the Improper Payments Information Act (IPIA). Beginning in fiscal year 2009, DHS performed testing on all of the programs that it identified as high risk of improper payments during the risk assessment process, and prepared the necessary corrective action plans. Testing results and related corrective action plans were published in DHS' 2009 AFR. DHS' actions taken to perform risk assessments and related testing (including the OCFO's oversight of these efforts) enabled DHS' auditors to report that DHS was in compliance with IPIA in 2009 and 2010.
Department of Homeland Security To help improve its efforts to implement IPIA and recover improper payments, the Secretary of Homeland Security should direct the Chief Financial Officer to require all applicable components to determine and document how they plan to assess their grant programs to determine whether they are at high risk for issuing significant improper payments, and, if necessary, test these grant programs.
Closed - Implemented
The Department of Homeland Security's (DHS) Office of the Chief Financial Officer issued guidance, the Improper Payments Reduction Guidebook, to assist components in preparing risk assessments for their grant programs. Specifically, the guidebook, dated May 26, 2011, provides guidance concerning grant program improper payment risk documentation, including guidance on risk conditions and scoring criteria. Our review of FEMA's risk assessments for 2008, 2009, and 2010, showed that applicable grant programs were appropriately assessed and tested.
Department of Homeland Security To help improve its efforts to implement IPIA and recover improper payments, the Secretary of Homeland Security should direct the Chief Financial Officer to provide oversight and monitor the progress of all applicable DHS components to successfully perform and report on their recovery auditing efforts.
Closed - Implemented
To provide oversight and monitoring of components recovery auditing efforts, the Department of Homeland Security (DHS) hired contractors to perform recovery audits for their applicable components. The recovery audit work was completed in stages for DHS components and reported in the appropriate year's DHS financial report. Specifically, during fiscal year 2011 recovery audit work was completed and reported for the United States Customs and Boarder Protection for 2010 payments. During fiscal year 2010, recovery audit work was completed and reported for the United States Coast Guard and Immigrations and Customs Enforcement for 2009 payments and the Federal Emergency Management Agency for 2008 payments. DHS actions met the intent of our recommendation.
Department of Homeland Security To help improve its efforts to implement IPIA and recover improper payments, the Secretary of Homeland Security should direct the Chief Financial Officer to, similar to the required reporting on efforts to recover improper payments made to contractors under the Recovery Auditing Act, develop procedures for reporting in its annual Performance and Accountability Reports on the results of yearly efforts to recover any other known improper payments identified under IPIA, by the DHS Office of the Inspector General, or other external auditors.
Closed - Implemented
On July 9, 2013, DHS's Office of Chief Financial Officer provided GAO its "Risk Management & Assurance Division, Improper Payments Program Standard Operating Procedures" (dated July 8, 2013) that documents the processes and procedures for administering DHS' Improper Payment program. The document includes procedures for reporting the amount of improper payments recovered through methods other than the Recovery Audit in DHS' annual financial report.

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