Recommendation: The Administrator of FNS should develop and implement a process, documented in policies and procedures, to analyze SNAP state-level root causes to identify potential similarities among the states and develop and implement SNAP agency-level corrective actions, if appropriate, to help address them. (Recommendation 1)

Agency: Department of Agriculture: Office of the Secretary: Food, Nutrition and Consumer Services: Food and Nutrition Service
Status: Open

Comments: In commenting on our draft report, USDA stated that the Food and Nutrition Service should formalize its existing processes into a standard operating procedure to analyze the Supplemental Nutrition Assistance Programs (SNAP) state-level root causes to identify potential similarities among states, in order to improve development and implementation of SNAP agency-level corrective actions, if appropriate.

Recommendation: The Secretary of Agriculture should revise USDA's procedures to include processes for monitoring the progress and measuring the effectiveness of improper payment corrective actions. The process for measuring the effectiveness of corrective actions should clearly demonstrate the effect USDA's corrective actions have on reducing improper payments. (Recommendation 2)

Agency: Department of Agriculture
Status: Open

Comments: In commenting on our draft report, USDA stated that a proposed action plan will be developed to revise USDA's procedures for monitoring the progress and measuring the effectiveness of improper payment corrective actions. Processes will focus on the impact corrective actions have on the root causes of improper payments.

Recommendation: The Secretary of Education should revise and document Education's process for measuring the effectiveness of its corrective actions based on its new statistical estimation methodology for Direct Loan and Pell Grant improper payments. This process should clearly demonstrate the effect Education's corrective actions have on reducing improper payments. (Recommendation 3)

Agency: Department of Education: Office of the Secretary
Status: Open

Comments: In commenting on our draft report, Education stated that Federal Student Aid (FSA) will continue to evaluate and refine its processes to measure corrective actions and the effectiveness of these actions. Further, Education stated that FSA's measurement of corrective action effectiveness and root cause identification will gain additional precision as FSA collects annual improper payment data and builds upon the new baseline of statistically valid improper payment estimates. Education stated that FSA annually measures the overall effectiveness of its corrective action plans collectively against the improper payment reduction targets, rather than measuring the effectiveness of each individual corrective action. However, OMB guidance directs agencies to measure the effectiveness of each individual corrective action annually.

Recommendation: The Secretary of Health and Human Services should document in policies and procedures HHS's improper payment corrective action plan process. As part of these procedures, HHS should include processes for (1) establishing planned completion dates, (2) monitoring the progress of implementing corrective actions, and (3) measuring the effectiveness of improper payment corrective actions. The process for measuring the effectiveness of corrective actions should clearly demonstrate the effect HHS's corrective actions have on reducing improper payments. (Recommendation 4)

Agency: Department of Health and Human Services: Office of the Secretary
Status: Open

Comments: In commenting on our draft report, HHS elaborated on the improper payment corrective action plan process that is called for in OMB guidance. HHS stated that OMB guidance provides agencies the flexibility to measure the effectiveness of corrective actions and believes that this flexibility is vital to its oversight processes to reduce improper payments.

Recommendation: The Secretary of the Treasury should determine whether Treasury's current improper payment root cause analysis provides sufficiently relevant information that can be used as a basis for proposed corrective actions in reducing EITC improper payments and, if not, update the analysis using more timely data to ensure their reliability for identifying root causes of EITC improper payments. (Recommendation 5)

Agency: Department of the Treasury: Office of the Secretary
Status: Open

Comments: In commenting on our draft report, Treasury stated that each year it indicates in its corrective action plan that IRS will continue to work with Treasury to develop legislative proposals that will improve refundable credit compliance and reduce erroneous payments.

Recommendation: The Secretary of the Treasury should update Treasury's strategy for addressing the root causes of EITC improper payments to include (1) coordinating with other agencies to identify potential strategies and data sources that may help in determining EITC eligibility and (2) determining whether legislative changes are needed, and developing proposals as appropriate, to help reduce EITC improper payments, such as those related to the inability to authenticate taxpayer eligibility. (Recommendation 6)

Agency: Department of the Treasury: Office of the Secretary
Status: Open

Comments: In commenting on our draft report, Treasury stated that each year it indicates in its corrective action plan that IRS will continue to work with Treasury to develop legislative proposals that will improve refundable credit compliance and reduce erroneous payments. Although Treasury has made certain legislative proposals, it has not made proposals to specifically help address EITC eligibility criteria issues. Additionally, Treasury's strategy does not include identifying and proposing additional legislative changes needed to help reduce EITC improper payments.

Recommendation: The Commissioner of SSA should develop and implement a process, documented in policies and procedures, to measure the effectiveness of SSA's corrective actions for OASDI and SSI improper payments. This process should clearly demonstrate the effect SSA's corrective actions have on reducing improper payments. (Recommendation 7)

Agency: Social Security Administration
Status: Open

Comments: In commenting on our draft report, SSA stated that it will determine the most cost-effective strategies to remediate the underlying causes of payment errors and monitor, measure, and revise the strategies as needed.

Recommendation: The Director of OMB should develop guidance on how agencies test to identify improper payments, such as using a risk-based approach to help ensure that key risks of improper payments, such as eligibility, are addressed through testing processes. (Recommendation 1)

Agency: Executive Office of the President: Office of Management and Budget
Status: Open
Priority recommendation

Comments: OMB partially concurred with this recommendation. On July 31, 2019, we met with the Office of Management and Budget (OMB). At the meeting, OMB officials indicated that OMB's position has not changed since the issuance of the GAO report and what OMB had already communicated to GAO at the exit conference. Specifically, OMB stated that it should not have to develop more specific guidance as each program and activity has its own risks. Instead, inspectors general are better equipped and positioned to review the sampling and estimation plans as part of their annual Improper Payments Elimination and Recovery Act of 2010 compliance audits and that agencies, their statisticians, and inspectors general should work out the best testing procedures for their agencies. We continue to believe that OMB could provide suggestions during OMB's annual town meeting related to improper payments for areas that inspectors general may consider. Further, although we agree that programs and activities may face different risks of improper payment, we continue to believe that guidance from OMB on how agencies test to identify improper payments, such as using a risk-based approach, could help ensure that agencies address the specific risks they identify when developing improper payment estimates. In February 2020, OMB informed us that it had no status updates to provide at this time. We will continue to monitor agency's actions to address this recommendation.

Recommendation: The Director of OMB should develop guidance clarifying the appropriate treatment of nonresponse cases during improper payment testing. (Recommendation 2)

Agency: Executive Office of the President: Office of Management and Budget
Status: Open
Priority recommendation

Comments: OMB concurred with this recommendation. On July 31, 2019, we met with the Office of Management and Budget (OMB). At the meeting, OMB officials indicated that OMB's position has not changed since the issuance of the GAO report and what OMB had already communicated to GAO at the exit conference. At the meeting, OMB officials stated that OMB will "consider" updating guidance in OMB Circular A-123, Appendix C, to direct agencies to treat nonresponse cases such as improper payments and to include a new category for tracking such cases but only after assessing the impact such guidance would have on the agencies testing and reporting of improper payments. OMB has not taken action to develop this guidance. In February 2020, OMB informed us that it had no status updates to provide at this time. We will continue to monitor agency's actions to address this recommendation.

Recommendation: The Director of OPM should assess the processes to estimate Retirement improper payments to determine whether they effectively address key risks of improper payments--including eligibility and whether older claims face different risks of improper payments than new claims--and take steps to update the processes to incorporate key risks that are not currently addressed. (Recommendation 4)

Agency: Office of Personnel Management
Status: Open

Comments: The Office of Personnel Management (OPM) partially concurred with this recommendation. Prior to 2006, the improper payment estimate sampling methodology used by OPM included both new and old adjudicated claims. After analyzing several years of data using this methodology, OPM found that including older claims in the sample could result in claimant's records being sampled multiple times. In addition, OPM also found that the variance in the number of errors detected in new claims versus old claims was very low. OPM also looked at the resources used in performing the audit of old and new claims and based on these factors, management determined that it was not an efficient use of resources to include both old and new claims in the review. The methodology was updated to make the process more efficient. By using new claims only, OPM was able to provide feedback to program managers more timely. As a result, management can address issues negatively impacting the improper payment rate and prevent improper payments promptly. OPM agrees with the intent of our recommendation; however, OPM does not agree with our recommendation regarding a risk assessment on eligibility. Eligibility is determined before annuity/survivor benefits are fully adjudicated. As part of its correction plan, OPM stated that it will conduct an audit of older claims to determine if there are different risks to new claims. In February 2020, OPM indicated that it is currently in the process of pulling/gathering the cases that should be in the universe of this audit. OPM plans to complete the corrective action by end of 4th quarter of fiscal year 2020. We will continue to monitor the agency's actions to address this recommendation.

Recommendation: The Commissioner of Internal Revenue should re-establish long-term, quantitative goals for improving voluntary compliance. (Recommendation 1)

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: IRS reported it does not agree with the recommendation. In September 2018, IRS officials stated that the Fiscal Year 2018-2022 IRS Strategic Plan included six strategic goals and six performance measures. However, none of those performance measures related to a long-term, quantitative goal for improving voluntary compliance. In its 60-day letter, IRS agreed that improving voluntary compliance is core to its mission; however, it stated that creating a quantifying goal will do little to advance that purpose. IRS provided several reasons why it should not create a quantitative measure, including the voluntary compliance rate could rise over time without any help from IRS, or fall despite additional effort from IRS. Further, IRS reported that the voluntary compliance rate is not effective to making strategic and operational decisions. However, as we note in the report, setting long-term strategic goals is essential for results-oriented management, because such goals explain in greater specificity the results an agency is intending to achieve. Further, focusing on intended results can promote strategic and disciplined management decisions that are more likely to be effective because managers who use fact-based performance analysis are better able to target areas most in need of improvement and to select appropriate interventions. As of August 2020, there has been no change in this status.

Recommendation: The Commissioner of Internal Revenue should instruct the appropriate officials to develop and document a strategy that outlines how IRS will use National Research Program data to update compliance strategies that could help address the tax gap. (Recommendation 2)

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: As of August 2020, IRS stated that it is working on a redesign of the National Research Program (NRP). The outcome of the redesign will determine the scope of the information available from NRP in the future. IRS reported that next steps to address this recommendation is contingent on the completion of the NRP redesign.

Recommendation: To strengthen efforts to identify and address noncompliance with the EITC, ACTC, and AOTC, the Commissioner of Internal Revenue should direct Refundable Credits Policy and Program Management (RCPPM) to take necessary steps to ensure the reliability of collections data and periodically review that data to (a) compute a collections rate for post-refund enforcement activities and (b) determine what additional analyses would provide useful information about compliance results and costs of post-refund audits and document-matching reviews.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: No executive action taken as of December 2019. The Internal Revenue Service (IRS) disagreed with this May 2016 recommendation. IRS raised concerns about the cost of studying collections data for post-refund enforcement activities. GAO recognizes that gathering collections data has costs and the data have limitations, notably that not all recommended taxes are collected. However, use of these data -- once IRS is able to verify their reliability -- could better inform resource allocation decisions and improve the overall efficiency of enforcement efforts. By not taking necessary steps to ensure the reliability of that data and to link them to tax assessments to calculate a collections rate, IRS lacks critical information. Periodic reviews of collections data and analyses could help IRS officials more efficiently allocate limited enforcement resources by providing a more complete picture about compliance results and costs.