From: NASA Office of Inspector General
Posted: Monday, May 14, 2018
WHY WE PERFORMED THIS REVIEW
Each year the Federal Government makes billions of dollars in improper payments to individuals, organizations, and contractors. In fiscal year (FY) 2017, the estimated amount of improper payments Government-wide was $141 billion – a decrease of approximately $3 billion from the prior year's estimate. The Improper Payments Information Act of 2002 (IPIA) requires the heads of Federal agencies annually to identify programs and activities susceptible to improper payments and estimate the amount of improper payments made by their agencies. In addition, the Act requires agency Inspectors General to determine whether their agencies comply with IPIA requirements. Our overall objective in this review was to assess NASA's compliance in FY 2017 and evaluate the completeness and accuracy of the Agency's IPIA reporting and its implementation of recommendations made in our prior IPIA reports. We interviewed Agency personnel, reviewed applicable laws and regulations, and reviewed the IPIA section of NASA's Agency Financial Report and supporting documentation.
WHAT WE FOUND
Based on our review of the NASA's FY 2017 Agency Financial Report and supporting documentation, we concluded that NASA complied with IPIA. However, as in prior years we found that NASA can improve its risk assessment process and expand the scope of its recapture audit program in order to provide a more robust picture of the scope of potential improper payments at the Agency.
With regard to the Agency's risk assessment methodology, NASA did not adequately use available data to determine the risk rating under two of seven risk conditions – Internal Monitoring and External Monitoring. Consistent with our prior year's report, we also found the Materiality of Disbursements risk condition contained questionable and improperly used scoring criteria. These issues may have impacted the results of the Agency's risk assessment and affected the number of programs susceptible to significant improper payments.
Also consistent with our findings in prior years, we question NASA's decision to exclude cost-type contracts and limit its payment recapture audits to fixed-price contracts. In addition, we reiterate our concern about the Agency's lack of adequate documentation explaining this decision. Further, and consistent with our finding from last year, we believe some payments that should have been identified and recaptured through sources other than payment recapture audits were not reported in the Agency Financial Report as required. For example, overpayments returned to the Agency as an offset against future contract billings are not being reported by NASA.
WHAT WE RECOMMENDED
In addition to recommendations in prior years' audits that remain open, we recommended the NASA Chief Financial Officer: (1) implement a procedure to use information regarding known improper payments, including the latest available data used for payment recapture reporting, when performing the annual risk assessment; (2) revise the existing risk assessment process by considering improper payments from prior years identified in external reports reviewed in the assessment year to determine program susceptibility to significant improper payments; and (3) develop a process for tracking overpayments identified and subsequently recovered through reductions in future billings on existing contracts such as contract credits.
We provided a draft of this report to NASA management who concurred with our recommendations and described planned corrective actions. We consider the proposed actions responsive for all three recommendations and will close them upon verification and completion of those actions.
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