NASA OIG: NASA’s Compliance with the Improper Payments Information Act for Fiscal Year 2018
WHY WE PERFORMED THIS REVIEW
Improper payments are payments the federal government should not have made or made in an incorrect amount. They also include duplicate payments and any payment to an ineligible recipient, for an ineligible good or service, for a good or service not received, or that does not account for credit for applicable discounts. In fiscal year (FY) 2018, the estimated amount of improper payments government-wide was $151 billion. 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. The Act also requires Inspectors General to determine whether their agencies comply with IPIA requirements.
Our objectives were to: (1) determine whether NASA complied with IPIA requirements in FY 2018, (2) evaluate the completeness and accuracy of the Agency’s IPIA reporting, and (3) assess its implementation of recommendations we made in prior IPIA reports. To meet these objectives, we interviewed Agency personnel, reviewed applicable laws and regulations, and examined the IPIA section of NASA’s FY 2018 Agency Financial Report (AFR) and supporting documentation.
WHAT WE FOUND
Based on our review, we concluded the Agency complied with IPIA. However, as we reported last year, NASA did not use all available data to determine the risk rating in two categories: Internal Monitoring and Assessments and External Monitoring and Assessments. In addition, NASA failed to provide documentation of the analysis supporting its rationale for using the existing scoring criteria for the Materiality of Disbursements risk condition—a methodology we believe is not representative of NASA’s disbursement activity. These two issues impact the basis for assigning ratings within the Agency’s risk assessment and the determination of whether programs are susceptible to significant improper payments.
Consistent with our findings in prior years, we also questioned NASA’s decision to exclude cost-type contracts and limit its payment recapture audits to fixed-price contracts. We believe this decision increases the risk that improper payments will not be timely identified and recaptured. In addition, we remain concerned about the Agency’s lack of adequate documentation explaining this decision.
Further, we continue to find the Agency does not have processes in place to identify certain types of overpayments and resulting collection from sources outside of payment recapture audits. Specifically, NASA has yet to implement an Agency-wide process to gather, track, and report improper payments recaptured through credits on future billings and sustained questioned direct costs from post-award audits. Finally, NASA Centers improperly included or excluded several transactions from the AFR, resulting in an overstatement of the reported net amounts for identified and collected overpayments.
WHAT WE RECOMMENDED
In addition to reiterating recommendations from prior years’ audits that remain open, we recommended the NASA Chief Financial Officer: (1) revise existing policies and procedures for reporting overpayments identified and recaptured from sources outside of the payment recapture audit by documenting the processes developed to gather, track, and report improper payments recaptured through credits on future billings and sustained questioned direct costs from post-award audits; (2) provide training to organizations or individuals responsible for reporting overpayments from future billing credits and sustained questioned direct costs from post-award audits to ensure they are aware of NASA’s reporting requirements and their responsibility for tracking the information and communicating it to the Office of the Chief Financial Officer; and (3) enhance the annual payment recapture training provided to Centers with a focus on what constitutes an improper payment and how to improve the accuracy of their reporting.
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 completion and verification of those actions.
