NASA OIG Report: NASA’s Compliance with the Payment Integrity Information Act for Fiscal Year 2021
WHY WE PERFORMED THIS AUDIT
Improper payments are payments the federal government should not have made or made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. In fiscal year (FY) 2021, agencies across the federal government made an estimated $281.4 billion in improper and unknown payments.
Our overall objective in this required annual review was to determine whether NASA complied with requirements of the Payment Integrity Information Act of 2019 (PIIA) for FY 2021. We also evaluated NASA’s risk assessment methodology, improper and unknown payment estimates, sampling and estimation plan, and implementation of recommendations made in our previous reports. In conducting our work, we relied on guidance from the Office of Management and Budget (OMB) and the Council of the Inspectors General on Integrity and Efficiency (CIGIE); we interviewed NASA and contractor personnel, reviewed relevant information in the Agency Financial Report (AFR), and reviewed applicable federal laws and regulations and NASA policy and guidance.
WHAT WE FOUND
We found that NASA was not in compliance with PIIA for FY 2021 because it did not publish improper payment estimates for the Space Launch System (SLS) program in the accompanying materials to the AFR as required by the statute. In our FY 2019 improper payment compliance audit, we reported that NASA failed to identify the SLS program as susceptible to significant improper payments based on the Agency’s established risk assessment methodology, and since then the Agency has been working to bring the program into compliance. In FY 2021, NASA completed its improper payment testing and found no improper or unknown payments for the SLS program. However, the Agency failed to report the testing results in its AFR or to OMB. As a result, SLS reporting for FY 2021 was absent from the Agency’s AFR and the dataset and payment integrity dashboard on PaymentAccuracy.gov. The Agency should have submitted SLS-related data such as the $2.2 billion in program outlays and amount properly paid, the 100 percent payment accuracy rate, and the corresponding improper and unknown payment amounts and rates. Therefore, NASA was not compliant with PIIA’s requirement to publish improper and unknown payment estimates for programs susceptible to significant improper and unknown payments in the accompanying materials to the AFR.
We also identified opportunities for improvement in the Agency’s risk assessment and reporting processes. While these matters did not contribute to the Agency’s non-compliance, we believe it important for the Agency to address these issues to ensure the integrity of its improper payments program. For example, we found NASA used an inappropriate financial factor to derive program outlays when conducting its risk assessment process. Additionally, the Agency failed to adhere to OMB guidance, which resulted in incomplete information published on PaymentAccuracy.gov and an inefficient risk assessment process.
Finally, we found that NASA’s reported overpayment information was inaccurate. Although NASA reported the improper payments identified and collected through sources other than payment recapture audits in the accompanying materials to its AFR, the overpayment amounts and the programs that disbursed the payments were inaccurate for the FY 2021 reporting period.
WHAT WE RECOMMENDED
In addition to the recommendation that remains open from our prior reports, we recommended that the Chief Financial Officer:
1. Complete steps outlined in OMB guidance when an agency is not compliant with PIIA for one fiscal year. Non-compliant agencies must provide information describing the actions that the agency will take to become compliant in the OMB annual data call, including:
a. measurable milestones to be accomplished to achieve compliance (i.e., report the SLS testing results in the FY 2022 OMB data call),
b. designation of a senior agency official who will be accountable for the progress to become compliant, and
c. establishment of an accountability mechanism with appropriate incentives and consequences tied to the success of the senior agency official in leading NASA’s efforts to achieve compliance.
2. Report disaster relief funding as a separate program from the Institutional Construction of Facilities program when satisfying payment integrity reporting requirements.
3. Complete the OMB data call process for all programs with outlays over $10 million.
4. Ensure that program outlays exclude any transactions that do not meet the outlay definition provided by OMB.
5. Revise the materiality risk calculation methodology and sampling and estimation methodology plan to include payment transactions only.
6. Consider adhering to OMB’s $10 million threshold for program selection for the annual risk assessment.
7. Develop a detailed review process, such as a checklist or job aid, outlining the review procedures performed by the Quality Assurance Division within the reporting process for overpayments from sources other than recapture audits to ensure that the primary reviewer and the supervisory quality control reviewers are performing a thorough review of the aggregated submissions of overpayments. Necessary review steps include ensuring overpayments are not reported twice, capturing issues with overpayments submitted for the incorrect period, and tracking identified and collected portions that occur in different fiscal years for accurate reporting.
8. Determine the specific programs that had overpayments identified and collected during the reporting period and report those amounts by the Agency program as requested by OMB. If NASA deems this effort not cost-effective, the Agency should document its determination and report overpayments by Treasury Account Fund Symbol or another more meaningful method than by the Center or office that responded to QAD’s inquiries for overpayments.
We provided a draft of this report to NASA management, who concurred with Recommendations 6, 7, and 8 and described planned actions to address them. We consider the proposed actions for these three recommendations responsive and will close them upon completion and verification. Management did not concur with Recommendation 1, which related to our finding that NASA was noncompliant with PIIA. Additionally, management did not concur with Recommendations 2, 3, 4, and 5, which were related to improving the Agency’s risk assessment and reporting processes. These five recommendations will remain unresolved pending further discussions with NASA.
