FY 2014 Review of VA’s Compliance With the Improper Payments Elimination and Recovery Act

We conducted the fiscal year (FY) 2014 review to determine whether VA complied with the requirements of the Improper Payments Elimination and Recovery Act (IPERA). VA reported improper payment estimates totaling approximately $1.6 billion in its FY 2014 Performance and Accountability Report (PAR) compared with $1.1 billion in its FY 2013 PAR. The increase was due primarily to higher estimated improper payments for the Compensation and Pension programs under the Veterans Benefits Administration (VBA). VA did not comply with two of six IPERA requirements for FY 2014. VBA reported four programs that did not meet its reduction targets. The Veterans Health Administration (VHA) also reported a missed target for one program. Further, VBA did not meet the requirement to publish an improper payment estimate for one program because the estimate was not considered reliable. Additionally, VA’s risk assessments should incorporate a stronger consideration of contracting risk. VBA and VHA should make improvements in their sample evaluation procedures. VBA’s Compensation program crossed an Office of Management and Budget (OMB) threshold for potential designation as a high-priority program due to our review identifying additional improper payments within the sample transactions. Thus, we increased the projection of the potential improper payment in VBA’s Compensation program.