Review of VA’s Compliance with the Improper Payments Elimination and Recovery Act for FY 2012

We conducted this annual review to determine whether VA complied with the Improper Payments Elimination and Recovery Act (IPERA) for FY 2012. VA reported about $2.2 billion in improper payments in its FY 2012 Performance and Accountability Report (PAR). In doing so, we found VA did not comply with four of seven IPERA requirements in FY 2012. For example, VHA did not report a gross improper payment rate less than 10 percent or meet a reduction target for one program and VBA did not use statistically valid methodologies to calculate improper payment estimates for some programs or report recapture amounts. VA did meet the requirements to publish a PAR, perform risk assessments, and provide information on its corrective action plans. We recommended the action be taken to reduce improper payments and develop achievable reduction targets for the Non-VA Care Fee program, as well as to implement an estimation methodology to achieve statistical precision for all VHA programs. Further, a statistically valid estimation methodology needs to be implemented for the Compensation, Pension, and Vocational Rehabilitation and Employment programs. The required recapture information for all reported VBA programs needs to be provided as required. Lastly, we recommended the Executive in Charge for the Office of Management and Chief Financial Officer complete planned actions to improve compliance with IPERA. Our recommendations were agreed with and appropriate action plans provided.