Report Summary

Title: Review of VA’s Compliance With the Improper Payments Elimination and Recovery Act for FY 2016
Report Number: 16-04416-231
Issue Date: 5/15/2017
City/State:
VA Office: Veterans Health Administration (VHA)
Veterans Benefits Administration (VBA)
Office of Information and Technology (OIT)
Office of Management
Report Author: Office of Audits and Evaluations
Report Type: Audits, Reviews & Evaluations
Release Type: Unrestricted
Summary: We conducted this review to determine whether VA complied with the Improper Payments Elimination and Recovery Act (IPERA) for FY 2016. VA reported improper payment estimates totaling approximately $5.5 billion in its FY 2016 Agency Financial Report (AFR). As allowed by Office of Management and Budget (OMB) guidance, VA reported improper payment data based on the previous fiscal year activity. VA did not comply with two of six requirements that constitute compliance according to OMB. VA did not:

• Report a gross improper payment rate of less than 10 percent for each program and activity for which an improper payment estimate was published in the FY 2016 AFR. Two VA programs—VA Community Care and Purchased Long Term Services and Support—exceeded 10 percent.
• Meet annual reduction targets for the following six programs—VA Community Care, Purchased Long Term Services and Support, Beneficiary Travel, Civilian Health and Medical Program of the Department of Veterans Affairs, State Home Per Diem Grants, and Supplies and Materials.

VA met four of the six IPERA requirements for FY 2016 by publishing the AFR, performing risk assessments, publishing improper payment estimates, and providing information on corrective action plans. Although VA published improper payment estimates as required, we determined estimates for the Supplies and Materials Program and the Post 9/11 G.I. Bill Program were not reliable because of weaknesses in sample evaluation procedures. We also noted further improvements VA could make in estimating improper payments for two programs and in reducing improper payments for another program that resulted from a program design issue.

We recommended the Acting Under Secretary for Health take steps to reduce improper payment rates and achieve reduction targets. We recommended the Acting Under Secretary for Health, the Acting Assistant Secretary for Management and Acting Chief Financial Officer, and the Principal Executive Director, Office of Acquisition, Logistics, and Construction, take steps to improve improper payment estimates. We recommended the Acting Under Secretary for Benefits improve the improper payment estimate for one program and continue to address the issue of prohibited concurrent payments of certain program benefits and military reserve pay.
VA management concurred with our recommendations and provided plans for corrective action. We consider the planned actions responsive.