VA’s Compliance with the Improper Payments Elimination and Recovery Act for FY 2018

The VA Office of Inspector General (OIG) conducted this review to determine whether VA complied with the Improper Payments Elimination and Recovery Act of 2010 (IPERA) for fiscal year (FY) 2018. IPERA requires federal agencies to review and identify programs and activities that may be susceptible to significant improper payments. Payments are considered improper if they are made in an incorrect amount, to an ineligible recipient, for an ineligible good or service, or for goods or services not received. IPERA requires federal inspectors general to review their agencies for compliance. In FY 2018, VA reported improper payment estimates totaling $14.73 billion, an increase from the $10.66 billion reported in FY 2017. The OIG found that VA did not comply with IPERA because it did not satisfy two of the six requirements. Specifically, VA did not meet improper payment reduction targets for eight programs and activities assessed to be at risk for improper payments, and did not report a gross improper rate of less than 10 percent for seven VA programs and activities that had improper payment estimates in its FY 2018 Agency Financial Report. In addition, the OIG identified nine other programs and activities as noncompliant over two to four consecutive fiscal years. The OIG recommended taking steps to achieve improper payment reduction targets for three programs. The OIG is keeping open previous recommendations to meet reduction targets for four programs, and to ensure seven other programs do not exceed the 10 percent improper payment threshold. The OIG also recommended implementing steps to achieve stated reduction targets for the pension program and continuing work with the Department of Defense to increase the frequency of drill pay adjustments.