Significant Improvements Needed in Efforts to Address Improper Payment Requirements

May 13, 2013

What GAO Found

The Department of Defense (DOD) did not adequately implement key provisions of the Improper Payments Information Act of 2002 (IPIA) and the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and Office of Management and Budget (OMB) requirements for fiscal year 2011. Most important, GAO found that DOD's improper payment estimates reported in its fiscal year 2011 Agency Financial Report were neither reliable nor statistically valid because of long-standing and pervasive financial management weaknesses and significant deficiencies in the department's procedures to estimate improper payments. For example, DOD did not

have key quality assurance procedures in place, such as reconciliations, to validate the completeness and accuracy of the populations used to estimate improper payments;

develop appropriate sampling methodologies for estimating improper payments;

produce a statistical estimate for its largest program, Defense Finance and Accounting Service (DFAS) commercial pay; and

maintain key documentation supporting its reported improper payment estimates. 

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