Payment Integrity: Selected Agencies Should Improve Efforts to Evaluate Effectiveness of Corrective Actions to Reduce Improper Payments
Fast Facts
Improper payments—those made by the federal government to the wrong person, in the wrong amount, or for the wrong reason—are a significant problem. In fiscal year 2019, government-wide improper payment estimates totaled about $175 billion.
The law requires certain agencies to develop and monitor ways to reduce improper payments and take corrective actions to target their root causes. However, 2 agencies we reviewed did not develop corrective actions that corresponded to the root causes they identified. Further, most agencies did not measure the effectiveness of their actions.
We made 7 recommendations to address these issues.
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Highlights
What GAO Found
Five out of six agencies used their improper payment estimation results to identify the root causes for the eight programs GAO reviewed. However, the Department of the Treasury (Treasury) used 2006 through 2008 taxpayer data to identify root causes of fiscal year 2018 Earned Income Tax Credit (EITC) improper payments. Without timely data on the true root causes of EITC improper payments, Treasury will lack quality information needed to develop appropriate corrective actions to reduce them.
In addition, only one agency we reviewed—the Department of Veterans Affairs (VA)—adhered to relevant Improper Payments Information Act of 2002, as amended (IPIA), requirements and Office of Management and Budget (OMB) guidance. The Department of Agriculture (USDA) and Treasury did not develop agency corrective action plans corresponding to the identified root causes of improper payments for the Supplemental Nutrition Assistance Program (SNAP) and EITC, respectively. In addition, the remaining three agencies did not have processes in place to either establish planned completion dates, monitor progress, or measure the effectiveness of their corrective actions in reducing improper payments.
Agency Monitoring and Evaluation of Corrective Action Plans for Selected Programs
|
Program |
Did agency establish planned completion dates? |
Did agency annually monitor progress? |
Did agency annually measure effectiveness? |
|
Supplemental Nutrition Assistance Program |
N/A |
N/A |
N/A |
|
Direct Loan |
✓ |
✓ |
✗ |
|
Pell Grant |
✓ |
✓ |
✗ |
|
Children's Health Insurance Programa |
✗ |
✓ |
✗ |
|
Earned Income Tax Credit |
N/A |
N/A |
N/A |
|
Prosthetic and Sensory Aids Service |
✓ |
✓ |
✓ |
|
Old Age, Survivors, and Disability Insuranceb |
✗ |
✗ |
✗ |
|
Supplemental Security Incomeb |
✗ |
✗ |
✗ |
Legend: ✓= yes; ✗= no; N/A = not applicable as agency did not develop corrective actions corresponding to identified root causes of improper payments for the selected programs.
Source: GAO analysis of agencies' corrective action plans and processes. | GAO-20-366
aThe Department of Health and Human Services (HHS) did not have documented procedures for its corrective action plan process.
bSubsequent to our review, the Social Security Administration (SSA) implemented new procedures, including directives to establish planned completion dates and monitor progress.
Unless agencies develop corrective action plans that correspond to root causes of improper payments and implement processes to monitor progress and measure their effectiveness, their ability to ensure that their efforts will reduce improper payments will be limited
Why GAO Did This Study
Improper payments, estimated at almost $175 billion for fiscal year 2019, are a significant problem in the federal government. IPIA and OMB guidance directs agencies to analyze the root causes of improper payments and develop corrective actions to reduce improper payments. This report examines (1) actions that agencies took to identify root causes of improper payments for selected programs, (2) the extent to which their corrective action plans correspond to identified root causes, and (3) the extent to which they monitored progress and evaluated the effectiveness of corrective actions.
GAO analyzed corrective action plans reported in fiscal year 2018 for the following eight programs: Department of Education's Direct Loan and Pell Grant; HHS's Children's Health Insurance Program; SSA's Old Age, Survivors, and Disability Insurance and Supplemental Security Income; Treasury's EITC; USDA's SNAP; and VA's Prosthetic and Sensory Aids Service. GAO selected these programs based, in part, on those programs with at least $1 billion in fiscal year 2018 improper payment estimates.
Recommendations
GAO is making seven recommendations: one each to Education, HHS, and SSA and two each to USDA and Treasury to improve their processes for addressing root causes of improper payments and measure their effectiveness. In their responses, SSA agreed, USDA generally agreed, Education and Treasury neither agreed nor disagreed, and HHS disagreed with GAO's respective recommendation(s). GAO clarified four recommendations and continues to believe all the recommendations are valid.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Food and Nutrition Service |
Priority Rec.
The Administrator of FNS should develop and implement a process, documented in policies and procedures, to analyze SNAP state-level root causes to identify potential similarities among the states and develop and implement SNAP agency-level corrective actions, if appropriate, to help address them. (Recommendation 1) |
The US Department of Agriculture (USDA) generally agreed with the recommendation. In its letter to GAO dated December 7, 2020, USDA's Food and Nutrition Service (FNS) stated that it analyzes the Supplemental Nutrition Assistance Program (SNAP) state-level root causes, provides states with extensive technical assistance, and has included SNAP agency-level corrective actions in the agency's fiscal year 2020 priority plan. To ensure consistency and proper documentation, FNS stated that it will establish a national standard operating procedure (SOP) of SNAP state-level root causes to identify potential similarities among the states in order to develop and implement SNAP agency-level... corrective actions. In May 2022, FNS provided us its corrective action SOP (dated May 2022) for SNAP. We reviewed the SOP and verified that FNS added a section to the SOP specific to conducting internal root cause data analysis at the state and national level to inform agency level corrective actions to address quality control related performance criteria. In addition, FNS disseminated this SOP to FNS Regional Office staff on May 11, 2022. We believe that USDA's FNS has taken sufficient corrective actions to address the recommendation.
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| Department of Agriculture |
Priority Rec.
The Secretary of Agriculture should revise USDA's procedures to include processes for monitoring the progress and measuring the effectiveness of improper payment corrective actions. The process for measuring the effectiveness of corrective actions should clearly demonstrate the effect USDA's corrective actions have on reducing improper payments. (Recommendation 2) |
The US Department of Agriculture (USDA) generally agreed with the recommendation. In its letter to GAO dated December 7, 2020, USDA stated that its Office of the Chief Financial Officer (OCFO) would revise USDA's procedures for monitoring the progress and measuring the effectiveness of improper payment corrective actions for the fiscal year 2021 reporting year. In September and October 2021, USDA provided us several documents to demonstrate OCFO's commitment to improving USDA's processes and satisfying our recommendation. For example, USDA revised its standard operating procedures (SOP) for fiscal year 2021, which includes steps for USDA staff to ensure that the root causes, sub-root...
|
| Office of the Secretary of the Department of Education | The Secretary of Education should revise and document Education's process for measuring the effectiveness of its corrective actions based on its new statistical estimation methodology for Direct Loan and Pell Grant improper payments. This process should clearly demonstrate the effect Education's corrective actions have on reducing improper payments. (Recommendation 3) | The Department of Education (Education) neither agreed nor disagreed with this recommendation. In March 2022, Education provided us a copy of its Federal Student Aid (FSA) Measuring Effectiveness of Improper Payment (IP) and Unknown Payment (UP) Corrective Action Plans (CAPs) Standard Operating Procedure (SOP), dated November 15, 2021. As it relates to measuring the effectiveness of each individual corrective action, Education determines the availability of data that can be analyzed to evaluate the effectiveness of the corrective actions, such as quantifiable performance and outcomes of the actions taken to date to address the root causes, or in the case of long-term corrective actions...
|
| Office of the Secretary for HHS | The Secretary of Health and Human Services should document in policies and procedures HHS's improper payment corrective action plan process. As part of these procedures, HHS should include processes for (1) establishing planned completion dates, (2) monitoring the progress of implementing corrective actions, and (3) measuring the effectiveness of improper payment corrective actions. The process for measuring the effectiveness of corrective actions should clearly demonstrate the effect HHS's corrective actions have on reducing improper payments. (Recommendation 4) | The Department of Health and Human Services (HHS) disagreed with this recommendation. In commenting on our draft report, HHS stated that the Office of Management and Budget (OMB) guidance provides agencies the flexibility to measure the effectiveness of corrective actions and believes that this flexibility is vital to its oversight processes to reduce improper payments. Despite HHS's initial disagreement with this recommendation, in February 2023, HHS told us that it uses a variety of methods to provide standard operating procedures when requesting updates to its corrective action plans (CAP). HHS mentioned it conducts a kickoff meeting; sends email with detailed instructions for...
|
| Office of the Secretary for Treasury | The Secretary of the Treasury should determine whether Treasury's current improper payment root cause analysis provides sufficiently relevant information that can be used as a basis for proposed corrective actions in reducing EITC improper payments and, if not, update the analysis using more timely data to ensure their reliability for identifying root causes of EITC improper payments. (Recommendation 5) | Treasury neither agreed nor disagreed with this recommendation. In commenting on our draft report, Treasury stated that each year it indicates in its corrective action plan that the Internal Revenue Service (IRS) will continue to work with Treasury to develop legislative proposals that will improve refundable credit compliance and reduce erroneous payments. On July 13, 2021, we received Treasury's Planned Corrective Action status update which indicated that IRS completed an Earned Income Tax Credit (EITC) improper payment root cause analysis in September 2020 based on the most recent detailed 3-year compliance study data from years 2006 through 2008. Also, Treasury indicated that IRS...
|
| Office of the Secretary for Treasury |
Priority Rec.
The Secretary of the Treasury should update Treasury's strategy for addressing the root causes of EITC improper payments to include (1) coordinating with other agencies to identify potential strategies and data sources that may help in determining EITC eligibility and (2) determining whether legislative changes are needed, and developing proposals as appropriate, to help reduce EITC improper payments, such as those related to the inability to authenticate taxpayer eligibility. (Recommendation 6) |
Treasury neither agreed nor disagreed with this recommendation. In commenting on our draft report, Treasury stated that each year it indicates in its corrective action plan that the Internal Revenue Service (IRS) will continue to work with Treasury to develop legislative proposals that will improve refundable credit compliance and reduce erroneous payments. On July 13, 2021, we received Treasury's Planned Corrective Action status update which indicated that IRS worked with Treasury to develop legislative proposals that will improve refundable credit compliance and reduce erroneous payments. In addition, Treasury stated that it considers this recommendation implemented with the approval...
|
| Social Security Administration |
Priority Rec.
The Commissioner of SSA should develop and implement a process, documented in policies and procedures, to measure the effectiveness of SSA's corrective actions for OASDI and SSI improper payments. This process should clearly demonstrate the effect SSA's corrective actions have on reducing improper payments. (Recommendation 7) |
The Social Security Administration (SSA) agreed with this recommendation. In fiscal year 2020, SSA stated that it will determine the most cost-effective strategies to remediate the underlying causes of payment errors and monitor, measure, and revise the strategies as needed. In fiscal year 2022, SSA informed us that it continues to identify and measure the root causes of improper payments, and is in the process of documenting corrective actions in multiple Improper Payment Alignment Strategies (IPAS). In December 2022, SSA provided a copy of its IPAS Evaluation Training Guide that includes steps for evaluating and analyzing the success of corrective actions. The process includes...
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