Financial Management: Challenges in Meeting Requirements of the Improper Payments Information Act

Improper payments are a longstanding, widespread, and significant problem in the federal government. The Congress enacted the Improper Payments Information Act (IPIA) of 2002 to address this issue. Fiscal year 2004 marked the first year that federal agencies governmentwide were required to report improper payment information under IPIA. One result of the IPIA has been increased visibility over improper payments by requiring federal agencies to identify programs and activities susceptible to improper payments, estimate the amount of their improper payments, and report on the amount of and their actions to reduce their improper payments in their annual Performance and Accountability Reports (PAR). Because of continued interest in addressing the governmentwide improper payments issue, we continue to report on the progress being made by agencies in complying with certain requirements of the IPIA. This testimony summarizes the results of our most recent report on agencies' progress in meeting the requirements of the IPIA. Ultimately, the success of this legislation hinges on each agency's diligence and commitment to identifying, estimating, and determining the causes of, then taking corrective actions, and measuring progress in reducing improper payments.