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GAO Improper Payments: 2.8 TRILLION, Agency Reporting of Payment Integrity Information

https://www.gao.gov/products/gao-25-107552

Since FY 2003, federal agencies have made $2.8 trillion in improper payments—i.e., payments that shouldn't have been made or were made in incorrect amounts. The Payment Integrity Information Act of 2019 requires agencies to manage and report their improper payments.

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What GAO Found
Improper payments are those that should not have been made or that were made in an incorrect amount. The Payment Integrity Information Act of 2019 (PIIA) includes requirements that agencies must follow to estimate and report on improper payments. These include publishing improper payments estimates, corrective action plans, and reduction targets for certain programs and activities with their annual financial statements. PIIA also requires each agency’s inspector general (IG) to issue an annual report on the agency’s compliance with applicable criteria.

The Office of Management and Budget (OMB) plays a key role in developing guidance for agencies to estimate and report on improper payments. OMB guidance includes information for agency IGs on how to determine agency compliance with PIIA criteria. It also includes information on the corrective actions PIIA requires of agencies if they are found noncompliant. When IGs find agencies to be noncompliant with PIIA criteria in a fiscal year, the law requires agencies to report on their plans to come into compliance to the appropriate authorizing and appropriations committees of Congress. OMB has directed agencies to report their plans for coming into compliance on PaymentAccuracy.gov to meet this requirement.

When an agency has been noncompliant for 2 or more consecutive fiscal years for the same program, the agency must propose to OMB additional program integrity proposals that would help the agency come into compliance. OMB guidance directs such agencies to include the program integrity proposals in their next annual budget submissions.

In IG reports issued in 2023, 10 of the Chief Financial Officers (CFO) Act agencies were found noncompliant with PIIA for fiscal year 2022 and reported their plans to come into compliance on PaymentAccuracy.gov. In addition, according to data reported on PaymentAccuracy.gov, nine CFO Act agencies were noncompliant with PIIA criteria for one or more of the same programs or activities for 2 consecutive years (fiscal years 2021 and 2022). OMB staff stated they would provide guidance on the process for submitting required program integrity proposals during development of the fiscal year 2026 President’s Budget.

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Recommendations for Executive Action

Office of Management and Budget We recommend that the Director of the Office of Management and Budget clarify that agencies found noncompliant with PIIA criteria should state explicitly in their annual financial statements that agency plans to come into compliance are available on PaymentAccuracy.gov, or otherwise directly communicate such plans to the appropriate congressional committees.