oversight

Audit of the U.S. Office of Personnel Management's Fiscal Year 2017 Improper Payment Reporting

Published by the Office of Personnel Management, Office of Inspector General on 2018-05-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

       CE OF PERSONNEL MANAGEMENT
  OFFICE OF THE INSPECTOR GENERAL
          OFFICE OF AUDITS




    Final Audit Report
AUDIT OF THE U.S. OFFICE OF PERSONNEL MANAGEMENT’S
  FISCAL YEAR 2017 IMPROPER PAYMENTS REPORTING

             Report Number 4A-CF-00-18-012
                      May 10, 2018
            EXECUTIVE SUMMARY
  Audit of the U.S. Office of Personnel Management’s Fiscal Year 2017 Improper Payments
                                          Reporting

Report No.
Report No. 4A-CF-00-18-012
           4A-CF-00-18-012                                                                                                           May
                                                                                                                                     May 10, 2018
                                                                                                                                         10, 2018



Why Did We Conduct the Audit?              What Did We Find?

The objective of our audit was to          1. 	 We determined that OPM is in compliance with IPERA’s six
determine if the U.S. Office of                 requirements for FY 2017, as identified in the chart below:
Personnel Management (OPM) is                        Performance
	
compliant with the Improper Payments                     and
	
                                                    Accountability 

Information Act, as amended by the                     Report/ 

                                                       Agency                       Improper   Corrective 

Improper Payments Elimination and                     Financial
                                                       Report
                                                                          Risk
                                                                       Assessment
                                                                                     Payment
                                                                                    Estimate
                                                                                                Action
                                                                                                 Plan
                                                                                                              Reduction
                                                                                                               Targets
                                                                                                                          Recovery
                                                                                                                           Efforts
                                                                                                                                      Total Non-
                                                                                                                                     Compliances

Recovery Act of 2010 (IPERA) and                                                                                                         0
                                              OPM
the Improper Payments Elimination
                                                    Compliance                Non compliance
and Recovery Improvement Act of
2012 (IPERIA), for Fiscal Year (FY)        2. 	 IPERIA includes additional reporting requirements, such as
2017.                                           utilizing the Do Not Pay portal and approval for both the
                                                improper payments rates and reduction targets. We determined
What Did We Audit?                              that OPM is in compliance with IPERIA’s additional reporting
                                                requirements.
The Office of the Inspector General
                                           3. 	 General Observations: We identified two areas for
completed a compliance audit on                 improvement that, when addressed, could have a positive
OPM’s FY 2017 improper payments                 impact on OPM’s improper payments reporting. Specifically:
reporting, as defined in the U.S. Office
of Management and Budget’s (OMB)                    A. OPM included FY 2018 reduction targets in the Data
guidance and corresponding reporting                   Call located on the www.paymentaccuracy.gov website.
instructions. Our audit was conducted                  However, FY 2018 reduction targets were not included
                                                       in OPM’s FY 2017 Agency Financial Report (AFR).
from January 16, 2018, through
March 13, 2018, at OPM headquarters                 B. Since FY 2012, Retirement Services’ improper
located in Washington D.C.                             payments rate has fluctuated between 0.36 percent and
                                                       0.38 percent. While the improper payment rates were
                                                       within plus or minus 0.1 percentage points of the
                                                       reduction target set in the previous year’s AFR, as
                                                       required by OMB Circular A-123, Appendix C, the rate
                                                       has never been less than 0.36 percent.

______________________
Michael R. Esser
Assistant Inspector General for Audits

                                                         i
	
         ABBREVIATIONS

AFR      Agency Financial Report
FEHBP    Federal Employees Health Benefits Program
FY       Fiscal Year
IPERA    Improper Payments Elimination and Recovery Act of 2010
IPERIA   Improper Payments Elimination and Recovery Improvement Act of
         2012
OCFO     Office of the Chief Financial Officer
OIG      Office of the Inspector General
OMB      U.S. Office of Management and Budget
OPM      U.S. Office of Personnel Management
PAR      Performance and Accountability Report




                    ii
	
                         TABLE OF CONTENTS


                                                                                                                       Page

       EXECUTIVE SUMMARY ......................................................................................... i 


       ABBREVIATIONS ..................................................................................................... ii 


I.     BACKGROUND ..........................................................................................................1 


II.    OBJECTIVE, SCOPE, AND METHODOLOGY ....................................................6 


III.   AUDIT FINDINGS AND RECOMMENDATIONS.................................................8 


       1. IPERA Reporting Requirements ..............................................................................8 


       2. IPERIA Reporting Requirements ............................................................................8 


       3. General Observations...............................................................................................8 

          A. Reduction Targets .............................................................................................9 

          B. Improper Payments Rate ..................................................................................10 


       APPENDIX I 	             Status of Prior Office of the Inspector General Audit
                                Recommendations

       APPENDIX II		 The Chief Financial Officer’s response to the draft report, dated
                     April 13, 2018.


       REPORT FRAUD, WASTE, AND MISMANAGEMENT
                                I. BACKGROUND

This final audit report details the findings, conclusions, and recommendations resulting from our
compliance audit of the U.S. Office of Personnel Management’s (OPM) Fiscal Year (FY) 2017
Improper Payments Reporting. The audit was performed by OPM’s Office of the Inspector
General, as authorized by the Inspector General Act of 1978, as amended.

On July 22, 2010, and January 10, 2013, the President signed into law the Improper Payments
Elimination and Recovery Act of 2010 (IPERA), and the Improper Payments Elimination and
Recovery Improvement Act of 2012 (IPERIA), respectively, which amended the Improper
Payments Information Act of 2002. IPERIA redefined the definition of “significant improper
payments” and strengthened executive branch agency reporting requirements.

The U.S. Office of Management and Budget (OMB) issued improper payments guidance to
assist agencies in implementing the laws, including OMB Circular A-123 Appendix C,
Management’s Responsibility for Internal Controls, and OMB Circular A-136, Financial
Reporting Requirements. Routine updates are issued by OMB, including an update to OMB
Circular A-123 through Memorandum M-15-02 on October 20, 2014, and a revision to OMB
Circular A-136 on August 15, 2017, which places more emphasis on agencies utilizing the
www.paymentaccuracy.gov website to add more detailed information about improper payments.

An agency’s program is deemed susceptible to significant improper payments 1 if the total
amount of overpayments plus underpayments exceeds both 1.5 percent of program outlays and
$10,000,000 of all program or activity payments made during the fiscal year reported or,
$100,000,000 regardless of improper payments percentage of total program outlays.

Under OMB guidance, agencies must have performed the following with respect to improper
payments reporting:

    a. 	 “Published an AFR [Agency Financial Report] or PAR [Performance and Accountability
         Report] for the most recent fiscal year and posted that report and any accompanying
         materials required by OMB on the agency website;

    b. 	 Conducted a program specific risk assessment for each program or activity that conforms
         with Section 3321 note of Title 31 U.S.C. (if required);


1
 An improper payment is any payment that should not have been made or that was made in an incorrect amount
under statutory, contractual, administrative, or other legally applicable requirements.

                                                 1                 Report No. 4A-CF-00-18-012 

    c. 	 Published improper payment estimates for all programs and activities identified as
         susceptible to significant improper payments under its risk assessment (if required);

    d. 	 Published programmatic corrective action plans in the AFR or PAR (if required);

    e. 	 Published, and is meeting 2, annual reduction targets for each program assessed to be at
         risk and estimated for improper payments (if required and applicable); and

    f. 	 Reported a gross improper payment rate of less than 10 percent for each program and
         activity for which an improper payment estimate was obtained and published in the AFR
         or PAR.”

If an agency does not meet one or more of these reporting requirements, it is not compliant with
IPERA.

In addition, OMB Circular A-123 Appendix C and Circular A-136, require agencies to:

    x   Categorize their improper payment estimates based on OMB’s new improper payment
        categories;

    x   Perform risk assessments on all low risk programs at least every three years to assess their
        risk for improper payments;

    x   Develop indicators of improper payments for programs deemed high-priority, as required
        by OMB;

    x   Identify the accountable official that oversees efforts to reduce improper payments for
        high-priority programs;

    x   Describe alternative improper payments measurements;

    x   Expand payment recapture audits to all types of payments and activities with more than $1
        million in annual outlays, if cost effective;

    x   Improve corrective action plans to include incorporating lessons learned;


2
 “A program will have met a reduction target if the improper payments rate for that program in the current year falls
within plus or minus 0.1 percentage points of the reduction target set in the previous year’s AFR or PAR.”

                                                    2                  Report No. 4A-CF-00-18-012 

    x	 Recover improper payments by conducting recovery audits on programs that expend $1
       million or more annually, if conducting such audits is cost-effective;

    x	 Distribute funds recovered through payment recapture audits for authorized purposes;

    x	 Establish internal controls to reduce improper payment rates; and

    x	 Use the Do Not Pay List 3 to verify eligibility for Federal payments in order to help reduce
       and eliminate payment errors before they occur.

Each agency’s Inspector General is required to review improper payments reporting in the AFR
or PAR to determine compliance with IPERIA. OMB requires that the Inspector General review
the agency’s annual AFR or PAR, which includes evaluating the accuracy and completeness of
agency reporting, and evaluating agency performance in reducing and recapturing improper
payments. In addition, the OIG is required to determine if the agency’s corrective action plans
are robust and focused on the appropriate root causes of improper payments, effectively
implemented, and prioritized within the agency, to allow it to meet reduction targets. The
Inspector General is required to complete its review and determination within 180 days of
publication of the agency’s AFR.

Based on the guidance from OMB, risk assessments are conducted every three years for
programs considered to be at a lower risk for improper payments. During FY 2016, OPM’s Risk
Management and Internal Control group conducted risk assessments of several OPM programs,
including the National Background Investigation Bureau, formerly Federal Investigative
Services, the Federal Employees’ Group Life Insurance program, and the Payroll, Purchase Card,
Travel Card, Travel Reimbursements, and Vendor Payments programs. Therefore, no risk
assessments were conducted during FY 2017.

Two of OPM’s earned benefit programs, Retirement Services and the Federal Employees Health
Benefits Programs, are by definition susceptible to significant improper payments.

Retirement Services Program

In an effort to recapture identified improper payments from annuitants, Retirement Services
Program (Retirement Services) has developed the following three types of recovery methods:


3
 The “Do Not Pay List” is an initiative to prevent Federal agencies from making certain improper payments by
directing agencies to review current pre-payment and pre-award procedures to ensure the recipients are eligible.

                                                    3                  Report No. 4A-CF-00-18-012 

   x	 Off-roll debts are collected when the debtor is not on the annuity roll or their 

      entitlement is insufficient to recover the debt on a reasonable recovery schedule; 


   x	 On-roll debts are collected when OPM withholds a portion of the debtor’s monthly
      benefits until their entire debt is collected; and

   x	 Reclamations are recovery actions to recoup improper payments from an annuitant’s
      financial institution. OPM utilizes the U.S. Department of Treasury’s reclamation
      process.

The recaptured amounts are tracked by OPM’s Office of the Chief Financial Officer’s (OCFO)
Trust Fund office using the Treasury Report on Receivables and Debt Collection Activities.

Healthcare and Insurance Program

The calculation for the Federal Employees Health Benefits Program (FEHBP) combines
improper payments from audits and investigative recoveries. For audits, the improper payments
start as overpayments or underpayments identified by the OIG as recommendations in final audit
reports on FEHBP carriers. When a determination is made by Healthcare and Insurance
Program’s (Healthcare and Insurance) Audit Resolutions Group (Audit Resolutions) to disallow
these amounts, the amount becomes a reportable improper payment.

For investigative recoveries, when the FEHBP receives an award as the result of a civil
settlement or criminal judgement, the OIG will provide Audit Resolutions and the OCFO with a
memorandum detailing the amount of the FEHBP award and the allocation to specific FEHBP
carriers. The U.S. Department of the Treasury’s Report of Receivables captures the FEHBP’s
overpayments, as well as the amount recaptured or recovered from health benefit carriers, which
the OCFO provides to Healthcare and Insurance.




                                           4               Report No. 4A-CF-00-18-012 

OPM’s reported improper payments and overpayments recaptured for FY 2017 are summarized
in the following tables:


                             Table 1: FY 2017 Improper Payments Summary 4
                                           Gross                                                       2017
                          Total
                                         Improper        Overpayments        Underpayments           Improper
       Program           Outlays
                                         Payments         ($ millions)         ($ millions)          Payments
                       ($ millions)
                                        ($ millions)                                                  Percent

      Retirement
                        82,913.00          313.81             238.74                75.07              0.38%
       Services

       Federal
                        50,278.02          27.62              27.61                 0.01               0.05%
     Employees
    Health Benefits


                         Table 2: FY 2017 Overpayments Recaptured Summary 5
                                                                               FY 2017 Improper Payment
                        FY 2017 Amount Identified for Recovery
       Program                                                                     Amount Recovered
                                   ($ in millions)
                                                                                     ($ in millions)
     Retirement
                                            238.74                                          224.41
       Services
       Federal
     Employees                               27.61                                          70.046
    Health Benefits

PREVIOUS OFFICE OF THE INSPECTOR GENERAL REPORTS

During the audit of OPM’s FY 2016 Improper Payments Reporting, Report No.
4A-CF-00-17-012, we determined that OPM’s reporting of improper payments was not in
compliance with IPERIA’s Do Not Pay Initiative reporting requirements. In addition, we issued 10
recommendations where OPM could improve its oversight controls over improper payments
reporting. Based on testing performed in this year’s audit, we determined that recommendations
1 through 9 could be closed. Recommendation 10 remains open, as outlined in Appendix I.


4
  Data collected from Table 1 “Payment Summary” on page 135 of OPM’s FY 2017 AFR. 

5
  Data collected from section II “Recapture of Improper Payments Reporting” on page 144 of OPM’s FY 2017 AFR. 

6
  The Healthcare and Insurance amount recovered includes $20.23 million in recoveries from FY17 and $49.80 

million in adjustments (totaling $70.03 million), representing activity spanning current and prior years. A rounding 

variance of $10,000 was reported in the AFR. 


                                                     5                 Report No. 4A-CF-00-18-012 

II. OBJECTIVE, SCOPE, AND METHODOLOGY
OBJECTIVE

The objective of our audit was to determine if OPM complied with the Improper Payment
Information Act, as amended by IPERA and IPERIA, for FY 2017. The recommendations
included in this final report address this objective.

SCOPE AND METHODOLOGY

We conducted this compliance audit in accordance with generally accepted government auditing
standards as established by the Comptroller General of the United States. These standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objective.

The scope of our audit covered OPM’s FY 2017 improper payments reporting in OPM’s AFR.
We performed our audit from January 16, 2018, through March 13, 2018, at OPM headquarters
located in Washington, D.C.

To accomplish our audit objective noted above, we:

   x	   Reviewed OPM’s website to ensure that the AFR was published;

   x	 Analyzed OPM’s corrective actions to address the open audit recommendations 

      identified in the FY 2013, FY 2014, FY 2015, and FY 2016 Improper Payments 

      Reporting final audit reports; 


   x	 Reviewed and analyzed supporting documentation to ensure the offices of Healthcare
      and Insurance and Retirement Services’ estimated improper payments methodologies
      were supported, and recalculated the improper payments estimates to verify that the
      estimates reported were accurate;

   x	 Reviewed Healthcare and Insurance and Retirement Services’ corrective actions in
      the AFR to ensure they discussed robust and effective corrective actions to reduce
      improper payments;

   x    Compared the FY 2017 projected improper payments estimate, as reported by OPM
        in the FY 2016 AFR, to the actual improper payment rate, as reported by OPM in the


                                             6		                    Report No. 4A-CF-00-18-012 

       FY 2017 AFR, to ensure reduction targets for Healthcare and Insurance and
       Retirement Services were met;

   x	 Reviewed Healthcare and Insurance and Retirement Services’ improper payments
      estimates to determine if the gross improper payment rate was less than 10 percent;

   x	 Obtained and reviewed source documentation for all numerical data on improper 

      payments as documented in the AFR tables; 


   x	 Assessed the reasonableness of OPM’s plan to recapture improper payments; and

   x	 Interviewed program representatives from the OCFO, Retirement Services, and 

      Healthcare and Insurance. 


In planning our work and gaining an understanding of the internal controls over OPM’s improper
payments reporting process, we considered, but did not rely on, OPM’s internal control structure
to the extent necessary to develop our audit procedures. These procedures were mainly
substantive in nature. We gained an understanding of management procedures and controls to
the extent necessary to achieve our audit objective. The purpose of our audit was not to provide
an opinion on internal controls but merely to evaluate controls over the improper payments
reporting.

Our audit included such tests and analysis of OPM’s improper payments reporting process,
including documented policies and procedures, numerical data and narratives reported in the
AFR, and other applicable information, as we considered necessary under the circumstances.
The results of our tests indicate that OPM is in compliance with IPERA and IPERIA. However,
we identified two areas for improvement that, when addressed, could have a positive impact on
OPM’s improper payments reporting.

We did not sample improper payments for testing. In conducting the audit, we relied to varying
degrees on computer generated data. Due to the nature of the audit, we did not verify the
reliability of the data generated by the systems involved. However, while utilizing the computer-
generated data during our audit, nothing came to our attention to cause us to doubt its reliability.
We believe that the data was sufficient to achieve our audit objective. We did not evaluate the
effectiveness of the general application controls over computer-processed performance data.




                                             7              Report No. 4A-CF-00-18-012 

III. AUDIT FINDINGS AND RECOMMENDATIONS

 The sections below detail the results of our audit of OPM’s FY 2017 improper payments
 reporting for compliance with IPERA and IPERIA.

 1. IPERA Reporting Requirements

    Based on our review of OPM’s FY 2017 AFR, the www.paymentaccuracy.gov website, and
    other documentation provided by the agency, we determined that OPM is in compliance with
    the six reporting requirements of IPERA:

                                                                                                  Criteria
     Criteria for Compliance
                                                                                                   Met?
      1) Published and posted its FY 2017 AFR on Agency website                                     Yes
      2) Conducted program-specific risk assessments                                                Yes
      3) Published improper payment estimates for all programs and activities identified as
                                                                                                    Yes
         susceptible to significant improper payments under its risk assessment
      4) Published programmatic corrective action plans in the AFR                                  Yes
      5) Published, and is meeting, annual reduction targets for each program assessed to be at
                                                                                                    Yes
         risk and measured for improper payments
      6) Reported a gross improper payment rate of less than 10 percent for each program or
                                                                                                    Yes
          activity for which an improper payment estimate was obtained and published in the AFR

 2. IPERIA Reporting Requirements

    Based on our review of the reporting requirements for IPERIA, such as utilizing the Do Not
    Pay portal and OMB’s approval for both the improper payments rate and the reduction
    targets, we determined that OPM is in compliance with IPERIA for FY 2017.

 3. General Observations

    During our audit, we identified two areas for improvement that, when addressed, could have
    a positive impact on OPM’s improper payments reporting. The two areas include:




                                             8               Report No. 4A-CF-00-18-012 

A. Reduction Targets

   OPM did not list reduction targets for FY 2018 in “Table 1 - Payment Summary” in
   the FY 2017 AFR as illustrated below. However, the targets were included in the
   Data Call located on the www.paymentaccuracy.gov website. OPM’s Risk
   Management and Internal Control group informed us that it was not a requirement to
   include the reduction targets for FY 2018 in the FY 2017 AFR, since such projections
   already exist in the Data Call.




   On August 15, 2017, OMB issued instructions regarding how agencies should utilize
   the Data Call. OMB instructed agencies to add more detailed information in the Data
   Call and inform readers of the AFR that the Data Call located at
   www.paymentaccuracy.gov contains more detailed information on improper
   payments, including FY 2018 reduction targets.

   OMB Circular A-136, in accordance with OMB Circular A-123, Appendix C, states
   “agencies shall identify the … [r]eduction targets by program and activity for the next
   fiscal year.”

   We discussed this with OMB and were informed that the intent was for agencies to
   include FY 2018 reduction targets in the FY 2017 AFR. However, OMB stated that
   “their instructions might not have been clear, therefore it is not the agencies’ fault the
   reduction targets were not included in the AFR.”

   Recommendation 1

   We recommend that the OCFO ensure that reduction targets for the next fiscal year
   are included in the AFR.


                                      9                       Report No. 4A-CF-00-18-012 

   OPM’s Response (to Draft Recommendation)

   OPM concurs with the recommendation and will revise its work instructions to
   ensure reduction targets are included in the AFR for next fiscal year.

B. Improper Payments Rate

   The overall intent of the Improper Payments Information Act of 2002, as amended by
   IPERA and IPERIA, is to reduce improper payments. Executive Order 13520,
   Reducing Improper Payments and Eliminating Waste in Federal Programs, reiterates
   this point by stating that “When the Federal Government makes payments to
   individuals and businesses as program beneficiaries, grantees, or contractors, or on
   behalf of program beneficiaries, it must make every effort to confirm that the right
   recipient is receiving the right payment for the right reason at the right time. The
   purpose of this order is to reduce improper payments by intensifying efforts to
   eliminate payment error, waste, fraud, and abuse in the major programs administered
   by the Federal Government.”

   While Retirement Services met its improper payment reduction targets for fiscal years
   2012 through 2017, Retirement Services’ improper payments rate remained basically
   stagnant during that time period, at roughly an average of 0.37 percent, as shown in
   the table below.

      FY 2012         FY 2013      FY 2014      FY 2015        FY 2016       FY 2017
      IP Rate         IP Rate      IP Rate      IP Rate        IP Rate       IP Rate
       0.36%           0.36%        0.38%        0.38%          0.37%         0.38%

   In addition, Retirement Services’ improper payment amounts increased every year
   from 2012 to their current level of more than $313 million, as illustrated below.

        Fiscal Year         2012        2013     2014      2015      2016      2017

    Improper Payments
         Amount            265.8        278.3   303.3     304.2     304.21    313.81
      ($ in millions)




                                   10             Report No. 4A-CF-00-18-012 

Retirement Services’ outlined various corrective actions taken to combat improper
payments in the AFR. However, several have been discontinued due to the perceived
cost ineffectiveness of the programs, such as the Over 90 and Proof of Life projects,
and additional cost effective corrective actions have not been identified and
implemented. As a result, Retirement Services’ improper payment rates have
remained stagnant.

IPERA requires that agencies publish, and meet, annual reduction targets for each
program assessed to be at risk and measured for improper payments. While
Retirement Services is complying with the “letter of the law,” it is not meeting the
spirit of the Improper Payments Act of 2002, which is to reduce improper payments.

Recommendation 2

We recommend that Retirement Services develop and implement additional cost
effective corrective actions, aimed at the root cause(s) of improper payments, in order
to further reduce the improper payments rate.

OPM’s Response (to Draft Recommendation)

OPM partially concurs with the recommendation and stated that “When the
improper payment rate is expanded into the full decimal value, it tracks the
improper payment rate trending lower between FY 2014 and FY 2016, with a slight
uptick in FY 201 7. This would not be apparent in the AFR due to the rounding
guidelines for reporting the improper payment rate.” OPM provided the table
below to further illustrate their position. Note: The FY 2012 improper payment
rate should be 0.3615 percent, or 0.003615 expressed as a decimal, based on
support previously provided by OPM.




                                  11                     Report No. 4A-CF-00-18-012 

OIG Comment:

OPM expanded their improper payment rate out to six decimal places to illustrate that
the improper payment rate trended lower in FY 2015 and FY 2016. However, except
for those years, the improper payment rate has increased each year, as well as overall,
since FY 2012, as shown in OPM’s draft report response. While we are willing to
partner with OPM and conduct an analysis to help identify ways to reduce improper
payments, we urge Retirement Services to also reach out to the Federal Government
community for guidance.

We have revised our finding and recommendation based on OPM’s response to our
draft report. OPM will respond to our revised recommendation during the audit
resolution process.




                                  12                    Report No. 4A-CF-00-18-012 

                                                   APPENDIX I

       FY 2016 Improper Payments Reporting                          Recommendation
                                                                                                 Current Status
                Recommendations                                         History

Recommendation 1: We recommended that OPM evaluate
the Do Not Pay tool to determine if it is beneficial in
reducing Retirement Services’ improper payments,                         FY 2016
document the results of this evaluation, and report the results                              Closed on March 13, 2018
in the FY 2017 AFR.



Recommendation 2: We recommended that Retirement
Services adhere to OMB’s Do Not Pay Initiative reporting
requirements when reporting on the Do Not Pay results in
                                                                         FY 2016             Closed on March 13, 2018
OPM’s AFR.



Recommendation 3: We recommended that Retirement
Services strengthen their internal controls to ensure that the
improper payments information is supported, reviewed,                    FY 2016             Closed on March 13, 2018
validated and maintained prior to issuance to the OCFO.


Recommendation 4: We recommended that the OCFO
strengthen their procedures to ensure that the improper
payments information reported in OPM’s Agency Financial
Report is supported, reviewed, and validated for accuracy         Rolled-Forward from FY
prior to the information’s inclusion in the Agency Financial       2014, FY 2015 and FY      Closed on March 13, 2018
Report.                                                                    2016




Recommendation 5: We recommended that the OCFO
implement policies and procedures for the annual internal
                                                                  Rolled-Forward from FY
control assessments, to include, but not be limited to,                                      Closed on March 13, 2018
                                                                     2015 and FY 2016
describing the methodology utilized and the documentation
needed to address the methodology.

Recommendation 6: We recommended that in the FY 2017
AFR, OCFO correct all of the errors identified in the FY          Rolled-Forward from FY
                                                                                            Closed on November 28, 2017
2015 AFR Table 14, Status of Internal Controls.                      2015 and FY 2016



                                                                                      Report No. 4A-CF-00-18-012
Recommendation 7: We recommended that the OCFO
                                                                Rolled-Forward from FY
strengthen its oversight controls over the improper payments
                                                                2013, FY 2014, FY 2015        Closed on March 13, 2018
data reported in the Agency Financial Report to ensure that
                                                                      and FY 2016
it accurately reflects supporting data.

Recommendation 8: We recommended that OPM
implement policies and procedures to document the risk
                                                                Rolled-Forward from FY
assessment process, to include but not limited to, the                                      Resolved 7 on March 13, 2018
                                                                   2015 and FY 2016
                                                                                                     5F5F




objective of each risk attribute and outlining the types of
documentation needed to fulfill the risk attribute.

Recommendation 9: We recommended that OPM re-
evaluate the risk assessments performed on the National
Background Investigations Bureau (formerly the Federal
Investigative Services), Purchase Cards, Vendor Payments,       Rolled-Forward from FY
                                                                                            Closed on November 28, 2017
Federal Employees’ Group Life Insurance and Payroll                2015 and FY 2016
programs prior to the issuance of OPM’s FY 2017 AFR.




Recommendation 10: We recommended that OPM
implement controls to identify and evaluate the improper
payment estimates root causes, to ensure that the root causes   Rolled-Forward from FY
                                                                                                            Open
for the retirement benefits program’s improper payments are        2015 and FY 2016
properly categorized in OPM’s annual Agency Financial
Report.




      7
        Recommendation 8 is resolved; however, it will be retested for closure during the FY 2018 improper payments
      reporting audit.

                                                                                    Report No. 4A-CF-00-18-012
APPENDIX II




              Report No. 4A-CF-00-18-012 

Report No. 4A-CF-00-18-012 

Report No. 4A-CF-00-18-012 

	                                                                            




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