Inspector General Robert P. Storch announced today that the Department of Defense Office of Inspector General released its “Audit of the Department of Defense’s FY 2023 Compliance with Payment Integrity Information Act Requirements.”
Public Law No. 116-117, “Payment Integrity Information Act of 2019,” March 2, 2020 (PIIA) requires this audit each fiscal year.
The DoD OIG found that, while the DoD complied with five of the six PIIA requirements, the DoD did not comply with the PIIA requirement to publish reliable improper payment estimates. This marks the thirteenth consecutive year that the DoD has reported unreliable improper payment estimates.
The audit identified that in FY 2023, the DoD reported improper and unknown payment estimates of $1.5 billion for the eight DoD programs required to provide estimates. However, the DoD OIG found these estimates unreliable because Defense Finance and Accounting Service personnel did not have a sufficient methodology for determining complete universes of transactions to produce estimates.
“The DoD is entrusted with billions of dollars each year, and ensuring the integrity and accuracy of DoD payments is an incredibly important objective for it,” said IG Storch. “Our audit identified areas where the DoD has improved its reporting of improper and unknown payments, but the DoD must continue to implement corrective action plans to comply with payment integrity guidance.”
The DoD OIG made two recommendations to the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, to ensure that DoD Components implement a process to identify the characteristics of the differences in universes of transactions and to submit changes or actions that the DoD will undertake to bring the PIIA program into compliance.
The DoD OIG also recommended that the Director of the Defense Finance and Accounting Service implement internal controls to review the characteristics of commercial payments to determine whether the payments have a higher risk of being improper.
The report also noted that the DoD has yet to fully implement corrective actions to address 10 recommendations from prior DoD OIG PIIA reports concerning the development of improper payment estimates.
The Deputy Chief Financial Officer concurred with all three recommendations in this year’s report.
The DoD OIG will continue to monitor the DoD’s progress toward full implementation of these recommendations.