The Defense Department has made significant progress toward compliance with two laws’ requirements for reducing improper payments, but fell short in one category and cast doubt on the reliability of its financial data, a watchdog found.
The department inspector general’s report on a fiscal 2015 audit by the controller and chief financial officer released on Wednesday determined that Defense met five of the six requirements of the 2010 and 2002 improper payments laws, but that the “improper payment estimates were not reliable.”
Improper payments include checks cut to vendors for ineligible goods or services, or payments for goods or services not received, as well as payments for which, upon review, the agency is unable to provide sufficient documentation.
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In the defense world, that would include military health benefits, military and civilian pay, military retirement, official travel pay and department components’ commercial pay.
Defense’s agency financial report omitted data for four payment programs and could not assure that all payments had been reviewed, auditors found, calling into question $327 billion.
It was in the travel pay category that Defense “did not meet the reduction target for the fourth consecutive year,” the report said. “Travel Pay errors occurred because of administrative errors, traveler input errors, and inadequate reviews by approving officials. As a result of the DoD Travel Pay program errors, DoD did not achieve the improper payment reductions intended in IPERA for the DoD Travel Pay program.”
Despite past corrective actions, the IG wrote, the Defense financial team continued to be hampered by the lack of an auditable Statement of Budgetary Resources and was “unable to verify that approximately $327 billion in disbursed obligations were assessed for risk of improper payments.”
The IG recommended that Defense coordinate with the reporting activities to ensure future financial reports contain all required improper payment information and determine the source of all disbursed obligations not reviewed.
The Pentagon controller and CFO agreed.