Intensifying and Expanding Payment Recapture Audits

December 21, 2010 § Leave a comment

On November 16, 2010, the Office of Management and Budget (OMB) released  Memorandum M-11-04, Increasing Efforts to Recapture Improper Payments by Intensifying and Expanding Payment Recapture Audits, to heads of executive departments and agencies containing new improper payments guidance. The Memorandum and accompanying guidance focus on increasing efforts to recapture improper payments by intensifying and expanding payment recapture audits in accordance with the March 10, 2010, Presidential Memorandum and the Improper Payments Elimination and Recovery Act (IPERA). The guidance provides agencies with instructions on implementing new improper payments recapture requirements, including actions and strategies that executive departments and agencies must take.

The November Memorandum requires all agencies to submit a payment recapture audit plan that describes their current payment recapture efforts under the authorities that pre-date IPERA and their planned recapture efforts to align with IPERA by January 14, 2011. Each agency must submit a plan that contains a list of all potential program and activity areas that could be reviewed by payment recapture auditors under IPERA. Agencies without an existing payment recapture program, including those that deemed such a program would not be cost efficient, should submit a plan that outlines the agency’s timetable and plan for establishing such a program. To ensure agencies with an existing payment recapture program are in alignment with the newly enacted IPERA, their agency payment recapture audit plan must contain the following:

  • General description of the agency’s existing payment recapture audit program
  • Description of whether payment recapture audit program focuses on types of programs or moments in the life-cycle of a payment that are at higher-risk of fraud, waste, and abuse
  • Process and timeline to realign the payment recapture audit programs to focus examination on higher-risk areas, if the agency program does not already
  • Description of guidance the agency provides for agency staff and payment recapture auditors
  • Information on whether the agency payment recapture audit program leverages existing improper payments sampling measurements or other sources of information on potential waste, fraud, and abuse to identify and recapture payment errors
  • Assessment of the agency’s payment recapture audit program’s performance and any changes the agency will make to their program to improve the identification and recapture of  improper payments
  • Description of any technology or software that the agency is already using or is considering using that will assist in preventing and recapturing improper payments
  • Assessment of legislative authorities that may be needed to restructure programs or provide the necessary authority to recapture over payments

OMB will identify the agencies that account for the majority of improper payments through a review of agency efforts to recapture improper payments that were reported in agency annual Performance and Accountability Reports (PARs) and Agency Financial Reports (AFRs). Agencies identified by OMB must submit proposed quarterly and annual payment recapture targets for fiscal years 2011 and 2012, which will be reviewed and approved by OMB.

Plans submitted by agencies will be reviewed by OMB and the agency’s Inspector General, who will provide feedback, if any, to the agency.


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