Audit of USAID's Fiscal Year 2015 Compliance with the Improper Payments Elimination and Recovery Act of 2010

Agency for International Development (USAID) met the criteria for compliance with the Improper Payments Elimination and Recovery Act of 2010 (IPERA) for the fiscal year ended September 30, 2015. The Office of Inspector General (OIG) conducted this audit to determine whether USAID complied with the requirements of IPERA as amended by the Improper Payments Elimination and Recovery Improvement Act of 2012. USAID's internal controls were adequately designed and implemented to prevent, detect, recover, and report improper payments. The internal controls include consulting the Do Not Pay portal before making any payment to verify that payees are not listed there and periodic reviews of transactions using various databases to detect any duplicate or other improper payments. During the course of the audit, no deficiencies were observed that should be included in the report, and therefore, no recommendations were made. However, the Office of the Chief Financial Officer (CFO) reported to OIG after conducting an internal review that between November 2012 and March 2016, USAID made erroneous payments totaling $39,876.35. These were cost-of-living allowance payments made to the wrong employee. The CFO's office issued a bill of collection on May 4, 2016, and received a check from the employee for the full amount on May 6, 2016. OIG will follow up on this issue to ensure USAID implements appropriate controls to avoid a recurrence. OMB Circular A-50 states that a management decision on audit recommendations must be made within 6 months after a final report is issued. Accordingly, corrective action should proceed as rapidly as possible on the following recommendation. The FY 2012 Recommendation stated that USAID should investigate and resolve the potential funds control violations described in this report to determine whether they represent improper payments and/or Anti-Deficiency Act violations and report accordingly. A management decision was issued on March 15, 2013, but Recommendation 2 is still awaiting final action. The USAID Office of the Chief Financial Officer has resolved many of the outstanding potential funds control violations. However, resolution of several potential violations related to this finding requires assistance from other bureaus and outside agencies. USAID/Washington's new target date for closing this recommendation is June 30, 2016. The audit was conducted in accordance with generally accepted government auditing standards between March 2016 and May 2016. Those standards require that the audit be planned and performed to obtain sufficient, appropriate evidence to provide a reasonable basis to determine if USAID met OMB's criteria for compliance with IPERA. The evidence obtained provides that reasonable basis, but the audit does not provide a legal determination on USAID's compliance with the specified requirements. USAID management is responsible for complying with IPERA requirements, reporting improper payments in accordance with OMB Circular A-136, Section II.5.8, and complying with other applicable laws and regulations. OIG is responsible for obtaining reasonable assurance about whether USAID complied with these requirements for the fiscal year ended September 30, 2015. OIG is also responsible for obtaining a sufficient understanding of the internal controls over improper payments and compliance, use of the Do Not Pay Portal, and control over recoveries of outstanding questioned costs, to plan the audit, testing whether USAID complied with the reporting requirements of OMB Circular A-136, Section II.5.8, and testing compliance with selected provisions of IPERA. To fulfill these responsibilities, OIG obtained an understanding of the laws, regulations, and other guidance applicable to the improper payments program, obtained an understanding of USAID's internal controls, and tested whether USAID complied with the reporting requirements of OMB Circular A-136, Section II.5.8, and tested compliance with selected provisions of IPERA.