Improper Payments Information Act of 2002
Department of Defense Travel Expenditure Reporting Gao ID: GAO-07-767R May 31, 2007In November 2002, the Congress passed the Improper Payments Information Act of 2002 (IPIA). The major objective of the legislation was to enhance the accuracy and integrity of federal payments. This legislation, in conjunction with implementing guidance from the Office of Management and Budget (OMB), requires executive branch agency heads to review their programs and activities annually, identify those that may be susceptible to significant improper payments, estimate amounts improperly paid, and report on the amounts of improper payments and actions to reduce them. Since passage of IPIA, the Department of Defense (DOD) has continued to expand its annual disclosures in its performance and accountability reports (PAR) and currently discloses some detail of improper payment estimates for six programs or activities, including civilian pay, commercial pay, travel pay, military retirement, military health benefits, and military pay. DOD has reported improper payment information since 2003. The Congress mandated that we consider one facet of this reporting related to DOD--travel pay. The DOD Office of the Inspector General (OIG) first reported on whether the department complied with IPIA in fiscal year 2006 and identified several significant flaws in DOD's efforts to comply with IPIA. Over the past several years, GAO has issued numerous reports that highlighted problems with DOD travel practices that resulted in wasteful spending of millions of dollars, including weak controls over first class travel, unused airline tickets, and the accuracy of travelers' claims. Conference Report 109-676 accompanying the Department of Defense Appropriations Act, 2007 included a requirement for GAO to assess the reasons why DOD is not fully in compliance with IPIA related to travel expenditures and make any needed recommendations for corrective action. In response, this initial report provides an overview of DOD's IPIA reporting for fiscal years 2003 through 2006 and a discussion of the reasons reported by the DOD OIG that DOD was not in compliance with IPIA for fiscal year 2006. To further respond to this mandate, we plan to issue a separate report later this year that will include the results of a more comprehensive review of (1) the scope and methodology DOD used in its IPIA travel-related improper payments assessment and (2) DOD's internal control over travel-related IPIA reporting disclosures.
In fiscal year 2003, DOD began improper payment reporting in its annual PAR. As required under OMB Circular No. A-11, it reported improper payments for military health benefits and military retirement. In fiscal year 2004, DOD reported that its improper payment survey did not identify any programs or activities that were susceptible to risk of significant improper payments for purposes of IPIA. As in the prior year, DOD provided additional information for military retirement and military health benefits. In fiscal year 2005, DOD reported that none of its programs or activities met OMB's criteria for risk of significant improper payments under IPIA. Its survey, however, did find military pay susceptible to significant risk of improper payments. DOD's fiscal year 2005 reporting included information on statistical sampling and corrective action plans for its military retirement, military health benefits, and military pay programs. In its most recent PAR for fiscal year 2006, DOD continued to expand its annual reporting, including information in varying levels of detail concerning improper payment estimates for civilian pay, commercial pay, travel pay, military retirement, military health benefits, and military pay. In total, DOD identified $875.5 million in improper payments. Specifically, for travel pay for fiscal year 2006, DOD estimated about $8 million in improper payments. For fiscal year 2006, the DOD OIG reported that the department did not fully comply with the requirements of IPIA and implementing OMB guidance. The DOD OIG cited, for example, an inadequate control process at the Defense Finance and Accounting Service as well as control weaknesses identified in GAO's prior assessments demonstrating that programs related to military pay, travel, property, contract payments, and automated systems may be at risk of making significant improper payments. The DOD OIG also reported on steps the department was taking to improve IPIA compliance, including the establishment of a Project Officer for Improper Payments and Recovery Auditing.
GAO-07-767R, Improper Payments Information Act of 2002: Department of Defense Travel Expenditure Reporting
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May 31, 2007:
Congressional Committees:
Subject: Improper Payments Information Act of 2002: Department of
Defense Travel Expenditure Reporting:
In November 2002, the Congress passed the Improper Payments Information
Act of 2002[Footnote 1] (IPIA). The major objective of the legislation
was to enhance the accuracy and integrity of federal payments. This
legislation, in conjunction with implementing guidance[Footnote 2] from
the Office of Management and Budget (OMB), requires executive branch
agency heads to review their programs and activities annually, identify
those that may be susceptible to significant improper payments,
estimate amounts improperly paid, and report on the amounts of improper
payments and actions to reduce them. Since passage of IPIA, the
Department of Defense (DOD) has continued to expand its annual
disclosures in its performance and accountability reports (PAR) and
currently discloses some detail of improper payment estimates for six
programs or activities, including civilian pay, commercial pay, travel
pay, military retirement, military health benefits, and military pay.
DOD has reported improper payment information since 2003. The Congress
mandated that we consider one facet of this reporting related to DOD--
travel pay. The DOD Office of the Inspector General (OIG) first
reported on whether the department complied with IPIA in fiscal year
2006 and identified several significant flaws in DOD's efforts to
comply with IPIA.
Over the past several years, GAO has issued numerous reports that
highlighted problems with DOD travel practices that resulted in
wasteful spending of millions of dollars, including weak controls over
first class travel, unused airline tickets, and the accuracy of
travelers' claims.[Footnote 3] Conference Report 109-676[Footnote 4]
accompanying the Department of Defense Appropriations Act,
2007[Footnote 5] included a requirement for GAO to assess the reasons
why DOD is not fully in compliance with IPIA related to travel
expenditures and make any needed recommendations for corrective action.
In response, this initial report provides an overview of DOD's IPIA
reporting for fiscal years 2003 through 2006 and a discussion of the
reasons reported by the DOD OIG that DOD was not in compliance with
IPIA for fiscal year 2006. To further respond to this mandate, we plan
to issue a separate report later this year that will include the
results of a more comprehensive review of (1) the scope and methodology
DOD used in its IPIA travel-related improper payments assessment and
(2) DOD's internal control over travel-related IPIA reporting
disclosures. Our follow-on report will also include recommendations for
any needed corrective actions.
To complete this work, we reviewed DOD's PAR for fiscal years 2003,
2004, 2005, and 2006. We also reviewed prior GAO reports, applicable
federal laws, prior DOD OIG reports, and OMB implementing guidance
found in OMB Circular No. A-123, Appendix C.[Footnote 6] We did not
independently validate the improper payment data reported by DOD.
However, we are providing this agency-reported data as descriptive
information that will inform interested parties about DOD improper
payments and other improper payment-related information. We believe the
data to be sufficiently reliable for this purpose. We also did not
independently assess whether DOD was in compliance with IPIA related to
travel expenditures. We performed our work from November 2006 through
April 2007 in accordance with generally accepted government auditing
standards. We requested comments on a draft of this report from the
Secretary of Defense or his designee. Written comments from DOD's
Acting Deputy Chief Financial Officer are reprinted in enclosure I.
Results in Brief:
In fiscal year 2003, DOD began improper payment reporting in its annual
PAR. As required under OMB Circular No. A-11,[Footnote 7] it reported
improper payments for military health benefits and military retirement.
In fiscal year 2004, DOD reported that its improper payment
survey[Footnote 8] did not identify any programs or activities that
were susceptible to risk of significant improper payments for purposes
of IPIA. As in the prior year, DOD provided additional information for
military retirement and military health benefits. In fiscal year 2005,
DOD reported that none of its programs or activities met OMB's criteria
for risk of significant improper payments under IPIA. Its survey,
however, did find military pay susceptible to significant risk of
improper payments. DOD's fiscal year 2005 reporting included
information on statistical sampling and corrective action plans for its
military retirement, military health benefits, and military pay
programs.
In its most recent PAR for fiscal year 2006, DOD continued to expand
its annual reporting, including information in varying levels of detail
concerning improper payment estimates for civilian pay, commercial pay,
travel pay, military retirement, military health benefits, and military
pay. In total, DOD identified $875.5 million in improper payments.
Specifically, for travel pay for fiscal year 2006, DOD estimated about
$8 million in improper payments. For fiscal year 2006, the DOD OIG
reported that the department did not fully comply with the requirements
of IPIA and implementing OMB guidance. The DOD OIG cited, for example,
an inadequate control process at the Defense Finance and Accounting
Service as well as control weaknesses identified in GAO's prior
assessments demonstrating that programs related to military pay,
travel, property, contract payments, and automated systems may be at
risk of making significant improper payments. The DOD OIG also reported
on steps the department was taking to improve IPIA compliance,
including the establishment of a Project Officer for Improper Payments
and Recovery Auditing.
Background:
IPIA was enacted in November 2002 with the major objective of enhancing
the accuracy and integrity of federal payments. IPIA requires executive
branch agency heads to review their programs and activities annually
and identify those that may be susceptible to significant improper
payments. OMB provided implementing guidance for reporting under IPIA
in Appendix C of OMB Circular No. A-123. The OMB guidance defines
significant improper payments[Footnote 9] as those in any particular
program exceeding both 2.5 percent of program payments and $10 million
annually.[Footnote 10] In addition, the guidance provides that agency
programs that were included in former section 57 of OMB Circular No. A-
11 must estimate improper payments even if the estimate does not exceed
$10 million and 2.5 percent of program payments.
In its guidance, OMB may also determine, on a case-by-case basis,
whether certain programs should be reported even if those programs do
not meet established thresholds. For all programs and activities
susceptible to significant improper payments, agencies are to determine
an annual estimated amount of improper payments made in those programs
and activities. If the estimate of improper payments exceeds $10
million, the agency must implement a plan to reduce the amount of such
erroneous payments. Agencies that have identified programs or
activities that may be susceptible to significant improper payments are
also required to include the amount of estimated improper payments in
their annual PAR, regardless of whether they meet the $10 million
threshold.
DOD IPIA Reporting for Fiscal Years 2003 through 2006:
DOD has continued to expand its annual reporting on improper payments
in its PAR. Its most recent report covering fiscal year 2006 included
varying levels of detail concerning improper payment estimates for
civilian pay, commercial pay, travel pay, military retirement, military
health benefits, and military pay. The following provides an overview
of DOD's reporting for fiscal years 2003 through 2006, with special
emphasis on fiscal year 2006.
Fiscal Year 2003. In fiscal year 2003, DOD began reporting information
as required under IPIA and OMB Circular No. A-11 in its annual
PAR.[Footnote 11] DOD reported on improper payments for military health
benefits and military retirement. DOD also reported it "is reviewing
all programs and activities and identifying those which are susceptible
to significant improper payments." The department went on to describe
its planned actions, including estimating the amount of improper
payments and establishing goals to reduce the amounts of these
payments. DOD also provided further detail on the projected improper
payments and approximate error rate for military health benefits and
military retirement.
Fiscal Year 2004. In its fiscal year 2004 PAR,[Footnote 12] DOD
reported that its improper payments survey did not identify any
programs or activities where erroneous payments exceeded the
established thresholds, nor were any found to be susceptible to
significant risk. Further, DOD described the risk assessments performed
on nine programs/activities that the department identified as being
susceptible to improper payments. As a result of this assessment, DOD
determined that none of the programs/activities were susceptible to
high risk. Further, for two programs--military retirement and military
health benefits--DOD described the statistical sampling process,
planned corrective actions, reduction outlook, existence of information
systems, and other infrastructure needed to reduce improper payments,
as well as the statutory or regulatory barriers that might limit
corrective action.
Fiscal Year 2005. In its fiscal year 2005 PAR,[Footnote 13] DOD
reported that its survey did not identify any programs or activities
where payments met OMB's criteria for reporting as "significant"
improper payments. DOD reported that its survey, however, did find
military pay susceptible to significant risk of improper payments. DOD
reported information on statistical sampling and corrective action
plans related to its military retirement, military health benefits, and
military pay programs. DOD also provided information on information
systems, accountability for improper payments, and recovery auditing at
the department.
Fiscal Year 2006. In its fiscal year 2006 PAR,[Footnote 14] DOD
reported that its current IPIA review did not identify any programs or
activities at risk of "significant erroneous payments" in accordance
with OMB criteria. However, the department also reported that civilian,
commercial, and travel pay potentially were susceptible to improper
payments in excess of $10 million and reported estimated improper
payments information for these programs. Further, the department again
reported on its sampling and corrective actions concerning its military
retirement, military health benefits, and military pay programs. Table
1 shows the information DOD reported on estimated improper payments for
six programs in its fiscal year 2006 PAR.
Table 1: DOD's Reported Improper Payment Estimates for Fiscal Year
2006:
Program: Commercial Pay;
Estimated improper payments (in millions): $550.0;
Improper payments as a percentage of total program payments: 0.2%.
Program: Military Health Benefits;
Estimated improper payments (in millions): 140.0;
Improper payments as a percentage of total program payments: 2.0.
Program: Military Pay;
Estimated improper payments (in millions): 65.9;
Improper payments as a percentage of total program payments: 0.1.
Program: Civilian Pay;
Estimated improper payments (in millions): 62.8;
Improper payments as a percentage of total program payments: 0.1.
Program: Military Retirement;
Estimated improper payments (in millions): 48.8;
Improper payments as a percentage of total program payments: 0.1.
Program: Travel Pay;
Estimated improper payments (in millions): 8.0;
Improper payments as a percentage of total program payments: 1.0.
Total;
Estimated improper payments (in millions): $875.5;
Improper payments as a percentage of total program payments: [Empty].
Source: DOD fiscal year 2006 PAR.
[End of table]
Further, DOD described the risk assessment process for each of the
programs or activities that addressed the strength of the internal
controls in place to prevent improper payments and reported on the
results in its disclosure. DOD also described the statistical sampling
and corrective action plans for these six programs or activities.
Additionally, DOD summarized the improper payment reduction outlook for
the military retirement, military health benefits, and military pay
programs. Finally, DOD described its improper payments auditing,
accountability information, information system usage, and statutory and
regulatory barriers limiting the department's corrective actions.
With regard to improper payments reporting related to its travel
program in DOD's fiscal year 2006 PAR, the department described the
process in place to conduct monthly random postpayment reviews of
travel records settled through the Defense Travel System (DTS) and
Integrated Automated Travel System (IATS). DOD reported that these
random reviews were designed to produce annual estimates of improper
payments, with a probability of 95 percent and sample precision of plus
or minus 2.5 percent, at the component level (e.g., Army, Navy, Air
Force, and Marine Corps). Further, at the U.S. Army Corps of Engineers,
DOD reported that all temporary duty travel (TDY) and permanent change
of station vouchers greater than or equal to $2,500 were subject to
postaudit review, and a sample of every 366TH TDY voucher less than
$2,500 was also reviewed.
DOD's fiscal year 2006 PAR also described the risk assessment DOD
completed for several programs, including travel, to address the
strength of internal controls in place to prevent improper payments,
system weaknesses identified internally or by outside audit activities,
and voluntary returns of overpayments. In Section 4 of its fiscal year
2006 PAR, DOD described its corrective action plans regarding improper
payments, including specific information on travel. In this section,
the department only reported information on travel processed through
DTS, although DOD uses other systems, such as IATS, to process travel
in addition to DTS. In its PAR, DOD reported that in fiscal year 2006,
over 783,000 trip records with a total settlement dollar value of
$823.6 million were processed through DTS. However, based on our
ongoing work, this amounted to only 11 percent of the $7.483 billion of
DOD travel obligations reported for fiscal year 2006 in the 2008 Budget
of the U.S. Government.[Footnote 15] DOD reported that as of September
30, 2006, the department had randomly selected and reviewed 30,100
settled trip records related to DTS transactions, with a value
exceeding $32.6 million. Based on these reviews, DOD projected that
improper payments accounted for .968 percent of the tested sample and
thus DOD projected that improper payments in the population of DTS
settlements could approach $7.97 million.
The DOD OIG Raised Concerns with DOD's IPIA Reporting for Fiscal Year
2006:
DOD's independent auditor, the DOD OIG, determined that the
department's fiscal year 2006 reporting did not fully comply with the
requirements of IPIA and implementing OMB guidance. The auditors
reported that their conclusion was based, in part, on an inadequate
control process at the Defense Finance and Accounting Service as well
as control weaknesses identified in GAO's prior assessments
demonstrating that programs related to military pay, travel, property,
contract payments, and automated systems may be at risk of making
significant improper payments.
The DOD OIG also reported that the department had taken steps to
resolve some previously identified issues regarding the methodologies
and processes used in reporting improper payments. Further, the OIG
reported that DOD had recently established a Project Officer for
Improper Payments and Recovery Auditing. The project officer's reported
responsibilities include (1) reviewing DOD's statistical methodologies
and processes to verify that DOD's reported information is accurate,
complete, and meets or exceeds OMB minimum reporting requirements; and
(2) establishing an Improper Payments and Recovery Auditing working
group to help DOD modify improper payment methodologies and processes
as needed.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Secretary of
Defense or his designee. The Acting Deputy Chief Financial Officer of
DOD provided written comments, which are reprinted in enclosure I.
DOD's comments correctly noted that this report does not contain any
audit conclusions or recommendations, but does provide a summary of the
DOD OIG's conclusions contained in DOD's fiscal year 2006 PAR that the
department did not fully comply with IPIA for fiscal year 2006. DOD
commented that our report would achieve a more balanced reporting of
the department's compliance with IPIA if it included the positive
comments made by the DOD OIG, also included in the fiscal year 2006
PAR, as well as an acknowledgement of DOD's ongoing efforts to
continually improve oversight and reporting of improper payments.
Inasmuch as the mandate to which this report responds specifically
required GAO to assess the reasons why DOD is not fully in compliance
with IPIA related to travel expenditures, our draft report necessarily
focused on the noncompliance aspects of the DOD OIG's fiscal year 2006
reporting. Nonetheless, we have modified the report to include the
positive steps DOD had taken, as reported by the DOD OIG. Further,
while we agree that DOD is taking steps intended to improve IPIA
reporting, including holding an IPIA conference and continuing to work
with OMB, the scope of our initial review did not include assessing the
effectiveness of such steps.
DOD's comments also included a status update on the department's
efforts to reconcile the amount of its travel payments reported in the
fiscal year 2006 PAR, which represents 11 percent of the $7.483 billion
of DOD travel obligations reported in object class 21 (travel and
transportation of persons) in the fiscal year 2008 Budget of the U.S.
Government. We appreciate DOD's ongoing efforts to reconcile the
disparate amounts reported in its PAR and fiscal year 2008 budget for
travel and will assess the results of these efforts as part of our
ongoing work.
We are sending copies of this report to other interested congressional
committees. Copies will be made available to others upon request. In
addition, this report will also be available at no charge on GAO's Web
site at http://www.gao.gov.
If you or your staffs have any questions regarding this report, please
contact me at (202) 512-9095 or at williamsm1@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Major contributors to this
report include Dianne Guensberg, Assistant Director; Heather Dunahoo;
and Bradley Klingsporn.
Signed by:
McCoy Williams:
Director, Financial Management and Assurance:
List of Congressional Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Thomas R. Carper:
Chairman:
The Honorable Tom Coburn:
Ranking Member:
Subcommittee on Federal Financial Management, Government Information,
Federal Services, and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable John P. Murtha:
Chairman:
The Honorable C.W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure I: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Comptroller:
1100 Defense Pentagon:
Washington, DC 20301-1100:
May 16 2007:
Mr. McCoy Williams:
Director:
Financial Management and Assurance:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Williams:
This is the Department of Defense (DoD) response to the GAO draft
report 07-767R, "Improper Payments Information Act Of 2002: Department
of Defense Travel Expenditure Reporting," dated April 26, 2007 (GAO
Code 195105). The draft report is comprised of a brief overview of the
Department of Defense (DoD) Improper Payments Implementation Act (IPIA)
reporting in the Performance and Accountability Report (PAR) for fiscal
years (FY) 2003 through 2006.
The draft GAO report contained no audit conclusions or made any
recommendations to DoD. The draft report did, however, reiterate a
portion of the DoD, Office of Inspector General (OIG) conclusions
contained in the FY 2006 PAR that the Department did not fully comply
with the requirements of IPIA and implementing Office of Management and
Budget (OMB) guidance. Included as part of the OIG's conclusions, but
not cited by GAO in the draft report, was the acknowledgment that DoD
worked closely with them in addressing previously identified reporting
issues, including recently establishing a Project Officer for Improper
Payments and Recovery Auditing (IPRA) reporting. In addition, the OIG
noted that the DoD Project Officer was establishing an ongoing IPRA
working group, comprised of representatives from the numerous
Departmental IPIA reporting elements, to further improve compliance of
DoD's IPIA reporting. We request your final report include a discussion
of the additional DoD OIG comments in the FY 2006 PAR and the
Department's ongoing actions to improve oversight and reporting of
improper payments.
We also note that as part of the Department's ongoing actions to
improve the IPIA reporting, we are holding an IPIA conference on May 16
and 17, where subject matter experts from OMB and DoD, OIG will provide
training and knowledge sharing to attendees throughout the Department's
IPIA reporting community. Additionally, the Department is working
closely with OMB in implementing plans, agreed upon with OMB as part of
the President's Management Agenda, towards eliminating improper
payments. For the past year, OMB has scored the Department's progress
as "green" to represent the Department's continued success and positive
steps taken towards eliminating improper payments.
We are actively researching the GAO's comment that the amount of travel
payments reported in the FY 2006 PAR amount to only 11 percent of the
$7.483 billion of DoD travel obligations reported in Object Class 21,
"Travel and transportation of persons," in the "Fiscal Year 2008 Budget
of the U.S. Government." The $7.483 billion includes obligations for
types of travel beyond the travel payments reported in the FY 2006 PAR,
primarily comprised of employee authorized travel costs. The OMB
Circular A-11, Section 83, Object Class 21 includes not only travel and
transportation obligations for Government employees and other persons
while in an authorized travel status, but also includes "Contracts to
transport people from place to place, by land, air, or water," such as
commercial transportation charges; rental or lease of passenger cars;
charter of trains, buses, vessels, or airplanes; ambulance service or
hearse service; and expenses incident to the operation of rented or
chartered conveyances." We are reviewing Department vendor and
commercial pay databases to identify the amount of payments for
contracts covering personnel transportation that may further bridge the
difference between the obligations reported under Object Class 21 in
the budget report, and the amount of employee travel payments reported
in the FY 2006 PAR. Once this reconciliation is complete, we will
advise you of our results.
In summary, we believe the GAO would achieve a more balanced reporting
of the Department's compliance with IPIA if the report included the
positive comments made by the DoD, OIG in the FY 2006 PAR, as well as
the Department's ongoing efforts to continually improve oversight and
reporting of improper payments. We appreciate the opportunity to
provide comments to your draft report. My point of contact is Mr. Wayne
Goff, who can be contacted by telephone at 703-697-0831 or e-mail at:
wayne.goff@osd.mil.
Sincerely,
Signed by:
Robert P. McNamara:
Acting Deputy Chief Financial Officer:
[End of section]
Related GAO Products:
DOD Business Transformation: Defense Travel System Continues to Face
Implementation Challenges. GAO-06-18. Washington, D.C.: January 18,
2006.
Army National Guard: Inefficient, Error-Prone Process Results in Travel
Reimbursement Problems for Mobilized Soldiers. GAO-05-400T. Washington,
D.C.: March 16, 2005.
Army National Guard: Inefficient, Error-Prone Process Results in Travel
Reimbursement Problems for Mobilized Soldiers. GAO-05-79. Washington,
D.C.: January 31, 2005.
DOD Travel Cards: Control Weaknesses Led to Millions of Dollars of
Improper Payments. GAO-04-576. Washington, D.C.: June 9, 2004.
DOD Travel Cards: Control Weaknesses Led to Millions in Fraud, Waste,
and Improper Payments. GAO-04-825T. Washington, D.C.: June 9, 2004.
DOD Travel Cards: Control Weaknesses Led to Millions of Dollars Wasted
on Unused Airline Tickets. GAO-04-398. Washington, D.C.: March 31,
2004.
Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of
First and Business Class Travel. GAO-04-229T. Washington, D.C.:
November 6, 2003.
Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of
First and Business Class Travel. GAO-04-88. Washington, D.C.: October
24, 2003.
(195105):
FOOTNOTES
[1] Pub. L. No. 107-300, 116 Stat. 2350 (Nov. 26, 2002).
[2] Appendix C to OMB Circular No. A-123, Requirements for Effective
Measurement and Remediation of Improper Payments (Aug. 10, 2006).
[3] See the Related GAO Products section at the end of this
correspondence.
[4] H.R. Conf. Rep. No. 109-676, at 94 (Sept. 25, 2006).
[5] Pub. L. No. 109-289, 120 Stat. 1257 (Sept. 29, 2006).
[6] Appendix C to OMB Circular A-123 consolidates three memorandums
previously issued by OMB. These memorandums are: M-03-07, "Programs to
Identify and Recover Erroneous Payments to Contractors" (Jan. 16,
2003); M-03-12, "Allowability of Contingency Fee Contracts for Recovery
Audits" (May 8, 2003); and M-03-13, "Improper Payments Information Act
of 2002 (Public Law 107-300)" (May 21, 2003).
[7] Prior to the executive branchwide IPIA reporting requirements,
beginning with fiscal year 2004, former section 57 of OMB Circular No.
A-11 required certain agencies to submit similar information, including
estimated improper payment target rates, target rates for future
reductions in these payments, the types and causes of these payments,
and variances from targets and goals established. In addition, these
agencies were to provide a description and assessment of the current
methods for measuring the rate of improper payments and the quality of
data resulting from these methods.
[8] DOD conducts an annual survey of all programs and activities that
may be susceptible to improper payments. The survey requires
identification of underpayments and overpayments and a description of
the methodology used to estimate improper payments.
[9] "Improper payment" and "erroneous payment" have the same meaning
under Appendix C of OMB Circular No. A-123.
[10] IPIA does not include a similar threshold for defining significant
improper payments.
[11] DOD, Performance and Accountability Report: Fiscal Year 2003 (Dec.
23, 2003).
[12] DOD, Performance and Accountability Report: Fiscal Year 2004 (Nov.
15, 2004).
[13] DOD, Performance and Accountability Report: Fiscal Year 2005 (Nov.
15, 2005).
[14] DOD, Performance and Accountability Report: Fiscal Year 2006 (Nov.
15, 2006).
[15] Fiscal Year 2008 Budget of the U.S. Government, Object Class
Analysis (Feb. 5, 2007).
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