ML18134A016
ML18134A016 | |
Person / Time | |
---|---|
Issue date: | 05/14/2018 |
From: | Bell H NRC/OIG |
To: | Kristine Svinicki NRC/Chairman |
References | |
OIG-18-A-12 | |
Download: ML18134A016 (8) | |
Text
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 OFFICE OF THE INSPECTOR GENERAL May 14, 2018 MEMORANDUM TO: Chairman Svinicki FROM: Hubert T. Bell /RA/
Inspector General
SUBJECT:
AUDIT OF NRCS FISCAL YEAR (FY) 2017 COMPLIANCE WITH IMPROPER PAYMENT LAWS (OIG-18-A-12)
The Office of the Inspector General (OIG) conducted this audit to (1) assess the Nuclear Regulatory Commissions (NRCs) compliance with the Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA), and (2) report any material weaknesses in internal control. In addition, OIG reviewed the status of an audit recommendation from OIGs audit report on NRCs Fiscal Year (FY) 2016 compliance with improper payment laws. 1 OIG determined that for FY 2017 the agency is in compliance with the requirements of IPIA,2 as demonstrated in Table 1. Although NRC had not yet taken final action on OIGs recommendation from the prior OIG audit report regarding questioned costs3 that potentially should be included in NRCs improper payment reporting, the agency had 1 OIG-17-A-13, Audit of NRC's Fiscal Year (FY) 2016 Compliance with Improper Payment Laws, May 11, 2017. (Refer to OIG-17-A-13.)
2 Unless otherwise indicated, from this point forward in this report, the term IPIA will imply IPIA, as amended by IPERA and IPERIA.
3 In accordance with the Inspector General Act of 1978, as amended, questioned costs result from (a) an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; (b) costs not supported by adequate documentation at the time of the audit; or (c) the unnecessary or unreasonable expenditure of funds.
Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws taken steps to analyze the issue. Thus, OIG also concluded that agency reporting of improper payments is accurate and complete.
Table 1: NRCs Compliance with IPIA Requirement Compliant
- 1. Published an Agency Financial Report (AFR) or Performance and Yes Accountability Report (PAR) for the most recent fiscal year and posted that report and any accompanying materials required by Office of Management and Budget (OMB) on the agency Web site.
- 2. Conducted a program specific risk assessment for each program or Yes activity that conforms with 31 U.S.C. 3321 note (if required).
- 3. Published improper payment estimates for all programs and N/A activities identified as susceptible to significant improper payments under its risk assessment (if required). (Estimation methodologies are not required or applicable because NRC is not susceptible to significant improper payments based on previous and current risk assessments.)
- 4. Published programmatic corrective action plans in the AFR or PAR N/A (if required). (Corrective action plans are not required or applicable because NRC is not susceptible to significant improper payments based on previous and current risk assessments.)
- 5. Published, and is meeting, annual reduction targets for each N/A program assessed to be at risk and estimated for improper payments (if required and applicable). (Reduction target rates are not required or applicable because NRC is not susceptible to significant improper payments based on previous and current risk assessments.)
- 6. Reported a gross improper payment rate of less than 10 percent for Yes each program and activity for which an improper payment estimate was obtained and published in the AFR or PAR.
Source: OIG-Generated.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws BACKGROUND Enacted in 2002, IPIA requires each agency to annually estimate its improper payments.4 IPERA amended IPIA in 2010. IPERA requires Federal agencies to periodically review all programs and activities that the agency administers and identify all programs and activities that may be susceptible to significant improper payments. In addition, IPERA requires each agency to conduct recovery audits5 with respect to each program and activity of the agency that expends $1,000,000 or more annually, if conducting such audits would be cost effective.
IPERIA was signed into law on January 10, 2013. It amended IPIA by establishing the Do Not Pay Initiative, which directs agencies to verify the eligibility of payments using databases before making payments.
On October 20, 2014, OMB issued Memorandum M-15-02, Appendix C to Circular No. A-123, Requirements for Effective Estimation and Remediation of Improper Payments. Appendix C implements IPIA requirements. Table 1 of this report lists the IPIA requirements established in OMBs memorandum. OMB guidance also specifies that each agencys Inspector General should review agency improper payment reporting in the agencys annual PAR or AFR, and accompanying materials, to determine whether the agency complied with IPERA.
4 According to IPERA, an improper payment is (A) any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements, and (B) includes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), and any payment that does not account for credit for applicable discounts. IPERA provides a detailed explanation of what is considered a significant improper payment (Section 2(a)(3)(A)).
5 Recovery audits are also referred to as payment recapture audits.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws OBJECTIVE The audit objective was to assess NRCs compliance with IPIA, as amended by IPERA and IPERIA, and report any material weaknesses in internal control.
FINDING Based on our review of NRCs FY 2017 AFR and other documentation provided by the agency, OIG determined that the agency is in compliance with the IPIA. NRC reported the required information and conducted the mandated risk assessment. Although NRC had not yet taken final action on OIGs recommendation from the prior OIG audit regarding questioned costs that potentially should be included in NRCs improper payment reporting, the agency had taken steps to analyze the issue. Thus, OIG concluded that agency reporting of improper payments is accurate and complete as noted on Table 1.
NRC Reported Required Information Agencies are required to report five items regarding improper payments in their AFR or PAR.6 NRC complied with these requirements, as applicable, by including certain improper payment information in its AFR and reporting a gross improper payment rate of less than 10 percent. Three IPIA reporting requirements were not applicable to NRC. (Refer to Table 1:
NRCs Compliance with IPIA, numbers 3-5.)
6 See Table 1, item numbers 1, 3, 4, 5, and 6.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws NRC Completed Required Improper Payments Risk Assessment IPIA requires agencies to review all programs and activities susceptible to significant improper payments every 3 years. In FY 2017, NRC conducted a review to comply with this requirement. NRC assessed the following programs: (1) commercial payments, (2) grants, (3) employee payments, and (4) payroll. The agency performed limited testing over each area.
Based on NRCs qualitative risk assessment and testing, the agency did not identify any programs susceptible to significant improper payments.
Treatment of Questioned Costs from FY 2016 OIG reviewed NRCs progress on implementing a recommendation from OIG-17-A-13, Audit of NRC's Fiscal Year (FY) 2016 Compliance with Improper Payment Laws, regarding NRCs improper payment reporting.
As part of that prior audit, OIG concluded NRCs improper payment reporting was accurate and complete. However, OIG noted the Defense Contract Audit Agency (DCAA) identified questioned costs totaling $1.6 million when conducting a contract audit on behalf of OIG.7 OIG recommended NRC review these questioned costs and determine (1) how the questioned costs affected the agencys improper payment calculation, and (2) if these questioned costs should be mentioned in NRCs AFR improper payments section. As of the issuance of this report, NRC had not yet determined if these questioned costs were improper payments that should be reported under IPIA. The agency took steps to analyze the issue but had not yet finished its review.
7 NRC OIG has an interagency agreement with DCAA to perform contract audit services.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws AGENCY COMMENTS The Office of the Executive Director for Operations and the Office of the Chief Financial Officer reviewed the draft memorandum report and had no comments.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws SCOPE AND METHODOLOGY To accomplish the audit objectives, OIG reviewed agency documents related to NRCs compliance with IPIA for FY 2017. OIG also reviewed applicable Federal laws, regulations, and requirements for IPIA. OIG interviewed agency personnel and reviewed NRCs Results of the Fiscal Year 2017 Improper Payments Risk Assessment, dated November 2, 2017. In addition, OIG reviewed DCAA Audit Report No. 6321-2015V17900001, dated May 6, 2015, and NRCs efforts to examine the questioned costs identified by DCAA.
We conducted our work at NRC headquarters in Rockville, Maryland, from March through April 2018. Internal controls related to the audit objectives were reviewed and analyzed. Throughout the audit, auditors considered the possibility of fraud, waste, or abuse in the program.
This performance audit was performed in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
This audit was conducted by Eric Rivera, Team Leader; Timothy Nelson, Audit Manager; and Michael Steinberg, Senior Auditor.
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Audit of NRCs Fiscal Year (FY) 2017 Compliance With Improper Payment Laws TO REPORT FRAUD, WASTE, OR ABUSE Please
Contact:
Email: Online Form Telephone: 1-800-233-3497 TTY/TDD: 7-1-1, or 1-800-201-7165 Address: U.S. Nuclear Regulatory Commission Office of the Inspector General Hotline Program Mail Stop O5-E13 11555 Rockville Pike Rockville, MD 20852 COMMENTS AND SUGGESTIONS If you wish to provide comments on this report, please email OIG using this link.
In addition, if you have suggestions for future OIG audits, please provide them using this link.
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