GAO: DHS lags on tracking incorrect payments

The Homeland Security Department is at risk of making incorrect payments to partners and grantees because it has not evaluated all the programs under which it makes those payments for grants and claims, the Government Accountability Office said.

DHS has provided limited information in the three years that agencies have been documenting risk assessments for programs under the Improper Payments Information Act, said McCoy Williams, director of financial management and assurance at GAO. DHS disbursed a total of $29 billion in 2006.

For $16 billion of the total disbursements, DHS said that it was at high risk for issuing erroneous payments and reported related estimates for two programs, the Individuals and Households Program and disaster-related vendor payments, he said. For the $13 billion remaining in payments covered by the law, DHS did not perform any risk assessments. Almost half of that amount is in grant programs.

Developing a plan to assess risk and potentially test grant payments is important because the DHS Office of Inspector General, GAO and other auditors have highlighted weaknesses in grant programs, Williams said in a report posted Oct. 19.

“Until DHS fully assesses its programs, the potential magnitude of improper payments is unknown,” he said.

The federal government is accountable for how its agencies and grant recipients spend more than $2 trillion in taxpayer money. Agencies are also expected to recoup any payments that the government has paid out in error.

DHS has not completed many of the critical milestones for existing action plans, such as integrating shelter tracking mechanisms into the National Emergency Management Information System and limiting access to that system to users authorized through DHS’ Integrated Security and Access Control System, the report states.

Internal controls are an agency’s frontline defense against making improper payments, but recovery auditing can identify overpayments to contractors, Williams said. DHS is taking steps to improve its improper payments reporting, such as updating guidance to focus on program identification and risk assessments. It also plans to reduce the incorrect payments at its two identified high-risk programs. But it needs to do more, he said.

DHS should exert oversight and control over critical milestones identified in its action plan to make sure DHS agencies stay on track to identify programs and perform risk assessments, Williams said. All DHS agencies that have grant programs should determine and document how they plan to assess those grant programs for risk of improper payments, GAO said. DHS should begin reporting on its annual Performance and Accountability Report the results of its yearly efforts to recover any incorrect payments.

DHS said it would implement more actions to address the gaps detailed in the GAO report, including strengthening its financial management and oversight functions to improve controls and perform risk assessments, said Steven Pecinovsky, director of DHS’ liaison office with GAO and OIG.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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