The objective of our audit was to determine whether the Department complied with the Payment Integrity Information Act of 2019 (PIIA) for FY 2023. We found that the Department complied with the PIIA for the FY 2023 reporting period because it met all six compliance requirements; however, it could improve its processes for implementing its methodologies for computing improper payments and unknown payments. Specifically, the Department’s improper payment and unknown payment estimates for the Improving Basic Programs Operated by Local Educational Agencies and Education Stabilization Fund programs were produced from incomplete Stage 1 sampling populations. An incomplete Stage 1 sampling population of drawdowns could affect the accuracy of the confidence intervals for the improper payment and unknown payment estimate. Further, although we found the point estimates reflect the annual improper payment and unknown payments, the Department’s improper payment and unknown payment estimates for five programs were not reliable because of issues in the calculation of the confidence intervals. We made five recommendations to address the issues identified, including that the Department develop and implement procedures to ensure the sampling populations of drawdowns are complete, and ensure changes made for the query design are implemented in subsequent years for programs that are required to produce an improper payment estimate.
Open Recommendations
| Recommendation Number | Significant Recommendation | Recommended Questioned Costs | Recommended Funds for Better Use | Additional Details | |
|---|---|---|---|---|---|
| 2.1 | Yes | $0 | $0 | ||
| We recommend that the Chief Financial Officer for the Department develop and implement procedures to ensure that thesampling populations of drawdowns are complete for the basis of calculating the improper payment and unknown paymentestimates. | |||||
| 2.2 | Yes | $0 | $0 | ||
| We recommend that the Chief Financial Officer for the Department ensure changes made for the query design concerningthe use of three filters, are implemented in subsequent years for programs that are required to produce an improper paymentestimate. | |||||
| 3.1 | Yes | $0 | $0 | ||
| We recommend that the Chief Financial Officer for the Department, for programs that require them, design and implementimproper payment and unknown payment sampling and estimation plans that are appropriate for the sampling of paymentsbased on accurate sampling populations and result in reliable estimates. The improper payment and unknown paymentsampling and estimation plans should also include language stating why sampling populations in Stage 1 may not matchsampling population in Stage 2 and explain the statistical impact on the estimates. | |||||
| 3.2 | Yes | $0 | $0 | ||
| We recommend that the Chief Financial Officer for the Department implement its quality assurance checklist to ensure theproper details from the drawdown population are accurately included on the extrapolation sheet. | |||||
| 3.3 | Yes | $0 | $0 | ||
| We recommend that the Chief Financial Officer for the Department, in conjunction with the acting Chief Financial Officer forFSA, develop sampling and estimation plans for the Pell and Direct Loan programs that will produce reliable estimates.Specifically, the plan should (a) produce appropriate and accurate confidence intervals around a statistically valid pointestimate; (b) consistent with 31 U.S.C. section 3352(c)(1)(A), produce an estimate that is otherwise appropriate using amethodology approved by the Director of OMB; or (c) consistent with OMB Circular A-123 Appendix C, Part II, B(2), include adetailed explanation as to why it is not possible to produce a statistically-valid point estimate and appropriate and accurateconfidence intervals around the estimate. | |||||
