The U.S. Department of Education’s Compliance with Payment Integrity Information Reporting Requirements for Fiscal Year 2024

The objective of our audit was to determine whether the U.S. Department of Education (Department) complied with the Payment Integrity Information Act of 2019 (PIIA) for FY 2024. We found that the Department complied with the PIIA for the FY 2024 reporting period because it met all six compliance requirements as described in Finding 1. However, we found that the Department could improve its processes for implementing its methodologies for estimating improper payments and unknown payments. While we found that the point estimates for the Federal Pell Grant (Pell) and William D. Ford Federal Direct Loan (Direct Loan) programs reflect the programs' annual improper payments and unknown payments, we found that the Department’s improper payment and unknown payment estimates for these programs were not reliable because of issues in the calculation of the confidence intervals, as described in Finding 2. Specifically, the improper payment sampling and estimation plans for the Pell and Direct Loan programs included nonrandom student-level sampling from some of the compliance audits Federal Student Aid (FSA) used to calculate the estimates, which affected the accuracy and appropriateness of the confidence intervals used in the calculation of the improper payment and unknown payment estimates. The nonrandom student-level sampling issue has been a repeat finding since our report on the Department’s compliance with improper payment reporting requirements for FY 2019. We recommend that FSA develop sampling and estimation plans for the Pell and Direct Loan programs that will produce reliable estimates.