Federal Reports

We audited the U.S. Department of Housing and Urban Development’s (HUD) fiscal year 2020 compliance with the Payment Integrity Information Act of 2019 (PIIA) and other Office of Management and Budget guidance.  PIIA was enacted to prevent and reduce improper payments and requires each agency’s inspector general to perform an annual review of the agency’s compliance with PIIA.  Our audit objective was to determine whether HUD complied with PIIA reporting and improper payments reduction requirements according to guidance from the OMB.HUD did not fully comply with PIIA reporting and improper payments reduction requirements for fiscal year 2020.  Of the six requirements, HUD did not comply with one requirement, and one requirement was not applicable.  Specifically, HUD did not use a comprehensive sampling and estimation methodology for publishing an improper payments estimate for three of four reported programs.  Due to the impacts of the COVID-19 pandemic, HUD did not test the complete payment cycle, to include payments issued by State, local, or other agencies, which was not made clear in its reporting of improper payments estimates.  Instead, HUD was limited to the extent that the documentation and information were readily available to it without burdening the direct recipients of funds.  As a result, HUD’s programs were vulnerable to the adverse effects of improper payments, and HUD will likely continue to miss opportunities to prevent, identify, reduce, and recover improper payments unless it fully complies with PIIA reporting and reduction requirements.  However, we recognize that HUD is making progress in being fully compliant with PIIA and acknowledge its plan to execute a comprehensive sampling and estimation methodology in the coming year.We recommend that HUD use a comprehensive sampling and estimation methodology for all reported programs and disclose in its reporting any limitations imposed or encountered.

Improved review methods when considering the allowability of costs for grant funds will aid the EPA in identifying estimated improper payments.

In accordance with guidance from the Office of Management and Budget, we reviewed the “Payment Integrity” section in the U.S. Department of the Interior’s Agency Financial Report (AFR) for fiscal year (FY) 2020. Our objective was to determine whether the Department met the requirements of the Payment Integrity Information Act of 2019 (PIIA) and accurately and completely reported on improper payments in its AFR and accompanying materials.We found that the Department did not comply with PIIA reporting requirements for FY 2020 because it was unable to provide evidence that risk assessments were performed on three new programs.We were accordingly unable to verify the Department’s representations and the accuracy of the information published in the AFR and so were required to report a finding of noncompliance pursuant to relevant inspection standards.

The objectives of our audit were to: 1. Review the payment integrity section of the fiscal year (FY) 2020 Agency Financial Report (AFR) to determine whether the U.S. Department of Education (Department) is in compliance with the Payment Integrity Information Act of 2019 (PIIA). 2. Evaluate the Department’s (a) risk assessment methodology, (b) improper payment rate estimates, (c) sampling and estimation plans, (d) corrective action plans, and (e) efforts to prevent and reduce improper payments.The Department did not comply with the PIIA because it did not meet two of the six compliance requirements, as described in Finding 1. Specifically, the Department did not demonstrate improvement in reducing improper payments in the William D. Ford Federal Direct Loan (Direct Loan) program. In addition, the Department reported improper payment rates that exceed 10 percent for the Temporary Emergency Impact Aid for Displaced Students (Emergency Impact Aid) and Immediate Aid to Restart School Operations (Restart) programs.

The purpose of this report is to share with the U.S. Department of Education (Department) observations made by the Office of Inspector General (OIG) concerning institutions of higher education (IHE) that ceased to provide educational instruction in all programs of study (closed) and received or had access to coronavirus response and relief aid through the Higher Education Emergency Relief Fund (HEERF). We found that 17 IHEs that closed on or before December 31, 2020, applied for and were awarded a total of $4,912,675 of HEERF grants by OPE. Of these 17 IHEs, 14 drew down HEERF funds and 3 did not draw down any of their awards. Of the 14 IHEs that drew down their HEERF awards, 8 made drawdowns after the IHE closure date listed in the Postsecondary Education Participants System (PEPS). The total of these post-closure drawdowns was $1,261,329. In addition, 1 of the 14 closed IHEs that drew down funds made a draw of $364,715 one day before closing.