Federal Reports

The VA OIG conducted this review to determine whether VA complied with the requirements of the Payment Integrity Information Act of 2019 (PIIA) for FY 2023. PIIA requires federal agencies to identify and review all programs and activities they administer that may be susceptible to significant improper payments based on OMB guidance. PIIA also requires each OIG to review its agency’s improper payment reports and issue an annual report. In FY 2023, VA reported improper and unknown payment estimates totaling $3.2 billion for seven programs. Of that amount, about $1.8 billion (about 57 percent) represented a monetary loss, and about $1.4 billion (about 43 percent) was considered either a nonmonetary loss that cannot be recovered or an unknown payment. These results represent a reduction of $334 million (10 percent) from FY 2022 results. VA satisfied nine of the 10 requirements under PIIA. VA did not meet requirement 6 because VA failed to report an improper and unknown payment rate of less than 10 percent for two VA programs that had estimates in the materials accompanying their financial statements. VA satisfied the additional reporting requirements for two high priority programs with prior-year monetary losses from improper payments of more than $100 million reported in FY 2023. The OIG recommended the under secretary for benefits reduce improper and unknown payments to below 10 percent for the Pension Program and the under secretary for health reduce improper and unknown payments to below 10 percent for the Purchased Long-Term Services and Supports Program. Both are repeat recommendations that have not been implemented from the FY 2022 report.

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.

During the COVID-19 pandemic, ecommerce grew from 9.7 percent of total retail sales in 2018 to about 14.5 percent from 2020 to 2022. Returns grew during and after the pandemic as well: by 2023, the National Retail Federation estimated 17.6 percent of online purchases in the U.S. by revenue were returned to retailers.Reverse logistics refers to the movement of goods from the consumer to their place of manufacture, sale, or disposal. Returned items may be resold as new, refurbished to be sold on the secondary market, recycled, or disposed of in a landfill.

To see our report, click on the link below