Review of VA’s Compliance with the Payment Integrity Information Act for Fiscal Year 2021

The VA Office of Inspector General (OIG) conducted this review to determine whether VA complied with the requirements of the Payment Integrity Information Act of 2019 (PIIA) for fiscal year (FY) 2021. The PIIA, enacted in March 2020, requires federal agencies to identify and review all programs and activities they administer that may be susceptible to significant improper payments based on Office of Management and Budget (OMB) guidance. In addition, PIIA requires inspectors general to review each of their agency’s improper payment reporting and issue an annual report.Agencies found to be noncompliant with PIIA and OMB guidance are required to perform additional reporting to OMB, Congress, and the Comptroller General depending on the number of years the OIG found them noncompliant. FY 2021 is considered the first year for any program considered noncompliant when applying those additional reporting requirements.In FY 2021, VA reported improper and unknown payment estimates totaling $5.12 billion for seven programs and activities. Of that amount, about $1.97 billion (around 39 percent) represented a monetary loss, and the remaining approximately $3.14 billion (about 61 percent) was considered either a nonmonetary loss or unknown payment that cannot be recovered. Though VA had an overall decrease in total improper payments and unknown payments, the overall monetary loss more than doubled from $892 million in FY 2020 to $1.97 billion.VA satisfied nine of the 10 requirements under the PIIA; however, it is not considered to be compliant because it failed to report an improper and unknown payment rate of less than 10 percent for four VA programs and activities that had estimates in the accompanying materials to their financial statements.The OIG recommended the under secretary for health reduce improper and unknown payments to below 10 percent for the noncompliant programs.