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Audit Report: OAS-FS-12-07

March 15, 2012

Performance Audit of the Department of Energy's Improper Payment Reporting in the Fiscal Year 2011 Agency Financial Report

To fulfill the Office of Inspector General's Audit Responsibilities we contracted with the independent public accounting firm of KPMG, LLP to express an opinion on whether the Department of Energy (Department) met the Office of Management and Budget's criteria for compliance with the Improper Payments Elimination and Recovery Act (IPERA).  The objective of this audit was to complete an evaluation of the accuracy and completeness of agency reporting, and evaluate agency performance in reducing and recapturing improper payments under IPERA.  This audit found that the Department did not comply with the requirements of IPERA pertaining to site risk assessments, sampling methodology and consistent use of improper payment definition.  Furthermore, it was noted that the Department could improve its Headquarters guidance and clarify its policy.  Management concurred with the findings and recommendations identified in the draft report as well as the management responses that incorporated the specific corrective actions which will be taken during Fiscal Year 2012 to implement improvements in the improper payment reporting process.  The proposed corrective actions are consistent with our recommendations.