Improper Payments Information Act and Other Laws and Regulations

Bureau of the Comptroller and Global Financial Services
Report
November 15, 2016


 

 

 



Improper Payments Information Act, as Amended

The Improper Payments Information Act of 2002 (IPIA), Public Law No. 107-300, as amended, requires agencies to annually review their programs and activities to identify those susceptible to significant improper payments, as well as to conduct payment recapture audit programs. In 2010, the President signed into law the Improper Payments Elimination and Recovery Act (IPERA, Public Law No. 111-204), which amends the Improper Payments Information Act of 2002, and repeals the Recovery Auditing Act (Section 831 of the 2002 Defense Authorization Act, Public Law No. 107-107). In January 2013, the IPIA of 2012 (IPERIA Public Law No. 112-248) was signed into law and further amended IPIA. All remaining references in this disclosure to the term IPIA will imply IPIA, as amended by IPERA and IPERIA. Most significantly, IPERIA expanded the term payment to refer to all payments except intragovernmental transactions. It also codified OMB’s ongoing efforts to develop and enhance the government’s Do Not Pay Initiative, which included the creation of a centralized Do Not Pay List for agencies to access prior to disbursing payments.

IPIA defines significant improper payments as annual improper payments in a program that exceed both 1.5 percent of program annual payments and $10 million, or that exceed $100 million, regardless of the error rate. Once those highly susceptible programs and activities are identified, agencies are required to estimate and report the annual amount of improper payments. Generally, an improper payment is any payment that should not have been made or that was made in an incorrect amount under a statutory, contractual, and administrative or other legally applicable requirement.

IPIA Reporting Details

The Department defines its programs and activities in alignment with the manner of funding received through appropriations, as further subdivided into funding for operations carried out around the world.

Risk assessments over all programs are done every three years. In the interim years, risk assessments evaluating programs that experience any significant legislative changes and/or significant increase in funding will be done to determine if the Department continues to be at low risk for making significant improper payments at or above the threshold levels set by OMB. The Department conducted a risk assessment of all programs and activities in 2013 and again in 2016.

Risk assessments of Department programs and activities involve an evaluation of the risk factors described in OMB Circular A-123 Appendix C including whether the program or activity reviewed is new to the Department; the complexity of the program or activity reviewed, particularly with respect to determining correct payment amounts; the volume of payments made annually; whether payments or payment eligibility decisions are made outside of the Department; recent major changes in program funding, authorities, practices, or procedures; the level, experience, and quality of training for personnel responsible for making program eligibility determinations or certifying that payments are accurate; inherent risks of improper payments due to the nature of Department programs; significant deficiencies in the audit reports on the Department including OIG, GAO, and SIGAR audit report findings; results from the prior year improper payment recapture work; and the percentage increase in funding. Additional risk factors are considered as needed. Further, risks and results from the work performed in compliance with OMB Circular A-123 Appendix A, other internal Department reviews, and other relevant information are considered.

Based on this series of internal control review techniques performed in 2016, the Department determined that none of its programs were risk-susceptible for making significant improper payments at or above the threshold levels set by statute. The 35 programs assessed were: American Compensation; Foreign Locally-Employed Staff Compensation; Foreign Service Annuity Compensation; Voluntary Contributions to International Organizations; Assessed Contributions to International Organizations; Post-Assignment Travel; Temporary Duty Travel; National Endowment for Democracy; Economic Support Fund; Miscellaneous FSI and Human Resources Operational Expenses; Overseas Programs; Diplomatic Policy and Support; Border Security and Machine Readable Visas; IT Central Fund and Expedited Fees; Public Diplomacy; Worldwide Security Protection; Security for Afghanistan and Pakistan; Border Security and Western Hemisphere Travel Surcharges; Nonproliferation, Anti-terrorism and Demining; Overseas Contingency Operations; Leaseholds and Function Programs; Capital Cost Sharing Initiative; Working Capital Fund; International Cooperative Administration Support Services; Aviation Working Capital Fund; Refugee Admissions; Fulbright Program; Promote the Rule of Law programs; INL All Other Anti-crime programs; Supply, Transportation, and Procurement; Political and Military Affairs Nonproliferation, Anti-terrorism and Demining; Overseas Building Operations Design/Development; Construction; Short-term Lease Residential Program; and Project Construction/Major Rehabilitation. Based on these procedures, the Department determined that none of its programs in 2016 were risk-susceptible for making significant improper payments at or above the threshold levels set by OMB.

Recapture of Improper Payments Reporting

A number of improper payment activities, both preventative and recovery, exist for domestic and overseas payments at the Department, Bureau, post, and program levels to support IPIA efforts and ensure the integrity and accuracy of Department payments. The Bureau of the Comptroller and Global Financial Services (CGFS) has a two-tiered improper payment monitoring and review program that consists of activities performed by the payment issuing office and secondly by the Office of Oversight and Management Analysis (OMA). As an integral part of our post-payment review process, improper payment reviews are performed initially by the payment issuing offices which include the Bureau’s Office of Claims (CGFS/F) and Office of Global Compensation (CGFS/C). The subsequent review performed by OMA focuses on overpayments and utilizes data and risk analysis to drive the recapture work performed. While many agencies hire external recapture auditors to perform a secondary review, this function is performed more efficiently within the Department by OMA. Because the activity performed by CGFS/F and CGFS/C is a post-payment (versus recapture payment) review process, those results are not considered recapture audits and are considered an activity outside of recapture audits. Because the OMA activity is secondary and consistent with a function that an external auditor would perform, for reporting purposes OMA’s activity is considered recapture as defined by IPIA. In addition, as required by IPIA, in 2015 Global Compensation began reporting confirmed overpayments identified through internal processes. The CGFS/C Annuitant Pay Processing (ANP) began reporting this information in 2014 for Annuity Payments and continues to report this data in 2016.

Payment Recapture Audit Reporting

CGFS incorporates various manual and automated data analysis techniques and processes to identify, validate and collect improper payments, including use of data mining software, manual sampling of internal payment records, U.S. Treasury taxpayer identification number matching, and sampling of vendors. Monthly, as part of the Recapture Audit process, OMA conducts a query of domestic vendor payments. Domestic vendor payments represent the largest category of Department-made payments subject to IPIA recapture audit requirements, focusing on identifying potential improper and duplicate payments. Currently, these payments are reviewed on a monthly basis using IDEA - Data Analysis Software. An automated analysis is executed to run matches of vendor invoice numbers and payment amounts against current payment data and payments dating back to 2007. The increased quality control processes by CGFS/F in both payments generation and internal post-payment review process have contributed to overall lower improper recapture audit amounts. At times, transactions identified during the monthly IDEA analysis by OMA were previously identified by CGFS/F and the collection process initiated. These transactions are not included in recapture audit figures since the CGFS/F internal processes made the initial identification. In addition to the automated IDEA analysis, OMA performs a manual quarterly review of overseas and domestic payments. These manual recapture audits validate elements such as vendor, payment amount, and ensure proper documentation exists to support sampled payments. In 2016 OMA contract recapture audit efforts identified $202.4 thousand contract overpayments. Also in 2016, $65.5 thousand was recovered and returned to the originating appropriation.

In addition, OMA performs a quarterly manual recapture audit of employee claim payments subject to the Department’s overall travel program. This recapture audit focuses on known identified issue areas as well as providing overall audit coverage of employee travel payments. As shown in the Other column of the “Improper Payment Recaptures with and without Audit Programs” table, in 2016 OMA identified $87.8 thousand in travel program recapture audit overpayments, and collected $40.5 thousand ($34 thousand collected of the amount identified in the current year and an additional $6.5 thousand was collected from prior year recapture audit overpayments). The collected funds were returned to the originating appropriation.

During 2016, OMA built on prior year efforts and expanded recapture audit activities in several areas.

  • Grant payments made on behalf of the Department by the Department of Health and Human Services through their Payment Management System (PMS). OMA continued manual sampling and testing of grants with exact dollar PMS payment activity and performed analysis of data across systems that contained Department grant information. In addition, OMA initiated a pilot review of closed grants and the documentation that supports this process and continues to explore recapture auditing down to the grant recipient level. Since manual sampling efforts of grants can be laborious, additional data analysis efforts were developed in an effort to identify grant overpayments in a more cost-effective manner. Research continues on matched transactions to determine if the data and information gained can assist in developing standardized data mining efforts and implementing additional improper payment identification methods in the PMS grant recapture audit program. Each year the Department closely monitors payment activity of grantees for which the Department is the designated Federal cognizant agency, including follow-up with grantees regarding any questioned costs identified on the grantees audit reports issued in compliance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
  • FSRDF annuitant payments. OMA expanded its efforts over the prior year by reviewing annuitant payments that are calculated based on certain eligibility requirements. Specifically, OMA completed a pilot recapture audit of annuity disability payments and supplemental payments. In 2016, as shown in the “Improper Payment Recaptures with and without Audit Programs” table, OMA identified $62.9 thousand in annuity overpayments of which $25.3 thousand or 40 percent were collected. The collected funds were returned to the originating appropriation.
  • OMA implemented additional recapture efforts during 2016 to include American Employee (AE) and Foreign Locally Employed (LE) Staff Compensation payments. LE Staff payments represent compensation made to local employees of Embassies and Posts who typically hold residency in those countries. OMA continued systematic analysis and duplicate payment reviews, which did not identify any duplicate payments in AE or LE areas. In addition, OMA performed sampling and manual testing of AE and LE employees with payments that displayed an increased frequency or amount of adjustments. OMA continues to expand efforts in the AE and LE Staff Compensation recapture audit areas in future years.

The CGFS automated duplicate or erroneous payment program using the domestic payment file for recapture audit analysis has proven to be a cost effective tool. The additional inclusion of automated and manual recapture audit processes implemented in the domestic and overseas vendor, annuity payment, PMS grant, AE compensation, and LE Staff compensation areas ensures the Department has coverage in required IPIA recapture audit areas. Prior to these efforts, in 2005 and 2006, the Department contracted with an external firm to perform recapture audit activities. However, after 2006, the contracted firm determined it was not cost-effective to continue this function. At this time, CGFS has not made a request to OMB to exclude any IPIA area from recapture audit activity. CGFS realizes that additional recapture audit opportunities may exist and continues to collectively assess areas of greater risk of improper payments and implement recapture audit measures deemed cost-effective.

Improper Payment Recaptures With and Without Audit Programs
(dollars in thousands)
  Overpayments Recaptured through Payment Recapture Audits Overpayments Recaptured outside of Payment Recapture Audits
Contracts Benefits Other Total
Program or Activity
Amount Identified
Amount Recaptured
CY Recapture Rate
CY + 1 Recapture Rate Target
CY + 2 Recapture Rate Target
Amount Identified
Amount Recaptured
CY Recapture Rate
CY + 1 Recapture Rate Target
CY + 2 Recapture Rate Target
Amount Identified
Amount Recaptured
CY Recapture Rate
CY + 1 Recapture Rate Target
CY + 2 Recapture Rate Target
Amount Identified
Amount Recaptured
Amount Identified
Amount Recaptured
Travel Program                     $87.8 $40.5 46% 48% 50% $87.8 $40.5 $35.2 $12.8
Foreign Service Annuities           $62.9 $25.3 40% 50% 50%           $62.9 $25.3 $763.2 $166.6
American Compensation                                   $5,295.3 $4,145.6
Diplomatic and Consular Programs $17.4 $17.2 98% 85% 90%                     $17.4 $17.2 $6,363.9 $7,013.9
Working Capital Fund $16.6 $18.6 112% 85% 90%                     $16.6 $18.6 $2,709.6 $466.6
OBO Programs $168.4 $29.7 17% 85% 90%                     $168.4 $29.7 $1,060.6 $1,060.6
Nonproliferation, Anti-terrorism, De-mining                                   $103.1 $100.0
INL Programs                                   $673.1 $673.1
Other State Programs                                   $3,122.0 $3,083.1
Total $202.4 $65.5       $62.9 $25.3       $87.8 $40.5       $353.1 $131.3 $20,126.0 $16,722.3
Disposition of Funds Recaptured Through Payment Recapture Audits
(dollars in thousands)
Program or Activity Amount Recovered Type of Payment Original Purpose
Travel Program $40.5 Other $40.5
Foreign Service Annuities $25.3 Benefits $25.3
Diplomatic and Consular Programs $17.2 Contracts $17.2
Working Capital Fund $18.6 Contracts $18.6
OBO Programs $29.7 Contracts $29.7
Total $131.3   $131.3
Aging of Outstanding Overpayments Identified in the Payment Recapture Audits
(dollars in thousands)
Program or Activity Type of
Payment
Amount Outstanding
(0 – 6 months)
Amount Outstanding
(6 months to 1 year)
Amount Outstanding
(over 1 year)
Travel Program Other $43.9 $1.0 $56.2
Foreign Service Annuities Benefits $3.5 $48.4 $—
OBO Programs Contracts $133.1 $5.8 $—
Total   $180.5 $55.2 $56.2
Overpayments Recaptured Outside of Payment Recapture Audits

Improper payment identification and collection are essential functions of the CGFS/F Accounts Payable operations. As such, CGFS/F has established an internal debt management unit, whose primary mission is to identify and collect improper payments. In addition, this Unit assists in identifying potential systemic issues leading to improper payments, which facilitates immediate implementation of corrective actions. Programs in which CGFS/F identified improper payments in 2016 include: Diplomatic and Consular Programs; the Working Capital Fund; Embassy Security, Construction, and Maintenance; Nonproliferation, Anti-terrorism, De-mining; International Narcotics Controls and Law Enforcement; Peacekeeping Operations; and other State programs. Results are presented for each program individually in the “Improper Payment Recaptures with and without Audit Programs” table. Collectively, during 2016, CGFS/F identified and confirmed transactions totaling $14.8 million of actual duplicate/improper payments, of which we recovered $11.6 million in addition to collecting $825 thousand of the prior year unrecovered balance. Thus, amounts recovered in the current year totaled $12.6 million. At the end of fiscal year 2016, the Department’s cumulative outstanding uncollected balance of $8 million is mostly attributed to a $2.2 million vendor overpayment identified in September 2016 and a $5.2 million vendor overpayment that remains on hold pending the outcome of litigation. Also, in 2016 the Department identified and confirmed employee claims overpayments totaling $35.2 thousand, of which we recovered $12.8 thousand, including $540 from prior year identified amounts.

CGFS/C also leverages an overpayment processing unit whose purpose is to review, calculate, and notify employees of any salary or allowance overpayment debt. Salary overpayments can occur for various reasons in the Department’s complex global pay environment, much of which is dependent on timely notification of events impacting pay. For example, late receipt of a cable notifying CGFS that an employee has departed an overseas mission for official duty travel or on personal leave can result in an overpayment of allowances. The payroll systems have programmatic internal controls and system edits in place to assist in preventing overpayments. CGFS/C continues to implement additional measures to prevent and identify overpayments. As presented in the “Improper Payment Recaptures with and without Audit Programs” table in 2016 the Department’s CGFS American Pay Processing Division identified and confirmed payroll overpayments totaling $5.3 million, of which $2.9 million has been recovered. An additional $1.2 million of prior year debts were recovered, bringing the total recovered in 2016 to $4.1 million. To date, CGFS/C has collected 82.5 percent of prior year debts. This is notable because recovery of payroll debts can be delayed due to a debtor’s request for an administrative review or a waiver. Efforts to collect outstanding payroll debts are on-going and attempts are made to use the most effective means to maximize collection, such as salary offsets, when possible.

In addition to salary overpayments, Global Compensation performs procedures to identify overpayments impacting Foreign Service annuities paid by the Department. In 2016, ANP identified and confirmed overpayment transactions totaling $763.2 thousand and recovered $166.6 thousand ($103.8 thousand of the overpayments identified in 2016 and ANP recovered $62.8 thousand of prior year overpayments). These overpayments occur for reasons such as annuity reductions due to divorce, annuitant re-employment, and untimely notification of death. CGFS continues the use of the Do Not Pay Death Master File (DMF) on a pre-payment basis to better identify when annuitant deaths occur. This and other internal controls greatly assist ANP in preventing and managing improper payments.

Agency Reduction of Improper Payments with the Do Not Pay Initiative

The Department reviewed potential improper payments provided by the Department of the Treasury (Treasury) generated as a result of submitting disbursed payments through the Do Not Pay (DNP) portal. In Fiscal Year 2016, the Treasury reviewed and disbursed 1,563,550 payments totaling $16.2 billion paid by the Department through the DNP portal. Potential matches were provided on a daily basis, comparing payments to the public Death Master File (DMF) of the Social Security Administration and the General Services Administration’s Excluded Parties List System (EPLS). The Department has access to the private EPLS matching criteria, and as such, the DMF results were based on a social security number and name match of any payees who have been reported as deceased.

Through daily access via the Treasury DNP portal, the Department reviewed 1.2 million unmatchable payments, totaling $5.5 billion, and adjudicated nine potential erroneous payment matches (eight DMF and one SAM generated potential matches), totaling $244,637,110 as part of the post-payment review process. The Department adjudicated and determined that the eight DMF matches were deemed to be rightfully due to the deceased annuitants’ estates, and the remaining SAM sourced payment was a valid transaction. Accordingly, there were no erroneous payments identified through this process.

The Department continued to utilize the Do Not Pay portal’s Social Security Administration DMF on a pre-payment continuous monitoring basis for all annuitant payments this year. At least twice each month the Department’s annuitant database is screened against the DMF to identify deceased annuitants. All matches are researched and if confirmed, payment to the annuitant is stopped prior to processing the monthly annuity payment run. In 2016, 188,793 annuitant payments totaling $930.6 million were reviewed against the DMF and 150 payments totaling $466.3 thousand were stopped due to this initiative. This process has been successful in timely identifying deceased annuitants and ensuring improper payments are not made. In addition, all annuity manual payments processed through Treasury’s Secure Payment System are also reviewed through the Do Not Pay DMF online search prior to making the payment. For each manual payment, the Department maintains supporting documentation to show that a DMF match did not occur.

Results of the Do Not Pay Initiative in Preventing Improper Payments
(dollars in thousands)
  Number (#)
of Payments Reviewed for
Possible
Improper
Payments
Dollars ($)
of Payments Reviewed for
Possible
Improper
Payments
Number (#)
of Payments Stopped
Dollars ($)
of Payments Stopped
Number (#)
of Potential
Improper
Payments
Reviewed and Determined
Accurate
Dollars ($)
of Potential
Improper
Payments
Reviewed and Determined
Accurate
Reviews with the IPERIA specified databases 1,563,550 $16,195,521.3 150 $466.3 11 $247.5
Reviews with databases not listed in IPERIA 2,511,382 $7,870,070.1 4 $45.6 5,282 $49,205.6

For non-Treasury Disbursing Office payments made by the Department for disbursement overseas, payee information is checked against Treasury’s Office of Foreign Assets Control’s (OFAC) list of Specially Designated Nationals (SDN). During 2016 the Department processed 2,511,382 payments totaling $7.9 billion against the OFAC list and received 5,282 potential erroneous payment matches totaling $49.2 million. The potential payment matches were reviewed and resulted in 4 stopped payments totaling $45.6 thousand. Also, during country integration to the Society of Worldwide Interbank Financial Telecommunication network, the Department provided payee lists associated with the given country to the Federal Reserve Bank. The Federal Reserve Bank verified none of the listed payees were included on the OFAC’s SDN list. Furthermore, each disbursement payment batch was verified against OFAC’s SDN list before being sent to the intermediary bank and before the intermediary bank transferred the funds to local bank.

In addition, in 2016 Department grants processed through the Department of Health and Human Services Payment Management System (PMS) are included in a Do Not Pay review. The Health and Human Services Division of Payment Management incorporated a review of the Do Not Pay portal into their payment process to identify individuals or entities with delinquent Federal non-tax debt, a recipient that is listed as deceased on the DMF, and recipients excluded from doing business with the government. In 2016 the Department was notified of one grantee that appeared ineligible due to results of the Do Not Pay process. At the time of the match, this grantee had no funds available on any grants resulting in no subsequent payments issued to this grantee.

Premium Class Travel Reviews

The Department’s mission is conducted throughout the world and requires extensive travel, sometimes of a significant duration. Because of the high volume of travel, the Department has made concerted efforts to monitor if official travel has adhered to Government-wide and Department regulations for premium class travel.

For 2016, there were no instances identified where a business class travel payment was inappropriate and needed to be recovered, or where the travelers flying business class were found to be ineligible. However, there have been instances where proper and complete supporting documentation was not readily available. Those errors represent an error rate of 4 percent ($32,242) in FY 2016, 15 percent ($157,144) in FY 2015, 17 percent ($54,885.07) in FY 2014, 8 percent ($56,442) in FY 2013, and 6 percent ($34,867) in FY 2012. OMB requires agencies to report improper payment errors based on three categories of errors: documentation and administrative errors, authentication and medical necessity errors, and verification errors. All Department errors found each year were attributable to documentation and administrative errors. The Department carefully considered these results in combination with results from other travel reviews, and will undertake efforts in 2017 to correct the deficiencies noted during the FY 2016 review.

Debt Management

Outstanding debt from non-Federal sources (net of allowance) decreased from $43.8 million at September 30, 2015 to $34.6 million at September 30, 2016. Civil Monetary Penalties decreased by $10.1 million at September 30, 2016, resulting in a decrease overall to the non-Federal source figures.

Non-Federal receivables consist of debts owed to the International Boundary and Water Commission, Civil Monetary Fund, and amounts owed for repatriation loans, medical costs, travel advances, and other miscellaneous receivables.

The Department uses installment agreements, salary offset, and restrictions on passports as tools to collect its receivables. It also receives collections through its cross-servicing agreement with the Department of the Treasury (Treasury). In 1998, the Department entered into a cross-servicing agreement with Treasury for collections of delinquent receivables. In accordance with the agreement and the Debt Collection Improvement Act of 1996 (Public Law No. 104-134), the Department referred $3.6 million to Treasury for cross-servicing in 2016. Of the current and past debts referred to Treasury, $2.1 million was collected in 2016.

Receivables Referred to the Department of the Treasury for Cross-Servicing
  2016 2015 2014
Number of Accounts 1,002 1,212 997
Amounts Referred (dollars in millions) $3.6 $2.0 $2.5
Amounts Collected (dollars in millions) $2.1 $1.1 $1.1

Electronic Payments

The payments made through Electronic Funds Transfer (EFT) were 98.5 percent of the total payments made for domestic and overseas payments. Domestic operations accomplished 99 percent of its payments with EFT this year. Overseas operations have a slightly lower EFT percentage (98.3 percent) than domestic operations due to the complexities of banking operations in some foreign countries. For 2016, approximately 3.7 million payments were disbursed for the Department of State.

Federal Civil Penalties Inflation Adjustment Act

The Federal Civil Penalties Inflation Adjustment Act of 1990 established annual reporting requirements for civil monetary penalties assessed and collected by Federal agencies. The Department assesses civil fines and penalties on individuals for such infractions as violating the terms of munitions licenses, exporting unauthorized defense articles and services, and valuation of manufacturing license agreements. In 2016, the Department assessed one new penalty, and collected $10.1 million of outstanding penalties from four companies. The balance outstanding at September 30, 2016, was $2 million. The following table lists the current penalty level for infractions governed by the Department.

Federal Civil Penalties Inflation Adjustments
Statutory Authority Penalty Year Enacted Latest Year of Adjustment Current Penalty Level ($ Amount or Range) Sub-Agency/
Bureau/Unit
Location for Penalty Update Details
Arms Export Control Act of 1976, 22 U.S.C. 2778(e) International Traffic in Arms Regulations Violations – Export of Defense Articles and Defense Service 1985 2016 $1,094,010   Federal Register 81, 36791-36793
Arms Export Control Act of 1976, 22 U.S.C. 2779a International Traffic in Arms Regulations Violations – Prohibition on Incentive Payments 1994 2016 $795,445   Federal Register 81, 36791-36793
Arms Export Control Act of 1976, 22 U.S.C. 2780 International Traffic in Arms Regulations Violations – Transactions with Countries Supporting Acts of International Terrorism 1989 2016 $946,805   Federal Register 81, 36791-36793
False Claims Act of 1986, 31 U.S.C. 3729-3733 Penalty imposed on persons and companies who defraud governmental programs 1986 2016 $10,781 – $323,442   Federal Register 81, 36791-36793
Chemical Weapons Convention Act of 1998, 22 U.S.C. 6761(a)(1)(A) Prohibited acts relating to inspections 1998 2016 $36,256   Federal Register 81, 36791-36793
Chemical Weapons Convention Act of 1998, 22 U.S.C. 6761(a)(1)(B) Recordkeeping violations 1998 2016 $7,251   Federal Register 81, 36791-36793

Prompt Payment Act

Timeliness of Payments

Bar chart summarizing timeliness of Department of State payments for fiscal years 2014 to 2016. Values are as follows:

FY 2014:
     On Time: 98%.
     Late: 2%.
FY 2015:
     On Time: 97%.
     Late: 3%.
FY 2016:
     On Time: 98%.
     Late: 2%.

The Prompt Payment Act (PPA) requires Federal agencies to pay their bills on time. PPA assesses an interest penalty against Federal agencies that do not pay their vendors timely as required by law. In 2016, the Department timely paid over 98 percent of the 595,414 payments subject to PPA regulations. The “Timeliness of DOS Payments” bar chart reflects the timeliness of the Department’s payments from 2014 through 2016. During 2016, the Department paid over $349 thousand in interest penalties out of $10.4 billion in payments that were subject to PPA, compared to nearly $349 thousand in 2015.