Sneak Preview: Agencies Struggle with Improper Payments, Grants Management
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Recent reports released by several Offices of Inspector General (OIGs) discussing the top management challenges facing their respective federal agency continue to show that limiting improper payments, reducing fraud and effectively managing grant programs are key oversight concerns. OIGs issue annual reports on top management and performance challenges facing federal agencies and offer recommendations to improve programs and reduce vulnerabilities.
In its latest report, the Department of Health and Human Service (HHS) OIG said that in federal fiscal year (FY) 2023, improper payments for Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) were estimated at $103.6 billion. Specifically for Medicaid, HHS estimated that the improper payment rate was 8.58% of all payments. “Given the $2.5 trillion in spending by HHS for FY 2023 and the critical importance of the programs that HHS funds, the department must work to ensure sound stewardship and combat fraud, waste and abuse,” OIG explained.
The HHS OIG report noted that although the agency is taking steps to improve financial management, more can be done. For example, the HHS Centers for Medicare and Medicaid Services (CMS) has demonstrated successful coordination with law enforcement to prevent payments to fraudulent billers, so OIG is encouraging CMS to continue to expand upon this prepayment suspension mechanism where appropriate.
HHS also is working to modernize Grants.gov and to improve the grants management process, and OIG urged the agency to “continue its progress in providing guidance and up-to-date policies to inform grant recipients on financial management, internal controls and federal and departmental regulations, [including] ensuring sufficient visibility into subawards of grant funds and ensuring that grants serve their intended purpose.”
The Department of Justice (DOJ) OIG, in its annual report, stated that strengthening the planning, administration and oversight of grants and contracts continues to be a challenge for the agency. “DOJ OIG grant audits continued to find that grant recipients need to improve their program execution, grant financial management, as well as their oversight of subrecipients of grant funding,” it added.
For example, DOJ’s Office of Victims of Crimes (OVC), which oversees the Crime Victims Fund, distributes these funds to: (1) state administering agencies through victim assistance and compensation formula grants, and (2) state and local governments, individuals, educational institutions and private nonprofit organizations through discretionary grants. Since 2016, DOJ OIG has released more than 110 reports resulting in about 700 recommendations and approximately $15 million in questioned costs in conducting oversight of the use of these grant funds.
(The full version of this story has now been made available to all for a limited time here.)
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