department of defense agency financial report fiscal year 2012

Department of Defense Agency Financial Report for FY 2012
Agency Information Systems and Other Infrastructure
The Department has much of the information and infrastructure needed to reduce
improper payments in each of its six improper payment programs. The Department uses
the BAM tool to identify potential improper commercial payments prior to disbursement.
The Department's ongoing migration from the legacy environment to ERP systems
presents a number of challenges and opportunities to prevent and detect improper
payments, as well as debt collection for recapturing overpayments. These issues are
being addressed by stakeholders, though initially the new systems will add additional
complexity, especially in terms of the audit readiness efforts currently at full throttle.
Barriers
With the advent of The Do Not Pay List, the Privacy Act can be a barrier in terms of the
information that is legally allowed to be shared among federal agencies. Computer
matching agreements can take months and sometimes years to finalize and therefore
delay the ability to prevent improper payments based on information the Federal
Government has access to but cannot legally share. However, there is legislation
pending that may be able to address some of these delays without gutting the very
necessary protections afforded by the Privacy Act. In the interim, the Department will
continue using the means it currently has, including The Do Not Pay List, to prevent,
detect, and recover improper payments.
Additional Comments
Because the Department currently does not have an auditable SBR, it is not possible for
the Department to reconcile outlays to the quarterly or annual gross outlays reported in
the SBR to ensure all required payments for reporting purposes are captured. The
Department is working hard to become fully auditable by 2017. As part of this effort, each
of the Defense disbursing components is working diligently to review and report on all
payments that are subject to IPERA and ensure the processes used are compliant with
laws and regulations. Nevertheless, the Department continually looks for opportunities to
improve its methodologies, and the post-payment review teams are far from complacent.
The Department looks forward to receiving recommendations from the DoD Inspector
General’s IPERA Compliance Review for FY 2012 as well as from the GAO’s ongoing
engagement on improper payments, as we move forward with FY 2013 corrective actions.
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