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MEMORANDUM
| TO: | Guy K. Zimmerman
Assistant Inspector General
for Audit
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| FROM: |
Paul R. Corts
Assistant Attorney General
for Administration
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| SUBJECT: | Response to the Office of the Inspector General's (OIG) Draft Report: Department of Justice Process for Identifying, Preventing, and Recovering Improper and Erroneous Payments |
This responds to the Office of the Inspector General's (OIG) Draft Report: Department of Justice Process for Identifying, Preventing, and Recovering Improper and Erroneous Payments.
Recommendation 1: Ensure that its future risk assessment, required to be in its Improper Payments Information Act (IPIA) report, contains: 1) the results from its most recent financial statement audit, including any material weaknesses or reportable conditions; 2) the effect of those weaknesses or conditions on its risk of making improper payments; and 3) a description of the corrective actions taken to address those weaknesses or conditions.
Response: The Bureau of Prisons (BOP) concurs with the recommendation. The BOP will include in future risk assessments required for the Improper Payments Information Act (IPIA) report the results from the most recent financial statement audit, including any material weaknesses or reportable conditions; the effect of those weaknesses or conditions on the risk of making improper payments; and a description of the corrective action taken to address the weakness or conditions. The enhanced IPIA report for FY 2005 will be submitted to the Justice Management Division (JMD) when requested. The report for FY 2004 was submitted to JMD on September 1, 2004.
Recommendation 2: Ensure that future IPIA reports include a complete description of the risk assessment performed on each of the programs in its program inventory.
Response: The BOP concurs with the recommendation. In future IPIA reports, the BOP will include a description of the risk assessment performed on each of the programs in its program inventory.
Recommendation 3. Ensure that its future risk assessment, required to be in its IPIA report, contains: 1) the results from its most recent financial statement audit, including any material weaknesses or reportable conditions; 2) the effect of those weaknesses or conditions on its risk of making improper payments; and 3) a description of the corrective actions taken to address those weaknesses or conditions.
Response: The Office of Justice Programs (OJP) concurs with the recommendation. The OJP will include in future risk assessments required for the Improper Payments Information Act (IPIA)report the results from the most recent financial statement audit, including any material weaknesses or reportable conditions; the effect of those weaknesses or conditions on the risk of making improper payments; and a description of the corrective action taken to address the weakness or conditions.
Recommendation 4. Conduct a complete program inventory, perform a risk assessment for each identified program, and maintain the documentation of the program inventory and risk assessment.
Response: The OJP concurs with the recommendation. By July 31, 2005, the Program Review Office will conduct a complete program inventory and perform a risk assessment for each program identified. The Program Review Office will maintain documentation of the program inventory and risk assessment.
Recommendation 5. Ensure that future IPIA reports include a complete description of the risk assessment performed for each of the programs in its program inventory.
Response: The OJP concurs with the recommendation. In future IPIA reports, the OJP will include a complete description of the risk assessment conducted for each program in the program inventory.
Recommendation 6. Ensure that its future risk assessment, required to be in its IPIA report, contains: 1) the results from its most recent financial statement audit, including any material weaknesses or reportable conditions; 2) the effect of those weaknesses or conditions on its risk of making improper payments; and 3) a description of the corrective actions taken to address those weaknesses or conditions.
Response: The Federal Bureau of Investigation (FBI) concurs with the recommendation. For all future risk assessments, the FBI will include the results from the financial statement audits and the effect of those conditions on the risk of making improper payments. A description of corrective actions will also be included.
Recommendation 7. Provide a copy of its Desk Guide for invoice processing procedures to all relevant employees, ensuring that all employees certify that they have received a copy.
Response: The FBI concurs with the recommendation. The Commercial Payments Unit (CPU) has re-issued the Desk Guide, which incorporates changes through November 2004, and which was again provided to all voucher examiners. CPU updates this Guide periodically though emails, routing slips, and training. The CPU maintains a signature log of voucher examiners receiving a copy of the Desk Guide.
Status: The FBI considers this recommendation closed.
Recommendation 8. Ensure that its future risk assessment, required to be in its IPIA report, contains: 1) the results from its most recent financial statement audit, including any material weaknesses or reportable conditions; 2) the effect of those weaknesses or conditions on its risk of making improper payments; and 3) a description of the corrective actions taken to address those weaknesses or conditions.
Response: The United States Marshals Service (USMS) concurs with the recommendation. The USMS will include in future risk assessments required for the Improper Payments Information Act (IPIA) report the results from the most recent financial statement audit, including any material weaknesses or reportable conditions; the effect of those weaknesses or conditions on the risk of making improper payments; and a description of the corrective action taken to address the weakness or conditions.
Recommendation 9. Conduct a complete program inventory, perform a risk assessment for each identified program, and maintain the documentation of this program inventory and risk assessment.
Response: The USMS concurs with the recommendation. The USMS will conduct a complete program inventory, perform a risk assessment for each identified program, and maintain the documentation of the program inventory and risk assessment.
Recommendation 10. Ensure that future IPIA reports include a complete description of the risk assessment performed for each of the programs in its program inventory.
Response: The USMS concurs with the recommendation. The USMS will include a description of the risk assessment performed for each of the programs in its program inventory in future IPIA reports.
Recommendation 11. Provide documentation, including formalized policies and procedures, for the implementation of an ongoing internal review program, which includes transaction testing.
Response. The USMS concurs with the recommendation. The USMS will provide documentation, including formalized policies and procedures, for the implementation of an ongoing internal review program, which includes transaction testing.
Recommendation 12. Develop and implement a Department wide recovery audit policy, which defines the scope, types of payments, and criteria to be included in each component's recovery audit program.
Response. The Justice Management Division (JMD) concurs with the recommendation. The JMD, Finance Staff, will develop and implement a Department wide recovery audit policy, which defines the scope, types of payments, and criteria to be included in each component's recovery audit program.
Recommendation 13. Implement a policy for Department components to report quarterly on recovery audit activities, including: 1) current activities, 2) amounts of improper payments identified and recovered, and 3) planned activities for the following quarter.
Response. The JMD concurs with the recommendation. On December 16, 2004, the JMD, Finance Staff, established a new reporting requirement, the Quarterly Report on Recovery Audit Activities. The report for the first quarter of FY 2005, was due on January 7, 2005. Reports for subsequent quarters are due within 5 work days following the end of each quarter. The Department components are reporting quarterly on recovery audit activities, including current activities, amounts of improper payments identified and recovered, and planned activities for the following quarter.
Status: The JMD has included the memorandum establishing the Quarterly Report on Recovery Audit Activities (Report) and the data call for the second quarter Report in its response.
Therefore, the JMD considers this recommendation closed.
Recommendation 14. Develop and implement written policies and procedures for its recovery audit program, in accordance with guidance received from JMD.
Response. The BOP concurs with the recommendation. The BOP will develop written recovery audit procedures after receiving the appropriate guidance from JMD concerning the recovery audit program. The BOP'S recovery audit procedures will be documented within two months after JMD issues its guidance.
Recommendation 15. Report recovery audit activities and accomplishments quarterly to JMD, in accordance with guidance received from JMD.
Response: The BOP concurs with the recommendation. Beginning with the first quarter of FY 2005, the BOP began reporting the recovery audit activities and accomplishments to JMD on a quarterly basis.
Status: The BOP has included its quarterly Report on Recovery Audit Activities for the first quarter of FY 2005. Therefore, the BOP considers this recommendation closed.
Recommendation 16. Develop and implement written policies and procedures for its recovery audit program, in accordance with guidance received from JMD.
Response. The OJP concurs with the recommendation. The Program Review Office and the Office of the Comptroller will develop and implement written policies and procedures, consistent with guidance from JMD, for OJP's recovery audit program.
Recommendation 17. Ensure that its recovery audit program addresses and includes grant payments.
Response. The OJP concurs with the recommendation. The written policies and procedures for OJP's recovery audit program that will be developed by the Program Review Office and the Office of the Comptroller will include grant payments. While grant payments are not covered under Public Law 107-107, National Defense authorization Act for FY 2002, OJP agrees that recovery of overpayments to grantees should be collected.
Recommendation 18. Report recovery audit activities and accomplishments quarterly to JMD, in accordance with guidance received from JMD.
Response. The OJP concurs with the recommendation. Beginning with the first quarter of FY 2005, the OJP began reporting the recovery audit activities and accomplishments to JMD on a quarterly basis.
Status: The OJP has included its quarterly Report on Recovery Audit Activities for the first quarter of FY 2005. Therefore, the OJP considers this recommendation closed.
Recommendation 19. Develop and implement written policies and procedures for its recovery audit program, in accordance with guidance received from JMD.
Response. The FBI concurs with the recommendation. Following amplifying guidance from JMD, the FBI will formalize its existing policies and procedures in the form of a serialized electronic communication which mandates that the existing recovery program includes all activities related to improper payments. Further, the FBI's program will be in accordance with JMD guidance.
Recommendation 20. Report recovery audit activities and accomplishments quarterly to JMD, in accordance with guidance received from JMD.
Response. The FBI concurs with the recommendation. Effective with the reporting period which ended December 31, 2004, and in accordance with guidance received from JMD, the FBI began reporting its recovery audit activities and accomplishments quarterly to JMD.
Status: The FBI has included its quarterly Report on Recovery Audit Activities for the first quarter of FY 2005. Therefore, the FBI considers this recommendation closed.
Recommendation 21. Develop and implement written policies and procedures for its recovery audit program, in accordance with guidance received from JMD.
Response. The USMS concurs with the recommendation. The USMS will develop written recovery audit procedures after receiving the appropriate guidance from JMD concerning the recovery audit program.
Recommendation 22. Report recovery audit activities and accomplishments quarterly to JMD, in accordance with guidance received from JMD.
Response. The USMS concurs with the recommendation. Beginning with the first quarter of FY 2005, the USMS began reporting the recovery audit activities and accomplishments to JMD on a quarterly basis.
Status: The USMS has included its quarterly Report on Recovery Audit Activities for the first quarter of FY 2005. Therefore, the USMS considers this recommendation closed.
If you have any questions concerning this subject, please contact Melinda Morgan, Director, JMD/Finance Staff, on (202)616-5800, or Lori Armold, Assistant Director, Financial Management Policies and Requirements Group, JMD/Finance Staff, on (202)616-5216.
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