Commercial Pay – Mechanization of Contract Administration Services (MOCAS)

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Program level Payment Integrity results

Sponsoring agency: Department of War

View on Federal Program Inventory

PROGRAM METRICS

$222,333 M

in FY 2024 outlays, with a

100.0%

payment accuracy rate

PROGRAM METRICS

$225,039 M

in FY 2025 outlays, with a

99.4%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-0.04

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    The Department's Commercial Pay MOCAS program in FY 2024 did not have a formal corrective action plan based on current year findings. Specifically, corrective action plans are required under the Payment Integrity Information Act of 2019 (PIIA) when a program's total annual improper payments plus unknown payments exceed the statutory threshold. In the current reporting year, the Department's Commercial Pay MOCAS program reported an estimated total of $96.29 million of improper plus unknown payments, which is only 0.04 percent of the total outlays. Hence, no specific corrective actions were taken for this program. The Department pursues continuous training actions for current and new employees throughout the Commercial Pay MOCAS program. Additionally, through trend and root cause analysis, specific training is provided to prevent improper payments from technician error. For root causes other than technician error, the issue is addressed with the applicable party at fault (i.e., contracting personal, receiving entities and systemic controls to name a few. The Advana detection tool is continually monitored and evaluated to rank and rate proposed integrity checks to identify and prevent improper payments in the pre-payment environment.
    FY2024 Q4
    Completed
    Training
    The Department's Commercial Pay MOCAS program does not have a formal corrective action plan to maintain or improve based on current year findings. Specifically, corrective action plans are required under the Payment Integrity Information Act of 2019 (PIIA) when a program's total annual improper payments plus unknown payments exceed the statutory threshold. In the current reporting year, the Department's Commercial Pay MOCAS program reported an estimated total of $96.29 million of improper plus unknown payments, which is only 0.04 percent of the total outlays. Hence, no specific corrective actions were taken for this program. The Department pursues continuous training actions for current and new employees throughout the Commercial Pay MOCAS program. Additionally, through trend and root cause analysis, specific training is provided to prevent improper payments from technician error. For root causes other than technician error, the issue is addressed with the applicable party at fault (i.e., contracting personal, receiving entities and systemic controls to name a few. The Advana detection tool is continually monitored and evaluated to rank and rate proposed integrity checks to identify and prevent improper payments in the pre-payment environment.
    FY2025
    Planned

Overpayments

The Department’s Payment Integrity Commercial Pay – Mechanization of Contract Administration Services (MOCAS) program focuses on commercial vendors who deliver goods to or perform services for the DoD. The Department’s contractual payments require a three-way match between contract, invoice, and goods receipt and acceptance. Through internal controls and prepayment authorizations, overpayments are usually prevented. The Department's overpayments within the agency control under the Commercial Pay – MOCAS program in FY 2024 were mainly attributed to human input error. During the FY 2024 post-payment reviews of the program, it was found that payment terms were entered incorrectly into MOCAS when contract modifications were implemented. These overpayments are classified as within agency control because the contract input team has responsibility for ensuring that the payment terms are entered timely and accurately when a new contract or modification is received. The contract input team is also responsible for verifying the accuracy of the payment, to include payment terms, prior to release. The Department has several controls in place to prevent overpayments from occurring, including requiring that prior to payment, entitlement technicians complete a review of the contract and supporting documentation. In addition, a procedure is in place for any payments greater than $1 million to undergo secondary review to ensure entitlements are legal, proper, and correct. The contract input team also utilizes a daily report to track contracts and modifications received to ensure timely input into the system. The above controls that failed are being reviewed to determine how they can be strengthened and to determine if additional training or controls are needed.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $73.28 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $73.28 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Contractor or Provider Status $73.28 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Training Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $23.01 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $23.01 M

Eligibility element/information needed Eligibility amount
Contractor or Provider Status $23.01 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$23.01 M

Unknown Payment Details

Evaluation of corrective actions

The Department's Commercial Pay - MOCAS program will not have a formal corrective action plan based on current year findings. Specifically, corrective action plans are required under the Payment Integrity Information Act of 2019 (PIIA) when a program's total annual improper payments plus unknown payments exceed the statutory threshold. In the current reporting year, the Department's Commercial Pay - MOCAS program reported a total of $96.3 million in improper plus unknown payments, which is below the statutory threshold. The Department's existing controls to address improper and unknown payments under the Commercial Pay - MOCAS program are being reviewed to determine how they can be strengthened and if additional training or controls are needed to address potential deficiencies. DFAS Post Pay Review & Analysis team will provide training to review teams regarding proper documentation required for government credit card transactions. This Training will be provided to the review teams during the annual kick off meeting on the appropriate documentation required to complete sample packages along with specific examples of acceptable documentation. Additionally, through trend and root cause analysis, specific training will be provided to prevent technician error improper payments. In cases when the root cause is for other than technician error, the issue will be addressed with the applicable party at fault i.e., contracting personal, receiving entities and systemic controls.

The Department's Commercial Pay MOCAS program did not have a formal corrective action plan based on current year findings. Specifically, corrective action plans are required under the Payment Integrity Information Act of 2019 (PIIA) when a program's total annual improper payments plus unknown payments exceed the statutory threshold. In the current reporting year, the Department's Commercial Pay program reported a total of $96.3 million in improper plus unknown payments, which is below the statutory threshold.

The Department pursues continuous training actions for current and new employees throughout the Commercial Pay MOCAS program. Additionally, through trend and root cause analysis, specific training is provided to prevent technician error improper payments. For root causes other than technician error, the issue is addressed with the applicable party at fault (i.e., contracting personal, receiving entities and systemic controls to name a few). The Advana detection tool is continually monitored and evaluated to rank and rate proposed integrity checks to identify and prevent improper payments in the pre-payment environment.

Although below the statutory threshold, the $96 million in improper and unknown payments made by the Department under the Commercial Pay - MOCAS program should be preventable based on the following processes and controls: (1) The agency contract input team has responsibility for ensuring that the payment terms are entered timely and accurately when a new contract or modification is received; (2) The agency is also responsible for verifying the accuracy of the payment, to include payment terms, prior to release; (3) Requiring that prior to payment, entitlement technicians complete a review of the contract and supporting documentation; (4) A procedure is in place for any payments greater than $1 million to undergo secondary review to ensure entitlements are legal, proper, and correct; and (5) The contract input team utilizes a daily report to track contracts and modifications received to ensure timely input into the system. The above controls are being reviewed to determine how they can be strengthened and if additional training or controls are needed.

Future payment integrity outlook

Commercial Pay – Mechanization of Contract Administration Services (MOCAS) has NOT established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $244,566.72 M
Current year +1 estimated future improper payments $86.66 M
Current year +1 estimated future unknown payments $35 M
Current year +1 estimated future improper payment and unknown payment rate 0.05 %

The program's current year improper payment and unknown payment rate of 0.04 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The Department's established tolerable rate for the MOCAS Commercial Pay program is underneath the OMB statutory $100 Million projected Improper and Unknown payment estimates currently. The Department is confident that continued operational training and reliance on the Advana Payment Integrity tool will ensure continued effectiveness and rates below the OMB threshold.

Internal Controls:
The Department has the internal controls in place to support the reduction of improper payments in the Commercial Pay – MOCAS program to the levels the Department has targeted. However, a material weakness in Contract Administration related to improper payments was reported in fiscal year (FY) 2021 through the Risk Management/Internal Control Program. Moreover, the Office of the Under Secretary of the Defense (Comptroller) provides ongoing oversight to ensure material weaknesses are resolved by their target dates and coordination continues between the Risk Management/Internal Control Program and the Payment Integrity Program to leverage best practices in internal controls.

Human Capital:
The Department has the human capital it needs to reduce improper payments in the Commercial Pay – MOCAS program to the levels the Department has targeted. However, as the Commercial Pay -MOCAS program evolves and DoD operations change, additional skill sets and personnel resources may be needed to sustain and advance the program.

Information Systems and Other Infrastructure:
The Department has the information systems and other infrastructure it needs to reduce improper payments in the Commercial Pay - MOCAS program to the levels the Department has targeted. The Defense Finance and Accounting Service (DFAS) Contract Pay, received an unmodified System and Organizational Control (SOC) 1 Type 2 report under Statement on Standards for Attestation Engagements (SSAE) No. 18 in FY 2024. The general and application controls of the Mechanization of Contract Administration Services System (which accounts for more than 50% of the outlays of all Commercial Pay programs) were included in the scope of the DFAS Contract Pay SSAE No. 18 examination. As technology advances, the Department continues to consider ways to improve the accuracy and efficiency of commercial pay through implementation of new commercial and entitlement processing systems and enhancements to existing systems.

The MOCAS Commercial Pay program did not have any recent specific Payment Integrity budget submissions that the Office of the Under Secretary of Defense (Comptroller) Payment Integrity Team is aware. Furthermore, the Department is not aware outside the normal system upgrade requirements that will require additional resources.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

Within the Defense Finance and Accounting Service (DFAS), all Commercial Pay operations are responsible for tracking OMB metrics, proper payment count and dollars. Metrics are tracked monthly and updates are provided to the Director of DFAS at least three times per year. A green rating for this metric is greater than or equal to 99.6%, yellow is less than 99.6% and greater than or equal to 99.0% and red is less than 99.0%. Management must provide narratives and/or Corrective Action Plans for Red and Yellow ratings. At the operational level, entitlement technicians are held accountable through appraisal standards which limit them to no more than 5 errors per quarter, certifying official appraisal standards hold them to no more than 1% of payments certified during the rating period identified as improper. In addition, certifying officials have pecuniary liability for loss of funds unless relieved. Managers have overall responsibility to ensure metric targets are met and maintained.

Furthermore, the Department of Defense Payment Integrity Senior Accountable Officials Steering Committee (the Committee) was created in FY 2018, and it institutionalized a forum of accountability to oversee and guide the Department’s actions required by Appendix C of the OMB Circular Number A-123 to achieve full compliance with the Payment Integrity Information Act of 2019 (PIIA). The Committee is chaired by the Office of the Under Secretary of Defense (Comptroller)/Deputy Chief Financial Officer and co-chaired by the Defense Finance and Accounting Service, Deputy Director of Operations. It also includes Senior Executive Service representatives from the Military Services and Defense Agencies. The Committee provides oversight to the DoD Payment Integrity program and drives action for compliance with the PIIA. More specifically, the Committee evaluates the status of improper payments testing, the root causes of improper payments and appropriate actions to reduce them, payment recovery activities, and solutions to resolve DoD-wide audit findings and recommendations related to improper payments. Additionally, the Committee supports audits related to improper payments, reviews audit recommendations, performance of risk assessments and oversees the identification of root cause(s) and the development and implementation of corrective actions to address areas of noncompliance.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2023 - 09/2024


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-0.42

Causes

Payment Integrity reporting for the Department of War's (DoW) Commercial Pay - MOCAS program revealed a material level of improper and unknown payments, exceeding the $100 million statutory threshold. A significant portion of these errors stemmed from two primary causes: the handling of net credit disbursements at the service level and the practice of intentionally short-paying invoices based on calculated business decisions. Understanding the root causes of these issues is crucial for developing effective strategies to improve payment accuracy and ensure responsible stewardship of government funds.

The "net credit" problem arises from the Department's handling of multi-funded invoices. Vendors are permitted to bill credits without a corresponding net debit disbursement at the service level. This introduces complexity into payment calculations and can lead to inaccurate obligation balances, especially when errors occur in the setup of Contract Line Item Numbers (CLINs) and Accounting Classification Reference Numbers (ACRNs). Data quality issues exacerbate these problems, resulting in improper payments. The second major driver is the practice of intentionally short-paying invoices when all line items cannot be fully paid. While seemingly counterintuitive, this is a calculated risk mitigation strategy. The Department aims to reduce the accrual of costly late payment interest penalties and, more broadly, to preserve government funds and maintain purchasing power to support the warfighter. This approach prioritizes a smaller, controlled underpayment to avoid potentially larger, uncontrolled financial losses.

While classified as "improper payments," these intentional underpayments are recognized and can be rectified in subsequent payments. The Department has determined that the strategic benefits (reduced late payment interest, preservation of funds, and sustained purchasing power) outweigh the negative impacts. This approach acknowledges the complexities of large-scale government procurement and balances payment accuracy with broader financial and operational considerations. The Department is committed to reducing the occurrence of short payments by improving upstream compliance.

Finally, the Commercial Pay - MOCAS program experiences issues related to unknown payments. An analysis is underway to determine the root causes, with a report detailing findings and preventative measures expected in February 2026. This analysis will inform the development of measurable Corrective Action Plans (CAPs) to address the root causes and reduce future unknown payments.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $3.52 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $3.52 M

Underpayment root cause Underpayment amount
Amount of underpayments $462.19 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $462.19 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $751.84 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $169.62 M

Prevention

The Department of War (DoW) is committed to upholding the principles of the Payment Integrity Information Act of 2019 and complying with the requirements of OMB Circular A-123, Appendix C, to minimize improper and unknown payments. To address identified causes and prevent future occurrences, the Department has implemented and is planning several corrective actions centered around enhanced data integrity and standardized processes across the procure-to-pay lifecycle.

A key corrective action, already in effect as of May 21st, 2025, involves a procedural change within MOCAS Operations. Recognizing that invoices with net credits at either the service or invoice level frequently contribute to improper payments, the MOCAS program now rejects and returns such invoices to vendors without processing. This preventative measure ensures that vendors take responsibility for maintaining accurate billing practices, requiring them to submit only invoices reflecting net disbursements. Vendors needing to return funds are directed to utilize Pay.Gov instead of incorporating credit amounts directly into invoices that do not result in a net debit. This clear delineation of processes improves accuracy and reduces the risk of misapplication of funds.

Furthermore, the Department is addressing the established practice of intentionally short-paying invoices when full payment is not possible due to funding constraints on specific line items. While the Department acknowledges the continued necessity of this practice in certain situations, ongoing efforts aim to significantly reduce its frequency. These efforts focus on proactive measures designed to eliminate the conditions that lead to short payments. Specifically, the Department is working to ensure that adequate funding is loaded into the accounting system prior to vendors invoicing, thereby minimizing instances where line items cannot be fully paid. Additionally, vendors are being encouraged to bill expiring or cancelling funds separately to improve the chances of timely payment and reduce the need for short payments. A quarterly analysis and reporting of short pay trends is underway beginning March 2026, with the goal of developing additional measurable Corrective Action Plans (CAPs) by April 2026 to address root causes and reduce future short pays.

The long-term success of these corrective actions relies on establishing and enforcing key data integrity standards. The Department’s Corrective Action Plan (CAP) for the Commercial Pay – MOCAS program emphasizes strengthening the implementation of, and ensuring ongoing compliance with, critical standards that underpin the contract payment process. These include: (a) (OSD) Procure-to-Pay (P2P) Handshakes, which ensure seamless and accurate data exchange throughout the P2P lifecycle; (b) Procurement Data Standards (PDS), promoting standardized data elements and formats to enhance data quality and interoperability; and (c) Standard Line of Accounting (SLOA), maintaining consistent and accurate financial reporting through adherence to the SLOA framework. The Department will prioritize routine audits of transactions and reporting to ensure vendors are adhering to the new requirements. Training will be routinely conducted to ensure ongoing compliance.

In addition to these measures, the Department is conducting in-depth analyses of both technically improper and unknown payment causes. A detailed analysis of payment errors, particularly focusing on PGI and DCMA realignment-related errors, is scheduled for completion in March 2026, with corrective actions for at least 50% of identified root causes to be implemented by April 2026. Similarly, an analysis of reported unknown payments is targeted for completion in February 2026, with additional measurable CAPs to address root causes expected by March 2026. Ongoing compliance monitoring will be performed to measure corrective action plan effectiveness and achieve sustained improvement in payment accuracy and integrity across the Department.

The DoW's Corrective Action Plan (CAP) for the Commercial Pay - MOCAS program is designed with a level of planned and completed actions that directly addresses the identified causes of improper and unknown payments, ensuring proportionality to the severity of the associated amounts and the occurrence rate of each root cause. The implementation of a process within MOCAS Operations to reject and not process invoices with net credits at the service or invoice level exemplifies this principle. While the frequency of these instances may be relatively low, the substantial dollar value of transactions processed through MOCAS means that even a small number of errors can result in a significant financial projected impact. Therefore, implementing a proactive measure to eliminate this specific type of improper payment, effective May 21st, 2025, is a proportional and necessary response, preventing potentially large-scale errors from occurring in the first place. The immediacy of the improvement resulting from this measure underscores its effectiveness in directly addressing a high-risk area.

Addressing the underlying weaknesses in OSD Procure-to-Pay (P2P) Handshakes, Procurement Data Standards (PDS), and Standard Line of Accounting (SLOA) usage represents a longer-term, strategic approach to mitigating improper payments. While the impact of these improvements may not be immediately apparent, the systemic nature of these standards means that strengthening them will have a cascading effect across the entire financial management system. The root causes are widespread, impacting multiple payment streams and creating opportunities for errors to arise. These corrective actions, although not providing immediate, isolated remediation, aim to fortify the foundation of the payment process, ensuring data accuracy, consistency, and interoperability. This foundational strengthening is essential for reducing the frequency of improper payments stemming from various sources. The initial analysis of root causes for short paying invoices is expected by March 2026, with additional measurable CAPs to be created by April 2026.

Furthermore, the proportionality of these long-term corrective actions is carefully considered in light of the Department's broader objectives. While striving to eliminate improper payments, the CAP also recognizes the importance of maintaining operational efficiency and effectiveness. The enhanced data integrity and streamlined processes resulting from these improvements will not only reduce errors but will also contribute to the Department’s ability to minimize late payment interest penalties, preserve government funds, and maintain crucial purchasing power in support of the warfighter. This balanced approach ensures that corrective actions are not only effective in addressing improper payments but also supportive of the DoW's mission-critical priorities. The CAP recognizes that a multi-faceted, strategically proportional approach is required to ensure meaningful and lasting improvements in payment integrity.

The Department of War (DoW) has established a robust oversight structure to ensure the effective implementation and prioritization of corrective actions related to improper and unknown payments under the Commercial Pay – MOCAS program. Proposed corrective action plans undergo rigorous review and approval processes, requiring sign-off from the DFAS Site Director, responsible for overseeing the specific payment program, the DFAS Enterprise Accounting & Audit Support Director, and the Office of the Under Secretary of War (OUSW(C)) Enterprise Financial Transformation (EFT), directorate and the Payment Integrity Portfolio Manager. This multi-level approval mechanism ensures that corrective actions are aligned with both program-specific needs and broader Department-wide financial management objectives. To maintain continuous monitoring of progress, the DFAS Site Director and DFAS Enterprise Accounting & Audit Support Director receive monthly briefings on the status of corrective action plan milestone completion and program improper and unknown payment rates. The Department’s Payment Integrity Team creates and issues Provided-By-Client (PBC) requests in the Payment Integrity SharePoint, assigned to the owner of each corrective action plan, where individual milestones for each corrective action plan are monitored from inception through completion, with supporting documentation uploaded for storage and subsequent audit trail. This consistent oversight enables proactive identification of any challenges or deviations from the plan, allowing for timely adjustments and interventions to maximize effectiveness.

The implemented corrective actions are strategically focused on addressing the root causes of improper and unknown payments, particularly within the Commercial Pay - MOCAS program. Specifically, the new requirement, effective May 21st, 2025, for vendors to ensure net disbursements at both the service (if multi-funded) and invoice levels directly tackles the issue of vendors billing credits that do not result in a net debit disbursement at the service level. By returning invoices that do not meet this criterion without processing, the DoW effectively prevents the occurrence of these specific types of improper payments. Similarly, to mitigate improper payments resulting from the DoW's practice of short-paying invoices under certain conditions, the corrective actions target strengthening the implementation and ongoing compliance with critical data standards. Bolstering (OSD) Procure-to-Pay (P2P) Handshakes will improve data exchange accuracy across the P2P lifecycle, while enhanced Procurement Data Standards (PDS) will promote data quality and interoperability. Additionally, strengthening Standard Line of Accounting (SLOA) utilization will facilitate consistent and accurate financial reporting. These combined efforts will reduce the incidence of inaccurate open obligation amounts, thereby minimizing improper underpayments. The MOCAS process is also being reviewed, to allow short pays in special cases, and a possible request for a legislative waiver will be requested if necessary.

These corrective actions are considered adequate to address and prevent the identified improper and unknown payment. However, the full impact of these actions on reducing improper and unknown payments cannot be definitively assessed until the next PIIA review cycle, which examines payments one year in arrears. This time lag necessitates the use of alternative data sources to monitor current performance. To bridge this information gap, management will leverage other available improper payment data, such as ADVANA improper payment prevention data, to track performance in real-time. These insights, combined with the results of future PIIA compliance reviews, will provide a comprehensive understanding of the effectiveness of the implemented corrective actions, allowing for ongoing refinement and optimization to achieve sustained reductions in improper and unknown payments. This ongoing monitoring and adaptive approach would confirm whether the corrective actions are not only adequate but also dynamically responsive to evolving challenges.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Change Process, Training Change Process, Training
Underpayments Change Process, Training Change Process, Training
Technically improper payments Change Process, Training Change Process, Training
Unknown payments Change Process,Training Change Process,Training

Eligibility element/information needed Description of the eligbility element/information
Contractor or Provider Status Status or standing of contractor or provider, including recipient eligibility to provide medical services

Additional information

Reduction target

0.55 %

The Department of War (DoW) affirms that its existing internal controls, human capital, and information systems infrastructure are currently adequate to manage improper and unknown payments to a point where further investment in prevention and recovery efforts would likely exceed the projected cost savings. This determination is based on a comprehensive assessment of our payment processes, incorporating robust data analytics and risk-based strategies. Specifically, the DoW is leveraging its resources to improve data accuracy and consistency concerning contract payments. This includes strengthening data validation processes across systems, implementing rigorous reconciliation procedures, and continuously monitoring compliance with key standards such as P2P Handshakes, the Procurement Data Standards (PDS), and Standard Line of Accounting (SLOA) through established Key Performance Indicators (KPIs). Regular reporting on these KPIs will provide ongoing visibility into the effectiveness of these initiatives and inform any necessary adjustments to maintain an optimal balance between prevention costs and improper payment reduction.

Based on current information available to the Office of the Under Secretary of War (Comptroller) Payment Integrity Team, the Department did not include specific budget submissions explicitly dedicated to payment integrity enhancements in the most recent budget cycle. The Department acknowledges that ongoing system upgrades and maintenance across various financial management systems contribute indirectly to improving payment accuracy and reducing improper payments. The Department's budget strategy emphasizes leveraging existing resources and planned system enhancements to strengthen internal controls and improve data quality related to payments. Future budget submissions will continue to prioritize enhancements that promote payment integrity, incorporating lessons learned and evolving best practices.

Pursuant to the January 20, 2025, Presidential Memorandum entitled “Restoring Accountability for Career Senior Executives” and consistent with the President’s direction U.S. Office of Personnel Management (OPM) established new Senior Executive Service (SES) performance plans that all agencies must adopt beginning with the FY 2026 performance cycle. The “Faithful Administration of the Law and the President’s Policies” critical performance element has the highest weighted rating. Part of implementing these new directives that DoW mandates additional performance requirements specific to Financial Improvement and Audit Remediation (FIAR) standards.

SES members within the Secretary of War with ownership of the financial statement audit priorities will include specific performance requirements aligned to one or more of the annual audit priorities in their Achieving Organizational Goals critical elements. These requirements articulate specific, measurable, attainable, relevant and time-based performance measures that will support each organizational performance goal. As an example “Supports the annual financial statement audit by accelerating the path to an unmodified audit opinion.” SES members with a direct role must comply with the policies and regulations, implement internal control procedures, document transactions, submit auditor-requested materials timely, remediate high risk/priority material weaknesses, develop/update audit roadmaps and drive remediation strategy and plans targeted at achieving an unmodified opinion. They further direct continuous process and internal control improvements, identifies root cause(s) of issues and sustains up-to-date system internal controls. Additionally, SES members are accountable for driving government efficiencies within their organization to streamline proficiencies, quality work and cost-effective use of government resources. SES members with an indirect role must implement timely, effective and measurable corrective actions plans and maintain key supporting documentation to substantiate financial transactions to ensure their workforce is properly trained on their business effectiveness and are held accountable. All of which either directly and/or indirectly equips the DoW with the inherent ability and organizational leadership structure to achieve compliance with the Payment Integrity Information Act.

Furthermore, to provide high-level strategic direction and oversight, the Department of War Payment Integrity Senior Accountable Officials Steering Committee (the Committee) was established in FY 2018. This Committee, institutionalizes a forum of accountability designed to oversee and guide the Department’s actions required by Appendix C of OMB Circular A-123, aiming for full compliance with the PIIA. The Committee is chaired by the Office of the Under Secretary of War (Comptroller)/Deputy Chief Financial Officer and co-chaired by the Defense Finance and Accounting Service, Deputy Director of Operations and has SES representatives from the Military Services and War Agencies. The Committee evaluates the status of improper payment testing, analyzes the root causes of improper payments, oversees payment recovery activities, and drives the resolution of DoW-wide audit findings and recommendations related to improper payments. In addition, the Committee supports related audits, reviews audit recommendations, oversees risk assessments and supervises the identification of root causes and the development/implementation of corrective actions to address areas of non-compliance.

$1,214.03 M