VA continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper payments agency-wide as evidenced by its third consecutive and largest year of reductions. Specifically, from FY20 to FY21, the Communications, Utilities, and Other Rent program decreased its error rate from 12.23 percent to 3.58 percent (8.65% reduction) and improper payments from $213.94 million to $63.92 million ($150.02 million reduction).

Communications, Utilities, and Other Rent has established a baseline.

The program's current year improper payment and unknown payment rate of 3.58 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

VA does not have additional program needs.

VA performed an effectiveness review in FY 2022 of the actions implemented in FY 2021. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Communications, Utilities, and Other Rent program indicated that of the four actions assessed, two were closed and determined to be effective in mitigating the root cause, one was open and determined to be correctly designed to mitigate the root cause, and one was open and determined that improvements could be made to effectively mitigate the root cause. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to failure to access data/information, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $4.28 million in FY 2020 to $1.07 million in FY 2021, or a 75% reduction. For errors tied to statutory requirements of program were not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $209.44 million in FY 2020 to $27.87 million in FY 2021, or an 87% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies did not reduce the improper payment amount from FY 2020 to FY 2021.

VA will perform an effectiveness review in FY 2023 of the corrective action plans implemented in FY 2022 due to the time needed to implement actions as well as to impact the payment process. Results of this review will be reported in FY 2023.

Communications, Utilities, and Other Rent has established a baseline.

The Communications, Utilities, and Other Rent reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

The program's current year improper payment and unknown payment rate of 2.7 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments. The program plans to maintain compliance with the Payment Integrity Information Act of 2019 for FY 2022.

VA has not yet determined the tolerable rate. VA is working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish tolerable rates. At this time, VA is not aware of additional program needs.

VA is still working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish a tolerable rate. At this time, VA is not aware of additional program needs.

The Communications, Utilities, and Other Rent program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its fifth consecutive year of rate reductions. Specifically, from FY 2022 to FY 2023, the Communications, Utilities, and Other Rent program decreased its improper and unknown error rate from 2.70% to 2.49%, a reduction of 0.21%. In FY 2023, VA performed an effectiveness review of the actions developed and implemented in FY 2022. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Communications, Utilities, and Other Rent program indicated that of the five actions assessed, two were closed and determined to be effective in mitigating the root cause, two were open and determined to be correctly designed to mitigate the root cause, and one was open and determined that improvements could be made to effectively mitigate the root cause. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to statutory requirements of program not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $27.87 million in FY 2021 to $27.68 million in FY 2022, or a 1% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies contributed to a total reduction in the unknown payment amount from $34.99 million in FY 2021 to $14.97 million in FY 2022, or a 57% reduction. For errors tied to failure to access data/information, associated corrective actions or mitigation strategies did not reduce the improper payment amount from FY 2021 to FY 2022.

VA will perform an effectiveness review in FY 2024 of the corrective action plans developed and implemented in FY 2023 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2024.

Communications, Utilities, and Other Rent has established a baseline.

The Communications, Utilities, and Other Rent reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

The program's current year improper payment and unknown payment rate of 2.49 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments. The program plans to maintain compliance with the Payment Integrity Information Act of 2019 for FY 2023.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. In March 2023, GAO acknowledged VA’s substantial reduction in improper and unknown payments using effective mitigation strategies and corrective actions (GAO-23-106285, IMPROPER PAYMENTS: Fiscal Year 2022 Estimates and Opportunities for Improvement). VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements planned to internal controls, human capital, information systems and other infrastructure, as needed, over VA’s payment processing and procurement systems to continue reducing improper and unknown payments. VA will establish a tolerable rate if all applicable requirements are met.

At this time, VA is not aware of additional program needs. Therefore, VA has not requested additional resources to establish and maintain internal controls to reduce improper and unknown payments to a tolerable rate.

The Communications, Utilities, and Other Rents program prioritized and implemented effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its sixth consecutive year of rate reductions and projections under the statutory threshold for significant improper payments of both 1.5% and amount over $10 million. Specifically, from FY 2023 to FY 2024, the Communications, Utilities, and Other Rents program decreased its improper and unknown error rate from 2.49% to 0.57% (a reduction of 1.92%) and improper and unknown payments from $53.09 million to $13.27 million ($39.82 million reduction). In FY 2024, VA performed an effectiveness review of the actions developed and implemented in FY 2023. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Communications, Utilities, and Other Rents program indicated that of the five actions assessed, two were effective, two were designed effectively, and one was designed ineffectively. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to statutory requirements of program not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $23.30 million in FY 2023 to $8.57 million in FY 2024, or a 63% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies contributed to a total reduction in the unknown payment amount from $27.74 million in FY 2023 to $0.73 million in FY 2024, or a 97% reduction. For errors tied to failure to access data/information, associated corrective actions or mitigation strategies did not reduce the improper payment amount from FY 2023 to FY 2024.

Due to the program successfully reporting an error rate under 1.5% and improper payments under $100 million in FY 2024, an effectiveness review will not be performed in FY 2025. Management will continue its responsibilities for internal control outlined in the Government Accountability Office’s Green Book.

VA reduced the error rate in this program from 2.49% in FY 2023 to 0.57% in FY 2024, resulting in a reduction of $39.82 million by implementing effective corrective actions and mitigation strategies. VA's process for development of corrective actions and mitigation strategies ensures the severity of the error is considered and the action is adequate. VA's corrective actions and mitigation strategies have been evaluated by the Office of Inspector General during their FY 2024 annual audit and determined reasonable with no recommendations for improvement. The overpayments and underpayments were attributed to VA's failure to access data/information, technically improper payments were attributed to statutory requirements of the program not met, and unknown payments were attributed to being unable to determine whether proper or improper. Actions taken regarding change process included restructuring existing local and national contracts and rejecting invoices that do not comply with contract requirements. Additionally, VA ensured ordering processes were compliant with statute and regulation, thus reducing technically improper payments caused by unauthorized commitments.

VA has identified root causes for improper and unknown payments and developed effective corrective actions and mitigation strategies. The cause of overpayments and underpayments were attributed to failure to access data/information, the cause of technically improper payments were attributed to statutory requirements of the program not met, and the cause of unknown payments were attributed to unable to determine whether proper or improper. In particular, the majority of overpayments occurred because the claim was not paid according to contract terms. The majority of underpayments occurred because the claim was paid less than the lease agreement rate. The majority of technically improper payments occurred due to lack of requests for procurement action. The majority of unknown payments occurred because VA lacked information in the contract price schedule. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes.

VA updated corrective action plans annually based on testing results, and no less than quarterly throughout the fiscal year, to ensure actions planned were appropriately prioritized and designed to mitigate risks of improper and unknown payments. VA monitored progress and results of implementation on a quarterly basis. Additionally, an effectiveness review was performed annually to measure if an action planned had reduced or was properly designed to reduce improper and unknown payments for a specific root cause based on a set benchmark. The annual effectiveness review process allowed VA to create or update actions as necessary to ensure continued progress in the remediation of improper and unknown payments. If areas for improvement were identified, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error. The decrease in the improper payment and unknown payment rate from 2.49% in FY 2023 to 0.57% in FY 2024 supports the effective implementation and prioritization of action within the agency.

Communications, Utilities, and Other Rent has established a baseline.

VA did not set a reduction target for FY 2025 as the Communications, Utilities, and Other Rents program is reporting under the statutory threshold for significant improper payments in FY 2024. The program will revert to fulfilling legislative requirements for risk assessments no less than every three years. Management will continue its responsibilities for internal control outlined in the Government Accountability Office's Green Book.

The program's current year improper payment and unknown payment rate of 0.57 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA did not determine a tolerable rate as it was confident that planned and taken corrective actions and mitigation strategies did not impede the mission and could be implemented cost-effectively within existing budget authority. In FY 2024, this program is reporting under the statutory threshold for significant improper payments and will revert to fulfilling legislative requirements for risk assessments no less than every three years. Management will continue its responsibilities for internal control outlined in the Government Accountability Office's Green Book.

VA did not determine a tolerable rate as it was confident that planned and taken corrective actions and mitigation strategies did not impede the mission and could be implemented cost-effectively within existing budget authority. In FY 2024, this program is reporting under the statutory threshold for significant improper payments and will revert to fulfilling legislative requirements for risk no less than every three years. Management will continue its responsibilities for internal control outlined in the Government Accountability Office's Green Book.

At this time, VA is reporting under the statutory thresholds established for payment integrity and will revert to fulfilling legislative requirements for risk assessments no less than every three years. Management will continue its responsibilities for internal control outlined in the Government Accountability Office's Green Book.