Office of Inspector General
April 1, 2025
SENT BY EMAIL
The Honorable Rand Paul
Chairman
Committee on Homeland Security and Government Affairs
United States Senate
340 Dirksen Senate Office Building
Washington, DC 20510
Re: 2025 Office of Inspector General Review of the NCUA’s 2024 Compliance under the Payment Integrity Information Act of 2019 (PIIA)
Dear Chairman Paul:
The Payment Integrity Information Act of 2019 (PIIA), 31 U.S.C. §§ 3351-58, requires agencies to review all programs and activities they administer to identify those that may be susceptible to significant erroneous payments. OMB Circular A-1231 states that “any program that expends at least $1 million during the year [is required] to implement payment recapture audits, if cost effective to the agency, in order to recover improper payments.” PIIA requires the Office of Inspector General (OIG) of each agency to determine whether the agency complied with the PIIA. Appendix C to Circular A-123, Memorandum M-21-19, states that the OIG evaluates the accuracy, and completeness of agency reporting, reducing, and recapturing of improper payments.
On a quarterly basis, the National Credit Union Administration (NCUA) tests a sample of its programs and activities as a part of its Improper Payments Continuous Monitoring Program.2 Based on these tests, and as part of their annual improper payment reporting, the NCUA has concluded that it does not have programs that are susceptible to significant improper payments. In addition, because it would not be cost effective to the NCUA, the agency did not perform a recapture audit. The agency also did not receive recommendations from their recovery audit contractor regarding actions that can be taken to prevent overpayments. Accordingly, this requirement is also not applicable to the NCUA.
PIIA requires Inspectors General to annually assess and report on their agencies’ improper payment risk assessments in accordance with PIIA criteria. The NCUA OIG assessed the NCUA’s compliance with the following PIIA criteria:
1. Publish and post a Performance and Accountability Report (PAR) or Agency Financial Report (AFR).
The NCUA issued its financial statements and posted them to the agency website on February 13, 2025. The NCUA also published its 2024 Annual Report on March 18, 2025, which included a section on payment integrity/improper payments that concluded that the NCUA does not have programs that are susceptible to significant improper payments.
2. Conduct risk assessments at least once every 3 years.
We reviewed the NCUA’s 2023 risk assessment of all its programs and activities and its determination that these programs and activities have a low risk of significant improper payments. We agree with the NCUA’s overall risk analysis and because the NCUA’s improper payment amount was below the statutory threshold, we have nothing further to review for compliance under PIIA.
PIIA and OMB Memorandum M-21-19 require agencies to assess their programs at least once every 3 fiscal years. Consequently, the NCUA indicated its intent to reassess the susceptibility of its programs and activities to significant improper payments in FY 2026. We agree with this schedule based on the low risk of improper payments of NCUA funds.
3. Publish improper payment and unknown payment estimates.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
4. Publish corrective action plans.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
5. Publish and meet improper payment and unknown payment reduction targets.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
6. Demonstrate improvements to payment integrity or reached a tolerable improper payment or unknown payment rate.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
7. Develop a plan to meet the improper payment and unknown payment reduction target.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
8. Achieve an improper payment rate of less than 10%.
Because the NCUA’s programs are low risk, this PIIA requirement is not applicable.
Should you have any questions, please do not hesitate to contact my counsel, Marta Erceg, at 703/518-6352.
Sincerely,
/s/
James W. Hagen
Inspector General
cc: Executive Director Larry D. Fazio
Footnotes
1 OMB Circular A-123, Appendix C, also stated that significant improper payments are defined as gross annual improper payments in a program exceeding both 1.5 percent of program outlays and $10 million of all program payments made during the year, or $100 million regardless of the percentage.
2 NCUA has developed an Improper Payments Continuous Monitoring Program to identify, on a sample basis, improper payments and to communicate those results to process owners with the intent to recover those payments.