IG Labels CSRS Improper Payments ‘High-Risk’

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By on December 8, 2018 in Retirement with 0 Comments

Letter blocks on a table spelling the word 'risk'

A recent report from The Office of Personnel Management’s Inspector General said that while they represent a relatively small portion of the total annuity payments under the Civil Service Retirement System (CSRS), improper payments are still considered to be in a “high-risk category.”

In FY 2017, OPM paid over $82.9 billion to nearly 2.6 million Federal annuitants and survivor annuitants under both CSRS and the Federal Employees Retirement System (FERS). These payments are made out of the Civil Service Retirement and Disability Fund (Retirement Trust Fund), into which Federal employees and the Government (i.e., American taxpayers) each contribute.

OPM said that the overall improper payment rate for these retirement programs was .38 percent in the same fiscal year. According to the IG, the total amount of all types of improper retirement payments reported by OPM was $313.8 million, and of that figure, $238.7 million (.29%) were overpayments. The amount of payments that resulted in underpayments was $75.1 million, which represented .09%.

So why do the improper payments still represent a “high-risk” even though these figures are such a small percentage of the overall total of payments made? According to the IG report, it is due to the antiquated IT systems at OPM.

“OPM’s systems were not designed or built to perform analysis of vast quantities of data,” states the IG report, and added, “…it [OPM’s Retirement Service office] is unable to provide the level of granularity needed to fulfill OMB A-136 reporting requirements.”

Although OPM remains committed to identifying the root causes of the improper payments, the IG did not paint an optimistic picture of the situation. It said:

[W]e continue to believe that the process for conducting projects and reviews such as those described above, and for reporting and following up on the results, needs to be improved. In addition, the need for continuing innovation in the analysis of available information on annuity payments is never ending. The OIG spends a significant amount of time and resources identifying, assessing, and investigating retirement cases where a single deceased annuitant was improperly paid over five, ten, or even twenty years. It is clear that not all improper payments are being identified in a timely manner.

Furthermore, we continue to conclude that Retirement Services lacks a comprehensive centralized tracking system to record and analyze its program integrity work, and lacks appropriate internal control procedures to timely detect, identify, and report potential fraud, waste, and abuse.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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