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The federal agency in charge of the AmeriCorps program has failed to follow White House orders to reduce improper federal grant payments for the third year in a row, the agency’s inspector general (IG) said in a report released Friday.
The agency, which doles out $750 million in grant money per year, is susceptible to millions in improper payments every year, the IG found.
The IG for the Corporation for National and Community Service (CNCS ) criticized the agency for failing to comply with executive orders and guidance from the White House Office of Management and Budget.
According to the report, the corporation has never conducted an audit of its grantmaking across the entire AmeriCorps program, which supports volunteer efforts around the country.
In signing the 2010 Improper Payment Elimination and Recovery Act (IPERA), President Barack Obama predicted the law would save the federal government $50 billion annually.
Friday’s IG report found a pattern of CNCS noncompliance with presidential executive orders on the implementation of the IPERA and OMB guidance on the law.
“This is the third consecutive year in which OIG has questioned the validity of the corporation’s IPERA analysis,” the IG said.
In fiscal year 2011, the corporation denied that any of its grant programs were susceptible to fraud or improper payments. AmeriCorps, it said, had improperly paid only $2.14 in grant money.
The IG called its projections “on their face unreasonable.”
“The corporation reached these results because it failed to examine whether the corporation’s expenditures were used for their intended purpose, a key IPERA criterion,” the report found.
Its accounting problems continued the next year. In fiscal year 2012, “the corporation was continuing to understate the prevalence of improper payments and had not accurately assessed the susceptibility of at least some of its programs.”
Once again, it failed to gauge whether recipients of $750 million in grant money disbursed that year were using the funds for their intended purposes.
In response to IG criticism of its accounting failures the corporation pledged to undergo “a comprehensive, statistically-projectable review of costs incurred by [AmeriCorps State and National] grants to develop a basis on which to assess the level of costs that are improper on the basis of not conforming to the terms and conditions of CNCS’ awards.”
To date, however, CNCS “has never conducted an analysis of the costs incurred by AmeriCorps grantees across the entire grant portfolio.”
Preliminary accounting has found at least $10 million in potential improper payments, “but it cannot reliably estimate how much more.”
Its most recent report on improper payments did not measure a statistically representative sample of grants, examine internal controls over improper payments, or devise plans to minimize those payments or recoup them when discovered.
Two months after submitting its annual agency financial report for fiscal year 2013, CNCS provided the IG’s office with an “improper payment testing and assessment,” but did not say how it would remedy improper payments.
“In light of this uncertainty and the corporation’s clear non-compliance with IPERA in FY 2013, OIG has deferred further evaluation of the methodology used in the Corporation’s FY 2013 assessment,” the IG said.
CNCS did not respond to a request for comment on the IG report.