1. Improper Payment Information Act Program
Post Payment Review Training
March 2017

2. Post Payment Review (PPR) Training Objectives
During the Post Payment Review training, participants will receive information on how to identify, correct, prevent, and report improper payments.
Inform Navy staff of the Improper Payment Information Act as it relates to the post payment review process
Provide an overview on how to review vouchers, identify improper payments, and report results
Review sample improper payment vouchers for verification
Review the process to correct improper payments (pay overpayments and/or remit underpayments)
Provide tips on how to prevent improper payments through root cause analysis and corrective action plans
Understand reporting requirements and associated documentation

3. Background
The IPIA policy was developed to decrease improper payments and increase agency accountability. OMB has oversight and governs improper payment policy.
Improper Payment Information Act (IPIA) of 2002 requires agencies to periodically review all programs and activities (hereafter “programs”) and identify those that may be susceptible to significant improper payments. For those programs that are susceptible to significant improper payments, the law requires agencies to develop sampling plans and sample vouchers to determine the root causes of improper payments and to develop corrective actions to prevent improper payments from recurring.
OMB Circular A-123, Appendix C, Part 1A, Paragraph 2 defines an improper payment as:
Overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amounts and duplicate payments)
Any payment (over or underpayment) made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement
Any payment that was made to an ineligible recipient or for an ineligible good or service, or payment for goods or services not received (except for such payments authorized by law)
When an agency’s review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment must also be considered an improper payment

4. Associated Terms/ Acronyms
Key Highlights
The PPR process includes retention requirements, associated terms/ acronyms and critical forms
Record Retention
Associated Terms/ Acronyms
Critical Forms
Program Office must retain PPR supporting documentation for a minimum of three years after the completion of the Inspector General review or the completion of actions resulting from the review
Retain copies of sample sets, vouchers, and supporting documentation for each finding
Retain copies of RCAs and CAPs
Ensure records retained are sufficient for internal and external auditors to replicate the reported results
Acronym and term definition used within the PPR process include:
Improper Payment Information Act (IPIA)
Post Payment Review (PPR)
Root Cause Analysis (RCA)
Corrective Action Plan (CAP)
DoD Financial Management Regulation (DOD FMR)
Office of Management and Budget (OMB)
Tax Identification Number (TIN)
High Dollar Overpayment – overpayment made to an individual or entity. Any payment in excess of 50 percent of the correct amount of the intended payment (see appendix for details)
Post Pay Review Checklist (see slide 8) –a guide used when reviewing vouchers and supporting documentation
Matrix of Improper Payment Categories (i.e. similar to DoD FMR, Volume 4, Chapter 14) (see slide 13) – a document that must be completed for every improper payment by the Reviewer
Reporting Requirements-(see slide 16) this is a template that provides specific reporting requirements to the Program Office/FMO
A-136, Table 1 and the Overpayment Recapture Form (see slide 24, 25) – provides additional information to report
Instructor Notes:

5. Key Stakeholder Roles and Responsibilities
Stakeholders play a key role in the PPR process.
FMO
Reviewers
Certifying Officer
Program
Office
Responsible for administering the DON IPIA program and PPR requirements
Provide instruction and guidance to Reviewers and review sampling plans
Consolidate all PPR, Root Cause Analysis (RCA) and Corrective Action Plans (CAP) metrics for DON
Prepare Annual Financial Report (AFR) and incorporate IPIA notes
Pull vouchers and identify improper payments
Communicate improper payments to Certifying Officers
Provide insight into root causes and support the CAP resolution
Track and report results of the PPR and provide to the Program Office
Perform review of improper payments received from Reviewer
Collect over payments and/or pay underpayments.
Provide a status of improper payments and collections to reviewer
Support root cause analysis and CAP development
Issue sample sets to the Reviewer
Collect information from Reviewer
Identify the root cause(s) of improper payment(s) and develop corrective action plans
Consolidate reviewer information, the estimate table and Table 14-1 of the DoD FMR

6. Receive and Validate Samples
Post Payment Review (PPR) Process
The PPR process provides a standardized method to identify, correct, prevent, and report improper payments.
Process
Role
Activity
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Receive a sample set of transactions generated by a Service Provider or according to internal sampling plans
Ensure there is sufficient information within the sample sets to perform testing
Examine vouchers using the IPIA checklist to assess each payments’ propriety
Notify Certifying Officer of identified improper payment to take actions to correct, prevent, and report (Note: Report high dollar overpayments individually)
Track and report results of the review to the responsible Program Office
Certifying Officer will validate the review, recover overpayments and/or pay underpayments, take actions to prevent improper payments, and report status of improper payments to Reviewers
Program Office will use PPR results to conduct a comprehensive RCA and CAP to prevent the recurrence of improper payments
Report to FMO a consolidated list of improper payments and RCA and CAP summary
Reports results of 1) improper payment reviews, 2) matrix report of root causes or errors, 3) high dollar overpayments, 4) status of over and/or under payments, 5) status of RCAs and CAPs and 6) overall status of collection activity

7. Receive and Validate Samples
Reviewers are responsible for receiving and validating sample sets.
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Receipt of Sample Sets
Receive sample sets from Service Providers of transactions derived from the payment program universe, or
Obtain sample sets according to internal sampling plans
Validate Samples
Inspect to ensure there is sufficient information to review vouchers
Accept sample set
Retrieve vouchers and/or supporting documentation for review

8. Receive and Validate Samples
Review Vouchers and Documents
Reviewers examine vouchers and documents to determine if a payment is improper.
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Reviewing Payment Information
Leverage the Sample Post Payment Review Checklist1 to review sample sets and vouchers to determine if the payment is improper
Ensure there is appropriate supporting documentation (e.g. verify signature, match information to the voucher and payment documents, and identify missing documentation, etc.)
Identify improper payments and inform Certifying Officer for action to correct, prevent and report
Reporting Requirements
Receive the status of the RCA, CAP, and collection activities from the Certifying Officer
Track and report results of the review to the Program Office
Report High dollar Overpayments individually and as part of an aggregate Improper Payment Report
1 Sample Post Pay Package is included on next slide.

9. General Information about the program under review.
Review Vouchers and Documents: Sample Post Pay Review Package
Reviewers use PPR checklist to as a guide when reviewing vouchers and sample sets. 1
General Information about the program under review. 1 2
General payment information includes vendor details and voucher information. 2
Link to Checklist
3 *
Payment review findings indicated all items that require verification and, if necessary, corrective action.
3 *

10. Review Vouchers and Documents: Key Points to Review
Items to consider when verifying an invoice:
Were funds available?
Was the payment permitted by law, and in accordance with the terms of the applicable agreement?
Was the TIN or Payee ID number correct?
Was the payment a duplicate?
Were all cost effective discounts taken?
Were all applicable deductions made and credited to the proper account in the correct amount?
Was the proper document used?
Were special vendor reporting entries and documents, if required, furnished?

11. Receive and Validate Samples
Correct & Prevent: Certifying Officer
For each improper payment, the Certifying Officer validates the Reviewer’s analysis and recovers overpayment or remits underpayment
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Review improper payment
Verify the Reviewer’s findings to determine if the payment (i.e. over or underpayment) is following the applicable policy
Analyze any other documents (such as contracts, or other supplemental information) that may apply to the payment
Recover overpayment or remit underpayment
For overpayment, recover determined amount in accordance with the standard processes for that specific payment type in accordance with the DoD FMR Volume 16:
Initiate collection by contacting the payee and inform them of the overpayment
Follow due process
Receive funds from payee
Initiate additional collection actions, if necessary, in accordance with local standard operating procedures
For underpayment, remit determined amount in accordance with standard processes for the specific payment type in accordance with the DoD FMR Volume 16:
Contact payee and inform them of the underpayment
Pay the underpaid funds to the payee
Report to the Reviewer the status of collections and/or supplemental payments on a monthly basis

12. Receive and Validate Samples
Correct & Prevent: Program Office
The Program Office takes action to prevent the recurrence of identified improper payments by conducting a Root Cause Analysis
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Matrix of Improper Payment Categories ($ in Millions)*
Reviewer: Classify individual improper payments using the Matrix of Improper Payment Categories and send the matrix to the Program Office
Program Office: Identify the primary cause(s) of issues and conduct an RCA:
Use information from the Reviewer’s “Matrix of Improper Payment Categories” to identify the primary issues
Collect relevant issue information
Identify contributing factors
Document the RCA  
Track improper payment collection information
Reason for Improper Payment A
Over-
payments B
Under-
Program Design or Structural Issues
Inability to Authenticate Eligibility
Failure to verify: Death Data
Financial Data
Excluded Party Data
Prisoner Data
Other Eligibility Data
(Must explain if Other)
Administrative or Process Error Made by:
Federal Agency
State or Local Agency
Other Party
Medical Necessity
Insufficient Documentation to Determine
N/A
Other Reason (must explain)
Instructor Notes: RCAs are not completed for every improper payment found. However, a Matrix of Improper Payment Categories must be completed for every improper payment.
*Similar to table in DoD FMR, Volume 4, Chapter 14

13. Receive and Validate Samples
Correct & Prevent: CAP Development
Corrective Action Plans (CAPs) provide specific actionable steps to prevent the recurrence of improper payments
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Corrective Action Plan (CAP):
Design, implement, and monitor a CAP to resolve the weakness and prevent recurrence
Include specific, actionable steps. Consider the following:
State the objective of the CAP, identify a project leader and team, and identify affected processes and the associated stakeholders
Engage stakeholders who know the process and might be affected by changes
Verify existing process documentation, controls, and develop To-Be process
Develop implementation plan, roles and responsibilities, and identify risks and associated mitigation plans
Identify clear measures to evaluate the effectiveness of the CAP implementation and ongoing sustainment
Implement the corrections
Allow sufficient time for performance data to accumulate, then evaluate
Review at least monthly until there is reasonable assurance that the CAP has been implemented successfully
Report results, provide evidence of success, and retain related artifacts
Instructor notes:
The bullet, “engage stakeholders who know the process and are affected by changes” helps to ensure the effectiveness of the design, implementation, and sustainment of the CAP

14. Receive and Validate Samples
Report Requirements
Final reporting requirements of improper payment summaries are conducted by the Program Office and FMO.
Receive and Validate Samples
Review Vouchers
And Documents
Correct and Prevent
Report Requirements
Reviewer
Certifying Officer and Program Office
Program Office
Program Office:
Forward to FMO quarterly:
Total number and dollar value of payments,
Overall program improper payment estimate
Status summaries of RCAs and CAPs
High dollar overpayments
Consolidate all matrices of Improper payment categories into one matrix for FMO using Table 14-1 of the DOD FMR
Provide other information as directed by FMO
Report high dollar overpayment information (see slide 17)
FMO:
Consolidate DON reporting and submit to OSD (including a consolidation of the findings from all PPR reviews)
Incorporate the program estimates into the Agency Financial Report (AFR)
Include information from IPIA portion of the OMB Circular A-136 Table 1

15. Program Reporting Format
Program Name
# Pmts for Period of Review
$ Paid for Period of Review
# Sampled
$ Sampled
$ Over
$ Under
Total IP $
% of Improper payments
$ Collected
Program A
Program B
Reason for Improper Payment A
Over-
payments B
Under-
Program Design or Structural Issues
Inability to Authenticate Eligibility
Failure to verify: Death Data
Financial Data
Excluded Party Data
Prisoner Data
Other Eligibility Data
(Must explain if Other)
Administrative or Process Error Made by:
Federal Agency
State or Local Agency
Other Party
Medical Necessity
Insufficient Documentation to Determine
N/A
Other Reason (must explain)
Summary of RCA / CAP
RCA
CAP
High level information only
Table 14-1 of the DOD FMR. Only fill out applicable columns

16. Is this information included in the final report?
Program Reporting Quality Assurance Checklist
Is this information included in the final report?
Yes or No
GENERAL
Identify Payment Period of Review (POR) (Period of Review = date range of the data)
Number of Payments during the POR
Total Value of Payments during the POR
Number of Payments Sampled
Total Value of Payments Sampled
Improper Payment Rate
Improper Payment Dollar Estimate (IP Rate x Total Value of Payments during POR)
OVERPAYMENTS
Number of Overpayments
Dollar Value of Overpayments
Projected Overpayment Estimate
UNDERPAYMENTS
Number of Underpayments
Dollar Value of Underpayments
Projected Underpayment Estimate
ERROR ANALYSIS
Top Errors and/or Error Types (as appropriate)
Preliminary Root Cause Analysis on the top errors/error categories
COLLECTIONS
Total of Overpayments validated as debts
Value of outstanding (uncollected) debts

17. Appendix

18. Acronyms Improper Payment Information Act (IPIA)
Improper Payment Elimination and Recovery (IPERA)
Improper Payment Elimination and Recovery Improvement Act (IPERIA)
Post Payment Review (PPR)
DoD Financial Management Regulation (DoD FMR)
Office of Management and Budget (OMB)
Root Cause Analysis (RCA)
Corrective Action Plan (CAP)
Tax Identification Number (TIN)

19. Definitions/Descriptions
Improper Payment: from OMB Circular A-123, Appendix C, Part 1A, Paragraph 2:
Overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amounts and duplicate payments)
Any payment (over or underpayment) made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement
Any payment that was made to an ineligible recipient or for an ineligible good or service, or payment for goods or services not received (except for such payments authorized by law)
When an agency’s review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment must also be considered an improper payment
High Dollar Improper Overpayment: A high dollar overpayment can be made to an individual or to an entity. A high dollar overpayment that is in excess of 50 percent of the correct amount of the intended payment under the following circumstances:
Where the total payment to an individual exceeds $25,000 as a single payment or in cumulative payment for the quarter; or
Where the payment to an entity exceeds $100,000 as a single payment or in cumulative payments for the quarter

20. Definitions/Descriptions, continued
Post Payment Review (PPR): All reportable programs must perform PPRs and report results to the DON SAO via FMO’s IPIA PM. When conducting PPRs, reviewers must also determine and report High-Dollar overpayments in accordance with ref  (a), including the absence of High-Dollar overpayments:
Sample Draw And Review: PPR reviewers are required to use a sample draw.
Root Causes And Corrective Actions: Improper payments will be researched to determine root causes, and necessary corrective actions will be implemented to prevent future improper payments.
Overpayments (Receivables): For improper payments which have been reviewed and determined to be collectible debts, the appropriate accountable official must make diligent collection efforts. Collections must be tracked and reported through resolution (e.g., debtor repaid, certifying officer relief of liability granted, etc.) This information should be reported back to the PPR so that they can include this information in their reporting. The same applies to underpayments.
Underpayments (Payables): For improper payments which have been reviewed and determined to be due the payee (including improper denials and offsets of payments), the appropriate accountable official must ensure payments are made to payees for all monies due    

21. References
Improper Payments Information Act (2002): 107publ300/pdf/PLAW-107publ300.pdf
Improper Payments Elimination and Recovery Act (2010):
Improper Payments Elimination and Recovery Improvement Act (2012):
DoD FMR, Volume 4, Chapter 14, Section :
OMB Circular A-136 Table 1 (page 153): _revised_2015.pdf
OMB Circular A-123, Appendix C:
ASN (FM&C) FM Policy Letter 16-01, Delegation of Authority to Appoint Accountable Officials: npc/reference/messages/Documents/NAVADMINS/NAV2016/NAV16066.txt

22. Post Pay Review Checklist

23. Matrix of Improper Payment Categories ($ in Millions)*
Reason for Improper Payment A
Over-
payments B
Under-
Program Design or Structural Issues
Inability to Authenticate Eligibility
Failure to verify: Death Data
Financial Data
Excluded Party Data
Prisoner Data
Other Eligibility Data
(Must explain if Other)
Administrative or Process Error Made by:
Federal Agency
State or Local Agency
Other Party
Medical Necessity
Insufficient Documentation to Determine
N/A
Other Reason (must explain)
DoD FMR, Volume 4, Chapter 14, Section :

24. OMB Circular A-136 Table 1
Page 153:
--This report is to be submitted annually
--Note the percentage of improper payments need to reduce for out years

25. Improper Payment Recapture with and without Audit Programs
Overpayments Report
Improper Payment Recapture with and without Audit Programs
Program or
Activity
Overpayments Recaptured outside of Payment Recapture Audits
Amount Identified
Amount Recaptured
Program A
Program B
Program C
TOTAL
Taken from Table 4 of OMB Circular A-136