U.S. Department of State Fiscal Year 2019 Agency Financial Report

During 2019, OMA built on prior recapture audit activities by targeting additional payment aspects to ensure all document types are eligible for review. In addition, OMA reviewed grant payments within the universe of the domestic and overseas payment program. OMA systematic analysis and targeted payment reviews will continue to expand efforts in the vendor, travel, grants, and compensation recapture audit areas in future years. The CGFS automated duplicate or erroneous payment program using the domestic payment file for recapture audit analysis has proven to be a cost effective tool. The additional inclusion of automated and manual recapture audit processes ensures the Department has coverage in required IPIA recapture audit areas. Prior to these efforts, in 2005 and 2006, the Department contracted with an external firm to perform recapture audit activities. However, after 2006, the contracted firm determined it was not cost-effective to continue this function. CGFS realizes that additional recapture audit opportunities may exist and continues to collectively assess areas of greater risk of improper payments and implement recapture audit measures deemed cost-effective. Overpayments Recaptured Outside of Payment Recapture Audits Improper payment identification and collection are essential functions of the Accounts Payable operations in CGFS/F/C. As such, CGFS/F/C has established an internal debt management unit, whose primary mission is to identify and collect improper payments and refer the debt to the Accounts Receivable Branch in CGFS/F/ARB if collections are not recovered within 30 days of the notice to the debtor. This Unit assists in identifying potential systemic issues leading to improper payments, which facilitates immediate implementation of corrective actions. Programs in which CGFS/F/C identified improper payments in 2019 include: Diplomatic and Consular Programs; Working Capital Fund Programs; Nonproliferation, Antiterrorism, Demining; Embassy Security, Construction, and Maintenance; and other State programs. Collectively, as shown in the “Payment Recaptures Reporting” table, during 2019, CGFS/F/C identified and confirmed transactions totaling $782,435 of actual duplicate/improper payments, of which we recovered $632,527 in addition to collecting $228,557 of the prior year unrecovered balance. Also, in 2019 the Department identified and confirmed employee claims overpayments totaling $30,621, of which we recovered $20,747. Additionally we recovered $1,422 from prior year identified travel overpayments. Total recovered travel amounts in 2019 of $22,169 were returned to the original appropriations. CGFS/GC also leverages an overpayment processing unit whose purpose is to review, calculate, and notify employees of any salary or allowance overpayment debt. Salary overpayments can occur for various reasons in the Department’s complex global pay environment, much of which is dependent on timely notification of events impacting pay. For example, late receipt of a cable notifying CGFS that an employee has departed an overseas mission for official duty travel or on personal leave can result in an overpayment of allowances. The payroll systems have programmatic internal controls and system edits in place to assist in preventing overpayments. CGFS/GC continues to implement additional measures to prevent and identify overpayments. In 2019, the Department’s CGFS American Pay Processing Division identified and confirmed payroll overpayments totaling $6.25 million, of which $4 million has been recovered. Additionally $1.48 million of prior year payroll debts were recovered, bringing the total recovered in 2019 to $5.54 million. To date, CGFS/GC has collected 81 percent of prior year debts. This is notable because recovery of payroll debts can be delayed due to a debtor’s request for an administrative review or a waiver. Efforts to collect outstanding payroll debts are ongoing and attempts are made to use the most effective means to maximize collection, such as salary offsets, when possible. In addition to salary overpayments, Global Compensation performs procedures to identify overpayments impacting Foreign Service annuities paid by the Department. In 2019, the CGFS/GC Annuitant Pay Processing (ANP) identified and confirmed overpayment transactions totaling $574,268 and recovered $129,842 of current and prior year debts. All amounts recovered were returned to the original appropriation. These overpayments occur for reasons such as annuity reductions due to divorce, annuitant re-employment, and untimely notification of death. CGFS continues the use of the Do Not Pay Death Master File (DMF) on a pre-payment basis to better identify when 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 139 PAYMENT INTEGRITY AND OTHER LAWS AND REGULATIONS | OTHER INFORMATION