We conducted an audit of the U.S. Department of Housing and Urban Development’s (HUD) fiscal year 2013 compliance with the Improper Payments Information Act of 2002 as amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA).  IPERA was enacted to eliminate and recover improper payments by requiring agencies to identify and report on programs that are susceptible to significant improper payments.  IPERA also requires each agency’s Inspector General to perform an annual review of the agency’s compliance with IPERA.  Our audit objectives were to (1) determine HUD’s compliance with IPERA reporting and improper payment reduction requirements and (2) determine whether corrective action plans addressed the root causes of HUD’s improper payments and were effectively implemented.

HUD did not comply with IPERA reporting requirements because it did not sufficiently and accurately report its (1) billing and program component improper payment rates; (2) actions to recover improper payments; (3) accountability; or (4) corrective actions, internal controls, human capital, and information systems as required by IPERA.  In addition, HUD’s supplemental measures and associated corrective actions did not sufficiently target the root causes of its improper payments because they did not track and monitor processing entities to ensure prevention, detection, and recovery of improper payments due to rent component and billing errors, which are root causes identified by HUD’s contractor studies.