Financial Management: Improper Payments Reported in Fiscal Year 1999
Financial Statements (Correspondence, 07/27/2000, GAO/AIMD-00-261R).

Pursuant to a congressional request, GAO provided information on the
extent of improper payment estimates reported in agencies' during fiscal
year (FY) 1999 financial statements.

GAO noted that: (1) last year, GAO reported that 8 of 12 agencies
reported improper payments in their FY 1998 financial statements; (2)
this year, GAO identified four additional agencies--the Departments of
Defense, Energy, Justice and State--that reported improper payments in
their FY 1999 financial statements; (3) another agency--the Agency for
International Development--which reported making improper payments in
its FY 1998 financial statements, did not report any improper payments
in its FY 1999 financial statements; (4) GAO's prior report also noted
that 9 agencies collectively reported improper payment estimates of
$19.1 billion in their FY 1998 financial statements; (5) GAO's audits
and those of agency inspectors general continue to demonstrate that
improper payments are much more widespread than agency financial
statement reports have disclosed thus far; (6) additionally, not all
agencies are performing comprehensive internal studies or reviews to
determine the propriety of program expenditures for certain programs,
including some of those that disclosed improper payments in their FY
1999 financial statements; (7) because the methodologies used by some
agencies to estimate improper payments do not always result in complete
estimates and many other agencies have not attempted to identify or
estimate improper payments, the government does not have a reasonable
basis for gauging the extent of its improper payments; (8) ascertaining
the extent of improper payments is the first step in assessing the need
for and extent of corrective actions required; and (9) obtaining these
data would give agencies baseline information for assessing causes and
making cost-effective decisions about enhancing controls to minimize
future improper payments.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-00-261R
     TITLE:  Financial Management: Improper Payments Reported in Fiscal
	     Year 1999 Financial Statements
      DATE:  07/27/2000
   SUBJECT:  Financial management
	     Internal controls
	     Financial statements
	     Overpayments