Page:M-21-19 Memorandum for Heads of Executive Departments and Agencies.pdf/13

 B. Unknown Payments If a program cannot discern whether a payment is proper or improper, the payment is considered an UP. If a program is still conducting research or going through the review of a payment at the time that the program must finish their sampling and report its results, the payment will be considered an UP for reporting purposes that year. This is done so that the program would not unintentionally over or under report the payment type results. An UP will eventually be determined to be proper or improper but because the program does not know whether it is proper or improper at the time of their review, they must call it an UP for purposes of this guidance. Programs may be required to report the review results of their UPs in future reporting years as the results become available. Agencies should not cushion their reporting timeframe specifically for the purpose of allowing the agency additional time to verify whether an UP is proper or improper.

1. When a program is in phase 1 and assessing whether the program is likely to have IPs above the statutory threshold, UPs and IPs are both considered types of payments that contribute to the likelihood that a program could have IPs above the statutory threshold. Therefore, in phase 1, the program is considered likely to make IPs above the statutory threshold when the sum of the UPs and the IPs exceeds the statutory threshold. When a program is in phase 2, the UPs will be accounted for but should be reported separately from the estimate of the monetary loss and nonmonetary loss IPs. The UP estimate will be considered and added to the IP estimate for purposes of compliance and for purposes of determining whether the program is above the statutory threshold.

C. Identifying the Correct Type of Payment To efficiently prevent IPs and UPs, it is first important to properly understand the payment type. There are three main types of payments which collectively degrade the payment integrity of the agency: Monetary Loss IPs, Non-Monetary Loss IPs, and UPs. Correctly identifying the type of payment will aide in being able to effectively prevent that type of payment from occurring in the future. The decision tree below is meant to provide a cursory overview for determining the payment type. Rh