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Improper Payments Information Act of 2002

Reporting Details

The Improper Payments Information Act of 2002 (IPIA)1 and the Office of Management and Budget's (OMB) implementing guidance, Memoranda M-03-132, and OMB Circular A-1363, require agencies to annually review all programs and activities to identify those susceptible to significant improper payments. The guidance defines significant improper payments as those in any particular program that exceed both 2.5 percent of program payments and $10 million annually. For each program identified as susceptible, agencies are required to report the annual amount of estimated improper payments, along with steps taken and actions planned to reduce them, to the President and the Congress.

To facilitate agency efforts to meet the reporting requirements of the IPIA, OMB announced a new President's Management Agenda4 (PMA) program initiative beginning in the first quarter of fiscal year 2005 entitled Eliminating Improper Payments. Previously tracked along with other financial management activities through the Improving Financial Performance initiative, the establishment of a dedicated initiative focused the Department of Education's (Department) improper payments efforts. Under the new initiative, the status and progress of actions to further identify, report on, and reduce improper payments are now tracked and reported to OMB in quarterly PMA scorecards.

The Department has divided its improper payment activities into the following segments: Student Financial Assistance Programs, Title I Program, Other Grant Programs,and Recovery Auditing.


  1. Public Law 107-300, Stat. 2350, November 26, 2002.
  2. OMB Memorandum M-03-13, Improper Payments Information Act of 2002, Public Law 107-300 (May 21, 2003).
  3. OMB Circular No. A-136 (Revised), Financial Reporting Requirements (August 23, 2005).
  4. Executive Office of the President, Office of Management and Budget, The President's Management Agenda, Fiscal Year 2002 (August 2001). Title IV is a part of the Higher Education Act of 1965 that authorized and regulates various student financial aid programs.