Review of VA’s Compliance with the Payment Integrity Information Act for Fiscal Year 2025

The VA OIG conducted this review to determine whether VA complied with the requirements of the Payment Integrity Information Act of 2019 (PIIA) for fiscal year (FY) 2025. PIIA requires federal agencies to identify, test, report, and remediate risks in programs that may be susceptible to significant improper payments, following Office of Management and Budget (OMB) guidance. It also requires each OIG to review its agency’s improper payment reporting and issue an annual report. In FY 2025, VA reported improper and unknown payment estimates totaling about $3.9 billion across seven programs. Of that amount, approximately $1.5 billion (38 percent) represented a monetary loss, while the other $2.4 billion (62 percent) was considered either a nonmonetary loss that cannot be recovered or an unknown payment. The FY 2025 estimate was about $1.8 billion higher than FY 2024 largely because VA incorporated its largest program, Compensation, into its improper payment estimates for the first time.

The OIG concluded that VA met all six PIIA requirements for FY 2025. All seven programs identified as susceptible to significant improper or unknown payments reported rates below the statutory 10 percent threshold. The Supplies and Materials program reported a rate well below the threshold and is no longer considered high risk; it will undergo risk assessments at least every three years, as required by PIIA. VA also satisfied additional reporting requirements for three high-priority programs—Pension, VA Community Care, and Compensation—by providing quarterly updates to OMB that described actions to prevent and recover monetary losses from improper payments.

The OIG found VA’s testing, reporting, and remediation efforts responsive to reducing improper payments. The OIG did not make recommendations in this report.