A Third of FLRA's Budget Skipped a Legally Required Risk Check
Summary
The Federal Labor Relations Authority's Inspector General found the agency has no agency-wide process for assessing improper-payment risk. The gap centers on Employee Payroll and Benefits -- FLRA's largest program, and the only one that has topped $10 million in annual outlays in each of the last three fiscal years. The risk assessment FLRA did produce named the wrong payroll processor and was never reviewed by FLRA's own Human Resources Division.
A risk assessment that described the wrong system
FLRA did produce a risk assessment for the payroll and benefits program, prepared with help from its financial-reporting shared service provider. The auditors found it deficient⧉ on two counts: it named the wrong shared service provider -- not the one FLRA actually uses to process its own payroll -- meaning the risks and controls it described didn't describe FLRA's real system. And there was no evidence anyone at FLRA had reviewed it, including the Director of FLRA's own Human Resources Division, the office that runs the program being assessed.
View data as table
| Contract Payments | 2 | Compliant with both requirements |
|---|---|---|
| Payroll & Benefits | 0 | Non-compliant with both -- FLRA's largest program, >$10M in annual outlays |
| Purchase Card | 2 | Compliant with both requirements |
| Travel Card | 2 | Compliant with both requirements |
| Claims/Vouchers | 2 | Compliant with both requirements |
One program failed; four others passed
The audit scored five FLRA programs -- contract payments, payroll and benefits, purchase cards, travel cards, and claims/vouchers -- against federal PIIA compliance requirements⧉ under Memorandum M-21-19. All five passed the reporting requirements: publishing payment-integrity information with FLRA's annual financial statement and posting it to the agency's website. But on the two requirements that matter for catching improper payments before they happen -- whether a valid risk assessment was conducted, and whether it reached an adequate conclusion -- only payroll and benefits failed. Contract payments, purchase cards, travel cards, and claims/vouchers all passed both.
It's worth being precise about what this finding is not. FLRA-'s own semiannual report to Congress⧉ -- which independently corroborates AR-26-04's recommendation count and the payroll-and-benefits framing -- notes that none of the reports issued that period identified any questioned costs, unsupported costs, or funds that could be put to better use. No specific improper payment was found. The finding is that FLRA cannot show it has the process that would catch one if it happened, in the one program large enough for the law to require that process.
FLRA is a small agency -- fewer than 100 full-time employees⧉, with $29.8 million in total budgetary resources for all of FY2025. A payroll and benefits program large enough to clear $10 million a year against that budget is not a side program -- on the numbers each report states, it accounts for roughly a third of everything FLRA spends.
The auditors made four recommendations⧉ to FLRA's Executive Director: appoint a designated official responsible for compliance agency-wide; build a written, agency-wide risk-assessment procedure; require documented review and approval of each program's risk assessment by the office actually responsible for it; and add FLRA-specific review, including of pay and benefits, to the risk-assessment tool it already has. FLRA agreed with all four and told the auditors it had already named its Executive Director as the responsible official -- closing the first recommendation immediately. The other three carry a management-stated target of the end of fiscal year 2026, September 30. The auditors say they haven't yet tested whether that work is actually done; that check is scheduled for the next compliance-review cycle.
- FLRA's own audit for FY2025 found no agency-wide process for assessing improper-payment risk. The finding centers on Employee Payroll and Benefits -- FLRA's largest program and the only one exceeding $10 million in outlays each of the last three fiscal years.
- The risk assessment FLRA did produce was deficient on its face: it named the wrong shared service provider for FLRA's own payroll system, and no evidence shows FLRA's Human Resources Division -- which runs the program -- ever reviewed it.
- Four of FLRA's five reviewed programs passed both improper-payment risk-assessment requirements; only payroll and benefits failed both.
- No specific improper payment was found or questioned -- FLRA-'s semiannual report to Congress independently confirms the audit identified no questioned costs, unsupported costs, or funds to be put to better use. This is a process gap, not a fraud finding.
- Payroll and benefits' >$10 million threshold represents at least roughly a third of FLRA's entire $29.8 million FY2025 budget -- the single program most exposed to undetected improper payment is also the agency's biggest line item.
- FLRA closed one of four recommendations immediately by naming its Executive Director the -responsible official; the other three carry a September 30, 2026 target date the auditors have not yet independently verified.
Figures are drawn from the FLRA Office of Inspector General's Independent Auditors' Performance Audit Report on the Federal Labor Relations Authority's Compliance with the Payment Integrity Information Act of 2019 for Fiscal Year 2025 (Report No. AR-26-04, issued February 25, 2026, audit performed by Harper, Rains, Knight & Company, P.A.), read in full via direct PDF fetch from flra.gov, with an existing Wayback capture confirmed live at read time. The report's recommendation count, closure status, and no-questioned-costs finding are independently corroborated in FLRA-'s own semiannual report to Congress covering the same period. Budget-scale figures are drawn separately from FLRA's own audited FY2025 Performance and Accountability Report.
The share of FLRA's budget represented by the unassessed payroll and benefits program is this outlet's own arithmetic on figures the source documents state separately (method and caveats in analysis.json); it does not appear pre-computed in either report. Every finding in the underlying audit is attributed to FLRA, its Human Resources Division, its financial-reporting shared service provider, or its Executive Director in an official capacity -- never to a named individual; no private person is named as a wrongdoer anywhere in this piece.
Sources(4) ▾
- Federal Labor Relations Authority, Office of Inspector General (audit performed by Harper, Rains, Knight & Company, P.A. under contract to the OIG), Independent Auditors' Performance Audit Report on the Federal Labor Relations Authority's Compliance with the Payment Integrity Information Act of 2019 for Fiscal Year 2025 (Report No. AR-26-04) (2026-02-25) — Sole source for: the audit's objective, scope (Nov. 2025-Feb. 2026 fieldwork, FY2025 compliance), and methodology; the finding that FLRA lacks an agency-wide improper-payment (IP) risk-assessment process; the identification of Employee Payroll and Benefits as FLRA's largest and only annual program with outlays exceeding $10 million in each of the last three fiscal years; the specific deficiency in that program's risk assessment (prepared by FLRA's financial-reporting shared service provider, which referenced the wrong shared service provider FLRA actually uses for payroll processing, and was never reviewed by FLRA personnel including the Director of the Human Resources Division); the compliance matrix scoring five FLRA programs against ten numbered sub-requirements; the four recommendations to the FLRA Executive Director; and FLRA management's written response, including which recommendation the auditors considered closed at issuance. flra.gov · original document
- Federal Labor Relations Authority, Office of Inspector General, FLRA-OIG Semiannual Report to Congress, October 1, 2025 through March 31, 2026 (2026-04-22) — Used to corroborate, on an independently-issued second FLRA- document, that AR-26-04 was issued February 25, 2026, made four recommendations to FLRA, received a Management Decision of 'Yes,' and -- per the report's own Table 2 note -- did not identify any questioned costs, unsupported costs, or funds that could be put to better use (i.e., this is a process-gap finding, not a finding that any specific payment was improper). Also independently states, in its own narrative summary, that the deficiency centers on 'employee payroll and benefits, which is FLRA's largest annual program with outlays greater than $10 million,' and that FLRA had already acted to close one of the four recommendations based on comments on the draft report. flra.gov · original document
- Federal Labor Relations Authority, Federal Labor Relations Authority Fiscal Year 2025 Performance and Accountability Report (PAR) (2025-12-22) — Sole source for: FLRA's characterization of itself as 'a small agency (fewer than 100 full-time equivalent employees (FTEs))'; the Management's Discussion and Analysis statement that FLRA had $29.8 million in total budgetary resources in FY2025, incurred obligations of $29.5 million, and recorded outlays of $30.4 million; and the audited Combined Statement of Budgetary Resources' precise Total Budgetary Resources figure of $29,773,805 for FY2025 -- used only for scale/context against the >$10 million payroll-and-benefits threshold cited in AR-26-04, not as a restatement of that program's own budget. flra.gov · original document
- Federal Labor Relations Authority, Office of Inspector General, FLRA OIG Hotline (2026-07-21) — Used only to source the CTA hotline contact (cta.json). The same phone numbers, fax, and mailing address also appear on AR-26-04's own back cover. flra.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
An independent audit for the Federal Labor Relations Authority's Office of Inspector General⧉ found the agency did not fully comply with the Payment Integrity Information Act of 2019 () for Fiscal Year 2025 -- not because it caught improper payments, but because FLRA has no agency-wide process for assessing the risk of improper payments in the first place. The gap centers on one program: Employee Payroll and Benefits, which the audit identifies as FLRA's largest annual program and the only one that has exceeded the law's $10 million review threshold in each of the last three fiscal years.