Federal personnel office failed to implement reforms, ‘significant risk' of fraud remains

The U.S. Office of Personnel Management still hasn't implemented the majority of the Government Accountability Office's (GAO) reforms and faces a "significant risk" of improper payments and fraud.

OPM administers the Federal Employees Health Benefits (FEHB) program, which is the largest employer-sponsored healthcare program in the country, according to GAO.

In 2024, OPM’s Office of the Inspector General "reported that ineligible family members receiving FEHB payments remains a top management challenge for OPM," the watchdog said in its latest report on OPM.

GAO found that OPM’s "strategies do not address the significant risk of improper payments and potential fraud stemming from ineligible family members" who are already enrolled in the FEHB program.

"OPM has taken steps to mitigate improper payments, such as issuing guidance for validating certain new enrollments. While beneficial, OPM’s strategies do not address the significant risk of improper payments and potential fraud stemming from ineligible family members that are already enrolled in the FEHB program," the watchdog also said.

"To help address this issue, we recommended that OPM implement a monitoring mechanism to remove ineligible family members from the FEHB program," the GAO added.

The GAO said that legislation was enacted on July 4, 2025 that directed OPM to implement their recommendation. GAO estimated that OPM could save $1 billion after fully implementing their recommendation, which is a strong monitoring mechanism.

OPM manages and administers the federal retirement program and the agency has been working on modernizing the process for more than 20 years. 

GAO said that the federal employee retirement applications process has been "fraught with IT management weaknesses." 

Progress has been made in this area but more needs to be done, the agency said.

"OPM has not yet demonstrated that it has incorporated key aspects of IT project management as part of its modernization effort, as we recommended. Doing so would help ensure that key aspects of the project, such as scope, responsible organizations, costs, schedules, and risks are identified and that progress toward meeting objectives, such as processing timeliness, can be assessed," the report read.

GAO called for the OPM director to "establish a timeframe to develop a plan to manage permanent electronic records."

Under the "actions needed" section of its recommendation, GAO said OPM must "provide a plan that includes timeframes for when the agency will be able to capture and maintain permanent electronic records. If these actions are taken, OPM will be better positioned to manage its permanent electronic records."

OPM hasn't fully implemented a GAO recommendation related to software licenses. 

"To fully implement our recommendation, OPM needs to provide evidence that it has compared its inventory of software licenses with known purchases for its widely used licenses and has a plan to continue this comparison on a regular basis," GAO's latest report said.

"As of February 2025, OPM stated that its efforts to compare the inventory of current software licenses with information on purchased licenses are in progress. Taking action to fully implement our recommendation would help OPM ensure that it is identifying opportunities to reduce costs on duplicative or unnecessary licenses," GAO added.

According to the GAO's latest report, OPM’s "recommendation implementation rate" was 33% as of November 2024.