Overview

The OPM Office of the Inspector General (OIG) fiscal year (FY) 2027 Budget request totals $32,428,000. This amount is comprised of $6,217,000 from the Salaries and Expenses (S&E) General Fund and $26,211,000 from the OPM Trust Funds. This represents a reduction of $3.6 million from its enacted FY 2026 appropriation.

The OPM OIG greatly appreciates the support that Congress has shown the OPM OIG through the annual appropriations process. The OPM OIG respectfully requests that Congress continue to make the OPM OIG a funding priority in FY 2027.

Fiscal Year 2027 Budget Request

OPM OIG Investment Priorities

The OPM OIG was established as a statutory entity on April 16, 1989. It operates under the authority of the Inspector General Act of 1978 (Public Law 95–452), as amended.

The OPM OIG provides comprehensive and cohesive oversight of OPM programs to safeguard taxpayer resources and ensure accountability. Ongoing key initiatives include identifying improper payments related to the Federal Employees’ Health Benefits Program (FEHBP) and CSRS and FERS Retirement Programs, ensuring OPM and its contractors implement critical cybersecurity controls, and using proactive data analytics methods to combat the effects of the COVID-19 pandemic and opioid epidemic on the FEHBP and its enrollees. Investments in the OPM OIG consistently provide a significant positive return on investment. In FY 2025 alone the OPM OIG identified more than $430 million in improper and fraudulent payments demonstrating the value of strong oversight supported by modern technology tools.

To further improve operational efficiency, it is imperative that the OPM OIG continue to invest in information technology (IT) solutions that will greatly enhance its ability to recover taxpayer dollars lost to fraud, waste, and abuse. In addition to IT investments, the OPM OIG must continue to appropriately position itself to protect public safety through its criminal investigations and protect the financial integrity of OPM programs through improper payment recoveries. As a result, it must also prioritize the hiring of law enforcement staff.

These initiatives align directly with the President’s Management Agenda priorities to:

• Reduce waste, fraud, and abuse across Federal programs and ensure responsible stewardship of taxpayer resources;
• Strengthen accountability and integrity across Federal programs; and
• Leverage emerging technologies, including AI, to improve efficiency oversight, and service delivery.

Leveraging Data Analytics and AI to Combat Healthcare Fraud

The OPM OIG’s recently modernized information systems are the foundation for its expanding and evolving health care advanced data analytics program – specifically, its data warehouse environment containing billions of medical and pharmaceutical claim records related to the FEHBP. This system is a key pillar in the OPM OIG’s ability to identify and recover wasteful and improper spending in the FEHB.

In FY 2025, OPM OIG made significant strides in enhancing the accuracy of its data and incorporating machine learning solutions into this environment. It modernized the data layouts for medical claims to better align with current business needs and fraud and abuse threats. This involved processing over 2 billion historical claim records in this new layout. The OPM OIG also deployed generative AI components within its data analytics platform and developed oversight-specific generative AI use cases. The near-term goal is to deploy these components into full-scale production programs.

Once migrated to a production environment, the generative AI technology will dramatically increase the efficiency in which the OPM OIG detects fraud, waste, and abuse by transforming its healthcare claims data warehouse into an interactive insight-on-demand platform. It will empower auditors and investigators with intelligent tools to identify anomalous claims and prioritize candidates for audit or investigation. The OPM OIG has also developed (and intends to deploy to production) natural-language to database-query capabilities that allow auditors and investigators to pose plain English questions to its claims data warehouse and receive instant, policy-aware query results without the need to develop complex custom code. In addition, a conversational search agent will be trained on the structured data from the claims data warehouse as well as unstructured data from a variety of sources such as health plan benefit brochures and historical audit and investigation reports. Finally, generative AI pipelines will automatically profile patients, doctors, medical facilities, and pharmacies. The improved technology facilitates the identification of health care providers, pharmacies, medical facilities, and patients that are associated with likely fraud, waste or abuse, flagging them for deeper review by OPM OIG personnel.

Law Enforcement Personnel

The OPM OIG’s Office of Investigations detects and investigates improper and illegal activities involving OPM programs, personnel, contractors, or operations. OPM OIG investigations remove dangerous and malicious actors from the FEHBP health care system and curtail retirement fraud. This work stops fraud, waste, and abuse that otherwise costs millions in taxpayer dollars.

The OPM OIG is the last line of defense for combating fraud, waste, and abuse in OPM programs. From FY 2022 through FY 2025, OPM OIG law enforcement operations returned $57 million to OPM trust funds and secured 69 convictions. OPM OIG investigations referred over $1.4 billion to prosecutors for judicial action in the past 4 years. On average, the OPM OIG refers to the U.S. Department of Justice approximately $34 million of fraud loss per year per investigative staff member. 

Sufficient manpower to execute this mission is critical to the OPM OIG’s ability to keep up with the demand for criminal, civil, and administrative investigations into fraud, waste, and abuse against OPM programs and operations. Investigative personnel are necessary to maximize the OPM OIG’s analytically driven proactive oversight model and lead priority investigations of patient harm, opioids, and large-dollar health care fraud. The OPM OIG has embraced AI as a new tool for law enforcement and has experienced a dramatic increase in FEHBP dollars referred for judicial action.

OPM OIG Organizational Components

The Office of Audits

The Office of Audits conducts comprehensive, independent, and risk-based audits of OPM programs, operations, and contractors. One of the office’s core responsibilities is auditing OPM contractors that underwrite and provide health and life insurance benefits to Federal employees, annuitants, and their eligible dependents and survivors through the FEHBP and the Federal Employees’ Group Life Insurance program. There are over 200 insurance carriers participating in the FEHBP with annual premium payments that exceed $55 billion. In addition, the office conducts audits of OPM's Retirement Programs, which has over $1 trillion in net assets available for benefits and makes monthly payments to almost 3 million annuitants and survivors of approximately $100 billion annually. Audits issued by the office annually lead to the recovery of tens of millions of dollars of improper payments from the OPM trust funds.

The Office of Audits also conducts broad, issue-based evaluations of OPM programs that focus on program effectiveness and rely on in-depth analysis using multiple sources of data. The office combines the scoping and planning of traditional audits with a more reactive nature similar to investigations to quickly respond to high priority issues requiring immediate attention.

The Office of Investigations

The Office of Investigations conducts criminal, civil, and administrative investigations of fraud, waste, and abuse related to OPM programs and operations and investigates OPM employee and contractor misconduct or violations of criminal law. The office actively coordinates with the U.S. Department of Justice and other Federal, state, and local law enforcement authorities on investigations that lead to criminal prosecutions, criminal and civil monetary recoveries, administrative corrective actions, and exclusions on harmful medical providers from participation in the FEHBP.

The Office of Management

The Office of Management is responsible for managing OPM OIG functions related to IT, data analytics, human capital, budget, procurement, and facilities. The OPM OIG independently maintains its own internal IT infrastructure within the broader OPM technical environment and manages an advanced data analytics and AI program to support the OPM OIG’s oversight work.

The Office of Legal and Legislative Affairs

The Office of Legal and Legislative Affairs provides legal advice and representation to the IG and OPM OIG employees nationwide. The office also renders opinions on OPM programs and operations; provides legal support for the OPM OIG’s internal operations, including personnel and administration; and serves as the liaison to Congress and the media. The Debarring Official also resides within the office and is responsible for suspending and debarring from participation in the FEHBP health care providers who have committed various criminal and professional violations. These actions mitigate potential patient harm and reduce improper payments to those providers.

Additional Reporting Requirements

FY 2027 Budget Request by Object Class

Salaries and Expenses by Object Class

Trust Fund Limitations – Budget by Object Class

OPM OIG Revolving Fund Oversight

Revolving Fund

For FY 2027, the OPM OIG estimates that $1,997,000 for 7 FTEs will be required for OPM Revolving Fund (RF) oversight activities. Currently, the OPM RF consists of the following programs: Human Resources Solutions (HRS), HRS Information Technology Program Management Office, and Suitability Executive Agent.

The following information is provided to adhere to the requirements of the Inspector General Reform Act of 2008 (P.L. 110–498):

Participation in Council of the Inspectors General on Integrity and Efficiency (CIGIE) Resource Summary – includes all resources (dollars)

Training Resource Summary – includes all resources (dollars)

OPM OIG Performance Metrics and Other Statistical Information

Performance Metrics

The following performance metrics demonstrate how the OPM OIG measures improvements in organizational effectiveness in the accomplishment of its mission and goals.

Other Statistical Information

The following statistical information demonstrates to the public the impact of the collective efforts of the OPM OIG, OPM, and its contractors in reducing fraud, waste, and abuse. The statistical information reported by the OPM OIG, while indicative of the effectiveness of its oversight, is not solely under the control of or based on the OPM OIG’s efforts.

^AAn audit cycle measures the frequency of completed audits of carriers or other auditees in an audit universe. For FEHBP carriers, regulations require that they maintain documentation supporting rates and costs for 6 years. The target audit cycle for these carriers is based on this and the realization that the older the information is that the OPM OIG is trying to audit, the less efficient the audit will be.

^B The audit recovery rate represents the percentage of questioned costs from audit reports that are ultimately recovered and returned to the FEHBP Trust Fund (a small percentage of questioned costs may relate to other programs). The recovery rate presented is a 5-year average, but because it is not unusual for the audit resolution process of the agency to take multiple years, the reported rate is based on incomplete information.