Improper payments plague feds

"Financial management: Status of the Governmentwide Efforts to Address Improper Payment Problems"

The General Accounting Office says that government agencies are not working together to identify and prevent improper payments.

Improper payments, a longstanding and widespread problem in the federal government, refer to disbursements that should not have been made or were made for the incorrect amount. In April, the Office of Management and Budget estimated major federal benefit programs make about $35 billion a year in improper payments, and the long-term implications are considerable, especially as the Baby Boom generation leaves the workforce and demands increases for Medicare, Medicaid and Social Security payments.

In a report released today, GAO officials said they found wide disparity in agencies' progress in finding improper payment problems, trying to fix them and publicly reporting the results of those efforts.

"We recognize that OMB has shown leadership in the improper payments area," the report states. "However ... the ultimate success of the governmentwide effort to reduce improper payments is largely dependent on the specific actions taken by each of the agencies."

Auditors for GAO went on to say that not all agencies had implemented control activities to address internal control weaknesses.

"While officials generally acknowledged that they had not fully assessed all of their programs and activities to identify program risks of improper payments, some stated that they had considered those risks when designing or modernizing their program's general internal control systems," the report states.

Improper payments include:

* Inadvertent errors, such as duplicate payments and calculation errors.

* Payments for unsupported or inadequately supported claims.

* Payments for services not rendered or rendered to ineligible beneficiaries.

* Payments resulting from fraud and abuse.

In its response to the report, OMB officials said GAO's conclusions were "largely fair and accurate," but also overlooked the following:

* That the administration has conducted most comprehensive assessment of the government's pay processes in its history.

* Agencies' publication of statistically valid error rates more regularly than ever before.

* OMB's meetings with each agency's chief financial officer and Inspector General to ensure compliance with existing policies.