OMB outlines progress on eliminating government waste

Editor's note: This story was updated Feb. 1, 2011 to correct the date of Danny Werfel's announcement. 

The Obama administration’s endeavor to purge government waste has seen success over the past years, but what started as a first step on a long journey was far from a seamless process, according to a senior official.

Danny Werfel, controller at the Office of Federal Financial Management within the Office of Management and Budget, delivered a keynote at a Jan. 31 event organized by Government Executive Media Group and Dun & Bradstreet. The discussions focused on government waste and how agencies can improve performance through efficiency and innovation.

The Obama administration made improper payments one of the focal points in its Campaign to Cut Waste. One of the main goals of the initiative was to reduce misspent tax dollars by $50 billion by the end of 2012. In November 2011, Werfel announced that “significant progress” had been made, including decreasing the governmentwide improper payment rate from 5.3 percent to 4.7 percent.

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“Right now, I feel as if we’re … at that point where we’re bringing agencies and other stakeholders together to find the first mile marker on further improvements down the road, while at the same time converting on activities where the mile markers were laid before us by previous work,” Werfel told the event crowd. 

When it comes to management and effectiveness, “the foundation and groundwork have been laid,” Werfel said. “Could we be doing more? Absolutely. But what we’re seeing is a series of results starting to come in that are very exciting.”

Those results stem from the very first improper payments initiative, which was launched in 2002 when Congress passed the Improper Payments Information Act. Around that time, there was a sense that misspent federal funds were a systematic problem, Werfel said. While some programs had measurements to identify improper payments, “we certainly didn’t have infrastructure across government to measure and figure out what to do to tackle the problem,” he added

However, that changed when the new law directed agencies to report governmentwide error rates and have action plans in place that included improper-payment reduction targets. “We learned so much about measuring errors,” Werfel said. “It’s not easy. There’s a lot of people and perspectives that come into finding what is an error and what is not.” 

Once OMB knew how to identify and measure errors in the most cost-efficient way, “we hit our rhythm with that and turned to the next mile marker, which was more cross-collaboration and deeper understanding of how to fix the problem,” Werfel said.

After the initial growing pains, OMB now has a better handle on dealing with improper payments and take corrective actions, Werfel said. “You should expect and anticipate that at this point in time, the government is on its game in terms of both measuring error, in terms of understanding what corrective actions work and what don’t, and that the results should be there,” he said.