"The federal government must work with states to establish mechanisms that will reduce the amount of improper payments.
According to a recent Government Accountability Office investigation, improper federal payments exceeded $38 billion in FY 2005. Overall, state-administered programs and other nonfederal entities receive more than $400 million in federal funds annually.
The Improper Payments Information Act of 2002, a part of the President's Management Agenda, forms the foundation of current fiscal reporting requirements for federal agencies. The reporting requirements for states receiving federal funds vary among agencies and programs.
'Measuring improper payments and designing and implementing actions to reduce or eliminate them are not simple tasks, particularly for grant programs that rely on quality administration efforts at the state level,' said McCoy Williams, GAO's director for Financial Management and Assurance, in a letter addressed to Rep. Todd Platts, R-Penn.
Platts chairs the Subcommittee on Government Management, Finance and Accountability.
In the 76-page letter, Williams also stressed the necessity for strengthening payment reporting."