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Friday, January 25, 2008

Agencies report more improper payments, take steps to address them

Major federal agencies reported about $55 billion in erroneous payments for fiscal 2007, according to the Government Accountability Office. While the estimate was up about $14 billion from 2006, GAO said agencies are making strides in reporting, and with continued effort should lower the number of improper payments.

The Office of Management and Budget applauded the improvement in agencies' reporting and other financial markers in November.

OMB added that in 2007, 13 more programs were included in the reporting from the previous year and almost 86 percent of high-risk programs reported, compared to 81 percent in 2006.

GAO's review (GAO-08-377r) found that eight high-risk programs were responsible for 88 percent of improper payments. Such payments are defined as those mistakenly made to ineligible recipients or as a result of fraud or other error.

In November, Danny Werfel, acting controller for OMB's Office of Federal Financial Management, said the majority of errors identified in the 13 programs reporting for the first time in 2007 were instances in which there was insufficient documentation to verify the accuracy of a claim or propriety of a payment. "Errors in these 13 programs will decrease significantly after correcting the root cause of the insufficient documentation errors," Werfel said.

GAO said implementing reporting requirements will need continued attention and oversight.

-Elizabeth Newell, GovExec.com

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