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Friday, February 01, 2008

Bill would press agencies to reduce improper payments

A bill introduced today in the Senate would more strictly enforce a law to identify and collect overpayments to beneficiaries of federal programs such as Social Security, Medicare and unemployment insurance, and introduce new penalties for agencies that do not comply.

The bill, introduced by Sen. Tom Carper, D-Del., chairman of the Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security, would amend the Improper Payments Information Act of 2002 by levying financial penalties on agencies that do not fully comply with the law.

The act requires agencies to report annually to the Office of Management and Budget the amount of payments issued in error, such as mistakenly or fraudulently paying more than a beneficiary is entitled to or paying individuals who are no longer in a program or are not eligible. The law focuses on at-risk agencies -- those that have issued improper payments totaling 2.5 percent of a program's outlays and $10 million or more in improper payments. OMB audits such agencies.

However, Carper's bill would expand the definition to include an agency that fulfils either of the two conditions. Under the old definition, a $50 billion program with less than $1.25 billion in overpayments would not be considered at risk and therefore not audited, said Sen. Tom Coburn, R-Okla., ranking minority member of the subcommittee.

Carper also would impose penalties for noncompliance. If an inspector general finds that the agency is not reporting its improper payments, the head of the agency has the authority to transfer available funds from any part of the agency to the program to pay for oversight of improper payments. If the IG rules the agency has not complied in a second consecutive year, the head of the agency is required to transfer the funds. If the agency is not in compliance for a third consecutive year, any program not in compliance must transfer 5 percent of its appropriations to the Treasury.

-Gautham Nagesh, GovExec.com
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