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Monday, June 28, 2010

Federal government paid $110 billion in improper payments

The federal government made $110 billion worth of improper payments in fiscal 2009, according to the text of a new Office of Management and Budget website.

Dubbed PaymentAccuracy.gov, this new OMB website centralizes and visualizes into graphs information about federal improper payments made to individuals, organizations and contractors.

The reported fiscal 2009 amount is $38 billion more than the reported fiscal 2008 amount; federal officials attribute the increase to improved detection capabilities as well as more federal outlays for economic stimulus.

An improper payment occurs when a recipient receives either too much or too little of an intended federal payment, or when the recipient misuses the funds, or even when there's a lack of sufficient documentation to prove that a payment was proper.

According to a dataset available from another OMB website, overpayments from programs found to be susceptible to significant improper payment from fiscal 2004 through fiscal 2009 were worth almost $148.7 billion, while underpayments were worth almost $23.6 billion. However, because both over- and under- payments in the dataset are an optional data element, it's difficult to state with certainty whether those numbers are accurate.

According to PaymentAccuracy.gov, programs at the worst risk of improper payments generally are federal benefit efforts. The worst absolute offender in fiscal 2009, based on incomplete data, was Medicare Parts A and B, which made improper payments of $35.4 billion, or 12.4 percent of its $285.1 billion in outlays.

However, in terms of percentage of outlays misdirected to improper payments, the Agriculture Department's National School Lunch Program took the crown with 16.4 percent of its $9.4 billion outlay misdirected into improper payments, an absolute value of $1.6 billion.

In his blog post, Orszag also applauded the Senate's June 23 passage of the "Improper Payments Elimination and Recovery Act of 2010," sponsored by Sen. Thomas Carper (D-Del.). The bill requires agencies to follow OMB prescriptions for financial management programs to combat improper payments. The House passed a similar bill (with the same title) on April 28; the two bills nonetheless require reconciliation, however. The House bill also contains a section that would require federal agencies to follow OMB prescriptions on reducing improper payments.

Read more: Federal government paid $110 billion in improper payments - FierceGovernmentIT

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