Why agencies break the law on improper payments

Despite an attempted crackdown by the Obama administration, agencies are increasingly likely to make payment mistakes. The error rate rose from 3.53 percent in fiscal 2013 to 4.02 percent in fiscal 2014. In other words, the government misspent about $10 billion more last year than the year earlier.

That we knew, thanks to a Government Accountability Office report issued a few months back. But recent inspector general reports round out the picture by showing where agencies go wrong.

Of the 24 CFO Act agencies — those required to have audited financial statements —about half failed to comply with the law on improper payments, according to a preliminary analysis of the IG reports by the accounting firm Grant Thornton. The low scorers include the agencies that misspent the most money: the departments of Health and Human Services, Treasury, Agriculture and the Social Security Administration.

The overall picture seems, at first glance, worse than in past years, when inspectors general evaluated agencies on a multilevel scale that ranged from "compliant" to "noncompliant." While agencies have made strides in some of their programs, complying with the improper payments law is now pass-fail, thanks to guidance the White House issued in October.

"They're trying to say, ‘No more wiggle room. You're either compliant or not compliant,'" said Grant Thornton Principal Robert Shea.

-Emily Kopp, FederalNewsRadio.com
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Agencies can’t always tell who’s dead and who’s not, so benefit checks keep coming

The U.S. government has a problem with dead people. For one thing, it pays them way too much money.

In the past few years, Social Security paid $133 million to beneficiaries who were deceased. The federal employee retirement system paid more than $400 million to retirees who had passed away. And an aid program spent $3.9 million in federal money to pay heating and air-conditioning bills for more than 11,000 of the dead.

These mistakes are part of a surprising glitch at the heart of the federal bureaucracy. Because of a jury-rigged and outdated system meant to track deaths, the government has trouble determining exactly which Americans are deceased.

As a result, Washington is bedeviled by both the living dead and the dead living.

The task of tracking deaths for the federal bureaucracy is an enormous one; about 2.5 million Americans die each year. Federal officials say the vast majority of these cases are handled correctly: The death is recorded. Government money is no longer sent to that person.

But not always. In fact, glitches in the system have paid more than $700 million to the dead, according to government audits performed since 2008.

The trouble with dead people often begins with something called the Death Master File, which is kept by the Social Security Administration. Every day new reports are added, provided by relatives, funeral homes and the state agencies that issue official death certificates.

The list contains 90 million reports.

The problem is that not all of them are correct.

Now, after years of inattention, President Obama and two senators have laid out ideas to improve the system. In his 2014 budget, Obama requested $22 million to improve the death reports that come in from states by upgrading their systems to transmit faster and more accurate data.

In the Senate, Carper and Sen. Tom Coburn (R-Okla.) have written a bill that would require all federal agencies to check the Death Master File before paying benefits. It would also give all agencies access to the full file, not just the partial one. And it would require new efforts to make sure the data in the file are accurate.

-David A. Fahrenthold, WashingtonPost.comREAD MORE...

Largest USDA overpayments go toward farm subsidies, report says

The Department of Agriculture doled out more than $20 million in excess financial assistance last year, with the largest overpayments coming in the form of farm subsidies for crop insurance.

In a report released this week, the USDA inspector general said the agency spent nearly $15 million on undue payouts through the Federal Crop Insurance Corporation while issuing no major overpayments for nutrition assistance, including the Supplemental Nutrition Assistance Program — formerly known as food stamps.

Overpayments are defined as payouts that rise at least 50 percent higher than the correct amount while totaling at least $5,000 per individual or $25,000 per organization, according to the analysis.

The watchdog analysis, released Wednesday, focused on the USDA’s compliance with reporting requirements under an executive order President Obama issued in 2009 to reduce high-dollar overpayments.

The Department of Agriculture reported 239 overpayments worth a combined $20.3 million during the 2012 fiscal year, compared to 143 payouts totaling $11.7 million during the previous cycle, according to the review.

Excess payments through the Federal Crop Insurance Corporation averaged excesses of $209,000 per payout. The next highest amount came from a wildland firefighting program that sent out overpayments of $58,000 apiece on average.

The inspector general said the USDA could decrease its overpayments through better control over bookkeeping and stricter adherence to reporting guidelines, including the deadlines for producing quarterly numbers.

The Agriculture Department said in its response that “agencies misinterpreted or deviated from the requirement of the Office of Management and Budget and the [Office of the Chief Financial Officer].” The agency said its CFO would issue a memo directing each department to certify that its reporting processes comply with the established standards.

-Josh Hicks, WashingtonPost.com

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DoD using flawed approach to calculate $1.1B in improper payments

The Defense Department reported making just $1.1 billion in improper payments in fiscal 2011, a small fraction of the Pentagon's total outlays of more than $1 trillion.

But, in a new report, the Government Accountability Office said those estimates are neither reliable nor statistically valid because of "longstanding and pervasive" weaknesses in DoD financial-management practices as well as specific deficiencies in the department's procedures for estimating improper payments.

Lacking in DoD's current efforts to curb improper payments are basic quality-control measures, Asif Khan, GAO's director of financial management and assurance, told In Depth with Francis Rose. (Federal News Radio's DoD Reporter Jared Serbu served as guest host)

-Jack Moore, FederalNewsRadio.com
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