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 Because of a jury-rigged and outdated system meant to track deaths, the government has trouble determining exactly which Americans are deceased.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...

Agencies not working together to quell improper payments

The Social Security Administration needs to work with other federal agencies and state government and share data to make sure Social Security payments are made properly, Office of Federal Financial Management Controller Daniel Werfel told the Senate Homeland Security and Governmental Affairs Committee May 8.

Werfel said an example of how agencies can work together is on curbing Supplemental Security Income payments to those people living overseas.

SSI recipients are ineligible when outside the country for more than 30 days.

SSA and the Homeland Security Department should develop a process so that SSA could access DHS-collected travel data on individuals who enter and leave the United States, O'Carroll said. As of April 2013, SSA was pursuing access to this data and developing a database matching agreement, he said.

There has been some success in lower improper payments, though. In fiscal 2012, SSA investigators recovered $96.5 million in SSA restitution and projected $398.5 million in savings from programs such as the Cooperative Disability Investigations initiative, which works with state agencies to detect potential fraud and reduces the number of fraudulent disability payments, O'Carroll said.

Read more: Agencies not working together to quell improper payments - FierceGovernment http://www.fiercegovernment.com/story/agencies-not-working-together-quell-improper-payments/2013-05-09#ixzz2Sp7a0300
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Today's GAO Publications

The Government Accountability Office (GAO) today released the following report and testimony:

Disability Insurance: SSA Can Improve Efforts to Detect, Prevent, and Recover Overpayments.

GAO-11-724, July 27.
http://www.gao.gov/products/GAO-11-724

Highlights - http://www.gao.gov/highlights/d11724high.pdf


DOD Financial Management: Numerous Challenges Must Be Addressed to Improve Reliability of Financial Information, by Asif A. Khan, director, financial management and assurance, before the Subcommittee on Readiness and Management Support, Senate Committee on Armed Services.
GAO-11-835T, July 27.
http://www.gao.gov/products/GAO-11-835T
Highlights - http://www.gao.gov/highlights/d11835thigh.pdf

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following publications:

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses, by J. Christopher Mihm, managing director, strategic issues, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-908T, September 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-908T
Highlights - http://www.gao.gov/highlights/d09908thigh.pdf

Social Security Disability: Additional Performance Measures and Better Cost Estimates Could Help Improve SSA's Efforts to Eliminate Its Hearings Backlog.
GAO-09-398, September 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-398
Highlights - http://www.gao.gov/highlights/d09398high.pdf

United States Merchant Marine Academy: Internal Control Weaknesses Resulted in Improper Sources and Uses of Funds; Some Corrective Actions Are Under Way.
GAO-09-635, August 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-635
Highlights - http://www.gao.gov/highlights/d09635high.pdf

Today's GAO Publications

The Government Accountability Office (GAO) today released the following report and correspondence:

Social Security Administration: Service Delivery Plan Needed to Address Baby Boom Retirement Challenges. GAO-09-24, January 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-24
Highlights - http://www.gao.gov/highlights/d0924high.pdf

Aviation Security: TSA's Cost and Performance Study of Private-Sector Airport Screening. GAO-09-27R, January 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-27R

Today's GAO Publications

The Government Accountability Office (GAO) today released the following publications:

Social Security Disability: Management Controls Needed to Strengthen Demonstration Projects.
GAO-08-1053, September 26.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1053
Highlights - http://www.gao.gov/highlights/d081053high.pdf

DOD Financial Management: Improvements Are Needed in Antideficiency Act Controls and Investigations.
GAO-08-1063, September 26.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1063
Highlights - http://www.gao.gov/highlights/d081063high.pdf


Information Management: The National Archives and Records Administration's Fiscal Year 2008 Expenditure Plan.
GAO-08-1105, September 26.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1105
Highlights - http://www.gao.gov/highlights/d081105high.pdf


Federal User Fees: Improvements Could Be Made to Performance Standards and Penalties in USCIS's Service Center Contracts.
GAO-08-1170R, September 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1170R

Grades on management score card fall

Many federal agencies have taken a step backward on the Bush administration's five major management initiatives, according to quarterly grades released on Thursday by the Office of Management and Budget.

There were 14 downgrades on the status section of OMB's management score card for the third quarter of 2008, which ended June 30. And there were only six instances in which grades improved.

The problems were limited to two areas of the President's Management Agenda: human capital and electronic government.

Eight agencies' e-government scores declined on the traffic-light-style system, with seven dropping to red, signifying unsatisfactory performance. Only two agencies improved their grades in that area.

Meanwhile, six of the 26 agencies that are evaluated by OMB had their human capital score drop a notch, generally from green to yellow; one agency moved up a level.

OMB did recognize slight upticks in the scores on commercial services management -- previously called competitive sourcing -- and in the category of performance improvement. Scores did not change in the financial management category.

The Environmental Protection Agency, Social Security Administration and Labor Department each earned perfect scores of green in all five categories. The Homeland Security and Veterans Affairs departments had the worst scores, with three categories in the red.

As in most quarters, the scores were generally much higher on a separate chart that mapped the progress agencies had shown in implementing the goals of the PMA.

On the second quarter score card, OMB credited agencies with seven improvements and five declines. And, on the first quarter score card, agencies moved up 12 times compared to only three declines.

-Robert Brodsky, GovExec.com
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Agencies improve PMA scorecards

Agencies are improving their compliance with the President's Management Agenda, according to the latest quarterly scorecard.

The Office of Management and Budget's scorecard for the second quarter of fiscal 2008 shows that almost half of the agency status scores were green, the highest possible, on their current status. More than 75 percent of the progress scores were green.

The Labor department, Social Security Administration, and Environmental Protection Agency maintained green scores for both status and progress on all five governmentwide initiatives.

The fine initiatives are human capital management, competitive sourcing, financial performance, e-government and performance improvement.

-Michael Hardy, FCW.com
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EPA, SSA get all greens on score card

The Environmental Protection Agency and the Social Security Administration joined the Labor Department as the only agencies to achieve green scores in all five areas of the President’s Management Agenda.

EPA improved its score in the human capital area, while SSA jumped from red to green in e-government in the latest score card, which the Office of Management and Budget released today.

Labor has been green in all five areas — human capital, competitive sourcing, financial performance, e-government and performance improvement — for nine of the past 10 score cards.

In the other areas of the President’s Management Agenda, Robert Shea, OMB’s associate director for management, said only 22 percent of agency programs now rate as ineffective under the performance improvement initiative.

He said every agency has designated a performance improvement officer, as required by an executive order issued in November 2007.

-Jason Miller, FCW.com
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Today's GAO Publication

The Government Accountability Office (GAO) today released the following report:

Social Security Administration: Policies and Procedures Were in Place over MMA Spending, but Some Instances of Noncompliance Occurred.
GAO-07-986, August 31
http://www.gao.gov/cgi-bin/getrpt?GAO-07-986
Highlights - http://www.gao.gov/highlights/d07986high.pdf

Today's GAO Publication

The Government Accountability Office (GAO) today released the following report:

Managerial Cost Accounting Practices: Implementation and Use Vary Widely across 10 Federal Agencies.
GAO-07-679, July 20
http://www.gao.gov/cgi-bin/getrpt?GAO-07-679
Highlights - http://www.gao.gov/highlights/d07679high.pdf

Stumping for Attention To Deficit Disorder

The problem is the skyrocketing cost of government health-care and retirement benefits. By most estimates, they will break the national bank as the baby boom generation retires.

Fed up with Washington's paralysis on the issue, the government's chief auditor, David M. Walker, along with analysts from three ideologically diverse think tanks, is venturing beyond the Beltway to explain the issue to voters. Their goal: to generate enough grass-roots anger to force the 2008 presidential candidates to discuss the problem.

Their unusual road show is called the Fiscal Wake-Up Tour which is organized by the Concord Coalition, a Virginia nonprofit group formed in 1992 to promote responsible budgeting. The group is collaborating with the liberal Brookings Institution and the conservative Heritage Foundation.

Walker is the tour's rock star, profiled on "60 Minutes" and interviewed by faux-pundit Stephen Colbert. A former Arthur Andersen accountant, Walker heads the Government Accountability Office, a legislative agency that aims to improve government performance through audits and investigations.

With six years to go on a 15-year term, Walker has the stature and independence to say what he wants. For the past five years, since Congress ignored his advice and created a hugely expensive prescription-drug program for Medicare beneficiaries, Walker has put the looming fiscal crisis at the top of his agenda.

The biggest entitlements are Social Security, Medicare and Medicaid, which together account for about 40 percent of federal spending. Interest on the national debt accounts for another 9 percent and is the fastest-growing budget category at $227 billion, or nearly twice what was spent last year on the war in Iraq.

All told, the cost of the three programs exceeds projected revenue by more than $50 trillion over the next 75 years, by the GAO's latest estimate.

-Lori Montgomery, WashingtonPost.com

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Upcoming Events - May 23, 2007

The Association of Government Accountants (AGA)
Dinner and awards ceremony in honor of eleven federal agencies that have been awarded the 2007 Certificate of Excellence in Accountability Reporting.

The recipients include: the Commodity Futures Trading Commission; the Housing and Urban Development Department; the Interior Department; the General Services Administration; the Government Accountability Office; the Nuclear Regulatory Commission; the Patent and Trademark Office; the Securities and Exchange Commission; the Small Business Administration; and the Social Security Administration.
[Note: There will be a media availability following the event.]

Participants: Clay Johnson III, deputy director for management at the Office of Management and Budget; U.S. Comptroller General David Walker of the Government Accountability Office; Linda Combs, comptroller of the Office of Management and Budget; and Redmond Van Danker, executive director of the AGA

Location: National Press Club, 14th and F Sts., NW, 13th Floor, Washington, D.C.. 6 p.m. (May 23, 2007)

Contact: Jennifer Curtis, 703-562-0770, jcurtin@agacgfm.org; [http://www.agacgfm.org]

Federal Accounting Standards
Federal Accounting Standards Advisory Board (FAR. Page 39318)

Meeting to discuss their conceptual framework, social insurance, application of the liability definition, the federal entity, natural resources, inter-entity costs, technical agenda, and any other topics as needed. May 23-24.

Location: Government Accountability Office, 441 G St., NW, room 7C13, Washington, D.C..
9 a.m. (May 23, 2007)

Contact: Wendy Comes, 202-512-7350

Unprecedented Eleven Federal Agencies to Receive AGA's Prestigious CEAR Award

AGA is pleased to recognize the outstanding Fiscal Year 2006 performance and accountability reporting efforts of the following federal agencies, which are the recipients of the Certificate of Excellence in Accountability Reporting (CEAR):

• U.S. Commodity Futures Trading Commission (1)
• U.S. Department of Housing and Urban Development (1)
• U.S. Department of the Interior (7)
• U.S. Department of Labor (7)
• U.S. General Services Administration (3)
• U.S. Government Accountability Office (6)
• U.S. Nuclear Regulatory Commission (6)
• U.S. Patent and Trademark Office (5)
• U.S. Securities and Exchange Commission (1)
• U.S. Small Business Administration (1)
• U.S. Social Security Administration (9)

*The number in parenthesis after each agency indicates the number of years, including this year, that the agency has received the award.

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World's Collide

Enterprise resource planning and service-oriented architecture are coming together. Three of the major software vendors of ERP software are moving their own platforms to ones that support Web services.

Oracle Corp. is rolling out its Fusion platform, which updates the PeopleSoft HR software with Web services interfaces. Already, its Fusion Middleware allows users to build their own composites, or applications that reuse already-existing functionality in other programs, said Wayne Bobby, vice president for solutions for finance and administration at Oracle Federal.

Likewise, SAP AG, based in Waldorf, Germany, has migrated its MySAP ERP software to a new Web services-based platform called Netweaver.

It is now exposing all the core functionality as Web services. So far, more than 1,500 functions are available. “We are going to expose every single element of our solution as a Web service,” said David Ditzel, director of public services technology solutions for the company.

In a similar move, CGI Inc. of Montreal has migrated its federal ERP software, called Momentum, to a Java 2 Enterprise Edition-based platform, allowing developers to easily hook their own J2EE applications into CGI’s software, said Heidi Green, head of CGI's state and local ERP practice, based in Fairfax, Va.

ERP systems traditionally are known as large, monolithic applications that tend to be difficult to install, maintain and upgrade. SOA promises to make software more responsive, namely by making it easy to reconfigure to meet changing needs.

In many ways, the federal government has tried to simplify ERP deployment by breaking the job into smaller chunks. For instance, when the Social Security Administration wrote the business case for a new core financial-management system in 2001, it broke fiscal duties into discrete functionalities, following Clinger-Cohen Act tenets to mitigate risk, said Tom Bianco, who manages the Social Security Online Accounting and Reporting System.

SSA’s system uses components of the Oracle Federal Financials package, including the general ledger, accounts payable, accounts receivable and purchasing modules.

With Web services-based interfaces, the modular approach could now become more fine-grained, advocates said.

As the Organization for the Advancement of Structured Information Standards said last summer, the SOA Reference Model is “a paradigm for organizing and utilizing distributed capabilities that may be under the control of different ownership domains.”

By reusing capabilities, theorists say, organizations could make better use of available resources or meet changing needs more quickly.

- Jacob Jackson, WashingtonTechnology.com

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Agencies scrutinize more payments for mistakes

Administration officials announced Wednesday that the number of federal programs susceptible to making erroneous payments has gone up, as has the total estimate of federal outlays at risk of mistakes -- and that the increases represent good news for the government's ability to assess mistaken payments.

For fiscal 2006, the federal improper payment rate, which includes payments made mistakenly to ineligible recipients or as a result of fraud or other error, was 2.9 percent, translating to $40.5 billion in errors, according to a new Office of Management and Budget report.

That represents a drop from the fiscal 2005 rate of 3.1 percent.

But in its latest report, OMB focused on increases in the federal dollars that have come under scrutiny for improper payment risk in the third year of reporting under the 2002 Improper Payment Improvement Act. Those outlays rose to $1.7 trillion in fiscal 2006, from $1.4 trillion in fiscal 2004. Of that amount, $184 billion was newly identified in 2006 as risk susceptible.

Officials said major progress was made in reducing mistaken payments in Medicare, which reduced errors from $12.1 billion in fiscal 2005 to $10.8 billion in fiscal 2006. They attributed much of the change to better processes for documenting claims.

OMB also highlighted progress at the Housing and Urban Development Department, which reduced payment problems in its rental assistance and public housing programs. The Agriculture Department also made strides by improving its error rate in the Food Stamp program. And at the Social Security Administration's Old Age, Survivors and Disability Insurance program, a 0.1 percent drop in the improper payment rate yielded a $401 million reduction.

The Government Accountability Office has questioned agencies' mistaken payment estimates. A November report noted that the Homeland Security Department, General Services Administration and NASA were among eight agencies reporting that they had no programs with significant risk of improper payments.

Senior GAO and OMB officials have debated where the risk threshold should be set, and how cost-benefit analyses should be used to focus on priorities. The officials agreed that lawmakers can help address the problem by allowing greater sharing of data on the beneficiaries of federal payments.

-Jenny Mandel, GovExec.com

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FederalNewsRadio - Ask the CFO - Dale Sopper (SSA)

Dale W. Sopper is the Deputy Commissioner for Budget, Finance and Management at the Social Security Administration (SSA). He is responsible for providing executive leadership and direction in administering: a comprehensive financial program of budget policy, formulation and execution; accounting policy and operations; the Agency's acquisition and grants program; audit resolution and liaison; the internal controls program; Agencywide facilities and publications management programs; and the Agency's efforts to improve Annual Wage Reporting and wage reconciliation activities. Mr. Sopper also serves as SSA's Chief Financial Officer and Principal Deputy Ethics Counselor.

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