The federal government made $124.7 billion in improper payments in 2014, nearly 20 percent more than the $105.8 billion improperly spent the previous year, according to a new report from the Government Accountability Office.
Most of the $19 billion increase resulted from erroneous payments made to the Medicare, Medicaid and Earned Income Tax Credit programs. The programs accounted for more than 75 percent of the government-wide improper payment estimate, with Medicaid and Medicare alone receiving $77.4 billion in improper benefits, the report said.
A payment is considered to be improper when it is made in error or when an incorrect amount is paid. They can include duplicate payments, those made to ineligible recipients, without proper documentation or for ineligible goods and services, according to McClatchy. They are often attributable to fraud or unintentional clerical errors and can also mean the government underpaid a taxpayer, according to The Washington Times.
In all, the GAO attributed improper payments to 124 government programs across 22 agencies for fiscal year 2014.
"We talk about so much money here in Congress - millions, billions, and trillions of dollars. We casually cite dollar figures that are incomprehensible to most people. And, too often, politicians and policymakers talk about these dollars as if they are Washington's, as if the funds just materialized out of thin air for the sole purpose of being spent by the government," said. Sen. Orrin G. Hatch, chairman of the Senate Finance Committee. "But let's be clear about one thing: These funds - these millions, billions and trillions of dollars that we talk about and sometimes spend rather haphazardly, belong to the taxpayers. These are dollars the federal government has either taken out of paychecks or borrowed from future taxpayers."
Recent federal laws have tried to reduce the amount of improper payments, however, "incomplete or understated estimates and noncompliance with criteria listed in federal law hinder the government's ability to assess the full extent of improper payments and implement strategies to reduce them," the GAO report said.
"For example, for fiscal year 2014, 2 federal agencies did not report improper payment estimates for 4 risk-susceptible programs, and 5 programs with improper payment estimates greater than $1 billion were noncompliant with federal requirements for 3 consecutive years."
Hatch said that the Obama administration and Congress were able to save $20 billion by cutting waste and abuse from 2011 to 2014 but added that only 29 percent of the more than 440 GAO recommendations had been "fully addressed."
The GAO estimated that since agencies started reporting improper payments in 2003, some $1 trillion in federal funds has been lost.
To fix the problem with improper payments to Medicaid and Medicare, the GAO suggested that the Centers for Medicare and Medicaid Services, which runs the programs, improve automated audits, remove Social Security numbers from Medicare cards to prevent fraud and track post-payment recovery audit activities, according to the Federal Times. The IRS should also have the ability to compare its information with other information collected by various federal agencies to identify spending problems, according to the GAO.
