Improper or incorrect payments by federal agencies cost taxpayers $236 billion in fiscal year 2023, the government’s watchdog said in a new report.
Such payments “have consistently been a government-wide issue. Since fiscal year 2003, cumulative improper payment estimates by executive branch agencies have totaled about $2.7 trillion. Reducing improper payments is critical to safeguarding federal funds,” the General Accounting Office (GAO) said in releasing the report yesterday.
Those numbers do not tell the whole story because some agencies did not report the totals from select federal programs "susceptible to significant improper payments," the GAO said.
According to the GAO, the worst offenders are the following:
• Health and Human Service’s (HHS) Medicare program ($51 billion).
• HHS’s Medicaid program ($50 billion).
• The Department of Labor’s Unemployment Insurance – Federal Pandemic Unemployment Assistance program ($44 billion).
• Department of the Treasury’s Earned Income Tax Credit ($22 billion).
• The Small Business Administration’s (SBA) Paycheck Protection Program Loan Forgiveness program ($19 billion).
The programs that aren’t reporting their overpayments include the Department of Health and Human Services' Temporary Assistance for Needy Families, the Department of Housing and Urban Development Office of Public and Indian Housing's Tenant Based Rental Assistance program and the Office of Multifamily Housing's Project-Based Rental Assistance program.
Among the improper payment totals that federal agencies reported to GAO for fiscal year 2023, about $175 billion was characterized as "overpayments," the watchdog found.
The GAO said improper payments "represent a material deficiency or weakness in internal controls" across the federal government. "Specifically, GAO has noted that the federal government is unable to determine the full extent of its improper payments or to reasonably assure that appropriate actions are taken to reduce them," the report stated.
Rep. James Comer, a Republican from Kentucky and chairman of the House Committee on Oversight and Accountability, and Rep. Jodey Arrington of Texas, Republican chairman of the House Committee on the Budget, said in statements that the improper payments are unacceptable.
“As our national debt continues to balloon, it’s imperative we reduce government spending and waste," Comer said. "It’s unacceptable our federal government made $236 billion in improper payments during the last fiscal year. This systemic mismanagement and waste of taxpayer dollars must be addressed. Our Improper Payments Working Group will continue to identify ways to address improper payments and ensure the federal government better stewards Americans’ hard-earned money."
The $236 billion in "fraudulent and wasteful payments" represents more than what the U.S. government spent on Homeland Security, the Department of Education, and NASA combined, Arrington said in a statement.
"In fact, since 2003, nearly $3 trillion in taxpayer dollars have been squandered on improper payments, a figure that is as stunning as it is unacceptable. In order to restore fiscal responsibility to Washington we must root out the gross mismanagement of Americans’ hard-earned tax dollars, rein in spending, and reverse the curse of a debt crisis that looms large over our children’s future,” Arrington said.
The latest report follows a GAO report released in February that found that billions are wasted on federal health insurance programs.
The Office of Personnel Management, which oversees health insurance for eight million federal workers and their families at a cost of more than $60 billion a year, has never checked the eligibility of those on its rolls, according to the GAO, which identified fraud on the part of individual government employees, who had added ineligible family members and members of their households to their insurance plans.
“Some agencies have made progress reducing the number of such errors in their programs. For instance, some have improved the accountability of senior leaders for their programs. Others have used technology to automate payment the payment process. Other agencies could use such techniques to reduce their own payment errors,” the GAO said in its latest report.
“There are a number of steps that Congress and federal agencies could take to help reduce federal imporover payments and save taxpayers funds,” the GAO said in the report.
For instance, Medicaid could improve oversight to ensure that claims aren’t paid to ineligible medical providers, including those who have suspended or revoked medical licenses. Agencies should also be undertaking aggressive audits, which are required, but only 14 or 24 agencies are doing so, the GAO said.
Congress should help agencies identify susceptible programs, develop reliable methods for estimating improper payments and implement effective and corrective actions, argued the agency, has been reporting on such payments since 1997.