Casey Calls on Administration to Reduce and Prevent Improper Payments

Last Year, Federal Government Made $115B in Wrong Payments

Government Watchdog Has Plan to End Improper Payments -- Casey Calls on Administration to Adopt Plan Immediately

Casey Also Backs Bipartisan Bill That Would Force Administration to Implement Watchdog’s Recommendations

WASHINGTON, DC – Today, U.S. Senator Bob Casey (D-PA) called on the Administration to immediately take steps to reduce improper payments by the federal government. A new Government Accountability Office (GAO) report showed that the federal government made $115.3 billion in improper payments last year.

In the GAO’s report, the watchdog agency made recommendations that would reduce and prevent improper payments. Today, Senator Casey wrote a letter to Office of Management and Budget Acting Director Jeffrey Zients urging him to immediately implement the GAO’s recommendations. Senator Casey also announced his support for a piece of legislation, the Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 2011, which would force the Administration to implement GAO’s recommendations.

“$115 billion in improper payments is simply unacceptable, and the Administration should take steps right away to reduce and eliminate them,” Senator Casey said. “The GAO has recommended a series of steps to reduce improper payments that the Administration can take today, but if the Administration refuses to act we should pass bipartisan legislation that would compel them to do so.”

An improper payment could be an incorrect payment, an overpayment or underpayment, and could include a payment to an ineligible recipient, a payment for an ineligible service, a duplicate payment or a payment for a service not received.  Under the current improper payment law, agencies are required to estimate the annual amount of improper payments and submit those estimates to Congress for federal programs meeting specific risk criteria. The law also requires improper payments recoveries, as well as authorizes and defines Recovery Audit Contracting procedures. In the intervening years, the amount of improper payments recorded by federal agencies more than tripled, a result of better detection and reporting mechanisms.

IPERIA strengthens the identification and reporting of federal agency improper payments, including codifying an existing Executive Order on improper payments estimating and reporting. In addition, agencies will be required to report annually to their inspectors general and make available to the public a report on any high-dollar improper payments identified by the agency. The bill establishes the Do Not Pay Initiative, which requires prepayment and contract award screening against databases containing relevant information on payees to verify eligibility and prevent improper payments. 

Senator Casey’s letter to OMB Acting Director Jeffrey Zients is below:

Dear Mr. Zients:

I write to bring to your attention a recent Government Accountability Office (GAO) study which found $115.3 billion in improper payments were made by the federal government in Fiscal Year 2011.  As a steward of taxpayer dollars, I am concerned that government agencies are not making sufficient progress in efforts to reduce improper payments.  I urge you to work with federal agencies to quickly implement GAO’s recommendations to further improve estimates of wrong payments and better identify which programs are most susceptible to these mistakes.

While not all improper payments represent a loss to the government, these errors do represent serious flaws in government operations, undermining the public’s confidence in government.  Efficiency is also negatively impacted when agencies spend time and resources recovering overpayments once they have been made, rather than preventing them at the outset.  In its report, GAO recommended that the following actions be taken to step up current efforts to limit improper payments:

  • Better identify and analyze root causes of improper payments.  Last year, many agencies inadequately reported the factors that most often led to improper payments, making it difficult to identify effective corrective and preventive actions.
  • Implement preventive controls.  Such activities as upfront eligibility validation, predictive analytic tests, and better program design are all effective strategies that should be implemented to avoid improper payments.
  • Improve detective controls to better identify and recovery overpayments.

While I appreciate the work your office is currently doing to limit improper payments, I urge you to fully implement the preventive measures proposed by GAO to further decrease improper payments in the future.  Thank you for your consideration.

Sincerely,

Robert P. Casey, Jr.

United States Senator

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