Improper payments, payments made by the federal government that should not have been made or are made in incorrect amounts, are a massive problem for the federal government. Not only because they waste tax dollars, but also because it weakens the integrity of federal programs and directs resources away from a program’s intended goal. Congress has tried to combat improper payments, but even their strides have fallen victim to improper protocols.
The Government Accountability Office (GAO) recently released a report finding only 15 of 24 agencies are in compliance with a recently passed law intended to measure and combat improper payments. These 15 agencies make up 96% of the government’s $136.7 billion in improper payments.
In 2012, the Improper Payments Elimination and Recovery Improvement Act (IPERA) was implemented to help reduce improper payments throughout federal agencies. Federal agencies are required to report programs that are susceptible to significant improper payments, publish improper payment estimates, implement actions to correct those improper payments, and report on the results. However, according to GAO’s report, there is no consistent reporting practice among federal agencies, making it difficult to determine the exact number and severity of improper payments and fraud.
GAO says inconsistent reporting “may present potentially misleading information.” Specifically, GAO found, “certain IGs (Inspector General) reported compliance based on the presence or absence of the required analysis or reporting, regardless of whether the IGs identified flaws, whereas certain other IGs reported agencies as noncompliant based on their performance of some degree of evaluative procedures.” In addition, some IGs reported noncompliance based on one finding, while a similar finding in another agency was issued as compliant.
Shockingly, the Office of Management and Budget (OMB) has issued no guidance for agencies to use, and does not specify what, if any, evaluative procedures should be used by federal IGs. GAO notes that if consistent guidelines and criteria were applied to all agencies, the number of noncompliant agencies would change the 2015 report results.
In addition to the IPERA reporting requirements, agencies must submit an action plan to Congress if a program is deemed noncompliant for three or more consecutive years. However, the Department of Agriculture (USDA) has had five noncompliant programs for at least three consecutive years, but has not submitted any plans to fix the noncompliant programs. GAO said the USDA will submit a letter by the end of the 2017 fiscal year, four years after its due date. Non compliant USDA programs include the School Breakfast Program, National School Lunch Program, the SNAP Program (food stamps), the Child and Adult Care Food Program, and the Farm Security and Rural Investment Act Program.
Finally, GAO reports that of the 435 corrective recommendations made by IGs, 320 have been closed as of December 31, 2016. Most of the open recommendations have only been issued over the past two years, making it likely agencies have not had enough time to implement strategies. While closing two-thirds of recommendations is a positive step for agencies and taxpayers, noncompliance under IPERA is at its highest point to date.
GAO recommends the Director of OMB, Mick Mulvaney, specify what procedures should be conducted to determine IPERA reporting compliance so taxpayers and agencies have a better understanding of improper payments throughout federal agencies. Certainly, improper payments pose a serious threat to our government’s finances, but agencies cannot begin to address that threat without accurate reporting.