Improper Payments Rate Nears Administration’s 3 Percent Goal

January 2, 2014 | By Jerry Ashworth | Post a Comment

moneypile2-300x168First of all, Happy New Year! Let’s hope 2014 proves to be a more healthy and prosperous year for everyone than last year. It will definitely be a more exciting, if not challenging, one for the grants community as we sort out the Office of Management and Budget’s new grants reform guidance.

But today I want to address a little offhanded remark I made way back last March. In a blog post back then, I was a bit skeptical about one of the Obama administration’s cross-agency priority goals that sought to “achieve a payment accuracy rate of 97 percent by the end of 2016.” At the time, I figured this would be an admirable achievement considering the history of the federal payment error rate.

In fiscal year 2009, the governmentwide improper payment rate was 5.42 percent. Since then, this error rate has been declining, slow and steady, down to 5.29 percent in FY 2010, 4.69 percent in FY 2011 and 4.35 percent in FY 2012. OMB anticipated then that this error rate will continue to decline to 3 percent by FY 2016, but I wasn’t convinced it would drop far enough at that pace.

However, OMB last month issued a blog post to announce that the improper payment rate declined to 3.53 percent in FY 2013. Wow! Furthermore, federal agencies recovered more than $22 billion in overpayments through payment recapture audits and other methods in FY 2013.

OMB said the reduction has been spurred by federal agencies working directly with states to ensure that appropriate corrective actions are put in place to reduce improper payments;  efforts made in advancing data analytics and improved technology to prevent improper payments before they happen; and the development of a comprehensive analysis of agency-specific corrective actions to identify programs with the highest return-on-investment or potential for substantially reducing improper payments.

Maybe we actually can reach that 3 percent goal by 2016, dare I say if not sooner. Personally, I’m all for it. However, I’ll hold out a little skepticism until that 3 percent goal is actually reached. Call me crazy.

What about you? Do you think the federal government will reach the 3 percent goal to reduce improper payments or are you skeptical about these numbers? Let us know.

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