Sneak Preview: Agencies Urged To Reduce Improper Payments

September 29, 2017 | By Jerry Ashworth | Post a Comment

(Thexsass_bookshot following was excerpted from a recent article in the Single Audit Information Service.) A key official with the Office of Management and Budget (OMB) recently encouraged federal financial officials to identify ways to reduce improper payments in their agencies in light of recent statistics showing that the percentage of federal improper payments has been rising over the last few years.

Earlier this year, a Government Accountability Office (GAO) financial audit of federal fiscal years (FY) 2015 and 2016’s federal consolidated financial statements found that while the nationwide improper payment rate had shrunk from 5.42 percent in FY 2009 to 3.53 percent in FY 2013, the rate rose to 4.67 percent in FY 2016, which equals an improper payment dollar amount of about $144.4 billion. In fact, GAO determined that the amount of improper payments could actually be higher because eight federal entities did not report FY 2016 estimated improper payment amounts for 18 risk-susceptible programs, including the Department of Agriculture’s Supplemental Nutrition Assistance Program and Department of Health and Human Services’ Temporary Assistance for Needy Families.

At the Association of Government Accountants Internal Control and Fraud Prevention Training held Sept. 20 in Washington, D.C., Mark Reger, OMB deputy controller, told attendees, many of whom were federal agency financial officials, that the growing percentage of improper payments is concerning. He said that 112 programs are deemed to have a high risk of significant improper payments. The Improper Payments Elimination and Recovery Act of 2010 (IPERA) (Pub. L. 111-204), as amended, defines programs and activities that have a high risk of significant improper payments as those making annual improper payments exceeding $100 million, or $10 million and 1.5 percent of the program’s expenditures.

“Think about what you can do to reduce the improper payment rates and dollar amounts in your agency,” Reger told the federal officials in attendance. “When [improper payment] numbers grow, our agency budgets shrink. When you think about $144 billion in improper payments, … it is a problem for all of us. If we could save just 1 percent of that number, imagine what budget cuts for FY 2018 would not have had to occur. When you talk about fraud, waste and improper payments, remember those are lost opportunities. It is a significant amount and if there is a way you reduce it by making an improvement in operations, think about doing that.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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