Federal agencies reported making $247 billion in improper payments in just one year according to a recent Government Accountability Office (GAO) report.
That’s $247,000,000,000, and that is just what the government knows about. All of that wasted money was reported by just 18 federal agencies.
Over time, the billions start to add up. GAO says that over the last 20 years, improper payments add up to nearly $2.4 trillion.
The improper payments highlighted in the GAO report were made across 82 government programs. These were the worst offenders among the various government programs:
- Medicaid ($81 billion)
- Medicare ($47 billion)
- Paycheck Protection Program ($29 billion)
- Unemployment Insurance ($19 billion)
- Earned Income Tax Credit ($18 billion)
Collectively, those five programs represent 78% (about $194 billion) of the total.
The improper payments consist of:
- Overpayments (monetary loss), totaling about $200 billion
- Underpayments, totaling about $5.3 billion
- Unknown payments, totaling about $32.7 billion
- Technically improper payments, totaling about $9 billion
These were the main causes for the improper payments reported by the agencies:
- Failure to access data/information needed accounted for about $145.1 billion (58.8%)
- Inability to access the data/information accounted for about $35.9 billion (14.5%)
- Data/information needed does not exist accounted for about $24.2 billion (9.8%)
- Unknown payment caused by insufficient or lack of documentation from applicants to determine eligibility accounted for about $20.3 billion (8.2%)
In the case of unemployment insurance, fraud was commonly reported by the Department of Labor as a cause.
What’s worse, there probably are a lot more payments that didn’t even make it into the GAO report. GAO said, “This total of fiscal year 2022 improper payment estimates does not include numerous agency programs that agencies determined are susceptible to significant improper payments. As a result, the fiscal year 2022 government-wide estimated improper payment amount is potentially incomplete and not representative of the full amount of improper payments.”
As far as solutions to the problem go, GAO said that it has made “numerous priority recommendations” to agencies to address the problem of improper payments. The report also notes that of the 18 agencies highlighted, 8 had open recommendations relating to improper payments, and 37 out of 53 of GAO’s recommendations were still open as of February 2023.
The report adds, “By working collaboratively to address the open priority recommendations and matters for congressional considerations, federal agencies and Congress can make progress toward reducing improper proper payments and improving payment integrity.”
