Despite new bureaucratic processes implemented last year to prevent payment errors by federal program administrators, the government reduced its improper payment rate a mere 0.16 percent.
What the White House calls an improvement others still consider a wasteful disappointment.
According to the Office of Management and Budget, the federal government in fiscal year 2010 spent $125 billion in improper payments — including payments to incorrect recipients, payments of incorrect amounts and improperly documented payments. Notably, 11 of 14 high-error programs, including unemployment insurance, Medicaid and Medicare Fee-for-Service, accounted for 96 percent of all improper payments.
Yet, at least one high-error program spokeswoman said this year marks progress.
“HUD has made strides to reduce improper payments in its rental housing assistance programs,” said Donna White in the Department of Housing and Urban Development Office of Public Affairs. “The agency has not only met its annual goals, but has exceeded those goals.”
Similarly, the administration considers its government-wide reduction efforts a success.
“We’ve worked hard to bring down the rate of improper payments, recapture misallocated funds, and meet the president’s goal of reducing improper payments by $50 billion by the end of 2012,” Jeffrey Zients wrote last week on the OMB blog. “Yesterday, federal agencies finished their year-end financial statements, and I’m pleased to report that we have made significant progress on these fronts.”
Even though the government reduced the error rate, there was still a $15 billion increase in improper payments.
Zients attributed it to “an unfortunate result of the recession and of basic math: the more that is paid out, the more paid out in error even if the overall rate declines.” He’s right, of course. Demand for targeted programs like unemployment insurance and Medicaid has gone up thanks to the economic downturn, and more transactions understandably mean more mistakes. But worded differently, what he wrote points out the problem more effectively: As government expands, so does waste.
That’s why the Obama administration shouldn’t be trumpeting this as a success when it doesn’t exactly move the government nearer to its reduction goal of $50 billion by 2012. While the minuscule rate reduction does mean agencies prevented an additional $3.8 billion of wasted spending, in this case, the outright number still matters most.
That’s what angered critics of the Obama administration like Rep. Darrell Issa (R-CA), ranking member of the Oversight and Government Reform Committee.
“It is unthinkable that we have come to accept having a bureaucracy that has institutionalized waste, fraud and abuse to the point where $125 billion in improper payments were made last year,” Issa said.
Tina Korbe is a reporter in the Center for Media and Public Policy at The Heritage Foundation.
