How Much Money Does the Federal Government Waste?
You know it’s a lot, but you may be surprised to learn no one knows the exact amount. That’s according to recent testimony (Adobe) to Congress and a report last month (Adobe) from the U.S. General Accountability Office (GAO).
In 2002, Congress passed The Improper Payments Information Act (Public Law 107-300). According to the White House’s OMB implementation guidance (Adobe), an improper or erroneous payment is:
“An erroneous payment is any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement. Incorrect amounts are overpayments and under payments (including inappropriate denials of payment or service). An erroneous payment includes any payment that was made to an ineligible recipient or for an ineligible service. Erroneous payments are also duplicate payments, payments for services not received, and payments that do not account for credit for applicable discounts.”
The bottom line, according to the GAO report:
“For fiscal year 2005, 18 agencies reported improper payment estimates for 57 programs totaling in excess of $38 billion, which is $7 billion less than the $45 billion reported for fiscal year 2004.8 Of the 18 agencies reporting improper payment estimates, 14 agencies had one or more programs with improper payment estimates exceeding $10 million, and thus were required to prepare and implement a plan to reduce improper payments and report on actions taken.” In fact, GAO suggested the estimate should be “markedly higher.”
What? An agency can make $10 million in erroneous payments and they don’t have to try to reduce them. To paraphrase the astronauts, Washington, we have a problem. With its budget now in excess of $1 billion, you gotta wonder the amount of Arlington County's erroneous payments. Now, don't you?