Federal agencies made at least $19 billion in improper payments in 1998, according to a General Accounting Office report released Friday by Sen. Fred Thompson, R-Tenn.
Thompson, chairman of the Senate Governmental Affairs Committee, said billions more taxpayer dollars are probably squandered through fraud, computer errors or carelessness, since the $19 billion figure covers just 14 programs in nine agencies.
"We have hundreds of government programs," Thompson said at a press conference. "We're dealing here with the tip of the iceberg."
The bulk of the improper payments GAO detailed came from Medicare, which made $12 billion in improper payments, auditors estimated. Medicare improved its record over 1997, however, when the agency made an estimated $20.3 billion in overpayments to beneficiaries. Other federal programs reporting payment errors included Social Security's Supplemental Security Income ($1.6 billion); food stamps ($1.4 billion); Old Age and Survivors Insurance ($1.2 billion); disability insurance ($941 million); and housing subsidies ($857 million).
Thompson commended the nine agencies responsible for the programs described in the report-the Agency for International Development, the Office of Personnel Management, the Social Security Administration and the Agriculture, Health and Human Services, Housing and Urban Development, Labor, Treasury and Veterans Affairs departments-for identifying and reporting the improper payments, saying that knowing the problem is half the battle.
"Other big departments are not even keeping track," Thompson complained, singling out the Defense Department for not being able to estimate improper payments. "It's clear that we lack internal controls with regards to most of these agencies."
In its report, "Financial Management: Increased Attention Needed to Prevent Billions in Improper Payments" (AIMD-00-10), GAO said agencies disbursing federal benefits often lack adequate controls to make sure people are eligible to receive the benefits. The immensity and complexity of federal programs exacerbates agencies' difficulties, GAO said. In addition, agencies that do not rigorously review payments and monitor programs invite fraud, GAO said.
Federal computer systems also contribute to the problem, since many systems do not provide reliable and timely data to help agency personnel reduce improper payments.
In response to a draft of the GAO report, Deidre Lee, acting deputy director for management at the Office of Management and Budget, said reducing payment errors is one of OMB's 24 top management priorities. Agencies, she noted, can set goals for reducing improper payments in their annual performance plans, which are required by the 1993 Government Performance and Results Act.