IGs outline abuses in mandatory spending programs

The top investigators for 19 federal agencies said Wednesday that waste, fraud and abuse may be responsible for the misuse of millions of dollars in federal expenditures and outlined ways departments are trying to stem the losses.

Inspectors general from the Agriculture, Health and Human Services, Education and Transportation departments testified before the House Budget Committee, which held a second hearing Wednesday on the theme of government waste in mandatory programs.

Budget Committee Chairman Jim Nussle, R-Iowa, began the hearing by decrying the lack of oversight over mandatory spending.

"Unlike discretionary funds, mandatory spending has no built-in process of review," Nussle said.

Budget ranking member John Spratt, D-S.C., voiced concern that one of the biggest agencies, the Defense Department, was absent.

"No comprehensive effort to root out waste, fraud and abuse can overlook the elephant in the room, the $400 billion defense budget," Spratt said.

Defense Inspector General Joseph Schmitz was among more than a dozen agency investigators who submitted statements for the hearing but did not appear.

USDA Inspector General Phyllis Fong, among those who testified, said her agency's biggest losses stem from fraud and waste in their Food and Nutrition Services and crop insurance program.

At FNS, which provides food stamps and the National School Lunch and Breakfast program, most spending errors stemmed from improper payments to individuals qualifying for services, Fong said. The national error rate for these payments in the last eight years has fluctuated between 8.6 percent and 10.8 percent.

Fong also said that fraud in the crop insurance program "enabled individuals to receive over $5.9 million in payments from [the Farm Service Agency] and Risk Management Agency."

Transportation Department Inspector General Kenneth Mead called for improved accounting plans to stop spiraling operating costs at the FAA, which are up 65 percent in the past seven years.

Mead also pointed to funding woes at Amtrak, arguing, "The current Amtrak model is broken." Mead also testified that investigators overall have questioned more than $475 million in agency costs.

HHS acting Principal Deputy Inspector General Dara Corrigan addressed ways of cutting costs of Medicare and Medicaid-of acute interest to lawmakers as legislation dealing with Medicare heads into a House-Senate conference.