House Oversight Committee Takes Aim at Improper Payments

It’s no secret that “ineffective financial management plagues the federal government.” The House Oversight and Government Reform Committee has driven this point home in their October report analyzing the last five years of improper payment data.

Improper payments are payments made by the federal government in the wrong amount, to the wrong people, or for the wrong reason. While these can sometimes be underpayments, over 90 percent of errors involve payments that are higher than they should be.

Congress and the executive branch have been trying to determine the extent of this problem since 2002; the Oversight Committee’s report paints a not-so-bright picture of the government’s progress in recent years.

The Committee concluded that improper payment reporting is still wildly inaccurate. Many agencies are unable or unwilling to provide accurate data about their improper payment levels, making it impossible for the government to know the true magnitude of this issue. The report states that, given the unreliability of fiscal year 2015 data, “improper payments may be far more than the $137 billion reported.” And while not explicitly stated in the report, this uncertainty most likely applies to all of the almost $1 trillion in improper payments reported since 2002.

Relevant laws and Inspector General (IG) recommendations are supposed to encourage agencies to fix these issues, but those efforts are not being unenforced, are being ignored, or can’t be implemented by the agencies. The Committee determined that nine agencies have never complied with improper payment laws, sixteen agencies failed to comply in 2015 alone, and many IG recommendations for improving the improper payment system have been left unaddressed for years—to no one’s surprise. The Committee also found that agencies and IGs need better data sharing practices in order to effectively identify and prevent improper payments.

This inaccurate reporting, non-compliance with guidance, and problematic access to needed data prevents an accurate understanding about the size of the problem and the development of long-term, effective solutions. If the federal government was a business, such erroneous payments and barriers to solutions would be treated with a higher urgency. This issue needs more attention, and it seems primed for an in-depth look by an incoming administration that touts its business acumen.

We are cautiously optimistic about renewed interest in this area after seeing the Oversight Committee’s report and its preceding hearing, and hope these efforts continue. POGO has recently released reports discussing the recovery process for improper payments and data matching restrictionsfaced by IGs and agencies in order to increase awareness of this issue.