Agencies' faulty payments make OMB site hit list is latest federal effort to reduce $110 billion in improper payments

The Office of Management and Budget has started a new Web site,, to track work to reduce improper payments and get ideas from the public on how to reduce them.

The site is the latest White House effort to reduce federal improper payments, which are allocations made to ineligible or unauthorized entities, or to eligible individuals for the wrong amounts, without proper documentation, or for the incorrect purpose. They include payments made to debarred contractors, deceased individuals and fugitive felons.

Federal improper payments were estimated to total $110 billion in fiscal 2009, up from $72 billion in fiscal 2008, according to a statement on The site said the overall improper payment rate for the federal government was 5.65 percent for fiscal 2009. The OMB has set a goal of reducing that rate to 5.33 percent in fiscal 2010, 4.99 percent in fiscal 2011, and 4.32 percent in fiscal 2012.

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Vice President Joe Biden’s said June 18 those payments included $180 million paid to deceased individuals and $230 million to fugitive felons. Biden also announced that authorities are compiling a Do Not Pay list combining information from a number of databases on debarred contractors, deceased individuals and other ineligible entities.

Peter Orszag, OMB director, said June 18 that OMB and the Health and Human Services department are using a new software tool to comb through spending data to identify potential improper payments. The tool identifies anomalies such as deceased people alleged to be receiving medical care. is “part of a sustained effort” and will “give taxpayers a way to join the fight by reporting suspected incidents of fraud, waste, and abuse,” Orszag wrote on his blog on June 24.

The Web site also showcases 14 federal payment “high-error” programs with high rates of improper payments, and four success stories of agencies that have reduced their improper payments.

For example, Medicare fee-for-service was responsible for $35 billion in improper payments in fiscal 2009, the highest of any program, which was a 12.4 percent rate. The second highest amount paid wrongly among the high-error programs was Medicaid’s $18 billion in improper payments, a 10 percent rate.

The site features four success stories of agencies that have reduced their improper payments:

  • The Housing and Urban Development Department reduced those payments from $3 billion in fiscal 2002 to $1 billion in fiscal 2009 by using data-matching technology to confirm recipient eligibility.
  • The Defense Department identified more than $700 million in improper payments to vendors during the past two years through its Business Activity Monitoring tool that flags potential improper transactions.
  • The Social Security Administration, working with banks, has deployed its Access to Financial Institutions program that identifies undisclosed bank accounts and verifies bank account balances.
  • The Veterans Affairs Department has launched its Health Care Effectiveness through Resource Optimization (Project HERO) pilot program to perform audits in medical and dental networks. The project has identified approximately $11.6 million of potentially erroneous payments to date.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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