Administration uses IT to cut improper payments

Agencies show a good start toward reaching Obama's goal of reducing the payments by $50 billion, officials said

The federal government issued fewer improper payments in fiscal 2010 than it did in 2009, and today Obama administration officials said they are using IT to further reduce those numbers.

In 2010, agencies made about $3.8 billion less in improper payments than in the previous year, and the payment error rate declined from 5.65 percent to 5.49 percent, said Danny Werfel, the Office of Management and Budget's controller, in a conference call.

Ten major programs are responsible for the majority of improper payments. When comparing fiscal 2009 with 2010, eight of those programs reduced the amount of improper payments they sent, officials said. Medicare and Medicaid had lower error rates in 2010 and avoided $8 billion in improper payments.


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Only the Social Security Administration’s Old Age, Survivors and Disability Insurance program increased its improper payments, from 0.4 percent to 0.48 percent, and the Labor Department’s Unemployment Insurance programs increased such payments from 10.3 percent to 11.2 percent.

Overall, Werfel said the administration has come further than anticipated based on fiscal 2010 results.

“The results today demonstrate that we can cut waste, boost effectiveness and create a government where tax dollars are respected,” Jeffrey Zients, OMB’s acting director, deputy director for management and chief performance officer, wrote in his blog today.

Reducing improper payments is part of President Barack Obama’s Accountable Government Initiative. Earlier this year, Obama set a goal of reducing such payments by $50 billion by the end of 2012.

To help agencies meet that goal, officials launched a new website named VerifyPayment.gov. It is a consolidation of three databases into one Do Not Pay List. The databases, which are typically used to verify whether recipients qualify for government benefits, are:

  • The Excluded Parties List System, which names companies barred from federal contracts.
  • SSA’s Death Master File, which records information on people who have died.
  • A Justice Department database that lists people who are incarcerated and therefore ineligible for government benefits.

Werfel said the new system won’t be available to the public because the three contributing databases contain personally identifiable information. The site will be open to government officials who have been authorized to access it securely.

OMB is launching a partnership with the Veterans Affairs Department to see how well VerifyPayment.gov works. Officials chose VA because it has a wide cross section of payment types and recipients, such as contractors and beneficiaries.

The administration has also established PaymentAccuracy.gov to post information about agencies’ improper payments.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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