White House renews efforts to improve integrity of federal payments

The Biden administration is doubling down on its commitments to accountability and efficiency in government in the wake of a recent uptick in improper payments, largely as a result of the coronavirus pandemic. 

The Office of Management and Budget released updated governmentwide data on December 30 on improper payments, which are payments that either shouldn’t have been made or were made in an incorrect amount. This has been a years-long issue in the federal government, spanning different presidential administrations. 

The new data “underscores the depth of the problems facing states that were in many cases overwhelmed by the unique and compounding challenges caused by the COVID-19 pandemic—and a general legacy of neglected oversight under the previous administration,” said a blog post from OMB. “Overall, the analysis estimates that between fiscal year 2020 and fiscal year 2021, the governmentwide improper payment rate rose from 5.6% to 7.2%.” 

The increase was mainly due to the increase of improper payments in the federal-state unemployment insurance programs, which was used heavily as a result of the pandemic-induced recession, said OMB. The office cited a recent report from the Pandemic Response Accountability Committee, established by the CARES Act in March 2020 for COVID-19-related oversight, about challenges 16 states faced in handling jobless benefits early on in the pandemic. 

A dashboard on PaymentAccurancy.gov allows users to search by agency for information on how effectively and efficiently federal agencies and state partners make payments. A similar site—USASpending.gov— just shows how the money is being spent. 

“The data is on federal programs, but many of the federal programs fund state programs. Medicaid, unemployment insurance, [Housing and Urban Development Department] community block grants, [Temporary Assistance for Needy Families], and education funding are some of the largest of these,” Linda Miller, former Pandemic Response Accountability Committee deputy executive director and a former Government Accountability Office official, who is now a principal with Grant Thornton Public Sector, told Government Executive on Monday. 

“So, the money is provided to the federal agencies ([Labor, Health and Human Services, Education and Agriculture departments,] etc.) then they transfer it to states for those state-run programs like Medicaid, [Temporary Assistance for Needy Families], and Unemployment Insurance,” she continued. “They do this in various ways, such as direct transfers, or block grants among others.” 

The Biden administration is working to help states with their unemployment insurance systems and improve oversight, said OMB.

For example, the American Rescue Plan authorized $2 billion for grants to help prevent identity theft, send “Tiger Teams” to work with state unemployment officials, and upgrade outdated technology systems; the Biden administration created a new data sharing agreement among states and the Labor Department’s inspector general; the Labor Department is working with “law enforcement agencies to counter the organized criminal syndicates targeting [unemployment insurance] benefits;” and President Biden launched an “Identity Theft Prevention and Public Benefits” initiative in May that will finalize recommendations and reforms this year. 

As for OMB itself, it has been working with the oversight community and agencies to make tackling improper payments a “top priority,” said the blog. 

OMB issued guidance on how agencies can foster better relationships with their IGs; updated payment integrity guidance; and released an implementation guide for the American Rescue Plan to maximize accountability and payment integrity, which OMB is looking to replicate for the Infrastructure Investment and Jobs Act.

“We won’t solve these problems overnight. But the bottom line is that the administration is going to remain laser-focused on taking every step possible to deliver the effective, efficient, and accountable government the American people expect and deserve,” said the blog post. “Sharing this data transparently and being direct about the challenges we face are part of that commitment.” 

GAO said in a June report that OMB partially addressed or agreed with several of its previous recommendations on improper payments, a years-long issue; however, more could be done. 

Overall, “since our April 2020 letter, OMB has implemented four of our 35 open priority recommendations,” wrote Comptroller General Gene Dodaro, to OMB leadership. “Given the critical role OMB plays in providing oversight of vital governmentwide performance and management issues, we ask for your attention to the remaining 31 open priority recommendations identified in the 2020 letter.” GAO also added 13 new recommendations on improper payments as well as government performance, transparency and availability of government data, acquisition management, federal real property and information management. 

Last month, OMB announced it’s collecting feedback on the draft of a learning agenda to further the president’s management agenda, which is due on January 31. One of the questions OMB would like answered is: “How can minimizing administrative burdens also improve upon objectives of minimizing improper payments and strengthening program integrity?”