Moving Aggressively on Improper Payments

Today, the Washington Post ran a story about an Inspector General report that showed that from 2006 to 2010, the Office of Personnel Management paid $601 million to retirees who are dead.

Unfortunately, paying people the wrong amount or paying the wrong people – what we call “improper payments” – has been happening in the Federal government for far too long, and it is just plain wrong. It’s why, as faithful readers of OMBlog know, the Obama Administration has moved aggressively against improper payments and wasteful government spending since day one.

President Obama set a goal of preventing $50 billion in improper payments and recapturing $2 billion in erroneous payments. The Administration has taken important steps towards achieving the President’s goals, which have yielded early results. 

In 2009, the President ordered agencies to identify programs with the worst records in this area and to select a senior official to be held accountable for coordinating agency program integrity efforts. The Administration set up a public website to track progress on reducing these payment errors and hold leaders accountable and called for action against government contractors for failing to report significant overpayments received on government contracts in a timely way.

In 2010, the President directed that Federal agencies use technology to attack this problem and return billions of erroneous payments to American taxpayers. As the Vice President announced in June 2010, we have expanded the use of cutting-edge fraud mapping tools to gather enormous quantities of information in real time, analyze the data, and connect the dots to identify indicators of possible fraud or error. This cutting edge forensic technology is at work today to detect and prevent fraud and error before it happens. We also have implemented new accountability measures, posting details of error rates at PaymentAccuracy.gov, and for the first time adding sanctions for programs that fail to meet an increasingly rigorous threshold for error. These new advances are helping us cut waste and find errors so we can go back and collect the money and pursue prosecution where appropriate.

We have seen the results of these efforts. In FY 2010, the Government-wide improper payment rate declined from the previous year, meaning that we avoided $3.8 billion in improper payments. Agencies also reported that they recaptured $687 million in improper payments in FY 2010 — the highest amount recovered to date. 

Of course, as this IG report shows, there is still more work to do. This is exactly why the President and Vice President launched the Campaign to Cut Waste, a government-wide initiative to root out wasteful spending in agencies and make government more effective and more efficient. 

Specifically addressing the issue of improper retirement payments, the interagency working group of Inspectors General and CFO staff meet regularly to hone in on this area of waste. OPM is cross-checking data with the Social Security Administration weekly and annually to identify those who are deceased as well as crosschecking other Federal data sources, double-checking with beneficiaries over the age of 90 to verify their status, and enhancing communications efforts to ensure families are reporting deaths. OPM is also strengthening its processes for reclaiming improper payments. As the IG's report notes, OPM has implemented 10 of their 14 recommendations. In addition, today OPM Director Berry announced he would be directing his staff to provide weekly updates on progress for the final four recommendations.

Moreover, the Treasury department is well on its way to setting up the Do Not Pay list that the Vice President announced last summer. This central portal will provide agencies information they need to prevent payments to ineligible businesses and individuals. This tool is in production right now and will be available government-wide in a few months. The President also signed into law the Improper Payments Elimination and Recovery Act of 2010 which includes a whole host of new accountability measures, and the President proposed in his 2012 Budget even more aggressive tools that will help drive down this waste. If Congress passes these proposals, they will result in more than $160 billion in savings to the Federal Government over the next decade. 

From the beginning of this Administration, the President has been clear he will not tolerate wasteful government spending. We have taken unprecedented steps not only to prevent fraud and error before it occurs, but to prosecute when it happens – and we are committed to stopping these wasteful payments.

Jeff Zients is the Deputy Director for Management and Chief Performance Officer.