Agencies see success in stemming tide of improper payments

Thursday - 2/9/2012, 8:22pm EST

Beryl Davis, director of financial mangement and assurance issues, GAO

Download mp3

The federal government paid out more than $115 billion in improper payments last year.

But according to a recent Government Accountability Office report tracking those payments in fiscal-year 2011, that's actually a decrease of $5.3 billion.

The total amount in improper payments identified by GAO stemmed from 79 programs across 17 agencies. Auditors traced the decrease to success in cutting improper payments by three programs: Unemployment insurance, the Earned Income Tax Credit and Medicare Advantage.

Beryl Davis, the director of financial management and assurance issues at GAO, testified before a House Oversight and Government Reform subcommittee this week. She joined In Depth with Francis Rose to discuss how agencies made progress on cutting improper payments as well as the improvements they need to continue to make.

Not always a loss to the government

Davis noted that improper payments don't always mean a loss to the government or indicate fraud.

"An improper payment is any payment that should not have been made or that was made in an improper amount," she explained, including under-payments and payments made despite without official documentation.

In its report, GAO noted a variety of methods and programs designed to reduce improper payments, Davis said.

Preventive controls, such as data-matching and data-sharing among agencies, are designed to catch improper payments before they actually happen. For example, Medicare has successfully used predictive analytics to assess billing patterns for potential fraud before it happens, Davis said.

Preventive controls help avoid the less efficient 'pay-and-chase' method, which has long plagued the system, she added.

RELATED STORIES:

OMB hangs hopes on new tools to cut $50B in improper payments

Agencies must work together to reduce improper payments

How agencies cut $18B in improper payments