How agencies cut $18B in improper payments

Wednesday - 11/16/2011, 7:26pm EST

Danny Werfel, controller, Office of Management and Budget

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By Jolie Lee
Federal News Radio

Agencies were able to stop $18 billion in improper payments last year by using technology and forging partnerships with each other, said Danny Werfel, controller at the Office of Management and Budget, in an interview with In Depth with Francis Rose.

One example of large reductions in improper payments came from Pell Grants. Historically, errors were caused by students or applicants misreporting their income. The Department of Education and the Internal Revenue Service partnered so that students filling out applications online could migrate income data directly from IRS, Werfel said.

"So it's less burdensome for the student or the applicant because they're not searching for their tax form trying to find the relevant information, and it produces less error because you're producing information from the trusted source," Werfel said.

The White House said this week the government had reduced its payment error from a rate of 5.3 percent in 2010 to a rate of 4.7 percent in 2011. The crackdown on improper payments is part of President Obama's Campaign to Cut Waste, launched two years ago with the goal of reducing payment errors by $50 billion before 2013.

"One of the root causes of why federal agencies make payments to the wrong person or the wrong amount or the wrong purpose is we don't have the information we need in real time to help prevent that improper payment from being made," Werfel said.

The administration's initiative to stop improper payments includes recovering improper payments that have already been made. The President set a goal to recapture $2 billion in improper payments by 2013. So far, agencies have collected $1.9 billion.

"A year early, we are almost at that goal, which tells me we are going to exceed that goal, which I'm very proud of," Werfel said.

Werfel said the responsibility of ensuring payments are to the right people, right amounts and right reasons lies with the government. But the contractors have a responsibility too to be a "good, sound partner with the federal government."

"I think there's joint responsibility to make sure taxpayer dollars are protected," he said.

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