President Barack Obama signed an executive order Monday demanding agencies take steps to reduce the volume of improper payments government programs make.

The directive calls for creation of a Web site to track improper payments on high-priority programs, such as Medicare and Medicaid. Improper payments include overpayments, underpayments and payments made without proper documentation or justification.

The site will be viewable by the public within six months. For each program tracking improper payments, the Web site will present current and historic rates and amounts of improper payments, the causes of the improper payments, the volume of funds recovered, and agency goals for reducing improper payments. The site will also name organizations, companies and individuals that have received a significant amount of improper overpayments but have not returned them to the government.

The order also directs each agency to name a Senate-confirmed official to be responsible for reducing improper payments for those high-priority programs. Those officials must prepare plans to reduce improper payments and submit them within six months to their agencies' inspectors general. Those officials also will report quarterly on improper payments they are responsible for tracking.

Obama also ordered the Federal Acquisition Regulatory Council and the Justice Department's Procurement Fraud Task Force to recommend penalties the government can levy against contractors that fail to promptly return overpayments. Although Obama makes no demands for what those fines should be, the order suggests the groups consider suspension, debarment and interest payments.

The order comes a week after the Office of Management and Budget released a report showing that improper payments against government programs grew 26 percent in 2009 to $98 billion. That represents a 5 percent error rate on the $2 trillion in programs OMB measures for improper payments each year. A majority of the improper payments are made through assistance programs, such as school nutrition programs, unemployment insurance and housing assistance programs. The increased demand for these services in the last year is partially responsible for the growth in improper payments, OMB Director Peter Orszag said Nov. 17.

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