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Agencies on track to cut or avoid $50 billion in improper payments

Feb. 7, 2012 - 06:00AM   |  
By SEAN REILLY   |   Comments
Error rate reductions were seen in almost every major program, said Office of Management and Budget Controller Danny Werfel.
Error rate reductions were seen in almost every major program, said Office of Management and Budget Controller Danny Werfel. (Staff file photo)

Agencies are on track to meet a 2010 Obama administration target of cutting or avoiding $50 billion in improper payments by the end of September, a senior Office of Management and Budget official told a House panel Tuesday.

"We have seen error rate reductions in almost every major program with a history of significant errors," including Medicare, Medicaid and Pell Grants, OMB Controller Danny Werfel said at the hearing of the House Oversight and Government Reform subcommittee on financial management.

In 2011, agencies reported an estimated $115.3 billion in improper payments, down about 4 percent from the revised 2010 figure of $120.6 billion. Improper payments are typically defined as money that is paid to the wrong recipient or in the wrong amount, is not used properly, or is paid without adequate paperwork.

The administration also expects to meet a separate goal of recovering at least $2 billion in faulty payments to contractors and overpayments to health care providers, Werfel said.

Despite that apparent progress, the government has yet to get a handle on the full scope of faulty payments, said Beryl Davis, director of financial management and assurance at the Government Accountability Office. OMB figures, for example, exclude improper payment estimates for commercial pay programs at the Defense Finance and Accounting Service and the Army Corps of Engineers which had combined outlays of almost $400 billion last year because both agencies were still working on estimating methods, Davis said.

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