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Improper payment rate falls again

Though the decrease is slight, erroneous payments fell in 2013 as measured both by dollar amount and percentage.

Dec. 31, 2013 - 06:00AM   |  
By SEAN REILLY   |   Comments
OMB Nomination Hearing MWM 20131002
Deputy OMB Director for Management Beth Cobert (Mike Morones/Staff) (Mike Morones)

Improper federal payments totaled an estimated $106 billion in fiscal 2013, down slightly from the 2012 figure of $108 billion, an Office of Management and Budget spokesman said Tuesday. The estimated improper payment rate dropped from 3.74 percent in 2012 to 3.53 percent last year, according to another OMB official.

The downtick came across an array of government programs, including Medicaid, unemployment insurance and Pell Grants, Deputy OMB Director for Management Beth Cobert wrote in an official blog post earlier this month. Agencies also recovered more than $22 billion in overpayments through recovery audits and other methods, she said.

Since fiscal 2009, the government-wide improper payment rate has fallen by about a third, according to OMB figures. While the estimated amount of improper payments has dropped only slightly during the same period — from $109 billion to $106 billion — the payment rate is the more accurate yardstick because it “is a function of the outlays for the programs” reporting mistaken payments, OMB spokesman Frank Benenati said. Only recently, for example, has the budget office begun including Defense Department payments to contractors in its estimates.

Improper payment rates for individual programs in 2013 should be available after is updated in the coming weeks, Benenati added.

Improper payments are typically defined as money spent in the wrong amount, for the wrong recipient or for goods and services not received. The erroneous payments include underpayments as well as overpayments. Some arise from honest mistakes, while others are the result of fraud. Only about one-third of improper payments are generally recoverable, OMB Controller Danny Werfel has said.

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