Federal Government Spends $144 Billion in 2017 on Improper Payments

Improper payments along with duplicate spending could push the total to around $350 Billion. Recent report from the GAO paints D.C. not stopping wasteful spending.

Here’s more from Economics 21:

This year the federal government is projected to spend almost $4.1 trillion, with over $600 billion in deficit spending. According to a January Government Accountability Office (GAO) report and the White House’s PaymentAccuracy.gov, $144 billion was spent on improper payments last year. GAO reported that improper payments increased by $7 billion from FY 2015, mostly due to growing Medicaid costs. PaymentAccuracy.gov estimated that the rate of error was 4.7 percent.

Improper payments are defined as those payments that send too much or too little money to intended recipients. Programs with the rates of improper payments over 10 percent are Medicare fee-for-service, Medicaid, Earned Income Tax Credit, Unemployment Insurance, the national school lunch and breakfast programs, and two Veterans Affairs programs. Medicaid and Medicare fee-for-service account for $77 billion of the $144 billion, and Medicare Advantage Part C’s 10 percent improper payment rate totaled $16 billion.

Improper payments are not the only problem facing taxpayers when it comes to accountability of agencies. For fiscal year 2015, 15 of 24 federal agencies were not able to fully account for their dollars in line with the 2012 law, according to Inspector General reports – and those agencies accounted for about 96 percent of improper payments in 2015.

Many opportunities for significant savings are available, such as the annual GAO reports on duplication. According to former Senator Tom Coburn, a Manhattan Institute fellow, duplication wastes at least $200 billion per year. Tens of billions in annual health care and military-specific savings have also been targeted by various policy experts and politicians. OMB did not respond to multiple requests for comment as to how the administration plans to better hold agencies accountable to taxpayers.



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