$125 Billion In “Improper Payments”

With the national debt and federal spending at an all-time high several U.S. government agencies joined forces to make an outlandish $125 billion in “improper payments” last year, an increase of more than $16 billion from the previous year. This sort of government waste and corruption is hardly an earth-shattering development. Congressional investigators have for years documented the growing crisis of federal agencies making fraudulent payments to those who don’t qualify yet little has been done to correct the situation. In fact, this month’s audit containing the latest figures stresses that previous investigations have “highlighted long-standing, widespread and significant problems with improper payments in the federal government.”

The impropriety is so pervasive that President Obama issued a much-ballyhooed order last summer commanding federal agencies to create a “Do Not Pay List” to protect taxpayer resources and stem abuse. It has done nothing to protect increasingly scarce taxpayer dollars, according to the Government Accountability Office (GAO), the investigative arm of the U.S. Congress. In its latest report the GAO reveals that federal agencies made $125.4 billion in improper payments in fiscal 2010, marking a substantial increase from the $109.2 billion it dished out in fiscal 2009. The biggest chunk of the fraudulent payments—more than 90%—was made by social spending programs, mainly Medicare (health coverage for the elderly), Medicaid (health coverage for the poor) and the Labor Department’s unemployment insurance. Improper income tax credits, Social Security and disability payments, free school lunches and food stamps round off the top 10.

Incredibly, just a few weeks ago the U.S. Department of Agriculture launched a $5 million campaign to recruit more food-stamp recipients, even though the GAO reveals that the agency doled out nearly $4.8 billion in improper benefits last year due to “incorrect computations, misapplication of an income or resource exclusion and inadequate verification of accounts and wages”. "There seems to be no end in site to the waste", according to GAO investigators, who diplomatically state that “challenges” remain in “determining the full extent of improper payments across the federal government and in reasonably assuring that effective actions are taken to reduce improper payments.” Some agencies don’t even bother reporting improper payments, the GAO says, so the full extent of the problem will never really be known.