Obama administration falls slightly short of goal for cutting improper payments

Danny Werfel, Controller, OMB Danny Werfel, Controller, OMB Charles Dharapak/AP

The error rate in payments to contractors, grantees and beneficiaries of government programs has been reduced to 4.3 percent from a high-water mark of 5.4 percent in fiscal 2009, the White House announced on the Wednesday before Thanksgiving.

The estimated savings from avoiding erroneous payments tops $47 billion for the past three years, Comptroller Danny Werfel wrote in a blog post. This is just short of President Obama’s earlier goal of saving $50 billion by the end of fiscal 2012.

Crediting the ongoing Campaign to Cut Waste, the Obama administration’s “do not pay” list of contractors, and the 2010 Improper Payments Elimination and Recovery Act, Werfel said the president’s “resourceful steps” had cut “payments that are made in the wrong amount to the wrong entity or for the wrong purpose.”

The result, Werfel wrote, is billions of dollars saved in such programs as Medicare Fee-for-Service; Medicaid; unemployment insurance; the earned income tax credit; SNAP (food stamps); Pell Grants; the school lunch program; and Retirement, Survivors and Disability Insurance. “The administration has moved quickly to deploy cutting-edge forensic technologies to crack down on such waste for the first time in government,” he added. Werfel also singled out the Labor Department’s new partnership with New York state to crack down on improper unemployment insurance payments.

Federal agencies “recaptured a record $4.4 billion in overpayments to contractors over the last three years, due in large part to the success of the Medicare Fee-for-Service Recovery Audit Contractor program,” the comptroller said.

When the Defense Department’s commercial payments are included, the total savings for three years goes up to $70 billion, and the governmentwide error rate shrinks to 3.7 percent.

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