OPM pays out $601 million in benefits to the dead

The federal government is losing an average of $120 million annually in improper payments to deceased annuitants, according to a new audit.

A report from the Office of Personnel Management inspector general published Thursday found that in the past five years, the agency has distributed more than $601 million from the Civil Service Retirement and Disability Fund to beneficiaries who have already died. In some cases, the deaths were not reported and payments continued to survivors for years, according to the report.

While annuity payments have risen 19 percent in the past five years, the amount owed the government from these post-death payments is up 70 percent, the IG found. In one case, a survivor received $515,000 in fraudulent payments over 37 years.

OPM has made some progress in reducing these payments, according to the report. For example, the agency currently is matching its annuity roll with Social Security Administration death records, sampling beneficiaries older than 90 to determine status, using an automated check reclamation system, and communicating with family members to improve death reporting. These improvements, however, were "clearly only partial remedies at best," the IG wrote.

"Despite these positive developments, there remains a high probability that egregious loss of monies from the CSRDF will continue and require strategic corrective actions," the report stated. "Stronger steps must be implemented by OPM to identify and recover improper payments."

Given the Obama administration's push to crack down on improper payments, the IG recommended that OPM establish a workgroup to examine the problem and allocate additional funding and resources toward improvements.

OPM did not respond to an immediate request for comments.