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Issues - Payment Errors

Payment Errors

Every year, the federal government makes billions and billions of wrong payments to individuals, organizations and businesses, among others.  The subcommittee is working vigorously to tackle this problem, including forcing agencies to comply with the Improper Payments Act of 2002.

Billions Wasted in Wrong Payments by the Federal Government

Payment errors include inadvertent and irresponsible payments, and are costing the taxpayers at the very least, over $37 billion each year.  The Improper Payment Information Act (IPIA) was enacted in November 2002 for the purpose of finding and eliminating payments that should not have been made, or were made for incorrect amounts, by government agencies.

Payment errors consist of overpayments and underpayments.  Overpayments are payments made without adequately supported claims, for services not provided, or provided to ineligible beneficiaries in programs like Medicare, Social Security, Food Stamps, Medicaid, and the Earned Income Tax Credit.  Underpayments are payments that were never paid out to eligible beneficiaries.

The following four steps are what agencies must do in order to be compliant with the law:

  • Perform a risk assessment to determine whether or not programs and activities are risk susceptible to making “significant improper payments.”
  • Develop a statistically valid estimate of improper payments for all programs and activities identified as susceptible to significant improper payments in the risk assessment.
  • Develop a corrective action plan for all programs where the statistical estimate exceeds $10 million in annual improper payments, agencies are required to develop a remediation plan for eliminating improper payments.
  • Report the results of Improper Payments Information Act activities on an annual basis in their Performance and Accountability Report (PAR).
  • One of the most frightening things about the government’s payment errors problem is that the magnitude is not yet known, because some of the largest programs are neither reporting nor performing any of the steps mentioned above.

Voting against legislation to eliminate payment errors means not only condoning non-compliance with a law written and passed by Congress itself; but a vote against a payment errors amendment is supporting wrong payments made by the federal government: fraudulent, wasteful, irresponsible and improper payments.

The subcommittee has had numerous hearings on this topic:

Hearing 3

Hearing 2

Hearing 1



Related Resources:

Hearings:


Oversight Actions:


Examples of Government Waste:


News:



Senator Tom Coburn

Subcommittee on Federal Financial Management, Government Information, and International Security

340 Dirksen Senate Office Building     Washington, DC 20510

Phone: 202-224-2254     Fax: 202-228-3796

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