GAO Findings Point to Government Waste in Programs

US Government Accountability Office
Current Findings

Report Findings as of June 2016 (PDF)

Reducing Government-wide Improper Payments
An improper payment is any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. Reducing improper payments—such as payments to ineligible recipients or duplicate payments—is critical to safeguarding federal funds, but the federal government has consistently been unable to determine the full extent of improper payments and whether its actions to reduce them are appropriate.

Summary:

Improper payments have consistently been a government-wide issue despite efforts to identify their root causes and reduce them.

Examples of past improper payments include erroneous payments made by:
(1) the Department of Agriculture’s National School Lunch program due to verification and authentication errors, including inadequate documentation and fraud or misrepresentation by participants;
(2) the Department of Labor’s Unemployment Insurance program due to eligibility errors in handling separation issues, and claimants who have returned to work and continue to claim benefits; and
(3) the Department of Health and Human Services’ Medicare Fee-for-Service program due to medically unnecessary services and insufficient documentation.

The government’s ability to understand the scope of the issue is hindered by incomplete, unreliable, or understated estimates; risk assessments that may not accurately assess the risk of improper payment; and noncompliance with criteria listed in federal law. GAO has reported improper payments as a material weakness in internal control in its reports on the U.S. government’s consolidated financial statements.

Since fiscal year 2003—when certain agencies were required by statute to begin reporting improper payments—cumulative improper payment estimates have totaled over $1 trillion. The improper payment estimate in fiscal year 2015, attributable to 121 programs across 22 agencies, was $136.7 billion, up from $124.6 billion in fiscal year 2014. The $12 billion increase was primarily due to estimated improper payments for the Medicaid program. As shown in the figure, the Medicare, Medicaid, and Earned Income Tax Credit programs account for over 76 percent of the government-wide improper payment estimate. Federal spending for Medicare and Medicaid is expected to significantly increase, so it is critical to take actions to reduce improper payments in these programs.

Figure: Government-wide Improper Payment Estimates by Program for Fiscal Year 2015

 

Government-wide Improper Payment Estimates by Program for Fiscal Year 2015

Note: These estimates do not include the Department of Defense’s (DOD) Defense Finance and Accounting Service (DFAS) Commercial Pay program. The DOD Office of Inspector General reported in DOD’s fiscal year 2015 Agency Financial Report that the department was unable to reconcile outlays and ensure that all payments subject to improper payment estimation requirements were captured for review. Therefore, DOD’s fiscal year 2015 improper payment estimates, including its estimate for the DFAS Commercial Pay program, may not be reliable.

Continued agency attention is needed to:

(1) identify susceptible programs,
(2) develop reliable methodologies for estimating improper payments,
(3) report as required by statute, and (4) implement effective corrective actions based on root cause analysis.

Absent such continued efforts, the federal government cannot be assured that taxpayer funds are adequately safeguarded.

What GAO Found

1) For fiscal year 2014, 15 of the 24 Chief Financial Officers Act (CFO Act) agency inspectors general (IG) determined that their agencies did not comply with criteria in the Improper Payments Elimination and Recovery Act of 2010 (IPERA). This is the largest number of CFO Act agencies reported as noncompliant under IPERA since the requirement for IGs to report on their agencies’ compliance was implemented in fiscal year 2011, and represents an increase of 4 agencies from fiscal year 2013.

2) In fiscal year 2014, IGs reported 38 programs accounting for $100.6 billion in estimated improper payments as responsible for instances of noncompliance. Agency noncompliance for fiscal year 2014 was largely due to agencies failing to meet improper payment reduction targets or to report improper payment error rates at less than 10 percent for all programs. If the 5 agencies with programs exceeding 10 percent error rates had reported error rates under the threshold set in IPERA, the government-wide improper payment estimate would have been $23.1 billion, or 18.6 percent, lower.


What GAO Recommends

GAO recommends that four agencies submit proposals as required to Congress in response to 3 years of noncompliance with IPERA criteria. The Departments of Defense and Transportation concurred with GAO’s recommendations and the Department of Agriculture and the Small Business Administration stated that they had no comments on the draft report.

FINANCIAL AUDIT:
Fiscal Years 2016 and 2015 Consolidated Financial Statements of the U.S. Government
GAO-17-283R: Published: Jan 12, 2017. Publicly Released: Jan 12, 2017.

Report Findings (PDF)

What GAO Found

To operate as effectively and efficiently as possible, Congress, the administration, and federal managers must have ready access to reliable and complete financial and performance information—both for individual federal entities and for the federal government as a whole. GAO’s report on the U.S. government’s consolidated financial statements for fiscal years 2016 and 2015 underscores that much work remains to improve federal financial management.

Three major impediments continued to prevent GAO from rendering an opinion on the federal government’s accrual-based consolidated financial statements:
(1) serious financial management problems at the Department of Defense (DOD) that prevented its financial statements from being auditable,
(2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal entities, and
(3) the federal government’s ineffective process for preparing the consolidated financial statements.

Efforts are under way to resolve these issues, but strong and sustained commitment by DOD and other federal entities, as well as continued leadership by the Department of the Treasury (Treasury) and the Office of Management and Budget (OMB), are necessary to implement needed improvements.

In addition to the three major impediments, GAO identified other material weaknesses. These are the federal government’s inability to:
(1) determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them,
(2) identify and resolve information security control deficiencies and manage information security risks on an ongoing basis, and
(3) effectively manage its tax collection activities.

The comprehensive long-term fiscal projections presented in the Statement of Long-Term Fiscal Projections and related information show that absent policy changes, the federal government continues to face an unsustainable long-term fiscal path. GAO plans to issue a report outlining its perspectives on the fiscal health of the federal government.

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Gee, if this was a market report, the company would have tanked– accounts payable companies would have been pounding on the door demanding payment; and, the company would have been on the skids for bankruptcy.

THIS is why we need conservative and fiscally responsible government economists to be working with the heads of each of the agencies.

We have funded the GAO and given it mandates for many years in order to straighten out government spending.  GAO has written each of those years findings that have increasingly shouted out government corruption, waste, and fraud. Yet politicians in Congress have not taken ANY action.  Why then do we pay every year for findings and recommendations that are going ignored? Seriously, watchdog groups as far back as I can remember have all found the government to be a “black hole” of overspending, unjustified spending, and less than adequate asset oversight.

How many are suffering who deserve and should have Medicare and Medicaid, but because of “improper”(might as well say illegal) payments have been turned down? How many buddies, of buddies, of buddies have fat retirement accounts as people who paid in and did what they were required to do have been turned away? How many illegal aliens, drug lords, pimps, refugees and others are receiving aid through our system? How many families on aid are manipulating the system for profit and personal comfort while those from whom the money is taken are steadily growing smaller, sicker, and weaker?

Accounting methods for EVERY department should be standardized in reporting method even if some of the things are unique to the agency. It should not take a financial genius to figure out this basic premise nor provide checks and balances to make sure an audit such as this one by GAO never happens again. Geez.

I would even be willing to say start at the moment any fiscal year funds THIS year are made and forget prior.  Don’t hand a dollar to the agencies until they comply except as it is life or death. Once in compliance, then go back and reformat years prior. Chase down the GAO complaints and those found to be engaged in the illegal activities. Then make them be legally held accountable for their actions as harshly as possible, as examples for any future would-be thieves.

Trump’s new cabinet is going to have their hands full trying to make sense and then rein in these idiots.

–Uriel–

About Uriel

Retired educator and constitutionalist
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4 Responses to GAO Findings Point to Government Waste in Programs

  1. Skip says:

    Stupidty,Fraud and just outright thieft of the Tax payers $$$$$$$$$$$$$

  2. Uriel says:

    Hi Skip. You are sooo right. How many times and ways have we seen this in action. More than I can count in my sixty plus years.

  3. Hardnox says:

    Anyone who thinks that government runs efficiently isn’t paying attention. Cuts can be easily be made if the pork introduced by Congresscritters was removed. There are thousands of programs for useless crap which were introduced by our legislators. Time for a purge.

    • Uriel says:

      Agreed. At an uneducated guess a reduction by a third or more could net big savings and not endanger major concerns.