Sen. Carper: Government Wastes Billions in Improper Payments

Tens of billions of dollars in improper payments are lost each year because 13 federal agencies do not find, eliminate and recover their agency’s overpayments, said Sen. Tom Carper (D-Del.), who called a hearing on this issue today as chairman of the Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.

"I was shocked, outraged, to learn that at a time when we are running record budget deficits, federal agencies are making literally tens of billions of dollars in avoidable, improper payments year in and year out," Sen. Carper said. "As we face a growing national deficit and more financial constraints with the retirement of the baby boomers, I believe everyone can rally around our efforts to reduce avoidable improper payments by nearly all federal agencies today."

This morning, Sen. Carper questioned seven government and private sector witnesses on how to improve federal agencies’ detection and recovery of improper payments as required by the Erroneous Payments Recovery Act of 2001 and the Improper Payments Information Act of 2002.

Sen. Carper stressed that in the last fiscal year, 2006, reporting of federal improper payments grew to an estimated $42 billion, but could be much higher still.

"As Americans send in their federal income tax payments, they would be even more displeased to know the agencies entrusted with their hard-earned dollars have, in many cases, proven incapable of complying with even the most basic requirements of the law we use to reduce and to recover billions of dollars in improper payments," Sen. Carper said.

Under current law, major federal agencies must review their programs and activities every year, and report to the Congress any estimated improper payments, including what caused the improper payment and what is being done to eliminate or recover those payments.

Sen. Carper stressed that the General Accounting Office has presented evidence that some federal agencies do not perform risk assessments or are not providing realistic estimates of the errors they make, meaning government-wide financial recovery totals should be much higher. In addition, just last week, Sen. Carper won approval in the budget resolution for two of his bipartisan amendments dedicating revenue realized from reduced improper payments and increased recovery auditing to go to deficit reduction.

"What we need now is to get federal agencies to be more transparent about their mistakes, start cleaning up management and internal control problems that allow improper payments, and work more aggressively to recover these fund whenever possible," Sen. Carper concluded.