January 31, 2008

Sen. Carper: Agencies Must Reduce and Recover Wasteful Improper Payments

Introduces Bill to Prevent Improper Payments, Collect More Back Payments

WASHINGTON – Federal agencies lost at least $55 billion in taxpayer dollars last year alone by making avoidable mistakes, and Sen. Tom Carper (D-Del.) took action to correct this growing source of government waste by today introducing his Improper Payments Elimination and Recovery Act.

Sen. Carper announced this important bill introduction this afternoon as chairman of the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.

Today’s hearing of the subcommittee, titled “Eliminating Agency Payment Errors” and chaired by Sen. Carper, was the sixth improper payments review that this subcommittee has held to investigate government waste, and seek better ways to make federal agencies more efficient and effective.

Improper payments occur when a federal agency pays too much or pays twice for a product or service. These improper payments may occur as a result of fraud or from poor financial management systems that do not detect or prevent mistakes before federal dollars are misspent.

Sen. Carper called this hearing to focus on the improper payments estimates that federal agencies recently reported in their 2007 year-end financial statements. His goal is to identify, reduce and eliminate improper payments, as well as recover lost funds.

“I am shocked at the amount of money federal agencies waste each year on avoidable errors, and these lost federal dollars grow each year,” said Sen. Carper. “To put the newest overpayment figure of $55 billion in perspective, $55 billion equals the entire gross national product for nations like Vietnam, Croatia or Slovakia. It’s more than the entire budget of the Department of Homeland Security, and more than twice what Congress slated to protect the vehicles our soldiers are using in Iraq against roadside bombs.”

Sen. Carper stressed that even $55 billion is a low estimate because it does not include improper payments made by some of the largest federal programs, including public assistance, children’s health and the new Medicare prescription drug program.

“The bottom line is we in Congress must have more complete and accurate accounting of all the improper payments federal agencies make each year,” Sen. Carper said. “That’s why today I am introducing legislation to improve the process for identifying and eliminating improper payment throughout all federal agencies.”

Sen. Carper’s legislation, the Improper Payments Elimination and Recovery Act, will:

– Improve transparency by lowering the improper payments threshold so more agencies must report more waste, which in turn, better informs the public about its taxpayer dollars and helps Congress find ways to fix these overpayment problems.

– Require agencies to produce audited corrective action plans with targets to reduce overpayment errors.

– Increase the recovery of these massive overpayments by requiring all agencies that spend more than $1 million to perform recovery audits on all their programs.

– Penalize, financially, all agencies that fail to comply with current improper accounting and recovery laws.

The subcommittee heard testimony from the Government Accountability Office, Office of Management and Budget, the Social Security Administration, the Federal Communications Commission and the Departments of Agriculture and Health and Human Services.