Government made $125 billion in improper payments last year

By Ed O'Keefe
Washington Post Staff Writer
Wednesday, November 17, 2010; 7:57 PM

The federal government's improper payments totaled about $125 billion in fiscal 2010 as unemployment insurance and Medicaid payments increased, officials said Tuesday. But agencies also recovered about $687 million mistakenly paid to delinquent government contractors and beneficiaries.

The government's total improper payment amount climbed $15 billion from the previous year, according to statistics from the Office of Management and Budget. The payments included about 89,000 checks for $250 each sent to dead or incarcerated people as part of the economic stimulus program.

"This is an unfortunate result of the recession and of basic math: the more that is paid out, the more paid out in error even if the overall rate declines," OMB Deputy Director Jeffrey Zients wrote Tuesday on his blog.

The overall payment error rate dropped to 5.49 percent in fiscal 2010, down from 5.65 percent the previous year. The drop means the government avoided making about $3.8 billion in improper payments, OMB said.

President Obama wants agencies to recoup at least $2 billion in improper payments by the end of fiscal 2012. In order to do so, he ordered the establishment of a government-wide "do not pay" database to stop payments made to dead or incarcerated people and debarred or suspended contracting firms. He also signed a law in July that penalizes agencies for failing to do so.

"We're right on target - in fact, as we look at the numbers, we're ahead of schedule," OMB Controller Danny Werfel said Tuesday.

Eight of the 10 largest government programs that account for most of the government's improper payments reported lower error rates last fiscal year, Werfel said. The Labor Department's unemployment insurance program and the Social Security Administration's old age survivor benefits program made more improper payments, he said.

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