Government Issued $175 Billion in Improper Payments, Watchdog Says

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Despite laws and technology changes, federal agencies saw increased losses from fiscal 2018. 

The federal government misspent $175 billion in fiscal 2019, according to an estimate by the Government Accountability Office, the investigative arm of Congress.

In a report released Monday, GAO indicates about $121 billion, or 69% of those improper payments were concentrated in three federal programs: Medicaid, Medicare and the Earned Income Tax Credit.

The report states nearly $75 billion of the governmentwide waste was reported by federal agencies as a “monetary loss,” which the government defines as “an amount that should not have been paid and in theory should or could be recovered.”

The $175 billion in total waste represents a 15% increase from the $151 billion the government misspent in fiscal 2018. According to GAO, improper payments since 2003 have cost taxpayers almost $1.7 trillion since 2003, and despite improvements in technology and policy to address the issue, little progress has been made.

“Improper payments—payments that should not have been made or that were made in incorrect amounts— continue to be an area of fiscal concern in the federal government,” the report states. “The federal government’s ability to understand the full scope of its improper payments is hindered by incomplete, unreliable, or understated agency estimates; risk assessments that may not accurately assess the risk of improper payment; and agencies not complying with reporting and other requirements in the Improper Payments Elimination and Recovery Act of 2010 (IPERA).”

Noncompliance with existing law appears to be costing the government significant amounts of money. According to GAO, only half of the CFO Act agencies—responsible for 99% of the government’s improper payments—were compliant with IPERA, nearly 10 years after the law first took effect.