How some agencies used tech to decrease improper payments

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Governmentwide, improper payments are up relative to fiscal year 2020. But digital tools — alongside other management tactics — enabled some agencies to find reductions.

Improper payments have long been a headache for the government, but some agencies have been able to reduce the rates of such mistakes in recent years, according to a new report from the Government Accountability Office.

In fiscal year 2022, there were about $247 billion in improper payments governmentwide, a decrease of about $34 billion relative to the previous year but still over $40 billion more than fiscal year 2020, according to the report.

The category of improper payments encapsulates payments that should not have been made or were made for the wrong amount, according to GAO. 

According to the Office of Management and Budget, the category also includes “payments made to the right recipient in the right amount but not in strict adherence to policies and procedures,” in addition to overpayments and underpayments. 

Fraudulent payments, which garnered widespread attention during the pandemic, are only one part of the improper payment tally.

GAO found 19 programs across eight agencies that saw reductions in their improper payments since fiscal year 2017, according to data on A total of 35 programs reported estimates annually.

GAO wanted to find “common features” that helped agencies reduce improper payments, eventually sorting efforts into two categories: accountability and collaboration as well as training, technology and tools.

Improper payments in the Department of Veterans Affairs’ beneficiary travel program — which gives mileage reimbursement and transportation services to eligible veterans — dropped from over $223 million in improper payments in 2017 to about $99 million in 2022, a decrease of over 17%. 

VA officials told GAO that one reason for the drop was a new software to “streamline claims, automate eligibility determinations, handle payment processing, help detect and prevent improper payments, and enhance reporting and auditing capabilities.”

The Veterans Health Administration, VA's largest component, also used a dashboard for the Payment Integrity Information Act to track where payment integrity problems were happening and focus efforts in those areas. 

Other agencies also turned to technology to cut down on improper payments. 

The Social Security Administration developed new wage reporting tools — such as an exchange with commercial payroll providers — to decrease its reliance on self-reported wages for determining eligibility, according to the report. 

The Federal Communications Commission and Universal Service Administrative Company — the not-for-profit that administers its Universal Service Fund Lifeline program — made improvements by launching a “national verifier” program to standardize the eligibility review and process for enrollments in its Lifeline program, which helps low-income people pay for phone service. The program uses a combination of automated and manual processes.

Efforts at the VA and Defense Department to establish senior officials accountable for payment integrity efforts also contributed to successful reductions in improper payment rates.

“These examples,” GAO writes, “underscore the importance of effective corrective actions to address root causes of improper payments.”