Legislative Update: Government Wasted $19 Billion in 2001

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Legislative Update: Government Wasted $19 Billion in 2001

Congress was ignominiously unsuccessful in achieving either a Medicare prescription drug benefit or Notch Reform again in 2002. They were, however, frighteningly effective in returning to massive federal budget deficits. While both sides blame the other, the truth is, precious little information about the fiscal oversight of our tax dollars is reported publicly. Seniors are kept in the dark about the true extent of waste, fraud, and abuse in government programs, according to a new report from the General Accounting Office (GAO).

The federal government reported squandering more than $19 billion through improper payments in 2001. As shocking as that may seem, the actual amount wasted is billions more, the GAO says. According to the GAO, “Recent audits, as well as information provided by agency Inspector Generals, continue to demonstrate that improper payments are much greater than has been disclosed thus far in financial statements.”

Although the amount reported in 2001 was down from $20 billion two years ago, fewer agencies (only six out of 15) disclosed the amount of their improper payments in 2001. In addition, the GAO says that only limited information on improper payments and progress reducing them is publicly available. In fact, no specific requirement exists for public reporting on improper payment-related activities at the agency level.

Earlier this year, the House passed legislation that addresses the problem, “The Improper Payments Information Act of 2002” (H.R. 4878). This legislation would require agency heads to review the programs for which they are responsible and estimate the amount of improper payments. Where amounts exceed (the lesser of) 1% of their total budget or $1,000,000, the legislation would require that the agency report actions to be taken to reduce improper payments. The legislation provides a sorely needed means for Congress to hold agencies more accountable—not only to taxpayers, but to ensure that limited resources are not wasted on persons not entitled to program benefits at the expense of legitimate beneficiaries. In a legislative year in which little got accomplished, the Senate has yet to take action.

TSCL will continue to follow the problem of waste, fraud, and abuse in 2003, but we urge you to contact Members of Congress to let them know how important accurate public information is as a means of providing proper oversight for fragile program financial resources.

Sources: “Financial Management: Coordinated Approach Needed to Address the Government’s Improper Payment Problems,” U.S. General Accounting Office, August 2002, GAO-02-749.

For more on this issue, see “New Medicare Policy Likely to Hide Improper Payments” at http://www.tscl.org/NewContent/101679.asp.

December 2002