Federal Agencies Wasting Nearly $20 Billion in Careless Payments

July 7, 2008 - 8:25 PM

(CNSNews.com) - A forthcoming congressional report to be released in the coming weeks cites the federal government as wasting more than $19 billion each year in improper payments, a problem which one congressional committee says is growing at "an alarming rate."

The House Budget Committee will release before the end of January its analysis of "waste, fraud, abuse and mismanagement" by federal government agencies. According to excerpts obtained by CNSNews.com, the report suggests a record number of agencies are "at risk" for waste, fraud and abuse.

Among the findings made by the Government Accounting Office (GAO) were $1.8 billion in wasted in the Federal Employees Health Benefits plan and nearly $1 billion returned by defense contractors between 1994 and 1998.

The GAO also found $448 million in Earned Income Tax Credit (EIC) payments were made in error - amounting to two-thirds of all payments in the program.

"When such problems are chronic, they also jeopardize the credibility of a government that spends about $1.8 trillion a year," the report states.

According to the House report, the Medicare program doled out $12.6 billion in improper payments, while the Supplemental Security Income program erroneously issued $1.6 billion.

The Food Stamp Program was responsible for $1.4 billion in improper payments and the Old Age and Survivors Insurance program improperly issued $1.2 billion.

The study was compiled after a GAO analysis of records kept on "programs and agencies it considers particularly prone to waste and abuse."

According to the Budget Committee report, many programs administered by the Federal government share some key characteristics such as "complex regulations, an emphasis on swift payments and a large volume of transaction."

"The problem is worsened because government agencies do not perform comprehensive reviews of their payment methods," the report concludes. "These problems persist - and in some cases are growing worse - despite repeated warnings from the government's principal watchdogs, the General Accounting Office and the Inspectors General of the government's agencies."