by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The Government Accountability Office reported that $136.7 billion dollars were spent by federal agencies on “improper payments” during fiscal 2015, but the actual total was likely higher.
Agencies are required to report their improper payments if they spend more than $750 million in taxpayer money or have an error rate of 1.5 percent or higher. Improper payments occur when funds go to the wrong recipient, when a recipient receives too little or too much money, when payment documentation is not available, or when “the recipient uses federal funds in an improper manner,” according to the Obama administration’s Payment Accuracy website.
The federal government has assessed improper payments since 2013. While the Obama administration has praised itself for lowering the rate of improper payments since 2009, the actual rate is unknown.
U.S. Comptroller General Gene Dodaro said in testimony to Congress earlier this year that “the estimated improper payments for fiscal year 2015 were attributable to 121 programs spread among 22 agencies.” The improper payments for fiscal 2015 were $12 billion higher than the previous year, according to the report.
Using GAO’s estimate of $136.7 billion in improper payments at a 4.8 percent error rate, approximately $2.85 trillion in federal spending was reported. But the federal budget in fiscal 2015 was $3.69 trillion—nearly one-third more than the $2.85 trillion reported for analysis.
Veronique de Rugy, a senior research fellow at the Mercatus Center, praised the GAO for being transparent about the limitations of its analysis but criticized the incomplete nature of the federal government’s auditing and accountability for its spending.
The GAO “only looks at improper payments as defined by” the 2002 law and subsequent 2010 and 2012 laws, de Rugy said. She pointed to the “expansion of eligibility” for food stamps as an example of how low standards for eligibility mean money is being wasted, while not being counted as improper payments.