You hear a lot of talk about waste, fraud and abuse in government, and how eliminating it might solve our fiscal problems. It won't. Like John McCain's repeated, annoying complaints about porkbarreling monies, which if completely eliminated would hardly dent our national deficit, the notion that, say, Medicare fraud is reason for our health care cost problems is a joke. 
But that doesn't justify waste through improper government payments, which is a serious and remediable problem that cost the government $98 billion last year--nothing to sneeze at, and a sharp uptick from $72 billion the previous fiscal year. So last Friday President Obama signed an executive order that requires a systematic review of relevant agencies to correct the problem of improper payments in federal programs. Within three months, the Office of Management and Budget will identify agencies with serious payment problems, and within six months the OMB director, in conjuction with the Attorney General and Secretary of the Treasury to implement a process to correct identified problems.
Government Executive.com's Elizabeth Newell reports that Peter Orszag and crew are aware of the problem and already working on it. "We can no longer tolerate these errors, mistakes and misdeeds," Orszag said. "Every dollar misspent is a dollar not going to help an unemployed worker, a family in need of help buying groceries, or a senior who relies on Medicare to stay healthy." (I want to extend a special thank you to GovExec's Alyssa Rosenberg for help with this post.)
Looking at the improper payment rates above, courtesy of this PDF from Government Executive.com, it's clear that some of the cabinet and non-cabinet agencies that liberals tend to defend and conservatives oppose are among those with the most embarrassing improper payment rates. Holding aside the Treasury Department--which tops the list by far in the share of improper payments, at 25.5%, all of which is for the Earned Income Tax Credit program--many of the most wasteful programs are liberal favorites. Because the table above would have been too noisy, I didn't list every one of the 72 measured programs, but among the programs above the national average of 5.0 percent are the Ag Department's School Breakfast (24.6%) and School Lunch (16.4%) programs; HHS’ Medicare Fee-for Service (7.8%), Child Care and Development Fund (11.9%), Medicaid (9.6%) and Medicare Advantage Part C (15.4%) programs; Homeland Security’s Disaster Relief Fund Vendor (8.8%) and Homeland Security Grant (18.8%) programs; Labor’s Unemployment Insurance program (10.3%); Treasury’s EITC (25.5%), and the VA’s Pension (11.2%) and Fee (17.0%) programs.
This is an unacceptable level of fraud and waste in programs that are often unable to fully serve the needs of populations that require serious help. It will be interesting to watch as this oversight process takes shape, and I'll check back in six months from now to see what OMB has learned--and what they are going to do about it.
11.25.2009
Government Waste Through Improper Payment
@ 4:01 PM
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34 comments
The Dept of Commerce isn't listed. They must be incapable of improper payment.
Now, to find out if the trolls will come crowing "I told you so!" without the addendum: "Why didn't this happen sooner... Like when we had control of two out of three branches of government?"
Can you explain the definition of "improper payment" and the method of determining the amount that each agency is "improperly paying"?
I was wondering that myself Quixote. I followed the "reports" link and found this example of an "improper payment"...
The improper payment rate for the Medicare fee-for-service program jumped significantly, from 3.6 percent to 7.8 percent. Orszag said that increase was primarily a reflection of stricter measurement. For example, he said, an illegible signature from a doctor was now more likely to trigger a classification of improper payment than it has in the past.
It looks like something that is definitely a fuzzy area where people could play with the numbers via definitions.
"an illegible signature from a doctor was now more likely to trigger a classification of improper payment"
If this is true, why isn't the fee-for-service program rate nearly 100%? I've never seen a doctor's signature that WAS legible.
"Why didn't this happen sooner... Like when we had control of two out of three branches of government?"
In what regard are the Republicans not in control of the judiciary?
The same people who are in the process of pissing away a trillion dollars in TARP and Porkulus slush fund dollars and then fabricated the jobs created and saved figures are now going to solve government waste and fraud?
Ummm... sure.
If you believe this, I have some sugar sand tropical beach front property for sale up here by Pikes Peak for the bargain basement price of $500,000. You need to act now because God is not creating or saving any more property like this in the Rocky Mountains.
The irony here is that the many of same people who believe this have the audacity to call Sarah Palin stupid.
@Bart
I can so picture you as an "ethically challenged" huckster working a phone at Glengarry/Glen Ross. Because the only think you haven't demonstrated here is being able to use the phone. :P
TARP was indeed ugly, ugly, ugly. That's what happens when the guy at the rudder is a lame duck trying to keep his head down and hoping the banking crisis that developed under his lackadasical stewardship doesn't blow up until the next guy wins the election (hopefully your team's guy, because mentioning what sort of shitstorm you'd brought about is sure to sink your team's chances of election). Really no time to put proper controls or plans in place, just do the equivalent to hiring a helicopter to fly out over Wall Street and try smother the flames by dropping big bags of money on it. :/
On the stimulus bill, it actually has a fair amount of transperancy built into the system to try control and thwart funneling. Of course that transparancy can get abused for nitpicking people improperly filling out their forms with the wrong Congressional District number. :D But on the whole it's a serious step forward, certainly there to be used for the better good by reporters willing to put in the work on it.
I'd say that the phrase "waste, fraud and abuse" has become the meme of the decade between 2000 and 2009. From WMD's that were never there to Blackwater to Walter Reed Hospital to the billions of dollars funneled into Iraq and Afghanistan that have mysteriously disappeared, the our troops dying for Hamid Karzai's government even as Transparency International rates them as the second most corrupt government on the planet, to the emergence of Email scams known as 419's sent from Nigerian princes to gullible schmucks, to the return of Spamford Wallace and the end of Bernie Madoff, to the housing and credit bubbles and adjustable rate mortgages and insurance companies bribing Senators to vote against the interests of their constituencies, the 2000's could be called the Decade of the Scam.
Where we were once known for the high quality goods we once produced, we now only manufacture debt. We spend more on direct to consumer marketing scheme than we do on developing useful medicine. Our banking institutions are referred to as casinos, and for all the military might we project outwardly to the world, we could neither prevent 9/11 nor evacuate New Orleans in time. We are told, when writing resumes, to trumpet our own horns, to fluff it up a little, because everyone else is lying on theirs, so if you want to compete, you have to as well.Everyone wants a tip, even when the service was shit.
If Time Magazine had a man of the decade, I would nominate Richard Heene. Perhaps nobody better exemplifies our desperation for attention, and willingness to lie just to get it than he.
Mine is the generation of Three Card Monty.
@Statler N Waldorf said...
Good para. Couldn't agree more.
Wait - "Defense" at only 0.5%?!
Methinks there is a bit of a reporting problem here...
Looks like "Defense" in the original analysis only includes pay and benefits. Where do I find the entry for all the money being poured down the drain on corrupt and incompetent military contractors, unnecessary yet hideously expensive weapons systems, etc?
I'm submiting the first paragraph of this point to the bad writing contest. Just a terrible writer, or a Nate would say. "not hardly a good writer insofar as the piece in concerned"
It seems strange that they do not explain their methodology. The example from medicare of legibility of a Dr's handwriting would seem to indicate that not all is what we would normally consider waste or fraud.
They also do not explain why the chart seems to lack many departments or payment types. As noted previously, why DOD only listed for payroll and benefits? Why no vendor costs, which would likely be a major eye opener.
In fact, Tom notes that many are popular with liberals but also fails to note that many of the programs popular with conservatives are not even measured.
In reference to the annoying complaints of John McCain, let me borrow a line from the great scholar of our time, Robert Gibbs.
"You've got to start somewhere".
I'm just happy (but not surprised) to see that my old agency, the National Science Foundation, gets a perfect 0.0.
Statler N Waldorf, I think I love you.
How much of the improper payment rates are actual fraud and not an improperly filled form that would be corrected.
What is the fraud rate in private insurance?
You also have to keep in mind that private insurance has profits and marketing expenses.
Has anyone actually compared fraud rates of private/public insurance and compared them to profit and marketing costs? Does anyone actually care to find out which one is working better?
It would also be nice to find data on how many claims were improperly denied from public and private plans as well.
Essentially it would be nice to have real data and not cherry picked stats to use to make decisions on.
Jesus Bartman, are you an idiot on purpose or do you really want to see our nation go down in flames?
This is one small step towards improvement. A step that should have been done decades ago at the very latest, and one that no previous administration even considered.
If we can save even a portion of the $98 billion mentioned, won't that make you at least a little bit happier? Even if this order costs $10 million a year to run, and only saves 1% of the waste mentioned, that's a 10-fold return on investment.
You can play partisan puppet all you want, but even the tea-partiers should be giddy as idiots about this one.
For those wanting a definition of "improper payment", here's a nice quote
As a point of reference, under the Improper Payments Information Act of 2002, the term, “Improper Payment”
(a) means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements: and
(b) includes any payment to an ineligible recipient, any payment for an ineligible service, any duplicate payment, payments for services not received, and any payment that does not account for applicable discounts.
Note that this includes underpayments - which means that some of these "improper payments" saved the government money. Also, overpayments are probably registered with the full amount, not just the surplus.
Recently the San Francisco, CA School Lunch program lost a batch of Federal funding due to failing inspections. Some of the egregious inspection failures found were: A missing nutrition poster at one school, teachers/adults HANDING cafeteria trays to children, and (omg!) no chocolate milk per principal's orders. In other words, schools missed "inspection criteria", hence were improperly paid for "ineliglbe services".
10kZebra said...
Jesus Bartman, are you an idiot on purpose or do you really want to see our nation go down in flames? This is one small step towards improvement. A step that should have been done decades ago at the very latest, and one that no previous administration even considered. If we can save even a portion of the $98 billion mentioned, won't that make you at least a little bit happier? You can play partisan puppet all you want, but even the tea-partiers should be giddy as idiots about this one.
This has nothing to do with partisanship. Government is and always has been corrupt under all parties. The solution is to limit the size and scope of government to the absolute minimum, not to have a President who wasted far more than $98 billion this year sign a meaningless executive order telling himself not to waste more money. This is the objective of the Tea Party movement as it was of our Founders.
"Power tends to corrupt, and absolute power corrupts absolutely" - Lord Acton
Defense" at only 0.5%?
They need to rechart this from "% of payments" to "total money lost." We've had more lost in the form of pallets of cash 'gone missing' in Iraq that the entire budget of some of these programs, but this would only count that as one incident. Which is worse - 3 school lunch mistakes costing $6k, or 1 DOD mistake costing $10 billion?
Bart sez "The solution is to limit the size and scope of government to the absolute minimum, not to have a President who wasted far more than $98 billion this year sign a meaningless executive order telling himself not to waste more money."
You're right. I can't believe Obama wasted all that money himself this year. What a crazy president he is.
Can't you just admit you're afraid of the dark?
where do the 50 million dollars for abstinence only that the Oral Hatch and the GOP voted for goes under?
would the 50 million dollars for abstinence only go under health and human service or education and will it be consider wasteful spending, if there was no overpayment or underpayment for the abstinence only programs?
melissa:
would the 50 million dollars for abstinence only go under health and human service or education and will it be consider wasteful spending, if there was no overpayment or underpayment for the abstinence only programs?
That is the game.
Here is how we balance the budget. For every dollar in Dem pork barrel and individual or corporate welfare that the GOP proposes cutting, your Dems can propose an equal amount of cuts to GOP pork barrel and individual or corporate welfare.
I will start by offering to eliminate the remainder of the Porkulus.
@Bart
Since the Stimulus bill is actually helping America, and since you oppose helping America, I have to ask - could you explain why you hate America?
@shrinkers
I think that he just hate americans. I do think that abstinence only is wasteful spending because it doesn't help anyone. President Obama had already cut out funding for abstinence only because studies had shown that it does not work, W gave millions of dollars to these wasteful program that guess what, Texas had the largest teen pregnancy and STD then the northeastern states.
the GOP was the one who put this pork back in. I think that if someone is really a fiscal conservative, they would vote against this wasteful spending, not out of compromise but because it is wasteful in general.
I don't know why they don't consider this a pork that need to be eliminate on its own wasteful merit but some deal that need to be compromise, unless if they think it is a good pork compare to the stimulus package who goal is to help americans.
@melissa
Interesting insight there, that perhaps conservatives hate Americans, not America. Have to think about that one.
Good point too that conservative pork is viewed by conservatives as being good pork. Personally, I see the whole "War on Terror" as pork - is main purpose seems to have been to provide no-bid no-accountability contract to Halliburton and KBR. This huge pork project moved us a long way toward privatizing the military, while putting the contractors out of reach of both American and international law.
I think the answer is, conservatives hate anything and anybody that interferes with their profits, and / or their ability to live as feudal manor lords. It is the American system of democracy they hate - "democracy", by definition, is government of the people, by the people, and for the people. The right wing doesn't want this, especially not the "for the people" part - as they'll be happy to tell you, it might cut into profits.
I don’t understand how abstinence only is in the same page as the stimulus package, because the stimulus package purpose is to help people and abstinence only tells people that they are a baby killer if they use birth control and will get disease if they use a condom.
So I do consider abstinence only to be pork but I am curious if it falls under wasteful spending if there are no overpayment or underpayment and which department it falls under. I don’t understand how someone can said, I am a fiscal conservative but it is okay to have pork, so long as it makes a few people millionaires but if it help Americans, that is evil and bad.
Abstinence only education is wasteful pork and if someone has any principal; they will get rid of it. It doesn’t benefit anyone, so it goes against the laws of logic to have that pork because other people “have pork too.” Don’t complain about pork if you refuse to get rid of those that are true fully wasteful.
Abstinence only education does not benefit anyone, I don’t know why the right wingers want to keep it.
Summary of the above post: McCain harping on waste is "annoying," but we should totally fix the problem because it's wasteful. Okay.
I'm just going to skip over everything Tom Schaller posts at this point, I think.
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