Improper payments are part of government's culture, says report

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Despite continued attention from government watchdogs, high rates of improper payments by government agencies continue in part because they are often viewed as a cost of doing business, according to an Association of Government Accountants research report (.pdf). The acceptance of poor improper payment rates is a cultural problem, says report author Anna Gowans Miller, AGA's former director of research.

"There is an inevitable tension between imposing effective internal controls over making payments to recipients and delivering the benefits and services that the agency's mission entails," writes Miller.

"If the mission is to redistribute wealth or help the poor and aged, many federal officials and members of Congress feel that erring on the side of paying out the benefits quickly is better than cold-hearted efficiency," adds Miller.  

Reducing improper is also an expensive effort, as agencies may have to slow down current processes, hire examiners, employ data mining strategies or purchase business analytics software. Other factors make reducing improper payments difficult, as well. The definition itself is understood inconsistently across agencies, it's difficult to explain to the public why the reported amounts cannot simply be returned and the authorizing legislation is complex, says the AGA report.

Miller makes several recommendations for reducing the cost of improper payments. Among them, agencies should be required to conduct regular risk assessments of programs and set improper payment targets, says Miller. Agencies should use all means of debt collection at their disposal, and agencies should cooperate in sharing data and streamlining eligibility requirements to facilitate screening, finds the report.

Given that checking improper payments and implementing controls does have an associated cost, "sometimes it may not be effective to reduce improper payments by more than a certain level," notes the report.

The report is not an audit nor is it exhaustive or statistically valid, according to a note from AGA.

For more:
- see the AGA report (.pdf)

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