Financial Management: Status of the Government Efforts to Address Improper Payment Problems

Improper payments are a longstanding,widespread,and significant problem in the federal government.This past April, the Office of Management and Budget (OMB)estimated these payments to be about $35 billion annually for major federal benefit programs. Importantly, this estimate does not account for all federal programs and activities and considers less than half of the $2.3 trillion net cost of the federal government for fiscal year 2002. Because of its continued interest and concerns regarding financial management in the federal government, Congress asked GAO to follow-up on the implementation of the recommendations contained in our August 2002 report (GAO-02-749). Our 2002 report recommended that Chief Financial Officers Act (CFO Act) agencies take actions to minimize improper payments in their programs and activities and for OMB to assist agencies in developing methods to identify and implement those actions. OMB described our report as largely fair and accurate. It characterized the administration's current efforts to reduce erroneous payments as the most comprehensive assessment of the government's payment processes in history.