As Americans across the country prepare to file their taxes, the Administration today is launching a tool to help guard against wasteful and improper payments that squander taxpayer dollars. The new Do Not Pay tool will help Federal agencies avoid the types of payment errors that have plagued government for too long – including pension payments to the deceased and payments to contractors who have attempted to defraud the government.
Every year, the Federal government wastes tens of billions of dollars on payments to the wrong person, in the wrong amount, or for the wrong reason. When the President took office, the government-wide improper payment rate was on the rise, reaching an all-time high of nearly 5.5 percent in 2009. In response, he has taken swift and aggressive action to make improper payments a focus of the Administration’s Campaign to Cut Waste.
As a direct result of these efforts, we have begun to see real results. Last year, we announced that the government-wide improper payment rate decreased to 4.7 percent, a sharp drop from the 2009 error rate of 5.4 percent that helped prevent $20 billion in improper payments in 2010 and 2011 combined. In addition, we are announcing today that we have already exceeded the goal the President set in 2010 to recapture $2 billion in overpayments to contractors by the end of this fiscal year. The Administration surpassed this goal nearly 6 months ahead of schedule, due in large part to hundreds of millions of dollars in recoveries from the Medicare Fee-for-Service Recovery Audit Contractor Program.
The President’s 2013 Budget calls on the government to do even more. The budget includes a suite of program integrity proposals that, if enacted, would save billions of dollars by reducing payment errors and improving collection of outstanding debts owed to the government. Collectively, these proposals could result in $102.2 billion in savings over the next ten years. This is an area where all parties can agree that bold steps are necessary to protect taxpayer dollars, and we urge Congress to enact these proposals without delay.
But we can’t wait for Congress to act, and that is why we are taking further steps to build on our progress to date. In June 2010, the President issued a memorandum directing Federal agencies to review current pre-payment and pre-award procedures and check the appropriate available databases before making payments, to ensure that the recipients of those payments are eligible to receive them. Today, we are taking a critical step in meeting the President’s charge by announcing the official launch of the Do Not Pay solution at the Department of the Treasury. The Do Not Pay solution will help agencies avoid making payments to individuals or entities who should not be receiving Federal funds, such as debarred contractors receiving federal awards, or retirement benefits going to dead federal employees. By providing a single point of access to an array of databases and using data analytics, we are arming Federal agencies with new tools to stop improper payments before they occur.
OMB is also issuing a memorandum to all agencies directing them to use this tool. Agencies such as Treasury, the Government Printing Office, and the National Archives Records Administration are already using this solution, and others such as the Department of Agriculture, the Department of Veterans’ Affairs, the Small Business Administration and the Department of Labor will be on board in the coming months. By next spring, we expect every major Federal agency will be leveraging the Do Not Pay solution to combat improper payments.
This challenge is not going away, and we must remain vigilant in confronting it. With the launch of new tools like the Do Not Pay list, that’s exactly what we’re doing.
Additional information about improper payments is available to the public at PaymentAccuracy.gov.
Danny Werfel is Controller of the Office of Management and Budget