JANUARY
24, 2000
THOMPSON
DETAILS $220 BILLION IN GOVERNMENT WASTE
$35 BILLION LOST IN FY ‘98 ALONE
Washington,
DC – Senate Governmental Affairs Committee Chairman Fred
Thompson (R-TN) today released an alarming compilation of
government waste detailing $220 billion in taxpayer losses. In
1998 alone, $35 billion in taxpayer dollars was lost due to
government waste, fraud, abuse and mismanagement.
"One
of the reasons people are losing faith in the government is
because it can’t be counted on to spend taxpayer dollars
properly," Senator Thompson said. "In just one year,
the federal government squandered $35 billion. That’s real
money, even in Washington. We’ve got to hold these agencies’
feet to fire and make them more accountable."
It’s
difficult to track exactly how much the federal government loses
to waste, fraud, abuse and mismanagement primarily because
federal agencies are not required to keep this information and
most don’t. With input from the agencies’ Inspectors
General, the Committee was able to uncover $35 billion in wasted
1998 taxpayer dollars and $220 billion overall.
The
Committee’s compilation of government waste includes:
-
Defense
Dept. maintained $11 billion in inventory it didn’t
need;
-
Energy
Dept. invested $10 billion in projects that they never
completed;
-
Education
Dept. paid out $3.3 billion in student loans that
students failed to repay;
-
Agriculture
Dept. sent out $1.4 billion in food stamps to
ineligible recipients.
In
November of last year, Senator Thompson released a GAO report
that identified $19.1 billion wasted by just nine federal
agencies in Fiscal Year 1998 alone. Today’s compilation
provides a more comprehensive look at the problem of government
waste overall, and specifically for Fiscal Year ‘98.
Senator
Thompson said he will continue to insist that agencies provide
greater disclosure of government waste. In doing so, he will
attempt to force agencies to establish specific performance
goals to reduce this waste in an effort to restore taxpayer
faith in government.
PRICE
TAG FOR FEDERAL FRAUD, WASTE, AND MISMANAGEMENT
No
one knows how much the federal government loses to fraud, waste,
abuse, and mismanagement. Federal agencies do not routinely
track or quantify the costs of these problems. The following
table compiles some dollar amounts that have been documented in
recent Inspector General and GAO reports. These figures include
actual or estimated direct losses to fraud, waste and error as
well as amounts that could be realized by improved management.
Some of the figures represent annual losses, some are
cumulative, and some represent the time periods covered by
particular IG or GAO reviews.
The
total is over $220 billion. This includes about $35 billion for
one fiscal year. However, since figures for fraud, waste, and
abuse are not generally available, this amount surely is
understated.
Amount
(In
millions) |
Agency |
Explanation
and Reference |
$1,425.0 |
Agriculture |
Reported
Food Stamp Program overpayments for FY 1998.
(GAO/AIMD-00-10, p. 6) |
$6.5 |
Agriculture |
Improper
research expenditures. (Agriculture IG letter, 1129/99,
encl., pp. 5-6) |
$4.8 |
Commerce |
National
Technical Information Service (NTIS) cumulative losses,
FY 1995-98. (Commerce IG letter, 12/13/99, encl., p. 16) |
$1.9 |
Commerce |
Amount
the National Oceanic and Atmospheric Administration (NOAA)
spends annually on its in-house aircraft above
comparable private sector costs. (Commerce IG letter,
12/13/99, encl., p. 19) |
$14,000.0 |
Defense |
DOD’s
inventories contain $11 billion for which Defense has no
need; the Navy wrote off $3 billion of inventory as lost
in transit. (GAO/T-NSIAD-99-83, pp. 4, 7-8) |
$1,500.0 |
Defense |
New
inventory ordered by DOD one year in excess of its
current needs. (GAO/T-NSIAD-99-83, pp. 5) |
$500.0 |
Defense |
Potential
annual fraud and abuse in the military health care
program, TRICARE. (GAO/HEHS-99-142, p. 2) |
$984.0 |
Defense |
Between
fiscal years 1994 and 1998, DOD contractors voluntarily
returned $984 million that DOD had erroneously paid
them. (GAO/AIMD-00-10, p. 18) |
$3,300.0 |
Education |
In
FY 1997, the federal government paid out more than $3.3
billion to make good its guarantee on defaulted student
loans. (GAO/OCG-99-5, p. 7) |
$177.0 |
Education |
Estimated
Pell Grant overpayments during 1995-96 caused by
under-reporting of income. (Education IG letter,
12/8/99, encl., p. 6; IG Report ACN: 11-50001 (January
1997)) |
$10,000.0 |
Energy |
From
1980 through 1996, the Department of Energy terminated
before completion 31 major systems acquisition projects
after expenditures of over $10 billion. (GAO/OCG-99-6,
p. 12) |
$12,600.0 |
HHS |
Estimate
of Medicare fee-for-service overpayments for FY 1998.
HHS IG letter, 12/7/99, encl., p. 5; GAO/AIMD-00-10, p.
6) |
$1,000.0 |
HHS |
Improper
Medicare payments in 1998 for rehabilitation services. (HHS
IG letter, 12/7/99, encl., pp. 7-8) |
$857.0 |
HUD |
HUD
estimates erroneous rent subsidy payments at $857 for FY
1998, or about 5% of all payments. (HUD IG report
99-FO-177-0003, p. 24; GAO/AIMD-00-10, p. 6) |
$1,200.0 |
Interior |
Revenues
lost as a result of changes in Interior irrigation
assistance repayment policies. (Interior IG letter,
12/1/99, encl., p. 17) |
$43.0 |
Interior |
Amount
by which fluid mineral royalties may have been
underpaid. (Interior IG letter, 12/1/99, encl. 1, p. 21) |
$25.8 |
Interior |
Losses
identified in various IG reviews based on fees that
Interior failed to collect or misused. (Interior IG
letter, 12/1/99, encl., pp. 16-17) |
$18.2 |
Interior |
Losses
on land exchanges that did not comply with applicable
requirements. (Interior IG letter, 12/1/99, encl., p.
23) |
$708.0 |
NASA |
Cumulative
cost overruns on the International Space Shuttle. (NASA
IG letter, 12/1/99, encl., p. 13) |
$30.5 |
OPM |
Cost
of 1% premium surcharge OPM has paid carriers (so far)
to cover their costs resulting from enrollment
discrepancies in the Federal Employees Health Benefit
Program. This figure represents the government’s
share; plan subscribers have paid another $11.9 million.
(OPM IG letters of 12/1/99, encl., p. 4, and of 1/7/00,
p. 1) |
$1,800.0 |
OPM |
Estimated
annual losses to fraud, waste, and abuse in the Federal
Employees Health Benefit Program. (OPM IG letter,
12/1/99, encl., p. 6) |
$16.2 |
SBA |
Cost
of defaulted SBA-guaranteed loans for which the
guarantee should not have been honored. (SBA IG letter,
12/2/99, encl. p. 1) |
$3.7 |
SBA |
Cost
of additional questionable SBA-guaranteed loans. (SBA IG
letter, 12/2/99, encl. p. 4) |
$84.0 |
SBA |
Value
of Section 7(a) loans that are under criminal
investigation and may have been procured by fraud. (SBA
IG letter, 12/2/99, encl. p. 20) |
$27.0 |
SBA |
Estimated
loss to the government from loans procured by false
certifications. (SBA IG letter, 12/2/99, encl. p. 1) |
$2,500.0 |
SSA |
SSA
reported $2.5 billion in gross receivables for
Supplemental Security Income (SSI) overpayments. This
includes $1.65 billion in new overpayments for FY 1998,
out of total payments of $27 billion. (GAO/AIMD-00-10,
pp. 6, 17) |
$1,154.0 |
SSA |
Reported
Old Age and Survivors Insurance overpayments for FY
1998. (GAO/AIMD-00-10, p. 6) |
$941.0 |
SSA |
Reported
Disability Insurance overpayments for FY 1998.
(GAO/AIMD-00-10, p. 6) |
$651.6 |
Treasury |
Revenues
that Customs and ATF failed to collect. (Treasury IG
letter, 12/13/99, encl. 1, pp. 7-8) |
$90,000.0 |
IRS |
Unpaid
taxes that are supported by taxpayer agreements or court
rulings. (GAO/HR-99-1, pp. 108-190) |
$8,000.0 |
IRS |
Estimated
annual Earned Income Tax Credit (EITC) overpayments.
(Treasury Tax IG letter, 12/1/99, encl. p. 9) |
$8.0 |
VA |
Estimated
annual benefit overpayments from failure to deduct
disability compensation from military reserve pay. (VA
IG letter, 12/10/99, encl., p. 6) |
$103.9 |
VA |
Estimated
erroneous benefit payments to prisoners and deceased
persons.(VA IG letter, 12/10/99, encl., pp. 6-7) |
$260.0 |
VA |
Estimated
savings that could be realized from improved debt
management.(VA IG letter, 12/10/99, encl., p. 10) |
$247.0 |
VA |
Estimated
future savings that could be realized by better
oversight of Federal Employees Compensation Act claims.
(VA IG letter, 12/10/99, encl., p. 12) |
$60,000.0 |
Multiple
agencies |
At
the close of fiscal year 1998, delinquent non-tax debt
totaled $60 billion. This is an $8.1 billion increase
from FY 1996. (OMB Federal Financial Management Status
Report and Five Year Plan, June 1999) |
$6,500.0 |
Multiple
agencies |
According
to Congressional Budget Office cost estimates, a series
of GAO recommendations to improve the economy and
efficiency of various government operations would save
$6.5 billion in annual budget authority. (GAO/OCG-99-26) |
$514.0 |
Multiple
agencies |
Reported
overpayments for Veterans Benefits, Unemployment
Insurance, and others for FY 1998. (GAO/AIMD-00-10, p.
6) |
$92.0 |
Multiple
agencies |
Estimated
annual savings that could be realized by consolidating
most federal in-house aircraft operations. (Commerce IG
letter, 12/13/99, encl., p. 19) |
$221,284.1 |
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