Thompson:   Six Federal Programs Shell Out Over $19 Billions In Erroneous Payments

Billions More Wasted Government-wide Unidentified by Agencies

Friday, September 6, 2002

WASHINGTON , DC – Senate Governmental Affairs Committee Ranking Member Fred Thompson (R-TN) today released a report outlining the troubling trend that federal agencies continue to fail to identify billions of taxpayer dollars wasted each year in erroneous payments.

“It is disgraceful that the federal government is failing to report financial mismanagement of Americans’ tax dollars,” Thompson said.  “The public has a right to know when Medicare wastes more than $12 billion a year on services that were never provided, or pays medical bills that the government shouldn’t be covering.  For each of the 39 million Americans enrolled in Medicare, that’s over $300 a year.  That would make quite a dent in their monthly medical bills.”

Of the six government agencies that did report the extent of their erroneous payments – the Military Retirement Trust Fund, Education Assistance programs, Medicare, Housing Subsidy programs, the Labor Department, and Social Security -- it is estimated that more than $19 billion in taxpayer dollars was wasted in erroneous payments, according to a report by the General Accounting Office (GAO).  Erroneous payments result from a variety of causes ranging from bureaucratic  -- such as paying someone twice -- to outright fraud. 

The Internal Revenue Service continues to refund billions to fraudulent claimants without reporting these losses, while the Department of Agriculture’s Food Stamp Program has recently chosen not to publicly disclose in its financial statements how many billions of dollars it overpays to ineligible recipients and how much it underpays to those in need.

“Wasting tens of billions of taxpayer dollars in erroneous payments is appalling, but even more frustrating is that fewer and fewer agencies are disclosing these payments, so we have no way of knowing the full extent of this mismanagement,” Senator Thompson said.  “Public scrutiny is often the most effective tool in focusing agency managers’ attention on certain issues, and Americans deserve to know if their tax dollars are being mismanaged.” 

The GAO report credits the Administration’s efforts to identify and reduce erroneous payments by tasking agencies with submitting erroneous payment estimates to OMB and assessing quarterly executive branch financial management activities.

“It is not just the Administration’s responsibility to resolve erroneous payment issues,” said Thompson.  “Congress holds the purse strings and should also be held accountable should this problem fail to be resolved.”  

General Accounting Office (GAO) Report