Financial Management | Reduce Improper Payments

Improper payments occur when funds go to the wrong recipient, the recipient receives the incorrect amount of funds, documentation is not available to support a payment, or the recipient uses funds in an improper manner. In fiscal year 2011, Federal government improper payments totaled approximately $115 billion. Although not all improper payments are fraud (most are unintentional), and not all improper payments represent a loss to the government (many improper payments may have been proper, but are considered inaccurate due to missing documentation), all improper payments degrade the integrity of government programs and compromise citizens’ trust in government. To better protect taxpayers and improve efficiency, the Administration is working with Federal and State partners, Congress and other stakeholders to reduce improper payments without negatively impacting citizen access to needed programs. You can learn more about our efforts to reduce improper payments at PaymentAccuracy.gov

Government-wide Improper Payments

This metric shows the percentage of all payments by the Federal government that were improper – that is, they went to the wrong recipient, the recipient received the incorrect amount of funds, documentation was not available to support a payment, or the recipient used funds in an improper manner. While the vast majority of payments are done properly, an improper payment rate of 4-5% translates into approximately $115 billion in improper payments government-wide. As you can see, we are not settling with this current rate, but have identified concrete targets over the next few years to drive agency improvements. You can find out more about our efforts at PaymentAccuracy.gov. More detail is provided in the chart below on programs that an agency determines are susceptible to significant improper payments (specifically, improper payments greater than $10 million and over 2.5 percent of all annual payments made under that program, or improper payments over $100 million regardless of the improper payment rate), and which are required to measure and report improper payment estimates.

Improper Payments by Agency

This metric shows the total amount of all improper payments broken down by agency for fiscal year 2011. While this data provides some insight into which agencies are contributing the most to the approximately $115 billion improper payment total, some agencies do not have precise improper payment numbers for some of their programs. Additionally, agencies vary tremendously in their total payments. These numbers do not include results from recovery audits. You can find out more about programs that measure and report improper payments below and at PaymentAccuracy.gov.

Government-wide Recapture of Improper Payments

In addition to reducing payments made improperly, we must work to recapture any improper payments quickly. Under the Improper Payments Elimination and Recovery Act of 2010, agencies are responsible for reviewing their payments to identifyand recapture improper payments. Since fiscal year 2004, agencies have been reporting on their efforts to identify and recapture improper contract payments in their annual financial reports. This metric shows the total amount of improper contract payments recovered by all agencies in fiscal years 2009, 2010 and 2011, as well as our government-wide goal for recapturing improper payments in the future. While the Administration has set a government-wide target of recapturing at least $2 billion in improper contract outlays between fiscal year 2010 and fiscal year 2012, agency-specific targets have not yet been developed. Because of improved agency performance in fiscal year 2010 and fiscal year 2011, we are less than $100 million from reaching our $2 billion recovery goal.

Breakdown of Programs that Report Improper Payments
Program	Agency	Total Payments	Improper Payments	% Improper Payment Rate
Medicare Fee-for-Service (FFS)	Department of Health and Human Services	$336.4 B	$28.8 B	8.6
Medicaid	Department of Health and Human Services	$269.2 B	$21.9 B	8.1
Unemployment Insurance (UI)	Department of Labor	$114.1 B	$13.7 B	12.0
Medicare Advantage (Part C)	Department of Health and Human Services	$112.2 B	$12.4 B	11.1
Supplemental Security Income (SSI)	Social Security Administration	$50.3 B	$4.6 B	9.1
Retirement, Survivors & Disability Insurance (RSDI)	Social Security Administration	$695.5 B	$4.5 B	0.6
Supplemental Nutrition Assistance Program (SNAP)	Department of Agriculture	$64.7 B	$2.5 B	3.9
Medicare Prescription Drug Benefit (Part D)	Department of Health and Human Services	$53.2 B	$1.7 B	3.2
School Lunch	Department of Agriculture	$10.7 B	$1.7 B	15.9
Pell Grants	Department of Education	$36.5 B	$993.0 M	2.7
Public Housing / Rental Assistance	Department of Housing and Urban Development	$32.6 B	$959.4 M	2.9
School Breakfast	Department of Agriculture	$2.8 B	$705.0 M	25.2
Child Care and Development Fund (CCDF)	Department of Health and Human Services	$5.7 B	$638.0 M	11.2
Compensation/Dependency & Indemnity	Department of Veterans Affairs	$63.0 B	$629.9 M	1.0
Fee Program	Department of Veterans Affairs	$4.2 B	$522.9 M	12.5
Military Pay	Department of Defense	$96.0 B	$474.3 M	0.5
FHWA Highway Planning/Construction	Environmental Protection Agency	$48.1 B	$450.3 M	0.9
Travel Pay	Department of Defense	$8.7 B	$286.6 M	3.3
Other Contractural Services	Department of Veterans Affairs	$3.1 B	$276.3 M	8.9
Federal Crop Insurance	Department of Agriculture	$5.2 B	$246.6 M	4.7
Federal Employee Retirement Programs	Office of Personnel Management	$69.8 B	$235.9 M	0.3
Supplies and Materials	Department of Veterans Affairs	$1.6 B	$221.1 M	13.8
Education	Department of Veterans Affairs	$10.3 B	$216.2 M	2.1
Special Nutrition Program for Women, Infants, and Children (WIC) Vendor Error Component	Department of Agriculture	$4.6 B	$192.0 M	4.2
Federal Employee Health Benefit Program	Office of Personnel Management	$40.5 B	$151.7 M	0.4
Detention and Removal Operations	Department of Homeland Security	$1.3 B	$108.0 M	8.3
State Home Per Diem Grants	Department of Veterans Affairs	$713.2 M	$97.6 M	13.7
Disaster Assistance Loans	Small Business Administration	$339.6 M	$96.3 M	28.4
Civilian Pay	Department of Defense	$58.7 B	$90.9 M	0.2
Foster Care-Title IV-E	Department of Health and Human Services	$1.4 B	$72.1 M	5.2
Vocational Rehabilitation/Employment	Department of Veterans Affairs	$819.6 M	$57.4 M	7.0
Pension	Department of Veterans Affairs	$4.6 B	$46.2 M	1.0
HeadStart	Department of Health and Human Services	$7.2 B	$44.1 M	0.6
7(a) Business Loans	Small Business Administration	$2.4 B	$40.7 M	1.7
FAA Airport Improvement Program	Department of Transportation	$3.9 B	$34.6 M	0.9
Military Health Benefits	Department of Defense	$12.6 B	$30.2 M	0.2
Federal Protective Service	Department of Homeland Security	$811.0 M	$27.0 M	3.3
USAID Twenty Seven Program Areas	U.S. Agency for International Development	$16.4 B	$26.8 M	0.2
Conservation Reserve	Department of Agriculture	$1.6 B	$26.5 M	1.7
Assistance to Firefighters	Department of Homeland Security	$385.0 M	$19.8 M	5.1
Military Retirement Benefits	Department of Defense	$42.2 B	$18.9 M	0.0
Disaster Relief Fund Vendor Payments	Department of Homeland Security	$582.0 M	$17.0 M	2.9
Small Business Investment Centers (SBIC)	Small Business Administration	$1.4 B	$16.7 M	1.2
Marketing Assistance Loan	Department of Agriculture	$3.1 B	$15.9 M	0.5
FEMA Emergency Food and Shelter Program	Department of Homeland Security	$201.0 M	$15.3 M	7.6
Rental Assistance	Department of Agriculture	$1,000.0 M	$15.1 M	1.5
Clean & Drinking Water State Revolving Fund (SRF)	Environmental Protection Agency	$3.6 B	$14.2 M	0.4
Child and Adult Care Food - FDC Homes-Tiering Component	Department of Agriculture	$896.0 M	$13.7 M	1.5
National Flood Insurance Program	Department of Homeland Security	$1.1 B	$13.0 M	1.2
Workforce Investment Act (WIA)	Department of Labor	$4.1 B	$12.4 M	0.3
Farm Security & Rural Investment	Department of Agriculture	$1.4 B	$11.4 M	0.8
Public Assistance Programs	Department of Homeland Security	$3.5 B	$11.0 M	0.3
Background Investigations	Office of Personnel Management	$695.4 M	$10.8 M	1.6
Title I - Grants to States	Office of Personnel Management	$17.9 B	$9.0 M	0.1
Non-insured Assistance	Department of Agriculture	$90.0 M	$8.1 M	9.0
Farm Service Disaster	Department of Agriculture	$235.0 M	$6.7 M	2.9
Homeland Security Grant Program	Department of Homeland Security	$1.5 B	$5.0 M	0.3
USCG Active Duty Military Payroll	Department of Homeland Security	$2.9 B	$4.0 M	0.1
Milk Income Loss	Department of Agriculture	$182.0 M	$3.6 M	2.0
CBP Custodial Refund & Drawback	Department of Homeland Security	$1.2 B	$3.0 M	0.3
Direct & Counter-Cyclical Payments	Department of Agriculture	$3.9 B	$2.1 M	0.1
USACE Travel Pay	Department of Defense	$212.0 M	$2.1 M	1.0
Individuals & Households Program	Department of Homeland Security	$679.0 M	$2.0 M	0.3
Transit Security Grants Program	Department of Homeland Security	$109.0 M	$0.8 M	0.7
Federal Employee Life Insurance Program	Office of Personnel Management	$2.6 B	$0.5 M	0.0
Insurances	Office of Personnel Management	$1.6 B	$0.2 M	0.0

Error rate information for some programs may be slightly different than the error rates reported in USDA’s FY 2011 PARData is for FY2011

Performance.gov

Reduce Improper Payments

Featured Story

Learn More

Breakdown of Programs that Report Improper Payments