War on waste: More than law needed to curb improper payments

The U.S. Office of Management and Budget estimates that the federal government made approximately $110 billion in improper payments in fiscal 2009 — slightly more than $1 for every $20 it spent.

So on Thursday, President Barack Obama signed into law the Improper Payments Elimination and Recovery Act. Problem solved, right?

Unfortunately, it will take more than a new law to eliminate errors, waste and fraud from an operation as massive as the federal government. It will require a concerted effort by government workers at all levels to focus on accuracy and efficiency in carrying out their duties, as well as an effective system for holding employees accountable and penalizing people who seek to rip off the system.

Even then, taxpayers shouldn’t expect a waste-free government but rather hope for a significant reduction in the amount of money being misspent.

Can the new law help accomplish such a daunting task, or will it simply add to the already mammoth amount of paperwork generated by the federal government?

Under the bill, agency officials will be required to review their programs every three years and identify those that are the most susceptible to improper payments. A good place to start might be the federal Earned Income Tax Credit, where government investigators found that approximately $12 billion of the total $48 billion paid out by the program went to people who did not qualify for the money. That is an astounding 25 percent, and should not be tolerated by taxpayers.

Medicare and Medicaid are other programs where massive amounts of money are paid improperly. The Departments of Justice and Health and Human Services are making progress in cracking down on people abusing the system.

Likewise, a Do Not Pay List is being established, a single source that will allow all agencies to check the status of a potential contractor or individual. They then can determine if a contractor has been debarred or an individual is not qualified to receive funds.

But more needs to be done.

Not all of the misspent funds are taken by fraud. Bureaucratic errors, even simple typos, can send checks to people — some even deceased — who should not be receiving them.

Much of the emotion fueling movements such as the tea party comes as much from government waste as from the tax burden itself. Taxpayers are frustrated and angry that billions of their dollars are going for improper purposes.

The president issued an executive order last November providing incentives for states, local communities and other organizations to reduce improper payments and increasing penalties for contractors that fail to report mistakes such as double payments or getting paid for work not performed.

Now Congress has passed and the president signed the Improper Payments Elimination and Recovery Act strengthening efforts to identify fraud and address errors.

We doubt that the new law can eliminate improper payments, but if it can even reach the Office of Management and Budget’s goal of reducing the federal improper payment rate from 5.65 percent in fiscal 2009 to 4.32 percent in fiscal 2012, it will be saving taxpayers billions of dollars.