Memorandum: Hearing on Follow the Money: Tackling Improper Payments — March 28, 2022

Summary

A memorandum dated March 28, 2022 from Committee Staff to Members of the Subcommittee on Government Operations concerns a hybrid hearing titled "Follow the Money: Tackling Improper Payments" on Thursday, March 31, 2022, at 9:30 a.m. ET. It describes improper payments as any payment made by the government in the incorrect amount or to the wrong person, and names Medicaid, unemployment insurance, and Medicare as the top three examples of federal programs that incur them. The memo says federal agencies reported $108 billion in improper payments in fiscal year (FY) 2012, and that the annual estimate rose to $175 billion in FY 2019 before reaching $281 billion in FY 2021.

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                                           MEMORANDUM

                                            March 28, 2022

To:     Members of the Subcommittee on Government Operations

Fr:     Committee Staff

Re:     Hearing on “Follow the Money: Tackling Improper Payments”

       On Thursday, March 31, 2022, at 9:30 a.m. ET, the Subcommittee on Government
Operations will hold a hybrid hearing titled, “Follow the Money: Tackling Improper Payments.”
The hearing will convene in person in room 2154 of the Rayburn House Office Building and
remotely over Zoom.

         Congress has a vested interest in addressing improper payments, which include any
payment made by the government in the incorrect amount or to the wrong person. Medicaid,
unemployment insurance, and Medicare are the top three examples of federal programs that incur
improper payments. 1 Improper payments include underpayments and overpayments—
intentional or otherwise—and can indicate that fraud, waste, and abuse has occurred. 2
According to the Government Accountability Office (GAO), “reducing improper payments … is
critical to safeguarding federal funds.” 3 Federal agencies reported $108 billion in improper
payments in fiscal year (FY) 2012. Since then, the federal government’s annual improper
payment estimate ballooned to $175 billion in FY 2019, before skyrocketing during the
pandemic to $208 billion in FY 2020 and $281 billion FY 2021. 4

       According to GAO, “proactively managing fraud risks” should “facilitate, not hinder, the
program’s mission and strategic goals by ensuring that taxpayer dollars and government services

        1
          PaymentAccuracy, FY2021 Payment Accuracy Dataset_3_14_2022 (online at www.cfo.gov/payment-
accuracy/FY2021%20Payment%20Accuracy%20Dataset_3_14_2022.xlsx) (accessed Mar. 16, 2022).
        2
         Government Accountability Office, A Framework for Managing Fraud Risks in Federal Programs (July
2015) (GAO-15-593SP) (online at www.gao.gov/assets/gao-15-593sp.pdf).
         3
           Government Accountability Office, Improper Payments (online at www.gao.gov/improper-payments)
(accessed Mar. 21, 2022).
        4
         GovWin from Deltek, FY 2021 Improper Payment Totals Hit an All-Time High of $281B Due to the
Pandemic (online at https://iq.govwin.com/neo/marketAnalysis/view/FY-2021-Improper-Payment-Totals-Hit-an-
All-Time-High-of-281B-Due-to-the-Pandemic/6334?researchTypeId=1&researchMarket=) (accessed Mar. 16,
2022).
serve their intended purposes.” 5 Enhancing program integrity includes reducing improper
payments of all kinds, such as innocent mistakes—like paperwork errors. 6

         Past legislative efforts have enhanced reporting and provided a more accurate picture of
the extent of improper payments. While those efforts have also established programs to prevent
improper payments, such as the Treasury Department’s Do Not Pay initiative, they have not
successfully lowered the amount of improper payments agencies identify and report. 7 As such, it
is clear that the federal government must evolve its efforts to mitigate fraud, waste, and abuse—
while improving the delivery of and access to critical federal services.

I.      WITNESSES

        Ms. Linda Miller
        Principal, Advisory Services
        Grant Thornton
        Former Deputy Executive Director, Pandemic Response Accountability Committee
        Former Assistant Director, Government Accountability Office

        Mr. Scott Jensen
        Chief Executive Officer and Vice President of External Affairs,
        Research Improving People’s Lives
        Former Director, Rhode Island Department of Labor and Training

        Adrian Haro
        Chief Executive Officer
        The Workers Lab

Staff contacts: Joshua Kravitz, Wendy Ginsberg, and Annaliese Yukawa at (202) 225-5051.




        5
         Government Accountability Office, A Framework for Managing Fraud Risks in Federal Programs (July
2015) (GAO-15-593SP) (online at www.gao.gov/assets/gao-15-593sp.pdf).
        6
          Department of Agriculture, What is Program Integrity? (online at https://fns.usda.gov/program-integrity)
(accessed Mar. 22, 2022).
         7
           Department of Treasury, About Do Not Pay (online at https://fiscal.treasury.gov/dnp/about.html)
(accessed Mar. 16, 2022).



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