Sneak Preview: FY 2023 Improper Payments Drop; Level Still High

(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Although federal agencies’ total estimated improper payments for federal fiscal year (FY) 2023 remained at a staggering $236 billion, this estimate was an $11 billion decrease from the FY 2022 level, and nearly a $46 billion reduction from FY 2021, according to a recent report from the Government Accountability Office (GAO).

Improper payments — those that should not have been made or were made in the incorrect amount — have consistently been a governmentwide concern (see ¶340 in the Single Audit Information Service Module). GAO has reported on improper payments for the U.S. government’s consolidated financial statements since FY 1997, and since FY 2003, cumulative improper payment estimates by executive branch agencies have totaled about $2.7 trillion.

“It should be noted that the FY 2023 improper payment estimates do not include certain programs that agencies have determined are susceptible to significant improper payments,” according to GAO, which evaluated such payments across 71 programs administered by 14 federal agencies. “As a result, the governmentwide total potentially does not represent the full extent of improper payments.” For example, the FY 2023 total does not include the Department of Health and Human Services’ (HHS) Temporary Assistance for Needy Families program, because the agency does not have the authority to obtain the information it needs to estimate or report improper payment amounts for this program.

In its assessment of FY 2023 improper payments, GAO noted that some 79% ($186 billion) of the total for FY 2023 stemmed from five specific programs:

• HHS’ Medicare program ($51 billion);
• HHS’ Medicaid program ($50 billion);
• Department of Labor’s (DOL) Unemployment Insurance – Federal Pandemic Unemployment Assistance program ($44 billion);
• Department of the Treasury’s Earned Income Tax Credit program ($22 billion); and
• Small Business Administration’s (SBA) Paycheck Protection Program Loan Forgiveness program ($19 billion).

Other key programs with high improper payment rates included the Department of Agriculture’s (USDA) Emergency Conservation Program – Disasters (40.1%); Livestock Forage Disaster program (13.7%); Supplemental Nutrition Assistance Program (11.5%); and Noninsured Crop Disaster Assistance Program (10.5%).

(The full version of this story has now been made available to all for a limited time here.)

Join us for our following Thompson Grants events:
Thompson Grants Workshop: Procurement | May 23, 2024 | Virtual Event
Federal Grants Forum | June 26-27, 2024 | Columbus, Ohio