Sneak Preview: While Still High, Federal Improper Payment Level Drops in FY 2023
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Although the amount of federal agency reported improper payments for federal fiscal year (FY) 2023 has been estimated at $236 billion — a $12 billion decline from the FY 2022 estimation — the Government Accountability Office (GAO) recently reported that the actual amount could be even higher as it does not include certain risk-susceptible programs, such as the Department of Agriculture’s (USDA) Summer Food Service program and the Department of Health and Human Services’ (HHS) Temporary Assistance for Needy Families (TANF) program. In response, agencies are taking corrective actions to reduce the improper payment rate for many of these programs.
Improper payments — payments that the federal government should not have made or that were made in incorrect amounts — continue to be an area of fiscal concern in the federal government. Since FY 2003, cumulative executive agency improper payment estimates have totaled almost $2.7 trillion. The estimated improper payment amount for FY 2023 covered 71 programs administered by 14 federal agencies (compared to 84 programs administered by 18 agencies that comprised the FY 2022 total).
Under the Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 116-117), agencies are required to review all programs that annually spend more than $10 million, and to develop and report improper payment estimates for those that may be susceptible to significant improper payments. “Improper payments are a long-standing and significant problem in the federal government,” according to GAO. “Reliable improper payment estimates are helpful for understanding and addressing financial vulnerabilities, as well as assessing the effectiveness of corrective actions. Through the estimation process, agencies establish the baseline against which progress — in the form of reductions in future estimates — is assessed.”
Of the 71 programs with reported estimates for FY 2023, 16 programs had an improper payment rate of 10% or higher, GAO noted, adding that the rate exceeded 10% for at least two consecutive years for 10 of these programs.
(The full version of this story has now been made available to all for a limited time here.)
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