Report: US Govt. Wastes Billions

Wednesday, September 13th 2000, 12:00 am
By: News On 6

WASHINGTON (AP) — A dozen of the largest federal agencies reported squandering $20.7 billion last year, with improper Medicare payments accounting for more than half of that money, according to a General Accounting Office study released Tuesday.

``It's astounding that more than $20 billion of taxpayer money was wasted by just a handful of federal programs, and that's just a drop in the bucket,'' said Sen. Fred Thompson, R-Tenn., who ordered the study by Congress' investigative branch.

The improper payments were culled from the annual financial reports of agencies that accounted for most of the government's $1.7 trillion budget for fiscal 1999, according to the Office of Management and Budget. The $20.7 billion represents 1.2 percent of the total.

``These payments include things like providing federal benefits to dead people or making duplicate payments to contractors. They may be payments made by mistake or to people defrauding the government,'' said Thompson.

The GAO agreed with Thompson's assessment that the problem is far more widespread than is reflected on the agencies' financial statements.

Agencies are not required to identify improper payments, and several agencies reported losing money to improper payments but did not identify how much they lost.

Thompson introduced legislation Tuesday that would require agencies to audit their payments using practices commonly found in the private sector. Similar legislation introduced by Rep. Dan Burton, R-Ind., already passed the House.

The GAO report shows that $13.5 billion out of a Medicare budget of $171 billion was lost through improper payment of claims last year.
That is up from $12.6 billion in similar Medicare losses in 1998. But it is still an improvement over 1997 when improper Medicare payments totaled $20.3 billion, according to the inspector general's office at the Department of Health and Human Services.

HHS should be applauded for its dramatic turnaround, said OMB executive associate director and controller Josh Gotbaum. He said the agency initiated the changes on its own.

Gotbaum said the Clinton administration plans to set guidelines by the end of the year urging other agencies to devise systems for tracking and halting improper payments.

Thomas Schatz, president of the Citizens Against Government Waste watchdog group, said the issue deserves immediate and urgent attention.

``Taxpayers really don't know everything about what's going on with their money,'' Schatz said. ''... In a competitive situation outside of government, if you continue to make improper payments and overpayments, you wouldn't be in business very long.''
This is the second consecutive year the GAO has studied the issue. Last year's report showed nine federal agencies reported losses of $19.1 billion in improper payments.

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