US govt made $247b in improper payments

Seventeen agencies of the US government reported $247 billion in estimated improper payments last year, averaging about $20.5 billion per month or about $683 million a day, according to an independent government watchdog.

That $247 billion was enough to buy 10 million 2023 Toyota Corollas (at $23,590 each) or 657,000 homes (at $375,700 each) according to a report last week by Open the Books.

Chicago-based Open the Books describes itself as a transparency group devoted to posting online all the disclosed spending of every level of government across the US.

The $247 billion is more than Greece's annual GDP of $239 billion, and not too far below New Zealand's ($251.9 billion) and Portugal's ($267.7 billion).

The free-flowing billions contrast sharply with the financial well-being of US households.

According to a Federal Reserve report released last month, 63 percent of US adults could cover a $400 emergency expense in cash or its equivalent, down from a high of 68 percent in 2021.

When asked for the largest expense they could cover using only savings, 18 percent said it was under $100, and another 14 percent said it was between $100 and $499.

The survey, Report on the Economic Well-Being of US Households in 2022, conducted last October, found that self-reported financial well-being fell sharply and was among the lowest observed since 2016.

The Open the Books report defines improper payments as "payments that should not have been made or that were made in an incorrect amount".

While the government identified $51.7 billion in overpayments, it had a recovery rate of only 9 percent, according to the nonprofit.

In November 2022, the White House Office of Management and Budget, or OMB, said in its annual report on improper payments that the rate, including unknown payments, declined from 7.2 percent in 2021 to 5.1 percent in 2022.

The OMB said, "The most improper payments are not fraudulent and not all represent a monetary loss to taxpayers." It said the cause for an improper payment includes underpayments or payments made to the right recipient in the right amount "but not in strict adherence to policies and procedures".

Three departments saw the most overpayments in 2022, according to Open the Books: Health and Human Services, with $132.6 billion, the Small Business Administration's Paycheck Protection Program ($37.3 billion) and the Treasury ($25.9 billion).

Other agencies and departments with overpayments include Labor, with $19 billion, Education $15.7 billion, Social Security $7.4 billion, Veterans Affairs $3.5 billion, Defense $2 billion, Agriculture $1.9 billion and Transportation $756 million.