Government Watchdog Urges Agencies to Improve Reporting on Billions in Improper Payments

The U.S. Government Accountability Office (GAO) has released a report highlighting significant issues with how federal agencies report on improper payments, potentially hindering efforts to curb billions of dollars in taxpayer money lost annually. Federal agencies reported an estimated $186 billion in improper payments for fiscal year 2025 alone, contributing to a cumulative total of approximately $3 trillion in payment errors since fiscal year 2003. The GAO’s findings emphasize the need for enhanced transparency and accountability in addressing these financial discrepancies.

The Payment Integrity Information Act of 2019 (PIIA) mandates that executive branch agencies estimate and report improper payment rates for programs deemed susceptible to such errors. However, the GAO’s latest report, the eleventh and final in a series on this topic, reveals that several agencies have not consistently met these reporting requirements, particularly for programs with sustained high rates of improper payments. Specifically, the GAO identified seven agencies with programs that exhibited estimated improper payment rates of 10 percent or higher for two, three, or four consecutive fiscal years between 2021 and 2024. This recurring noncompliance can obscure the scope of the problem and the effectiveness of agency mitigation strategies for congressional oversight.

A key area of concern identified by the GAO is the clarity of guidance provided by the Office of Management and Budget (OMB) to agencies that are noncompliant with PIIA. While OMB offers guidance on PIIA requirements, the GAO found that this guidance does not explicitly direct noncompliant agencies to submit the annual reports required by law to Congress and the GAO. Without this clarification, Congress may lack the necessary information to scrutinize agency actions and ensure accountability for reducing improper payments. The report also notes that while agencies with programs noncompliant for two consecutive years generally took actions to address the issues, reporting compliance varied for those with longer periods of noncompliance. For instance, four agencies with programs noncompliant for three consecutive years submitted the required information to Congress, OMB, and the GAO, but the Departments of Labor and the Treasury experienced delays in their submissions, with the Treasury failing to report to the GAO altogether. Similarly, all four agencies with programs noncompliant for four consecutive years submitted their required reports to Congress and OMB.

Furthermore, the GAO discovered that five of the seven agencies lacking sufficient documented policies and procedures to ensure consistent and timely reporting for their noncompliant programs. This procedural weakness can lead to Congress losing critical visibility into which programs remain at elevated risk and whether agencies are implementing meaningful corrective measures. The development and implementation of robust policies and procedures are deemed essential to ensure that Congress receives timely and accurate information, which is vital for informed legislative decision-making and the overall effort to reduce government-wide improper payments, thereby saving taxpayer dollars.

In response to these findings, the GAO is making six recommendations. One recommendation is directed at OMB, urging it to clarify its guidance to agencies, ensuring they report required annual information to the GAO and relevant congressional committees. This information should detail programs that have been noncompliant for varying lengths of time and outline planned actions to achieve compliance. Additionally, the GAO recommends that the Departments of Labor, Education, Health and Human Services (HHS), the Treasury, and Agriculture (USDA) design and implement processes, supported by documented policies and procedures, to effectively track, monitor, and ensure the timely submission of PIIA-noncompliant program information. The Departments of Labor, Education, HHS, Treasury, and USDA have agreed with these recommendations. OMB did not provide comments on the recommendations.

Article by Mel Anara, based upon information from the U.S. Government Accountability Office

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