The tradeoff to quickly disbursing funds was that agencies like SBA did not have systems in place to prevent and identify payment errors and fraud. Image: Evgenia Parajanian/Shutterstock.com
By: FEDweek StaffThe GAO has said that while the pandemic aggravated problems with improper payments in federal programs, the issue is a long-standing one that is continuing apart from issues that arose with special pandemic relief spending.
Its most recent assessment identified $247 billion in improper payments in fiscal 2022, although that term includes not just overpayments ($200 billion) but also underpayments ($5 billion), and situations where it was unclear whether a payment was correct or whether the recipient was entitled to it.
Nearly four-tenths of the payments came from just five programs: Medicaid, Medicare, the Earned Income Tax Credit, the Paycheck Protection Program, and unemployment insurance. The first three have long been on GAO’s high-risk list and have been the focus of prior improper payment reports, with numerous recommendations still outstanding, the GAO noted in a blog posting accompanying a new report.
The pandemic-related Paycheck Protection Program was able to provide relief quickly to businesses, communities and individuals “but the tradeoff was that agencies like SBA did not have systems in place to prevent and identify payment errors and fraud,” it said, estimating $29 billion in improper payments in that program.
Similarly, it said that while unemployment insurance has long been vulnerable to improper payments, payment errors rose as additional benefits were provided in response to the pandemic. Causes included “claimants continuing to claim benefits after returning to work; employers failing to provide timely and adequate information on reasons for employee departures; and claimants failing to show that they met state requirements to demonstrate they were actively seeking work,” it said.
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