Improper Payment Rate Falls, but Some Trouble Persists

January 23, 2013

Eager to find savings, the Obama administration and Congress are stepping up pressure on agencies to reduce the tens of billions of dollars mistakenly paid each year to individuals, contractors, and state and local governments.

By the White House’s reckoning, that push has already paid off. For fiscal 2012, the improper payment rate — a measure of improper payments as a proportion of most federal payments — was 4.35 percent, down from 5.42 percent three years earlier. The estimated amount of improper payments dipped as well, from almost $116 billion in 2011 to about $108 billion last year, according to Office of Management and Budget data.

“We have successfully reduced error rates in major programs all across the government,” OMB Controller Danny Werfel said in a blog post heralding the latest numbers in November. During the preceding three years, agencies also recaptured $4.4 billion in improper payments to contractors, Werfel said.

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