Mary McCue Bell (The Washington Times)
Federal agencies made an estimated $186 billion in improper payments in the 2026 fiscal year, totaling about $3 trillion in payment errors since 2003, according to a new report.
Improper payments — ones that should not have been made or were made in the incorrect amount — rates of 10% or higher for two or more consecutive years from 2021 through 2024 were made by seven agencies, according to a recent Government Accountability Office report.
“Given the magnitude of these estimates, it is imperative that agencies prioritize reducing improper payments,” the report reads. “One way to help ensure that they do so, and thereby save taxpayer dollars, is by requiring they timely report to Congress, the Office of Management and Budget (OMB), and GAO.”
The Payment Integrity Information Act of 2019 requires agencies found noncompliant to provide annual reports, and the Office of Management and Budget issues guidance to agencies on how to implement that law. However, it does not direct agencies to submit a required separate annual report with a list of each noncompliant program and plans to bring programs into compliance.
As a result, six of the seven agencies that made high improper payments also failed to fully meet annual reporting requirements — a gap the GAO flagged and recommended OMB address by updating its guidance.
Programs with four consecutive years of noncompliance include the U.S. Department of Agriculture’s Emergency Conservation Program, whose improper payment rate climbed from 13.5% to 45.2%, and the Department of Labor’s Unemployment Insurance, with a rate of 15.9%.
Despite corrective action plans, the Agriculture Department’s Emergency Conservation Program continued to report increasing improper payment estimates from fiscal years 2023 to 2024, according to the report.
The department’s internal watchdog found that states either did not properly follow statutory requirements for payment eligibility, failed to access data needed to validate payment accuracy or did not appropriately review documentation before issuing payments.
Two of the Internal Revenue Service’s programs saw rates above 27%: American Opportunity Tax Credit and Earned Income Tax Credit.
The Treasury Department, which oversees the IRS, emphasized that without significant restructuring of the refundable tax credit programs, including legislative action, the improper payment rate for those programs will not be reduced below 10%.
This article was made available to WMAL via The Washington Times.
