Government-Wide Improper Payments Totaled $124.7 Billion

17.9 percent increase from 2013

• March 4, 2015 2:50 pm


The federal government issued $124.7 billion in improper payments in fiscal year 2014, representing a 17.9 percent increase, according to the Government Accountability Office (GAO).

Medicare reported the highest number of improper payments with $59.914 billion, followed by the Earned Income Tax Credit (EITC) at $17.7 billion, which has an error rate of 27.2 percent.

"Efforts to reduce improper payments could result in significant cost savings," the GAO said in a report released Wednesday. "For the first time in recent years, the government-wide improper payment estimate significantly increased—to $124.7 billion in fiscal year 2014, up from $105.8 billion in fiscal year 2013."

"This increase of almost $19 billion was primarily due to estimates for Medicare, Medicaid, and the Earned Income Tax Credit, which account for over 76 percent of the government-wide estimate," they said.

Medicaid also had a high rate of improper payments, which are defined as payments that "should not have been made or were made in the incorrect amount," with $17.5 billion.

"The size and diversity of the Medicaid program make it particularly vulnerable to improper payments—including payments made for people not eligible for Medicaid or for services not actually provided," the GAO said.

Over 11 percent of unemployment benefits were improper, costing $5.604 billion. The U.S. Department of Agriculture (USDA) is still facing high error rates with food stamps and its school lunch program, which had $2.4 billion and $1.8 billion improper payments, respectively.

Published under: Government Waste