USDA Made $6.2 Billion in Improper Payments Last Year

Failed to comply with law to avoid fraudulent payments for third year in a row

USDA intern / AP
April 28, 2014

The U.S. Department of Agriculture (USDA) made $6.2 billion in improper payments in 2013, according to the Office of Inspector General (OIG).

The OIG released an audit earlier this month that found that at least $416 million in waste could have been avoided if the agency had met its reduction targets mandated by the Improper Payment Information Act (IPIA). In fact, the USDA has failed to comply with the law for a third consecutive year.

"This occurred because some of USDA’s actions were not effective or completed to achieve compliance," the audit said. "These noncompliances continue to illustrate the risks of improper payments affecting taxpayers, as USDA could have avoided approximately $416 million in improper payments by meeting reduction targets."

The report noted that the agency runs more than 300 programs, spending $159 billion a year. Sixteen of those programs are considered "high-risk" for waste, fraud, and abuse, including the Food and Nutrition Service (FNS), which administers food stamps, and the school breakfast and lunch programs.

The School Breakfast Program had the highest rate for improper payments in 2013, with over a quarter of all disbursements being incorrect. The 25.26 percent of improper payments amounted to $831 million, of which $716 million were overpayments to schools.

The lunch program was not much better, as 15.69 percent of their payments were improper, amounting to $1.8 billion.

The Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, issued $2.6 billion in improper payments, and 65.92 percent of the errors were "agency-caused." More than $2 billion were overpayments.

The OIG defines improper payments as those "made to an ineligible recipient, a payment for an ineligible good or service, or a payment for goods or services not received."

In an attempt to cut back on fraud and abuse, Congress passed IPIA in 2002, though the USDA has not complied with the law for three years. The agency is required to publish estimates for improper payments for all of its programs, and reduce improper payments by meeting targets each year.

The USDA did not publish estimates for three programs, including its Child and Adult Care Food Program, which reimburses the costs for meals and snacks for children who attend daycare in private homes.

FNS said it would need $20 million to conduct a "feasibility study" in order to estimate the total number of improper payments administered to family daycare homes.

A partial estimate of improper payments made through the program was $10 million in 2013.

Published under: Government Waste , USDA