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Improper Ag Dept. payments top $6 billion despite efforts to curb them

Published: Thursday, Jan. 23, 2014 - 3:46 pm
Last Modified: Friday, Jan. 24, 2014 - 10:22 am

The Department of Agriculture reported more than $6 billion in improper payments last year, seeing its overall error rate tick up during a time the Obama administration was aggressively seeking to lower such mistakes, according to a recently released audit.

For fiscal year 2013, the massive department saw its improper payment rate rise to 5.4 percent from 5.1 percent the year before. The rate has been virtually unchanged the past four years, despite efforts to reduce it.

The Department of Agriculture, one of the largest in the government, oversees far more than farm programs. Among other things, it runs the government’s food stamp, school lunch and school breakfast operations, as well as rural housing assistance.

The recent audit, released by the department’s inspector general, shows two agriculture programs with improper payment rates that rank among the highest of any federal program. The school breakfast program, at 25.3 percent, and the school lunch program, at 15.7 percent, rank first and second among the department’s programs that are considered high risk for improper payments, according to the audit.

The rates in the audit are those reported in 2013, although due to the way data are compiled the payments in questions may have been from previous years.

Both the department and the Obama administration in general say they’re pushing hard to reduce improper payments.

In December, a top official in the White House’s Office of Management and Budget wrote in a blog post that improper payments “represent an unacceptable waste of taxpayer resources” and “undermine the integrity of critical government programs.” Beth Cobert, the office’s deputy director for management, went on to tout the administration’s efforts to reduce such payments.

Frank Benenati, a spokesman for the OMB, added Thursday that “reducing improper payments is a priority of this administration and we have made significant progress in reducing those rates over the last five years.” He added that efforts were underway to analyze the root causes of such payment errors.

Likewise, department spokeswoman Brooke Hardison said, “USDA takes the issue of improper payments seriously, and is committed to strengthening its program integrity.” She added that the department is “taking steps to reduce the rate of improper payments, including developing corrective action plans and setting agency-specific targets for error reduction.”

Improper payments occur when money goes to the wrong recipient; when the right recipient receives the incorrect amount of money, whether too much or too little; when documentation isn’t available to support a payment; or when a recipient uses funds improperly.

An improper payment is different from fraud, and the government is able to recoup some of the errant payments. But the administration said on its website that tracks the issue that “all improper payments degrade the integrity of government programs and compromise citizens’ trust in government.”

According to the recent audit, in fiscal 2012 the Department of Agriculture said 16 of its programs were “vulnerable to significant improper payments” and that it had made $5.5 billion in such payments.

Department officials laid plans to reduce improper payments. The department conducted quarterly status meetings with managers of programs at high risk of improper payments, revised its reporting processes and took several other steps to tackle the problem.

From fiscal 2012 to 2013, the improper-payment rate governmentwide dropped from 3.7 percent to 3.5 percent, according to the OMB.

The Department of Agriculture’s rate, however, increased. Given that department programs also were getting larger, it meant that the total in improper payments jumped to $6.2 billion, according to the audit.

In its high-profile food stamp program – a political hot potato that often comes under fire due to concerns about abuse – the improper-payment rate dropped to 3.4 percent, a historic low. Given the size of the food stamp program, however, that still meant $2.6 billion in improper payments went out.

There’s a wide variation among the states in error rates for the food stamp program, from a high of 7.4 percent in Rhode Island to less than 1 percent in Florida.


Email: cadams@mcclatchydc.com; Twitter: @CAdamsMcClatchy

Read more articles by Chris Adams



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