Tag Archives: improper payments

The Acceptable Rate Of Fraud

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On Wednesday, The U.S. Department of Agriculture posted a press release on its website announcing its 2025 state payment error rates in the Supplemental Nutrition Assistance Program (SNAP) program.

The press release states:

The national payment error rate for fiscal year (FY) 2025 is 10.62%, far surpassing the congressional threshold of 6%.

While this is a modest decrease from FY 2024, the FY 2025 rate still shows significant waste at the state level. Including both overpayments and underpayments, this year’s rate represents a collective $10.1 billion in improper payments nationwide.

“These payment error rates are further proof that state accountability is severely lacking in SNAP,” said Agriculture Secretary Brooke L. Rollins. “USDA has taken historic action to help interested states curb SNAP waste, and I hope other states, regardless of political leadership, prioritize needy families and the American taxpayer over politics.”

H.R. 1 added new guardrails for states’ payment error rates, implementing real financial consequences for states that mismanage taxpayer dollars. States with error rates at or above the 6% threshold will be responsible for covering 5%, 10%, or 15% of their states’ benefits. The higher their PER, the higher the percentage—and in most cases, as soon as October 1, 2027. The FY 2025 PER is the first year that could be used to calculate those percentages.

In addition to this matching fund requirement, states with PER at or above 6% threshold are required to submit a Corrective Action Plan to USDA’s Food and Nutrition Administration detailing how they will address the root cause of their errors. Some of these states may also be liable for a separate financial penalty as part of the SNAP quality control process.

When the states are assessed a penalty for their failure to combat fraud successfully, it is possible that they might take an interest in cleaning up that fraud. The amount of fraud that has been discovered in the spending of taxpayers’ money is disgraceful. It is beginning to look like we could seriously lower our national debt just by eliminating fraud. I am not convinced that any rate of fraud is acceptable!

Efficiency Makes A Difference

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On Tuesday, American Greatness posted an article about a new automated payment verification system spearheaded by the Department of Government Efficiency (DOGE).

The article reports:

The U.S. Department of the Treasury has blocked its first improper payment requests using a new automated payment verification system spearheaded by the Department of Government Efficiency (DOGE).

DOGE announced Tuesday that Treasury identified and rejected $334 million in improper payment requests due to missing budget codes, invalid budget codes, and budget codes with no authorization.

Invalid budget codes include budgets that had already been fully spent. Unauthorized codes refer to payments not linked to the budget.

Prior to DOGE’s intervention, the Treasury’s accounting code was optional for the $4.7 Trillion in payments that go out each year, making traceability almost impossible.

The kind of bookkeeping in place before DOGE intervened would never be acceptable in a private company. The Internal Revenue Service would never tolerate that kind of sloppiness in a private enterprise.

The article concludes:

“This is a big deal,” DOGE Chief Elon Musk commented on X. 

Back in February, the Treasury Access Symbol (TAS) became a required field, increasing transparency into where U.S. tax dollars are going.

Treasury went live with its new payment verification system last week, resulting in the rejection of over $300 million in fraudulent accounting entries.

Taxpayers should rejoice in this change.

Where Your Tax Money Goes

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Just the News posted an article today about ‘improper payments’ made by the Department of Health and Human Services (HHS) in 2019.

The article reports:

The Golden Horseshoe is a weekly designation from Just the News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s. 

This week, our award goes to the Department of Health and Human Services (HHS) for spending $106.7 billion on improper payments during 2019.

Improper payments are defined under federal law as “payments made by the government to the wrong person, in the wrong amount, or for the wrong reason.”

The article continues:

According to a new report from Open the Books, improper payments from the Medicaid and Medicare programs have increased significantly in the past decade, in part due to the implementation of the Affordable Care Act — also called Obamacare. In 2011, when the act was signed into law, Congress declared it would help pay for the expensive plan by rooting out waste, fraud and corrupt spending within the Medicare and Medicaid sections of the agency.

Health and Human Services is the leading source of improper payments in the entire U.S. government, dwarfing by a magnitude of multiples the second-worst offender, which in 2019 was the Department of Treasury.

You would think that if they realized that they were ‘improper payments’, they would be able to get the money back. You would be wrong, but you might think that.

The article explains:

Once the taxpayer money is mistakenly spent, it is very hard for the government to claw it back. Of the $106.7 billion HHS squandered on improper payments in fiscal year 2019, it has been able to identify for recovery only $14.1 billion, or about 13.2% of the total. Of that $14.1 billion, the department has been able to “recapture” about $12.1 billion.

We need to put a bunch of accountants in charge of our government. Maybe they could straighten this mess out.