Feds report $55 BILLION in erroneous payments for 2007

Well, this is embarrassing.

Government Executive reports that major federal agencies mistakenly paid out $55 billion to ineligible recipients as a result of fraud or other errors. This estimate is up about $14 billion from 2006.

“The increase in improper payments in fiscal 2007 is almost entirely attributable to one component of the Medicaid program, its fee-for-service element, which reported for the first time. It accounted for $13 billion in improper payments, based on six months' worth of claims processed by the states, rather than a complete year's worth of claims.”

Pocket change right? Only if you consider Washington state’s $29.6 billion two-year budget to be a mere pittance. The $55 billion worth of “oops” payments in one year of federal mismanagement (that we know about) could run most of Washington state government for about 3 ½ years.

Consider the following things you could buy with $55 billion:

-5.5 billion malaria nets
-Refund $183.33 to every man, woman and child in the U.S. (including non-citizens)
-183,333 new homes (assuming an average price of $300,000)
-World Vision sponsorships (clean water, food, healthcare, & educational opportunities) for every African child for one year
-5,000 private islands at the bargain price of $10 million each
-Four years of tuition for 458,000 thousand college students (assuming $30,000/yr private school tuition)

Needless to say, the feds are lacking some basic oversight mechanisms to prevent improper payments. Government is a lot bigger than it used to be, so the more eyes searching for waste and fraud, the better. This is why laws that promote transparency are so vital.

Posted to the official blog of Evergreen Freedom Foundation by Amber Gunn - January 29, 2008