Status of Fiscal Year 2010 Federal Improper Payments Reporting

Our work over the past several years has highlighted long-standing, widespread, and significant problems with improper payments in the federal government. Fiscal year 2010 marked the seventh year of implementation of the Improper Payments Information Act of 2002 (IPIA), which requires executive branch agencies to annually review all programs and activities to identify those that are susceptible to significant improper payments, estimate the annual amount of improper payment for such programs and activities, report these estimates, and report on actions taken to reduce any improper payment estimates that exceed $10 million. On July 22, 2010, the Improper Payments Elimination and Recovery Act of 2010 (IPERA) was enacted. IPERA amended IPIA by expanding on the previous requirements for identifying, estimating, and reporting on programs and activities susceptible to significant improper payments and to expand requirements for recovering overpayments across a broad range of federal programs. IPERA provisions related to identifying, estimating, and reporting on improper payments generally become effective in fiscal year 2011. For fiscal year 2010, federal agencies reported an estimated $125.4 billion in improper payments, an increase of about $16 billion over the fiscal year 2009 estimate of $109.2 billion. In light of the increase in improper payment estimates, Congress requested that we provide you with more detailed information on the reported amounts of estimated improper payments. Accordingly, this report summarizes available fiscal year 2010 improper payment information reported by federal executive branch agencies and the actions they reported taking to help reduce improper payments. We also summarized actions taken by the executive branch and Congress during fiscal year 2010 intended to improve transparency over, accountability for, and reduction of improper payments. Our scope included the 24 Chief Financial Officers Act agencies and 11 other entities that are significant to the 2010 Financial Report of the United States Government. In conducting our work, we obtained 317 federal agency fiscal year 2010 performance and accountability reports (PAR), agency financial reports (AFR), or annual reports to identify and aggregate the reported improper payment information. We did not independently validate the data reported in these agencies' PARs, AFRs, and annual reports. However, consistent with our reporting objective to summarize improper payment information, we are providing agency-reported data as descriptive information that will inform interested parties about the relative magnitude of governmentwide improper payments and other improper payment-related information..