Audit Finds $106 Billion in Improper Federal Payouts

Audit Finds $106 Billion in Improper Federal Payouts

The Mercatus Center at George Washington University has tallied the volume of improper government payouts during fiscal year 2013. An “improper” payment is one that violated federal rules or guidelines in some way. This includes:

  • fraud
  • clerical errors
  • failure to receive paperwork confirming the legitimacy of the expenditure
  • failure to document the person or agency to whom the funds were dispersed

How was the money spent?

  • $36 billion improperly went to Medicare.
  • $14.4 billion illegally went to Medicaid.
  • $6.2 billion in improper unemployment payments were sent to undeserving recipients.
  • The SNAP (food stamp) program paid out $2.6 billion more than it should have.
  • $1.3 billion improperly went to rent and housing assistance.
  • $700 million was wrongly given to Pell grant recipients.

Other improper government payouts went to supporting the current administration’s healthy school lunch initiative and other medically-related programs.

In addition to the high cost in dollars of these improper payments, the GWU study shows that some government programs have a high percentage of failure. The Earned Income Tax Credit (EITC) program, for example, not only paid out $14.5 billion too much, but that amount represents a 24% rate of improper payouts. Make no mistake, friends, this is how our hard-earned tax dollars are being used without our consent.

Malcolm Sparrow, a Harvard University expert in healthcare fraud, believes that federal auditors vastly underestimate fraudulently improper payments. Sparrow has said that as much as 20% of federal spending is fraudulent. This means that for each $100 you pay in taxes, up to $20 could be sent to support something without authorization.

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