President Obama on Thursday called on federal agencies to crack down on improper payments made by the government, signing into law a new measure he said would reduce waste and fraud by $50 billion by 2012.
Improper payments, ranging from wholesale fraud to government checks sent to the wrong person or in the wrong amount, totaled $110 billion in 2009 — the highest amount ever.
“When government doesn’t work like it should, it has a real effect on people’s lives,” said Mr. Obama, noting the wasted money amounts to fewer resources for schools, tax relief or other priorities.
With voters concerned by soaring deficits and the staggering national debt, Mr. Obama billed the measure, which passed both houses of Congress unanimously, as the latest effort by his administration to cut spending. He touted his proposal for a three-year freeze on non-security-related discretionary federal spending, as well as a freeze on White House staff salaries.
The “Improper Payments Elimination and Recovery Act” requires federal agencies to conduct annual risk assessments of programs, expands the types of programs that are subjected to audits, and imposes new penalites and other repercussions on agencies that don’t comply. The bill wouldn’t require agencies to return recovered funds to the federal treasury, allowing them to use the money for other activities.