The federal government can’t even say how much money it wastes each year on improper payments, the comptroller general testified to Congress on Wednesday.
Since 2003 the government has racked up at least $1.2 trillion, the Government Accountability Office estimates — but says agencies are so hindered in their tracking abilities that it’s impossible to know for sure how big the problem really is.
“The federal government really is not able to determine the extent of this problem across the government, or have a reasonable prospect that it’s managing it properly to reduce these improper payments,” Gene Dodaro, the comptroller general, told the Senate Budget Committee.
The Defense Department — the largest part of the discretionary budget — can’t even catalog all of its transactions or provide backing documents to justify a lot of them, Mr. Dodaro said.
“Tell me about the audit of the Department of Defense. Do we have one?” said Sen. Bernard Sanders, Vermont independent and ranking member on the panel.
“Uh, no,” replied Mr. Dodaro.
“Isn’t that a little bit of a problem when you’re dealing with a $600 billion-plus agency?” Mr. Sanders said.
“It’s a very significant issue. It’s one of the main reasons we cannot give an opinion on [the] consolidated financial statements of the federal government,” Mr. Dodaro said.
As Congress and President Trump look for ways to boost spending, they’re hoping to squeeze waste and fraud out of existing programs. But the government’s top watchdogs said that’s easier said than done.
Keith Hall, director of the Congressional Budget Office, said there are opportunities to increase efficiency in government but that to seriously tackle the issue, lawmakers can’t nibble around the edges.
“Improving the efficiency of government is an important objective, but being CBO, I have to mention that given an aging population and rising health care costs, making a significant dent in federal deficits would require broader changes in federal tax or spending policies,” he said.
“To make such changes, lawmakers would have to increase revenues above amounts projected under current law, reduce spending for larger benefit programs such as Social Security [and] Medicare, or combine these approaches,” he said.
And even though watchdogs can guess at the size of improper payments, getting at specific areas is difficult, Mr. Dodaro said.
Some programs don’t report their estimates, and there are also issues with noncompliance, fraud and potentially inaccurate risk assessments, according to a GAO report issued Wednesday.
Eight agencies didn’t report improper payment estimates for 18 “risk-susceptible” programs in 2016, such as the Supplemental Nutrition Assistance Program (SNAP) through the Agriculture Department.
The department had gotten the data in previous years, but said it couldn’t validate data from most of the state agencies that administer the program and couldn’t calculate a national error rate, the report said.
“They’re trying to sort through what those quality assurance problems are right now,” Mr. Dodaro said. “I expect that once they do they’ll be able to resume making estimates.”
Meanwhile the Defense Department remains a major challenge, with the Pentagon long resisting compliance with a 1990 law requiring federal agencies to undergo an audit.
Lawmakers have consistently tried to prod the department with deadlines and possible penalties.
A Defense Department inspector general’s report issued last year found that in 2015 alone, the Army and a Defense accounting service didn’t adequately document $6.5 trillion worth of adjustments personnel made trying to balance the books.
Sen. John Kennedy, Louisiana Republican, asked whether the Pentagon was providing information about improper payments, and Mr. Dodaro said GAO doesn’t think the estimates it does provide are accurate.
“In other cases, they’re not making estimates in that regard,” Mr. Dodaro said. “I think they should, and we’ve made recommendations along those lines.”
“That’s extraordinary,” Mr. Kennedy said.