During a House Oversight Committee hearing, Rep. Gary Palmer (R-AL) questioned witnesses about improper federal payments and fraud.
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NewsTranscript
00:00In 2002, Congress passed the Improper Payments Information Act. In 2010, Congress passed
00:07the Improper Payments Elimination and Recovery Act. In 2012, Congress passed two more bills,
00:13the Improper Payments Elimination Recovery Improvement Act and the Improper Payments
00:17Transparency Act. Yet GAO said that the Federal Government is losing between $233 billion
00:26to $521 billion per year. If you just split the difference, that's $377 billion over a
00:3210-year window. That's $3.7 trillion, not counting the interest that we're having to
00:37pay. And in regard to the Inspector Generals, it sounds like we're not going to miss the
00:49Inspector General. I don't mean to be dismissive of that. I have great high regard for the
00:53Inspector Generals, but in terms of actually lowering our improper payment rate, it keeps
01:01going up year after year. How do you explain that? Sorry, I'm looking at the wrong person.
01:09I need to sit up straight so I can see the names.
01:15I think we really need to get back to basics and having internal control in payment processes.
01:24As you noted, there's been numerous amounts of legislation adding on requirements reporting
01:31improper payments, but we really need to get back to the fundamentals of having internal
01:36controls in payment processes, understanding what the root causes are for the improper
01:42payments going out, and focusing on that, requiring agencies to report their plans for
01:49prevention to you and having accountability for having those prevention plans in place.
01:55Isn't the problem, though, the failure to have enforcement in any of these bills? I've
02:04been working on it since I've been in Congress. I believe I might have been the first one
02:08to get the Budget Committee to really take into account improper payments. I've been
02:12working with Mr. Dodaro this whole time on it, and it's not getting better. As a matter
02:19of fact, in fiscal year 2004, there were 16 agencies that reported a total of about $162
02:25billion in improper payments. When you dig down into it, about 54 or 55 percent of the
02:34improper payment problem is administrative error, failure to verify eligibility, and
02:39antiquated data systems.
02:41Which brings me to Mr. Musk. I know there's a lot of consternation about what they're
02:46doing, but literally, he's brought in some computer experts with 21st century technology
02:53and done better oversight of the federal government in the last six weeks than we've done in the
02:57last 40 years. Isn't that one of the biggest problems we have with improper payments? We've
03:04got antiquated data systems. We don't have the 21st century technology we need to do
03:10proper oversight.
03:12Having reliable data is very important. Having accurate, reliable, complete data in the systems
03:18to be able to do those integrity checks is critical, yes.
03:22After we did pass the Improper Payments Elimination Recovery Improvement Act, I know of one outside
03:28company that was brought in that did some analysis of Department of Labor contracts
03:35and found millions of dollars in fraud, overpayments, other monies that should have come back to
03:43the federal government through credits that were not recovered. When this was disclosed,
03:49the Department of Labor at that time basically waved off as disinterested. Isn't that a problem?
03:56The pay and chase model is a problem. Trying to recover the payments after the fact is
04:01much less effective.
04:04What we need to do is focus on stopping it on the front end. That's where we need the
04:10improvements in technology, where we need the investment in technology. This is a huge
04:17issue when you're reporting 16 agencies are accounting for $162 billion, 10-year window
04:25that's $1.6 trillion. We're running a deficit of over $2 trillion every year. If you just
04:33look at the totality of it, $377 billion, that's $3.77 trillion, not counting the interest
04:40we're paying on that money, because every dollar we send out improperly is a borrowed
04:44dollar.
04:45Mr. Chairman, I yield back.