Today, in his remarks in St. Charles, Missouri, President Obama announced his support for the Improper Payments Elimination and Recovery Act (IPERA). This bipartisan legislation was first introduced in 2008 by Democratic Congressman Patrick Murphy (D-PA, 8th District) and Republican Congressman Brian Bilbray (R-CA, 50th District).
President Obama is supporting Murphy and Bilbray's bipartisan legislation because it will reduce waste, fraud, and abuse resulting from lack of oversight on the part of federal agencies. The bill would reduce the estimated $98 billion in improper payments- those that occur when a federal agency pays too much or pays twice for a product or service. Improper payments may occur as a result of fraud, or from poor financial management systems that don't detect mistakes before federal dollars are misspent. According to the Office of Management and Budget (OMB), an estimated $98 billion in improper payments have been made by federal agencies in FY 2009.
"I'm heartened to see that President Obama has endorsed this critical legislation- at a time when Pennsylvania families are watching our expenses, Americans expect government to do the same," said Rep. Patrick Murphy. "There is simply no excuse to lose billions of taxpayer dollars to improper payments every year- the savings from this bipartisan bill should be redirected to middle class tax cuts."
"The federal government must be fiscally responsible, poor economy or not," said Congressman Bilbray. "American taxpayers have every right to expect fiscal responsibility, and this bipartisan legislation, the Improper Payments Elimination and Recovery Act, H.R. 3933, will give them some peace of mind that the government is not wasting their money by overpaying on federal contracts."
Additionally, the legislation has been endorsed by the National Taxpayers Union (NTU) and the Council for Citizens Against Government Waste (CCAGW). In their endorsement, NTU and CCAGW stated that it is "imperative that we do everything we can to prevent further waste in order to ensure that funds are being distributed to those who need them the most." Both groups recognized that the "bipartisan legislation would help to facilitate this process by lowering the improper payment threshold for agencies, requiring agencies to develop action plans to avoid future waste, and financially penalizing agencies that fail to meet accounting and recovery benchmarks," urging Members of Congress to support this "pro-taxpayer position".
The IPERA Act would help identify, reduce and eliminate improper payments, as well as recover lost funds that federal agencies have improperly disbursed. Specifically, this legislation would:
* Improve Transparency
This bill would lower the reporting threshold so Congress and the general public have a better picture of the problem we face. Currently, OMB has set the reporting threshold for improper payments very high, meaning millions of dollars in erroneous payments go unreported -- and potentially unaddressed -- each year;
* Prevent Improper Payments
The bill would help prevent improper payments from happening in the first place by requiring federal agencies report on their corrective action plans and the improper payment reduction targets they are using to address their payment error problems;
* Recover Overpayments
Under current law, agencies are only required to seek to recover overpayments they make if they hand out more than $500 million in payments to contractors each year. IPERA would expand the use of recovery auditing by requiring that all agencies with outlays of more than $1 million perform recovery audits on their programs and activities; and,
* Hold Agencies Accountable
IPERA would require that agencies hold top managers accountable for their progress, or lack of progress, in addressing their improper payment problems.