Reducing Improper Payments

1. Reducing Improper Payments UI Integrity Conference April 20th, 2010

2. Agenda • Introduction of the Executive Order • Components of the Executive Order • Stakeholder roles and responsibilities • Executive Order milestones • Guidance • Guidance overview • Major questions addressed in guidance • Sections that states may be interested in • Work Groups • Description of work groups and issue areas • Role of states and state agencies • Next Steps • Questions and resources

3. Collaboration • Strengthening partnerships between Federal, State, and local governments and agencies. • Partner4Solutions.gov has been established to gather best practices to improve program integrity.

4. Improper Payments Overview Landscape Statistics FY 2009 improper payments are approximately ~$100 billion Represent ~$30 billion increase versus FY 2008, driven primarily by more stringent measurement and increased expenditures Approximately 90% of the errors are in 12 of the 72 programs measured (6 agencies) The Medicare, Medicaid, EITC and Unemployment Insurance programs each have over $10 billion in improper payments Payment errors have been steadily increasing since 2004 when Federal agencies first began measuring and reporting payment errors. The increase is the result of: • More programs measuring error • More thorough measurement methodologies • Increases in total Federal outlays The President issued Executive Order #13520, Reducing Improper Payments on November 20, 2009.

5. Components of the Executive Order Incentives for Compliance Transparency Agency Accountability Accountable Senate-confirmed appointees for high-priority programs Inspector generals review: Error payments over certain thresh-hold amounts Measurement plans and reduction targets Agency forensic auditing pursued Required sharing of eligibility information among programs and agencies Quarterly reporting of high-dollar improper payments • Financial incentives for States to build better systems to identify and reduce errors • State audits to focus on error reduction versus compliance • Contractors charged damages for improperly invoicing the government • “High-priority” programs designated (programs with largest amount of error) • More frequent measurement and reporting • Improper payment dashboard • High dollar errors/fraud • Assessment of performance versus planned targets • Publicly available • Central website for reporting waste, fraud, and abuse

6. Stakeholders

7. Executive Order Milestones • Establish working groups • Issue government-wide guidance to agencies • Establish annual or semi-annual reduction targets • Publish dashboard • Submit recommendations on: • Improving measurements • Strengthening internal control measures • Improving information sharing • Enhancing contractor accountability • Shifting focus of single audits to improper payments • Improving incentives and accountability • Agency submits first quarterly report on high-dollar improper payments • Agency provides IG with report on error methodology and plans for meeting targets

8. Guidance Overview • OMB issued implementing guidance for Executive Order 13520 - March 22, 2010 • The guidance is: • Drafted in a “Question and Answer” format • Separated into several sections: • General questions • Improper payments reporting • Reporting deliverables

9. Major Questions Addressed in Guidance Although many questions are addressed in the guidance, the highlights include instructions on: • Specifying responsibilities for agency accountable officials; • Determining the programs subject to the EO (i.e., high-priority programs); • Defining supplemental measures and targets for high-priority programs; • Establishing reporting requirements under the EO; and • Establishing procedures to identify entities with outstanding improper payments.

10. Guidance Sections of Interest to State UI Officials • A few sections that may interest State UI community include: • Measures of access requirements; • More frequent “supplemental measures”; and • Posting additional information on the web.

11. Work Groups

12. Work Group Collaboration • Interagency work groups: • Being lead by agency representatives; • Sharing best practices from different agencies and programs; and • Bridging “silos” • State involvement in several work groups, including: • Measuring program access; • Improving data sharing; • Single audit requirements; and • Incentives for state and local governments

13. Next Steps • 5/19 Work groups to issue recommendations • 5/19 Website launch • Which recommendations will be pursued? • Payment Recapture Audits

14. Questions and Resources • Joe Pika: jpika@omb.eop.gov or 202-395-1040 • OMB’s improper payments website with EO, guidance, and other materials: http://www.whitehouse.gov/omb/financial_fia_improper/