Today, as families across the country are filing their taxes, the Obama Administration is launching a new online tool that will enable the Federal government to prevent the waste of taxpayer dollars on improper payments. The Do Not Pay tool will prevent the kind of payment errors that have occurred in government for too long,  such as sending funds out to dead people or entering into contracts with companies who have attempted to defraud the government. In his 2013 Budget, the President put forward a series of proposals that would save taxpayers $102 billion over the next decade by reducing payment errors and improving collection of outstanding debts owed to the government. These included provisions the President has submitted in multiple budgets and yet Congress has still not taken action. In the meantime, the Administration has been hard at work doing what it can without legislation, creating the Do Not Pay portal at the Department of the Treasury. The new tool brings together multiple government databases into one simple check point, and deploys advanced data matching and analytics to identify and stop wasteful errors before they happen.

President Obama said, “The American people expect their public servants to be good stewards of their tax dollars.  That’s why my Administration has made every effort to cut waste, from stopping payments to the deceased to cracking down on fraud.  I urge Congress to join these efforts by passing the reforms I put forward in my budget.”

Acting Director of the Office of Management and Budget Jeffrey Zients said, “As families across the country pay their taxes this week, we are committed to continuing an aggressive campaign to stop misdirected and erroneous payments that represent an unacceptable waste of these tax dollars. With advances in technology and data analytics, we are at a real turning point in this fight and the Do Not Pay tool will allow us to stop more of these payments before they occur.”

From the very beginning of this Administration, the President has made it a top priority to reduce improper payments, a longstanding challenge that occurs when funds go to the wrong person, in the wrong amount, or for the wrong reason.  When the President took office, the government-wide improper payment rate was on the rise, reaching an all-time high of 5.4 percent in 2009.  In response, the President has taken aggressive steps, including issuing two Presidential memoranda (which can be found here and here) on this subject, an Executive Order calling for reducing improper payments, and signing into law the Improper Payments Elimination and Recovery Act of 2010.  Moreover, the President and the Vice President have made improper payments a central focus of the Administration’s Campaign to Cut Waste.

As a result of the Administration’s reform efforts, the government-wide improper payment rate decreased to 4.7 percent last year, a sharp drop from the 2009 error rate of 5.4 percent.  Without such a steep decline in the error rate, the Government would have made an additional $20 billion in improper payments in 2010 and 2011 combined. 

Today, the Administration is also reporting that agencies have already exceeded the goal the President set in 2010 to recapture $2 billion in overpayments to contractors by the end of this fiscal year.  The Administration was able to surpass this goal nearly 6 months ahead of time, due in large part to hundreds of millions of dollars in recoveries from the Medicare Fee-for-Service Recovery Audit Contractor (RAC) program.

To help drive this continued success, OMB is issuing a memorandum today to all agencies directing them to use the new Do Not Pay tool.  Agencies such as the Treasury Department, the Government Printing Office, and the National Archives Records Administration are already using this solution, and others such as the Department of Agriculture, the Department of Veterans Affairs, the Small Business Administration and the Department of Labor will be on board in the coming months.  By the spring of next year, every major government agency will be leveraging the Do Not Pay solution to combat improper payments and cut down on government waste.  In conjunction with other innovative tools such as those pioneered by the Recovery Accountability and Transparency Board under the Recovery Act, the Do Not Pay solution represents critical progress in rooting out waste, fraud and abuse and protecting taxpayer dollars.

Additional information about improper payments is available at PaymentAccuracy.gov.