Fiscal Management

Strategies for Managing Improper Payments: Learning from Public and Private Sector Organizations

This General Accounting Office (GAO) executive guide describes the scope of erroneous payments in the federal government and identifies effective practices that federal agencies can implement to reduce improper payments. Head Start program staff and federal staff can review case illustrations based on the experiences of outside organizations to compare to their own practices. GAO identifies five components of effective internal control: control environment, risk assessment, control activities, information and communication, and monitoring. The executive guide suggests several key elements for successful monitoring of improper payments, including the need to tailor an agency's actions to its specific needs.

Improper payments are a longstanding, widespread, and significant problem in the federal government. This past April, OMB estimated improper payments of about $35 billion annually for major federal benefit programs that made payments in excess of $1.2 trillion annually. Importantly, this estimate does not account for all federal programs and activities. Read the document [PDF, 118KB]