Key Takeaways
- The Environmental Protection Agency (EPA), Department of Defense (DOD), and Office of Personnel Management (OPM) violated federal law by reporting inaccurate estimates of improper payments.
- Improper payments, which include money sent to the wrong person, in the wrong amount, or for the wrong reason, cost the government $161.5 billion in 2024 alone.
- Over the past four years, improper payments have totaled nearly $1 trillion.
- Federal auditors found that these agencies failed to meet transparency requirements, making it hard to track where taxpayer money is going.
The Problem with Improper Payments
Every year, the federal government loses billions of dollars due to improper payments. These mistakes happen when agencies send money to the wrong person, pay the wrong amount, or fund the wrong program. In 2024, this error cost taxpayers $161.5 billion. Over the past four years, the total loss is nearly $1 trillion.
What’s even worse? Some agencies, like the EPA, DOD, and OPM, are breaking the law by failing to report these mistakes accurately. Federal audits revealed that these agencies either understated or miscalculated their improper payments, making it harder to hold them accountable.
The Department of Defense: A History of Unreliable Estimates
The DOD is one of the biggest offenders. Its inspector general has called the agency’s improper payment estimates “unreliable” for 14 years in a row. Last year, the DOD reported $1.1 billion in improper payments for some of its salary and travel expenses. However, auditors say this figure is not trustworthy.
The problem doesn’t stop there. Some DOD programs don’t even have to report their improper payments because they’re considered “low risk.” But auditors discovered that the Navy’s travel pay department had improper payments exceeding $100 million or 1.5% of total spending. By law, this should have required the Navy to report its mistakes, but it didn’t.
OPM’s Underestimated Payments
The Office of Personnel Management (OPM) also failed to meet transparency standards. In 2024, the OPM made $593 million in improper payments. However, this number is likely an underestimate.
One of the OPM’s largest programs, the Federal Employees Health Benefits (FEHB), didn’t report its improper payments for 2023 or 2024. The program claims it’s “on track” to finally publish its estimates in 2025, but until then, taxpayers are left in the dark.
EPA’s Missing Millions
The Environmental Protection Agency (EPA) reported that only 0.8% of its grant payments were improper. But auditors found a major flaw in this claim: the EPA forgot to include $222 million worth of grants in its calculations.
To make matters worse, the EPA didn’t keep any records to explain how it arrived at its estimate. This lack of documentation means auditors “could not determine whether the published estimate is valid.” Without proper records, it’s impossible to know how much the EPA truly lost due to improper payments.
Why This Matters
Improper payments are a symptom of a larger problem: a lack of accountability in government spending. If agencies can’t accurately track where taxpayer money is going, how can they be trusted to manage it effectively?
The Payment Integrity Information Act was created to ensure transparency and accountability. But when agencies like the EPA, DOD, and OPM fail to follow the law, it undermines the entire system. Taxpayers deserve better.
A Pattern of Negligence
The issue of improper payments isn’t new. Year after year, federal agencies lose billions of dollars to mistakes. What’s even more disturbing is that some agencies areSerial offenders when it comes to misreporting these errors.
For instance, the DOD’s improper payment estimates have been unreliable for 14 straight years. This suggests a systemic problem within the department. Until these agencies take transparency seriously, taxpayers will continue to foot the bill for their mistakes.
What Can Be Done?
The first step toward solving this problem is accurate reporting. Agencies must be held to higher standards when it comes to tracking and disclosing improper payments.
Transparency is key. If agencies are honest about their mistakes, lawmakers and taxpayers can demand better accountability. Until then, the cycle of waste and mismanagement will continue.
The Bigger Picture
Improper payments are just one piece of the puzzle when it comes to government waste. The real question is: how can we trust the government to manage trillions of dollars in taxpayer money if it can’t even get the basics right?
The answer lies in transparency, accountability, and better oversight. Until then, billions of dollars will continue to disappear due to errors, inefficiencies, and a lack of proper tracking.
Taxpayers deserve better. It’s time for the government to take payment integrity seriously.
Explore government spending in detail at OpenTheBooks.com, the world’s largest database of federal, state, and local government salaries and vendor payments.