Strategies for Reducing and Eliminating Improper Payments


Strategies for Reducing and Eliminating Improper Payments

Monday, May 9th, 2011 - 17:27
Monday, May 9, 2011 - 17:22
We are asking our Government to do “more with less” or at best to do “more with no more.” Yet, over the past few years, the Federal government has lost billions of dollars to improper payments. Public-private partnerships are finding and eliminating these improper payments, and could be expanded across the government. Our guest blogger today is Doug Ichiuji, senior vice president of U.S. Bank, who knows how it is done.

In Fiscal Year (FY) 2009, the Government Accountability Office estimates that the government lost close to $110 Billion. In FY 2010, the Office of Management and Budget reports agencies losing $125 Billion. Though staggering, these numbers may not reflect actual taxpayer dollars lost. For example, a payment made before it was due or with an incorrect amount is considered an improper payment. That said, a significant portion of improper payments are in fact payments that should never have been made, (e.g., fraudulent Medicare claims)…and these are taxpayer dollars. Whether improper or erroneous, any payment made by the Federal government should be accounted for and be validated, auditable and transparent.

In April 2010, President Obama issued a memorandum to Federal agencies directing them to reduce improper payments by $20 Billion a year. In July 2010, this directive was reinforced when he signed the Improper Payments Elimination Act.

Private industry and the Federal government have benefitted from private-public partnerships. I have personally witnessed many successes during my years working in both the public and private sectors. The government continues to challenge industry to offer best practices and develop products that make government “Work Better and Cost Less.” (Anyone remember Vice President Al Gore’s National Performance Review in the 1990’s?)

Some agencies have established best practices that have eliminated labor intensive manual processes and created efficiencies, resulting in millions of taxpayer dollars saved. Such is the case with the Department of Defense (DoD). In the late 1990’s, the DoD collaborated with U.S. Bank to build an electronic invoice presentment and payment product. This product has brought great end to end visibility to their transportation program.

Given the urgency of reducing improper payments looming over the government agencies, and with very limited resources (human and IT), it is again time to look at partnering with private sector. In order for the agencies to meet such challenging goals, they must incorporate processes and products that are commercially available off the shelf and that eliminate improper/erroneous payments before, rather than after, being issued.

It goes without saying that time is of the essence. For every day that passes without a solution in place, $350 million in taxpayer dollars go out the door in the form of improper payments.

Doug IchiujiDoug Ichiuji, Sr. Vice President of Government Services, U.S. Bank

With more than 25 years of progressive management positions in Government and industry, Mr. Douglas Ichiuji leads U.S. Bank's Public Sector Payment Solutions business. Mr. Ichiuji leads a team of professionals across North America dedicated to providing payment products and services to public sector enterprises at all levels. Before joining U.S. Bank, Mr. Ichiuji served as the Director of Government Services for VISA, USA.

As a former executive with the Department of the Treasury, Mr. Ichiuji managed and implemented large, complex financial transaction programs including the IRS Lockbox Network. He directed or supported multi-agency management initiatives, including serving on Vice President Al Gore’s National Performance Review Team. For his work, Mr. Ichiuji received the Treasury “Secretary’s Award.”