British money

Perspectives

Improper payment reduction and prevention strategies

Increasing payment accuracy in government transactions

Understanding root causes of improper payments in government agencies and strategies federal leaders can adopt to increase payment accuracy.

Introduction to improper payment reduction

Reducing improper payments is not an easy task. While each agency or program operates under a specific set of circumstances, there are a variety of resources and strategies available to help agencies tackle the improper payments problem.

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Key actions to consider

Engage stakeholders and embrace collaboration across government. When designing solutions, agencies should engage with a broad range of stakeholders and lean on existing entities that address improper payments across government. The Do Not Pay Business Center provides free data analytic services that can complement an agency’s program integrity efforts. Congress also has provided direction for agencies to better understand and prevent improper payments. Collaborating across governmental entities and sharing best practices can help agencies generate ideas for improving program integrity at individual agencies and can provide solutions an agency would not have identified on its own.

Conduct a risk assessment of the payment process from beginning to end. Agencies should look holistically at their payment process—from federal disbursements to the states to the user experience—and implement solutions that address risks throughout the process. Payments may begin at the federal level, but if agency leaders only consider solutions to this portion of the payment process, it will likely be difficult to make meaningful progress. The Unemployment Insurance Integrity Center shows how a state-driven solution can have a large impact on improper payments. New Mexico’s Department of Workforce Solutions illustrates how focusing on the payment process from the claimant’s perspective can increase program integrity. By following the payment process from beginning to end, adopting Government Accountability Office's risk framework, and knowing the causes of the problems, programs will be better positioned to make more considerable progress.

Ensure access to good data. Timely and accurate data is essential to ensuring the right payment goes to the right person. Data also is key to understanding the primary reasons for improper payments and will inform possible solutions. New Mexico successfully used behavioral economics by drawing on data to inform its techniques to ensure more accurate claimant reporting. While agencies often have limited resources, it is important to invest in data analytics to help prevent improper payments and generate savings. Additionally, with resource constraints, agencies can use Do Not Pay to supplement their own work on payment integrity efforts.

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There are a variety of resources and strategies available to help agencies tackle the improper payments problem.

Conclusion

To reduce improper payments in a meaningful way, agencies should go beyond standard solutions. By engaging stakeholders across government, looking at the payment process holistically, and ensuring access to timely and accurate data, agencies can be better positioned to identify and address the root causes of improper payments. This, in turn, can strengthen the case to leadership about why investing in this issue is critical to government effectiveness.

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