Whether an underpayment or overpayment, an improper payment can occur for many reasons. Many people think that it can only occur because of fraud (or intentional misuse of funds) when in fact, improper payments can also occur because of unintentional errors.
It is important that agencies identify, prevent, and resolve improper payments to ensure the efficiency and effectiveness of our taxes. Apart from awareness and vigilance, here are other ways to reduce the occurrence of improper payments.
Assess Risk Factors
Risk assessment is essential when it comes to preventing improper payments. To identify which programs are susceptible, agencies must conduct comprehensive risk assessments that can look onto all quantitative and qualitative risk factors as well as statistical analysis. Risk factors to consider are payment processing methods, program age and complexity, and fund recipients.
Monitor Reviews Regularly
To enhance compliance, agencies can formulate corrective action plans that will leverage the leading practices in reducing improper payments. Through this, agencies can monitor reviews for detecting improper payments and execute a more effective remediation strategy.
Identify and Report on Programs and Results
To determine improper payments, agencies must implement diverse strategies that can aid their respective programs. By testing sampled payments and calculating annual improper payment rates, agencies can identify social security fraud immediately as well as waste and abuse. This gives them a hindsight on forthcoming issues, allowing them to practice the right actions to take when an improper payment occurs.
Evaluate Program Effectiveness
It is a chief financial officer’s job to ensure that all stakeholders and process owners know about the requirements for retaining records that can lead to an improper payment. Apart from correcting deficiencies, CFOs must also evaluate the effectiveness of their controls and programs. CFOs should lead agency-wide efforts like this to prevent or quickly identify improper payments.
Apart from agencies, the Office of Management and Budget should also be at the forefront when it comes to reducing the risks of improper payments. By being fair and vigilant, one can ensure the safety of every citizen’s hard-earned dollars.