Pentagon May Be Wasting a Billion Dollars a Year in Erroneous Payments to Contractors

http://truth-out.org/news/item/16850-pentagon-may-be-wasting-a-billion-dollars-a-year-in-erroneous-payments-to-contractors



Pentagon May Be Wasting a Billion Dollars a Year in Erroneous Payments to Contractors
Saturday, 08 June 2013 10:53
By Richard H.P. Sia, The Center for Public Integrity | Report

The Pentagon has been paying hundreds of millions of tax dollars a year to people and companies that don’t deserve it, but its financial management shortcomings are so severe that it’s made little progress in halting the errors or even measuring their magnitude, according to a report released by a Senate committee Thursday.

Although the Defense Department reported making over $1.1 billion in overpayments in fiscal year 2011 to military personnel and retirees, civilian defense workers, contractors, and others, investigators from the Government Accountability Office said that figure is not credible due to missing invoices and other flawed paperwork, as well as errors in arithmetic.

The Pentagon is required by law to ferret out programs susceptible to significant payment errors and then use statistical sampling to estimate the size of those errors, so that Congress can determine the size of the problem. But GAO found defense finance officials didn't have procedures in place to collect and maintain the data they need to come up with a credible estimate.

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The Pentagon’s payment system is so weak that sometimes it doesn’t pay what’s owed. By its own estimate, for example, the Pentagon made $238.2 million in overpayments and $48.4 million in underpayments related to travel alone during fiscal 2011, for a total of $286.6 million in incorrect payments.