In a world of tight budgets and pushes for continued fiscal austerity, it makes sense to take a look at an area that if solved could save the federal government over $100 billion annually – improper payments.
In the year 2012 the government reported 4.35 percent of all payments being made as being improper. This totaled an estimate of $108-billion before the year 2012. This is representative of 18 agencies and 75 different programs all reporting their improper payments.
What’s the Big Idea?
According to the federal government, “improper payments” occur when:
• Funds go to the wrong recipient
• The right recipient receives the incorrect amount of funds (including over payments and underpayments) documentation is not available to support a payment
• The recipient uses funds in an improper manner
Advanced analytic are becoming a very necessary tool in the fighting of improper payments. The use of advanced analytic being able to analyze an organization’s data, to be able to understand where trends and fraud, waste and abused areas are occurring, to be able to get down to a root cause is done exactly through the use of advanced analytic.
Why Does it Matter?
Those agencies who are addressing improper payment with the use of advanced analytic will have a competitive advantage over other agencies in that they will be able to keep their funds within their own agencies. They will be able to apply those funds in a meaningful way and be able to meet mandates and requirements that are coming down from OMB. Those agencies who are applying advanced analytic will be able to fight the increasing level of fraud and sophistication that is occurring in government today in a meaningful way.
Does it Really Work?
The Social Security Administration has been recently touting that 10 percent of all Social Security Administration payments are being made to incorrect recipients due to ineligibility reasons. They are tackling the improper payment issue by applying a data-centric life cycle approach and being able to understand the flow of their data and being able to determine the eligibility of their candidates so that the payments that are made are going to those that are indeed supposed to be receiving those.
Several agencies including the U.S. Department of Agriculture is applying this to one of their programs and within a eight week period was able to receive data files and then be able to determine over $5-million of improper payments.
Link : http://www.crmsoftwares.org/2013/08/applying-analytics-to-tackle-improper.html