Stopping Payments to the Dead

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In today’s world of fiscal uncertainty, it’s not hard to find a story in the news where an elected official talks about dysfunctional government, increasing taxes or budget cuts. As the saying goes, it seems the only things we can really count on in this world are death and taxes. Ronald Reagan once suggested a caveat – that a government program is the closest thing to eternal life on earth. According to an article in Government Executive, he may have been right.

A recent Government Accountability Office (GAO) report states that the U.S. Department of Agriculture (USDA) continued to pay out $36 million in subsidies to more than 6,300 deceased beneficiaries over a period of four years. Three agencies under the USDA were examined for their ability to properly identify deceased farmers, and subsequently prevent improper payments. While no one wants to see any improper payments, the findings had a silver lining? the Farm Service Agency (FSA), which administers various programs that help support farm incomes and provide disaster assistance, has a procedure to analyze program participants against the Social Security Administration’s Death Master File. This has enabled the organization to recover $1 million from nearly 1,800 people who improperly received $3.3 million after their date of death. (Excellent? Way to use public records to resolve identities and find potential fraudsters.)

Some other agencies within USDA that improperly paid the deceased do not use public records to confirm the death of benefit recipients. Perhaps that will change in the near future. GAO recommended that USDA agencies improve their ability to analyze program participant data so that improper payments to the deceased can be prevented.

The USDA spends $20 billion each year to support one million program participants with income assistance, crop insurance and disaster relief. If the agency is not notified when farmers die or agencies are unable to accurately identify deceased farmers, benefits continue to be paid – unless the identity is resolved and it is determined the identity is deceased. This is exactly the scenario where public records and data analytics can help solve the problem.

Kudos to the FSA for its efforts. Now, it’s time for the other agencies to follow suit.

Source: Today’s ”Fraud of the Day” is based on an article titled ”USDA Paid $36 Million to a Lot of Dead People,” written by Mark Mitcheli and published in Government Executive on July 31, 2013.

WASHINGTON – The title of the GAO report really says it all: ”USDA Needs to Do More to Prevent Improper Payments to Deceased Individuals.”

That stark pronouncement comes after a recent GAO audit discovered that three USDA agencies had made $36 million in improper payments to 6,336 dead people between 2008 and 2012.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.