Gibber-gabber
Unreconciled Transactions Affecting the Change in Net Position" ???
kristen b 2008-09-29 02:47:41 UTC

Examples of Government Waste – we’d all be fired if caught doing this.

1. The Missing $25 Billion

Buried in the Department of the Treasury’s 2003 Financial Report of the United States Government is a short section titled “Unreconciled Transactions Affecting the Change in Net Position”? which explains that these unreconciled transactions totaled $24.5 billion in 2003
The unreconciled transactions are funds for which auditors cannot account: The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent.

2.Unused Flight Tickets Totaling $100 Million

A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused.³

Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. The department would purchase the ticket directly and then inex­plicably reimburse the employee for the cost of the ticket. (In one case, an employee who allegedly made seven false claims for airline tickets professed not to have noticed that $9,700 was deposited into his/her account). These additional transactions cost taxpayers $8 million.

This $108 million could have purchased seven Blackhawk helicopters, 17 M1 Abrams tanks, or a large supply of additional body armor for U.S. troops in Afghanistan and Iraq.

3. Embezzled Funds at the Department of Agriculture

A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil­lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

4. Credit Card Abuse at the Department of Defense

The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern­ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

5. Medicare Overspending

Medicare wastes more money than any other federal program, yet its strong public support leaves lawmakers hesitant to address program effi­ciencies, which cost taxpayers and Medicare recip­ients billions of dollars annually. Putting it all together, Medicare reform could save taxpayers and program beneficiaries $20 bil­lion to $30 billion annually without reducing ben­efits. That would be enough to fund a $3,000 refundable health care tax credit for nearly 10 mil­lion uninsured low-income households.

6. Funding Fictitious Colleges and Students

n 2002, the Department of Education received an application to certify the student loan participa­tion of the Y’Hica Institute in London, England. After approving the certification, the department received and approved student loan applications from three Y’Hica students and disbursed $55,000.

The Education Department administrators over­looked one problem: Neither the Y’Hica Institute nor the three students who received the $55,000 existed. The fictitious college and students were created (on paper) by congressional investigators to test the Department of Education’s verification pro­cedures. All of the documents were faked, right down to naming one of the fictional loan student applicants “Susan M. Collins,�? after the Senator requesting the investigation.¹²

Such carelessness helps to explain why federal student loan programs routinely receive poor man­agement reviews from government auditors. At last count, $21.8 billion worth of student loans are in default, and too many cases of fraud are left undetec­ted.¹³ Tracking students across federal programs, verifying loan application data with IRS income data, and implementing controls to prevent the dis­bursement of loans to fraudulent applicants could save taxpayers billions of dollars.

7. Manipulating Data to Encourage Spending

The Army Corps of Engineers spends $5 billion annually constructing dams and other water projects. Yet, in a massive conflict of interest, it is also charged with evaluating the science and eco­nomics of each proposed water project. The Corps’ “strategic vision�? calls on managers to increase their budgets as rapidly as possible, which requires approving as many proposed projects as possible.¹⁴ Consequently, the Corps has repeatedly been accused of deliberately manipulating its economic studies to justify unworthy projects.

8. State Abuse of Medicaid Funding Formulas

Significant waste, fraud, and abuse pervade Medicaid, which provides health services to 44 million low-income Americans. While states run their own Medicaid programs, the federal govern­ment reimburses an average of 57 percent of each state’s costs.

This system gives states an incentive to overre­port their Medicaid expenditures in order to receive larger federal reimbursements. Not sur­prisingly, the GAO has identified state schemes that shift money between state accounts to create an illusion of higher Medicaid expenditures. Simi­larly, some states have spent their federal Medicaid dollars on non-Medicaid purposes. Tight state budgets like those experienced by most states today have increased the pressure to use such deceptive tactics.

9. Earned Income Tax Credit Overpayments

The earned income tax credit (EITC) provides $31 billion in refundable tax credits to 19 million low-income families. The IRS estimates that $8.5 billion to $9.9 billion of this amount—nearly one-third—is wasted in overpayments.

The complexity of the EITC law leads to many of these mistakes. Calculating the credits is more complex than calculating regular income taxes. While the credit amount depends on the number of children in a household, the tax code does not clearly define how a child qualifies for the credit. In addition, fraud and underreporting of income are common, and the IRS lacks the resources to verify the qualifications of all EITC claimants.