The federal government has little idea just how many of our hard-earned tax dollars it pays for bills we don’t owe. In fact, taxpayers lost nearly $21 billion in 1999 through improper government payments, according to a new report.

The General Accounting Office (GAO), the non-partisan arm of Congress, found that 12 federal agencies wasted $20.7 billion last year in improper payments.

The GAO cited, among other egregious examples, payments to provide federal benefits to dead people and to make duplicate payments to contractors.

In 1998 alone, there were $19.1 billion in improper payments of this type, according to the GAO.

In fiscal year 1999, improper payments accounted for 1.2 % of the federal government’s $1.7 trillion budget, according to the Office of Management and Budget (OMB).

Figures could be even higher, but most agencies do not have systems to determine how much money is being improperly paid. Agencies aren’t required to identify improper payments.

Nearly 75% of the improper payments in 1999 were in one program-Medicare. The program doled out $14.1 billion improperly, which was a $1.5 billion increase in improper payments from the previous year.

Besides Medicare overpayments, improper amounts paid included $1.3 billion for food stamps, $1.6 billion in supplemental security income, $1.3 billion for old age and survivors insurance, $1.1 billion for disability insurance, and $935 million in housing subsidies. The rest was spread among other programs.

Many agencies, including the Departments of State, Defense, Justice and Energy admitted overpayments but didn’t specify amounts of money wasted. An IRS draft audit indicates that agency’s overpayments could total billions of dollars, the GAO said.

Senator Fred Thompson (R-TN) is sponsoring a bill (S. 3030) that would require federal agencies to use a technique called “recovery auditing” that would identify improper payments or errors. Similar legislation (H.R. 1827) introduced by Rep. Dan Burton (R-IN) already passed the House.

Federal agencies need to do a better job of managing their programs to detect improper payments and stop them.

The first step in addressing improper payments is recognizing the problem. An agency can’t reduce its improper payments if it doesn’t even acknowledge making them. Then, and only then, can the overpayment problem be fixed.