Under IPIA, an improper payment is defined as a payment that should not have been made or that was made in an incorrect amount, including both overpayments and underpayments. This definition includes payments made to ineligible recipients, duplicate payments, payments for a good or service not received, and payments that do not account for applicable discounts. The data reported between FY2004—the first year of improper payments reporting—and FY2009 showed that a small subset of programs accounted for 85% to 96% of the government's total improper payments each year. In November 2009, President Barack Obama signed Executive Order (E.O.) 13520, which required the Director of the Office of Management and Budget (OMB) to work with agencies to identify "high-priority" programs (those which account for the "highest dollar value or majority of improper payments" across the government), establish annual targets for reducing improper payments under high-priority programs, and submit a report to the agency's inspector general that detailed how the agency planned to meet those targets. The executive order also required agencies to publish data on improper payments estimates and targets for the high-priority programs they administer. Under the revised circular, a program is deemed high-priority if it has
reported more than $750 million in improper payments in the most recent fiscal year; not reported an improper payments amount for the most recent fiscal year, but has reported more than $750 million in improper payments in a previous fiscal year; or not yet reported on improper payments for the program as a whole, but has determined that the total amount of improper payments for program components that have been measured exceeds $750 million. Trends in Total Improper Payments

Under IPIA, as amended, agencies are required to identify programs susceptible to significant improper payments, estimate the amount of improper payments issued under those programs, and notify Congress of the steps being taken to address the root causes of the improper payments. Table 2 identifies the amount of improper payments issued by each of these high-priority programs from FY2004 through FY2017. The data in Table 2 show that 20 high-priority programs issued more than $1.2 trillion in improper payments since FY2004. As the data in Table 4 show, the results have been mixed. While some high-priority programs have seen a steady decline in their improper payments error rates, others have shown little or no improvement—and some have seen their error rates increase over time. Specifically, the error rates for seven programs have increased since they first began reporting data, and the error rate for one program has remained unchanged.
The Improper Payments Information Act (IPIA) of 2002 defines improper payments as payments that should not have been made or that were made in an incorrect amount, including both overpayments and underpayments. This definition includes payments made to ineligible recipients, duplicate payments, payments for a good or service not received, and payments that do not account for applicable discounts. Since FY2004, federal agencies have been required to report on the amount of improper payments they issue each year and take steps to address the root causes of the problem. The data show a significant increase in improper payments from FY2007 ($42 billion) to FY2010 ($121 billion), followed by a slight decrease through FY2013 ($106 billion), another increase through FY2016 ($144 billion), and a slight decrease in FY2017 ($141 billion). The data also show that a small subset of programs has accounted for 85% to 98% of the government's total improper payments each year. With this in mind, President Barack Obama signed Executive Order (E.O.) 13520 in 2009, which requires agencies to take additional measures to reduce the amount of improper payments associated with these "high-priority" programs. Notably, the executive order requires agencies to identify high-priority programs, develop detailed plans for reducing related improper payments, and establish annual goals against which progress could be measured. Agencies have identified 20 high-priority programs, all but one of which have been reporting data for several years. The data on high-priority programs present mixed results. Nine high-priority programs have showed improvement over time, as indicated by decreasing error rates, while three others have reported no improvement in their error rates. The error rates for the eight remaining high-priority programs have increased since they were first reported. Without further progress in reducing the error rates among high-priority programs the government's total amount of improper payments may continue to exceed $100 billion per fiscal year, as it has since FY2009. Over the period of FY2004 through FY2017, high-priority improper payments have totaled $1.2 trillion and total improper payments have totaled $1.3 trillion.