Obama tackles payment blunders

4 December 2009

4 December 2009 | Jake Kanter

US president Barack Obama has ordered all public bodies to root out supplier “payment errors” to cut waste from spending projects.

Departments – and potentially individuals – who continue to make mistakes look set to be named and shamed.

In an executive order last month, Obama said the government must make every effort to confirm the “right recipient is receiving the right payment for the right reason at the right time”.

He hopes this will reduce mistakes, waste, fraud and abuse on major spending programmes.

As part of the order, the Office of Management and Budget (OMB) – the department that oversees public procurement – will identify projects where the most “improper payments” occur and set targets to reduce them.

Government agencies will report to the OMB on how they uncovered and measured problems with settling invoices, as well as how they plan to deal with the issue.

Within the next six months, the Department of the Treasury will publish information about payment errors online. These details are likely to include names of accountable officials, the value of invoice mistakes and targets for cutting errors.

The Federal Acquisition Regulatory Council and the National Procurement Fraud Task Force will also work with the OMB to ensure suppliers accountable for improper payments are punished.

For failing to disclose evidence of known overpayments on government contracts, vendors could face debarment, penalties and suspension. 


• Last month, Dan Gordon was confirmed by the US Senate as the administrator for federal procurement policy at the OMB. As the government’s most senior buyer, he will lead an overhaul of public procurement, which will include boosting skills.  

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