More than US$98 billion in improper government payments made in U.S.

In all, about 5 percent of spending in federal programs in fiscal year 2009 was improper, according to new details of a government financial report that were released Tuesday. Saying the overall error rate was similar in 2008, officials attributed the US$26 billion jump to some changes in how to define improper spending as well as an increase in overall spending due to the recession.

President Barack Obama is expected to sign an executive order within the next week aimed at cracking down on government waste and fraud, particularly in Medicare and other benefit programs. In the 2009 report, the government officially reported questionable Medicare payments of roughly US$36 billion, but that amount will be revised upward to about US$48 billion next year as the Health and Human Services Department fully converts to a new methodology that imposes stricter documentation requirements.

“We need to protect taxpayer dollars,” Peter Orszag, director of the Office of Management and Budget, told reporters. “Every dollar that goes to the wrong recipient or in the wrong amount is a dollar not available to help an unemployed worker, or to invest in education or key priorities of the administration.”

Under the executive order, every federal agency would have to maintain a Web site that tracks improper payments, error rates and outstanding payments. If an agency doesn't meet targets for reducing error rates for two years in a row, the agency director and responsible official will have to directly report to OMB to explain the delinquency and new actions they will take.

The Obama administration will also seek to impose penalties on government contractors that receive improper payments so they have incentives to return the money, Orszag said.

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