Dead federal retirees paid $120 million yearly, report says

In the last five years, the Office of Personnel Management has made more than $601 million in payments to dead federal retirees, according to the agency's inspector general. Total annual payouts range between $100 million and $150 million.

Inspector General Patrick E. McFarland, who previously reported on the improper payments in 2005 and 2008, urged OPM to more closely track such mistakes.

“It is time to stop, once and for all, this waste of taxpayer money,” he wrote in the report.

Improper payments to dead retirees are up 70 percent in the last five years, far higher than the 19 percent climb in total annuity payments, the report said.

The payments are on the rise because OPM is doing a poor job of tracking potential cheats, McFarland said. In one dramatic case, a deceased annuitant’s son continued receiving federal benefits until 2008 — 37 years after his father’s death. OPM learned of the improper payments — which exceeded $515,000 — only after the son also died. The agency never recovered the payments.

An OPM spokesman said Thursday that the agency is reviewing the report and had no immediate comment.

The report, published Sept. 14, said OPM is attempting to stop and recoup payments in several ways, by conducting weekly and annual matches of its data against the Social Security Administration’s death records and occasionally checking records for retirees 90 years and older to determine whether they are still alive.

McFarland called those checks “only partial remedies at best.”

Overall, the federal government's improper payments totaled about $125 billion in fiscal 2010 — a $15 billion year-to-year increase due to a growing number of unemployment insurance and Medicaid payments. Despite the jump, federal agencies also recovered about $687 million mistakenly paid to delinquent government contractors and beneficiaries.

Last October, an investigation by the office of Sen. Tom Coburn (R-Okla.) concluded that the federal government had paid nearly $1 billion to at least 250,000 dead people since 2000. That same month, a watchdog reported that the Obama administration's economic stimulus program had made 89,000 payments of $250 each to dead or incarcerated people.

In an effort to curb the payments, President Obama has ordered a reduction in the use of no-bid contracts and the development of a government-wide "do not pay" database. The White House is also forcing Cabinet secretaries to trim operational costs and on Wednesday ordered agencies to trim costs associated with conferences and off-site meetings.

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