The Obama administration has made reducing improper payments a high priority.
The government’s approach is to prevent improper payments in the first place through forward-looking business activity monitoring, said Alvin Tucker, executive director of the American Society of Military Comptrollers, in an interview with In Depth with Francis Rose. Tucker is the former deputy financial officer at the Defense Department.
Effective prevention requires monitoring a transaction as it “flows through the system” and identifying markers, Tucker said. These markers — such as a duplicate number on an invoice — can signal that a payment needs further investigation, he said.
Technology in financial management has given agencies the ability to analyze statistics and get a big-picture sense of a problem. But Tucker said that the challenge now is to parse out the individual improper payments.
“As we improve our ability to identify markers and to identify processes and systems and technology that will be more forward-looking, I think we’ll improve,” Tucker said. “But right now, I think [agencies] are doing what they can with the resources that they have.”
Financial management has evolved in the years since Tucker first started working for the government. Then, it was a “paper and pencil drill,” he said.
The focus, too, was different, with more attention on appropriations and legislative obligations, he said.
The Chief Financial Officer Act of 1990 changed agencies’ financial management priorities. When first enacted, the legislation was an “act of faith,” Tucker said.
“The government really didn’t have the capability to implement all of the requlations within the act, certainly within the year of implementation,” he said.
The success of the act was its creations of an infrastructure for financial managers in government. The bill created a comptroller position at the Office of Management and Budget, as well as deputy positions for management and budget.
Over the last 20 years, that infrastructure has achieved a “tremendous amount of success in achieving some of the objectives of the act,” Tucker said.