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GAO says Pentagon doesn't know how much it loses to improper payments

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Payments that shouldn't have been made cost the Department of Defense at least $1.1 billion in 2011 and possibly much more, according to a congressional watchdog agency.

The Government Accountability Office found that DOD's "long-standing history of pervasive financial management weaknesses, coupled with problematic sampling methodologies and the lack of adequate supporting documentation, contributed to improper payment estimates that were not reliable."

Things aren't likely to improve any time soon, either, GAO said, because DOD has not fully addressed the causes following 2009 audit, so the Pentagon remains "at risk of continuing to make improper payments and wasting taxpayer funds."

The GAO report was based on a two-year audit of eight major DOD programs. Included in the improper payments GAO found were $30.2 million in "military health benefits" and $286.6 million in "travel pay."

The Pentagon will spend more than $600 billion this year. That compares to approximately $913 billion expected to be spent by the Department of Health and Human Services.

The way DOD kept track of its improper payments was also faulty, GAO said, because using a random sampling method that didn't account for the complexity of the payments, the dollar amounts found were impaired.

Adding to the problems, GAO said DOD lacked a way to "collect and maintain key supporting documentation" necessary to verify the amount of the bad payments.

Finally, despite being required under President Obama's 2010 Improper Payments Elimination and Recovery Act, DOD officials refused to perform a risk assessment for 2011. WIthout such an assessment, the department was unable to identify what caused the bad payments, develop solutions or even figure out how to save money.

Go here for the full report.

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