The Risk Management Agency (RMA) estimates and reports improper payment rates for the Federal Crop Insurance Corporation Program. RMA reported that error payment rate improved by more than 50 percent dropping from 5.5 percent in 2014 to 2.20 percent in 2015. By way of comparison, the average error rate government-wide is 4 percent.
Former RMA director, Ken Ackerman, put this low error rate into perspective in a recent article. He noted: “RMA’s eye-catching new 2.2 percent ‘improper payment’ rate for 2015 was no fluke. Rather, it was the product of a long-term commitment and years of work by a wide range of people who deserve credit for sticking to it.”
An improper payment occurs when funds go to the wrong recipient, the right recipient receives the incorrect amount of funds (including overpayments and underpayments), documentation is not available to support a payment, or the recipient uses funds in an improper manner. When improper payments are identified, they must be corrected. For example, if a producer receives an indemnity payment that is too high, the excess must be returned.
The government reporting website states the following:
- “Not all improper payments are fraud (an intentional misuse of funds). The vast majority of improper payments are due to unintentional errors. For example, an error may occur because a program does not have documentation to support a beneficiary’s eligibility for a benefit, or an eligible beneficiary receives a payment that is too high—or too low—due to a data entry mistake. Also, many of the overpayments are payments that may have been proper, but were labeled improper due to a lack of documentation confirming payment accuracy. We believe that if agencies had this documentation, it would show that many of these overpayments were actually proper…”
Read more on the background and issues pertaining to improper payments here, beginning on page 198.
National Crop Insurance Services
8900 Indian Creek Parkway, Suite 600
Overland Park, KS 66210-1567
Phone: 913-685-2767