IBM Center for The Business of Government

Federal agencies make more than $2 trillion in payments to individuals and a variety of other entities each year. Disbursing these payments expose agencies to many risks. One such risk is making what is known as improper payments. Improper payments can take many forms:  incorrect amounts paid to eligible recipients; payments made to ineligible recipients; payments for goods or services not received; duplicate payments; and payments with insufficient or no documentation.

But little seems to happen.  There have been dozens of studies and reports over the past three decades.  However, there has not been a major overhaul since 1978, and many piecemeal legislative efforts, such as performance pay and streamlining the classification system, have been derailed.  So pragmatically, what can be done in the near-term, without a major legislative effort? 

Cognitive Category Management (CCM) has the potential to drive $340 billion in value for the federal government. Category Management has been a proven capability for leading commercial companies to unlock significant ongoing savings. However, the complexity and autonomy of federal agencies present challenges that have limited the federal government from taking advantage of these proven practices. Recent advances in cognitive tools and digital services help bridge these challenges by offering insights into unstructured data and simplifying the process for government.

The Government Accountability Office study went on to note: “Agencies reported 3,427 IT staff employed just to maintain legacy-programming languages, such as COBOL (1,085) and Fortran (613).”  In addition, the Office of Management and Budget recently observed that “43 percent of federal IT projects are reported to be over budget or behind schedule.”