Decreasing Improper Payments in a Complex Federal Program

Since the early 2000s, the U.S. federal government has placed increasing focus on combating improper payments. Implementing policies to control improper payments is no easy task. Federal programs are often large, complex, riddled with moral hazard concerns, and jointly implemented. In 2011, the U.S. Department of Labor adopted a national strategy to combat improper payments in the Unemployment Insurance program. This article examines the effect that the Department of Labor's strategic initiative had on lowering states' improper payments. Findings show that two of its toolsmandatory cross matching of employment records between the National Directory of New Hires and State Directories of New Hires and a communication strategy known as messagingplayed a statistically significant role in halting the rise of improperly paid unemployment insurance claims. These results suggest that information technology tools and increased communication among stakeholders can be effective in lowering improper payments and improving government performance.