A few billion here, a few billion there, and as the old adage goes, soon we're talking about real money. FOX Business is out with a startling story based on a Government Accountability Office (GAO) report on yet another reason why the federal government is good at only one thing, spending money, and in this case billions they shouldn't be spending.
The GAO reports that the Department of Energy (DOE) alone has spent $6.8 Billion on benefits in the last ten years, mostly for independent contractors. Nine out of every 10 dollars at DOE goes to contracts. The problem is contractors are not employees, meaning the DOE, and by extension taxpayers, should not be covering benefit costs. At least that's how it works in the real world.
"DOE bears the responsibility, according to its contracts, for reimbursing contractors for retiree benefits for an estimated 200,000 people, including 100,000 current and former contractor employees, and 100,000 beneficiaries of those employees, such as spouses.
Taxpayer costs for federal contractors’ retiree benefits at the DOE has been volatile. They ranged from as little as $43 million in 2001 to as high as three quarters of a billion dollars in 2009, the GAO says.
…At the same time, federal refunds for contractors’ health care benefits grew by 10%, to $389 million.
It gets worse in that the contractor picks their own plan, one of 50 the DOE covers, and the DOE is responsible for paying those costs. And to add insult to injury it's more than possible that DOE is double paying benefits already covered by large defense contractors like Lockheed who provide the contractors to DOE. From the FOX Business story:
Also, no one in government is tracking whether taxpayers are double-covering retiree costs for workers employed at big companies that already cover them, like Boeing or Lockheed Martin. Moreover, the GAO says in a new report the DOE has to set aside "significantly" more funds for these costs "since the economic downturn."
Looks like reducing fraud in government could actually result in billions in savings after all. It is information like this that gives people reason to believe the government really thinks it can operate in its own universe, unbridled by common sense and regular business practices.
The scariest part is other government agencies could have similar problems, but no one has found out. Stories like this, which slipped under the radar since the GAO report was released in April 2011, highlight the need for more citizen journalists. Mainstream media just doesn't have the manpower anymore with their drastically slashed budgets and reduced personnel to keep up with every report produced by government, meaning they sometimes will miss big stories like this one.