Efficacy of Congressional Oversight

Abstract

Oversight, scholars argue, allows Congress to control the executive agents it empowers to implement law. Yet the tools of oversight are rather limited and debate continues as to how much influence oversight provides. How well can members of Congress motivate bureaucratic performance? To measure the efficacy of oversight, we create a new dataset matching oversight efforts to a bureaucratic deficiency Congress has sought to reduce since the early 2000s: improperly made payments to contractors and clients. We estimate the effect of congressional hearings, one of the most important tools of congressional oversight, as well as correspondence, appropriation committee reports, statutes, and executive action. We find that hearings lead to subsequent declines in improper payments. The magnitude of the effect, however, is small relative to the scope of the problem, suggesting strong limits on the efficacy of oversight. Our findings imply that America’s elected officials struggle to effectively manage implementation of policy.

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Efficacy of Congressional Oversight
PAMELA BAN University of California, San Diego, United States
SETH J. HILL University of California, San Diego, United States
Oversight, scholars argue, allows Congress to control the executive agents it empowers to
implement law. Yet the tools of oversight are rather limited and debate continues as to how
much influence oversight provides. How well can members of Congress motivate bureaucratic
performance? To measure the efficacy of oversight, we create a new dataset matching oversight efforts to a
bureaucratic deficiency Congress has sought to reduce since the early 2000s: improperly made payments to
contractors and clients. We estimate the effect of congressional hearings, one of the most important tools of
congressional oversight, as well as correspondence, appropriation committee reports, statutes, and
executive action. We find that hearings lead to subsequent declines in improper payments. The magnitude
of the effect, however, is small relative to the scope of the problem, suggesting strong limits on the efficacy
of oversight. Our findings imply that America’s elected officials struggle to effectively manage implemen-
tation of policy.
INTRODUCTION
It is easy to see how the commands as well as the questions
of Congress may be evaded, if not directly disobeyed, by the
executive agents. Its Committees may command, but they
cannot superintend the execution of their commands.
(Wilson 1885, 271)
Although Congress possesses the Constitutional
authority to create and fund government oper-
ations, its ability to motivate effective imple-
mentation of law by the executive agencies it empowers
to do so is circumscribed by informational and contrac-
tual challenges. Relative to the executive branch, mem-
bers of Congress have less expertise and less easy access
to policy information, making it difficult to evaluate
bureaucratic performance. Even when members have
sufficient expertise and information to believe an exec-
utive agency is underperforming, civil service protec-
tions and separation of powers make it difficult for the
legislature to direct the actions taken by employees of
the executive branch. Members of Congress may com-
mand, but they cannot superintend execution of those
commands.
A long literature in political science explores the
many ways that legislatures work within these chal-
lenges. While some scholars conclude the legislature
is on balance successful in controlling bureaucratic
behavior and inducing efficient production of public
policy (e.g., Weingast and Moran 1983; McCubbins,
Noll, and Weingast 1987; McCubbins and Schwartz
1984) others suggest the legislature’s influence is likely
weak (e.g., Moe 1987; Wilson 1885). This debate
remains unresolved after decades of research.
Among the tools used to identify and remedy
bureaucratic underperformance, scholars commonly
consider legislative oversight. Oversight hearings, in
particular, have been recognized as a process through
which members of Congress collect information on
bureaucratic efforts, highlight shortcomings, and use
the implied threat of future budgetary or statutory
restrictions to motivate bureaucratic response to con-
gressional goals.
Almost all empirical work in political science mea-
sures the presence of oversight action—when and how
Congress conducts oversight—but stops at the ques-
tion of if oversight works and how much oversight
activity influences agency behavior. We know a
fair amount about when Congress performs oversight,
what happens in oversight hearings, and how the
distribution of oversight authority across committees
affects perceptions of Congress’s effectiveness in
conducting oversight. Yet we know almost nothing
about how effective these efforts are in constraining
and superintending agency behavior—theefficacyof
oversight.
We argue that this hole in our understanding is due to
the inherent difficulty in evaluating the performance of
the federal bureaucracy. Because executive agencies
often produce public goods that, by definition, are
difficult to price through market mechanisms, it is hard
to evaluate how effectively the bureaucracy delivers on
the directives set by congressional statute. For example,
is a cost of $78 million per F-35 strike aircraft
(Government Accountability Office 2022) evidence of
effective or ineffective legislative oversight of the
defense bureaucracy?
Corresponding author: Pamela Ban , Assistant Professor, Depart-
ment of Political Science, University of California, San Diego, United
States, pmban@ucsd.edu
Seth J. Hill , Professor, Department of Political Science, University
of California, San Diego, United States, sjhill@ucsd.edu
Received: September 28, 2023; revised: April 16, 2024; accepted:
October 02, 2024.
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To estimate the effectiveness of congressional over-
sight, one would want measures of the goals of Con-
gress and the output of the bureaucracy on a common
scale, ideally comparable across agencies and over
time. Comparison of the goals of Congress and the
output of the bureaucracy on such a scale would pro-
vide evidence on the magnitude of control. A compa-
rable measure is not an easy task because agencies
implement a range of programs that tackle diverse sets
of issues with varied mandates, constraints, and insti-
tutional settings. Indeed, scholars of the bureaucracy
have suggested that lack of a comparable measure of
agency and program outcomes is one of the chief
obstacles in the study of bureaucratic politics. David
Lewis (2007, 1075) writes, “One major difficulty is that
it is hard to define good performance objectively and in
a manner acceptable to different stakeholders.”One
approach has been to use questions on program per-
formance asked in surveys of federal bureaucrats (e.g.,
Clinton, Lewis, and Selin 2014; Gilmour and Lewis
2006; Lewis 2007), but these measures are limited in
availability across time and might differ in application
or measurement across programs and individual
respondents.
Here, we create a new dataset matching congressional
oversight activity to a plausibly comparable measure of
bureaucratic performance to estimate the efficacy of
congressional oversight. Sincethe early 2000s, Congress
has sought to reduce improper payments made by
bureaucracies to contractors and clients. An improper
payment is “any payment that should not have been
made or that was made in an incorrect amount under
statutory, contractual, administrative, or other legally
applicable requirement”(Paymentaccuracy.gov 2023).
Improper payments are identified by ex post audits of
disbursements to determine propriety—that is, sampling
from the previous year’s payment database and deter-
mining the propriety of each sampled payment. Exam-
ples of improper payments include Medicare coverage
of beneficiary goods (e.g., powered wheelchairs) without
adequate prior authorization, Medicare payments for
services determined in a subsequent audit not medically
necessary, Medicaid payments to providers ineligible
due to suspended or revoked licenses, Internal Revenue
Service tax refunds paid without following required pro-
cedures to review W-2 and other documentation,
Department of Homeland Security bills paid to a con-
tractor for services beyond those authorized by statute,
or Department of Labor unemployment benefits to a
fraudulent recipient.
According to the Government Accountability Office
[GAO] (2023, 15), the main causes of improper pay-
ments are failure to access the information to properly
document and disburse the payment, inability to access,
or nonexistence of, information needed to follow statute,
or lack of documentation from applicants to determine
payment eligibility. These problems mix employee
behavior, accounting systems, information technology,
and contractor or applicant actions (including fraud).
Improper payments are a large bureaucratic defi-
ciency—totaling $247 billion in fiscal year 2022 and
more than $2.4 trillion since 2003—that have been a
recurring target of oversight, executive directives, and
statutes from members of both political parties.
Improper payments can be made by any agency or
program in any fiscal year. Because both improper
payments and agency outlays are measured in dollars,
the fraction of all payments improper (the “improper
payment rate”) provides a plausibly comparable over-
time and cross-agency measure of agency performance.
Unlike many other outputs of the bureaucracy, there is
near-universal agreement on what Congress desires
from the bureaucracy: fewer improper payments.
Members from both political parties have passed five
federal statutes, held scores of hearings, and referred to
improper payments in dozens of appropriation com-
mittee reports.
The improper payment measure allows us to set
aside bureaucratic policies where members of the leg-
islature have different priorities, which complicates
evaluation of legislative control, and instead focus on
a valence issue with objective measures of what would
(and would not) follow from effective control. Congress
wants fewer improper payments and, so, effective leg-
islative control implies lower rates of improper pay-
ments.
We compile new data on the fiscal year rates of
improper payments at the agency and program level
and compare changes in this measure to new measures
of the incidence of oversight on improper payments.
We first examine the effect of congressional hearings, a
keystone of legislative oversight. If oversight is effec-
tive in mitigating agency loss, we should observe that
hearings lead to a decline in improper payment rates. If,
on the other hand, the power of the legislative branch to
motivate action in the executive is weak, we would not
see such a decline. Congress has used oversight hear-
ings in attempts to reduce levels and rates of improper
payments for more than two decades, providing a
unique opportunity to study the influence of congres-
sional oversight on a quantitative and comparable
measure of executive branch effort and output.
We imagine oversight as a two-way informational
exchange between the legislature and the agency. The
bureaucracy has many activities directed by enacted
statutes but does not have the resources to pursue all to
full effort. Executive agencies must make choices about
what to prioritize given finite budgets. Oversight com-
munication allows members of Congress to express
their priorities about allocation of bureaucratic effort.
Our read of hearing transcripts about improper pay-
ments and our interviews with congressional committee
staffers are consistent with this interpretation. Mem-
bers query officials about the actions they are taking
and plan to take to combat improper payments and
about what resources might help them be more effec-
tive. Officials learn about legislative priorities from
member statements and questions. Our research ques-
tion, then, is what consequences these interbranch
exchanges have on bureaucratic performance.
The threat of oversight, of course, exists even when
Congress is not actively holding an oversight hearing.
Absent a specific action of oversight—hearing, corre-
spondence, subpoena, etc.—agencies are still aware that
Pamela Ban and Seth J. Hill
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Congress could execute oversight and then could take
remedial action. We measure here the effect of Con-
gress’s communication of priorities to agencies through
oversight beyond any effect of the general regime of
legislative oversight, that is, the marginal effect of addi-
tional communication of priorities. This view of oversight
as the transmission of directives and priorities from
Congress to agencies echoes the focus of the empirical
oversight literature (e.g., MacDonald and McGrath
2016) and also reflects what legislative committee over-
sight staff reported to us when we interviewed them
about oversight.
Should we expect oversight to motivate action
within the bureaucracy? On the one hand, information
that Congress receives through oversight activities can
be used when Congress decides on program authori-
zations, budgets, or future policy proposals, possibly
inducing agencies to respond to oversight. Scholarship
suggests that other forms of nonstatutory control
influence bureaucratic behavior (Acs 2019;Bolton
2022); oversight activities might similarly spur bureau-
cratic response. On the other hand, simply revealing
information about an agency’s performance does not,
in isolation, require agencies to take action. The effi-
cacy of oversight stems from the public revelation of
agency performance and the implicit threat that Con-
gress, in gaining this information, is watching the
agency and might take future action. This limitation
to oversight may thus narrow its effectiveness in
influencing agency behavior (as argued by, e.g., Wil-
son 1885;Moe1987).
Oversight could even appear to have consequences
opposite the desired effect. Change in agency perfor-
mance may first require additional bureaucratic atten-
tion to the problem and time to implement reforms. If
efficacy of oversight stems from the attention it induces
executive agents to produce, hearings held on improper
payments may lead to a near-term increase in rates as
the targeted agency increases staff time devoted to
improper payments and discovers previously unappre-
ciated errors in its payment portfolio.
We offer two main results. First, we find that con-
gressional hearings do lead to subsequent declines in
improper payments. When a congressional committee
calls a witness from the bureaucracy to testify about
improper payments, on average the rate of improper
payments for that witness’s agency declines in subse-
quent fiscal years.
Second, while there is downward movement in rates
following oversight, the magnitude of these declines is
small relative to the scope of the problem. This is most
clear when looking at the pattern of improper pay-
ments across the entire bureaucratic state, which,
despite decades of hearings and statutory reforms by
Congress (along with attention from the executive),
has shown little improvement. Mean improper pay-
ment rate estimates of programs directed to audit
payments were 4.0% in 2005 and 5.9% in 2021. Con-
gressional statute defines a 1.5% improper payment
rate as “significant”and the Office of Management
and Budget has pointed to a 1% annual decrease in the
improper payment rate of a specific program as a
successful reduction.
1
Our estimates of the average
effect of oversight hearings are an order of a magni-
tude smaller.
An additional result of our analysis is that program
estimates of improper payments appear to increase in
the fiscal year of the oversight hearing. At first glance,
this suggests that oversight has a counterproductive
effect of increasing the problem that Congress sought
to address through oversight. However, our reading of
hearing transcripts suggests that this near-term increase
is likely driven by agency officials increasing efforts to
identify and measure improper payments following the
hearing. This apparent increase in agency loss is more
likely a more accurate measure of the true rate than an
actual increase. Declines in fiscal years beyond the first
support this interpretation.
To account for the possibility that the legislature also
engages in oversight outside of formal hearings (e.g.,
Selin and Moore 2023), we consider other techniques of
oversight. We rule out a possible secondary channel of
oversight, correspondence between individual legisla-
tors and agencies. We find that agency payments are
rarely mentioned in these contacts, which Lowande
(2018) finds to be largely driven by issues that have
direct constituent or district interests. We also place the
effectiveness of oversight hearings into the larger con-
text of other actions taken by Congress and the presi-
dent on improper payments. We evaluate the efficacy
of appropriation committee reports, statutes, and exec-
utive actions on improper payments and find muted
idiosyncratic effects that do not contain the systematic
pattern seen with oversight hearings.
One immediate concern with our design is that wit-
nesses at oversight hearings are not invited to testify at
random. Instead, congressional committees might be
selecting agencies or programs for oversight because of
issues with payment integrity. Although we cannot
entirely rule out this concern, we offer two counterar-
guments. First, we plot prehearing trends in improper
payments and use regressions to try to predict incidence
of hearings. Neither analysis suggests a relationship
between prehearing changes in improper payments
and hearings. Second, agencies count improper pay-
ments in the fiscal year after disbursement, at earliest,
by sampling from the previous year’s accounting data-
base. This means that by the time Congress learns of
rates and holds a hearing, the payment procedures of
the agency might well have changed. The use of ran-
dom samples also induces sampling variability into the
1
The Payment Integrity and Information Act of 2019 defines
improper payments as significant if in the preceding fiscal year they
exceeded either (1) 1.5% of program outlays and $10 million or
(2) $100 million regardless of the improper payment rate. The Office
of Federal Financial Management in the Office of Management and
Budget hailed the Unemployment Insurance Program’s 1% reduc-
tion in improper payments between fiscal years 2014 and 2015 as a
“success story”in a September 22, 2016 congressional hearing on
improper payments (Committee on Oversight and Accountability
2016). It seems likely that successful declines depend upon specifics
of programs such as their initial improper payment rate and the dollar
magnitude of outlays.
Efficacy of Congressional Oversight
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process, further limiting tight endogeneity. To our read,
these factors make a strong selection effect unlikely.
Our results suggest that congressional oversight is of
limited effectiveness. Discussion of oversight is fre-
quently linked with other action that a legislature can
take to influence the bureaucracy: statutory actions
such as determining agency budgets, the amount of
discretion granted to bureaucrats (e.g., Epstein and
O’Halloran 1994), and splitting authority across multi-
ple agencies (Bils 2020), or nonstatutory actions such as
specifying directives in committee reports (Bolton
2022) or communicating the preferences of legislative
actors (Lowande 2018; Shipan 2004). In the realm of
improper payments, however, Congress has availed
itself of many of these additional tools yet improper
payments remain an as-yet unsolved problem across
the bureaucracy. Our unique measure of effective-
ness, thus, allows us the conclusion that Congress’s
prospects for control of the modern bureaucracy are in
doubt.
LEGISLATIVE EFFORTS TO CONTROL THE
BUREAUCRACY
Scholars disagree about the ability of Congress to
control the bureaucracy. On the strong control side of
the argument, the literature suggests that ex post and ex
ante tools allow Congress to influence bureaucratic
action. Scholars of the “congressional dominance”the-
ories argued Congress has at its disposal myriad ways to
influence agencies including ex post tools such as over-
sight and budgetary decision making (McCubbins and
Schwartz 1984; Weingast 1984; Weingast and Moran
1983) and ex ante tools such as design and use of
administrative procedures (McCubbins, Noll, and
Weingast 1987;1989) or design of delegation and dis-
cretion (Epstein and O’Halloran 1994; Epstein and
O’Halloran 1999).
On the other side of the argument, critics such as
Moe (1987) argue that theories of strong congressional
control neglect the motivations, resources, and incen-
tives of the bureaucracy, which might lead the bureau-
cracy to ignore or sidestep congressional wishes. Even
with control mechanisms such as oversight, appoint-
ments, budgets, or new legislation, bureaucrats still
possess their own autonomy such that Congress fails
to achieve political control. Moe (1987) argues about
congressional dominance theory, “While the theory
presumes to explain congressional control of the
bureaucracy, in fact it offers little more than an asser-
tion supported by reference to legislative rewards and
sanctions and their alleged efficacy in securing bureau-
cratic compliance”(480).
Scholars have devoted much empirical effort to eval-
uating ex ante control of the bureaucracy. For example,
studies have shown how legislatures can vary influence
over agency outcomes through the use of administra-
tive procedures such as the notice and comment process
in rulemaking (e.g., Balla 1998; Yackee and Yackee
2010;2016), the appointment of agency personnel (e.g.,
Lewis 2007; Moe 1985; Wood and Waterman 1993), the
level of discretion given to agencies when writing stat-
utes (e.g., Epstein and O’Halloran 1999; Huber and
Shipan 2002), or through the internal organization of
Congress and committee jurisdictions (e.g., Aberbach
1990; Arnold 1979; Bendor 1985; Clinton, Lewis, and
Selin 2014; Dodd and Schott 1979; King 1997). These
studies position themselves to empirically evaluate the
extent to which the legislature can command ex ante
influence over the bureaucracy.
Among ex post means of legislative control, over-
sight is commonly highlighted as a central mechanism
available to Congress to influence the bureaucracy.
Conceptually, McCubbins and Schwartz (1984) define
oversight as the way in which Congress seeks to “detect
and remedy executive-branch violations of legislative
goals.”They argue that a reelection-minded Congress
prefers “fire alarm”oversight, with tools and proce-
dures designed to alert Congress to violations that are
most salient to interest groups and constituents, rather
than “police patrol”oversight that calls for comprehen-
sive, centralized monitoring. This view places Congress
as engaging in oversight of the executive branch pri-
marily to fulfill political goals, echoing other work
where oversight is viewed as an activity used in legisla-
tors’pursuit of reelection (Fenno 1973; Ogul 1976).
Others step back from elections and suggest over-
sight helps stop “policy drift,”where oversight occurs
when agencies take actions inconsistent with Con-
gress’s policy goals (Dodd and Schott 1979; Kriner
and Schwartz 2008; McGrath 2013). While policy goals
are, of course, related to political goals, it remains
unclear whether oversight is primarily driven by reelec-
tion motives or policy concerns.
Empirical work on oversight has largely focused on
examining congressional committee hearings where the
number (or presence of) oversight hearings conducted
by congressional committees is used to measure over-
sight (e.g., Fowler 2015). Scholars have found that
congressional oversight activity has overall increased
over time (Aberbach 1990; MacDonald and McGrath
2016), is driven by disagreement between congressio-
nal committees and the bureaucracy (Kriner and
Schwartz 2008; McGrath 2013), and is more frequent
during periods of divided government (Kriner and
Schickler 2016) or periods just after unified govern-
ment is reestablished as committees engage in
“retrospective”oversight (MacDonald and McGrath
2016).
Congressional efforts at oversight are not limited to
committee hearings. Congress conducts oversight
through correspondence between legislators and
bureaucrats (Lowande 2018; Ritchie 2018) and con-
gressional participation in rulemaking (Lowande and
Potter 2021; Silfa N.d.). Scholars have found that these
interactions between legislators and bureaucrats are
generally driven by constituency or district concerns
rather than ideological patterns.
While these empirical studies have explained when
and why Congress is likely to engage in oversight
activities, they all stop at the point of oversight being
conducted. While such analysis answers some impor-
tant questions (e.g., if Congress engages in oversight
Pamela Ban and Seth J. Hill
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when it is called for, as in McCubbins and Schwartz
1984 or MacDonald and McGrath 2016), it does not
answer a question of central importance to our models
of legislative control for the key ex post mechanism:
How much does congressional oversight influence
bureaucratic behavior? Much work on oversight
assumes that it influences bureaucratic behavior and
thus helps resolve Congress’s principal–agent problems
vis-à-vis the bureaucracy. But, to date, we do not know
how accurate this assumption is and, therefore, how
well oversight facilitates congressional control.
Research has circled the efficacy of oversight. Kriner
and Schickler (2016) find that congressional oversight
hearings can erode presidential approval ratings,
giving presidents the incentive to change bureaucratic
behavior. Oversight hearings also occur more often
when they are most likely to have a policy effect
(MacDonald and McGrath 2016), implying that the
purpose of hearings is to influence bureaucratic action.
Studies of other nonstatutory means of control have
found effects on bureaucratic behavior, such as agen-
cies withdrawing policy proposals in response to the
possibility of a legislative veto (Acs 2019) or agencies
adjusting their own monitoring activities in response to
shifting preferences of committees and Congress
(Shipan 2004). But no work, to the best of our knowl-
edge, directly estimates the empirical relationship
between oversight hearings and magnitude of change
in congressional agency loss to the bureaucracy.
One concern about oversight hearings as a method of
congressional control is that they may be subject to
forces unrelated to the putative goals of the oversight.
Due to their public nature, the existence of a hearing or
the content of the hearing itself may reflect ideological
or partisan disagreement, reducing its potential effec-
tiveness for true oversight. For instance, the House
Select Committee on Benghazi oversight hearings,
while ostensibly on the topic of conducting oversight
and investigations into the attack on the U.S. consulate
in Libya, were commonly interpreted as an effort to
discredit Secretary of State Hillary Clinton as she
pursued election to the presidency.
While oversight hearings in general can indeed be
motivated by factors unrelated to the topic of the
hearing—thus influencing the content of the hearing
and potentially its effect on the bureaucracy—
improper payments are, for better or worse, a topic
that does not garner much publicity, political grand-
standing, or partisan disagreement. As we show in the
next section, reducing improper payments has been a
goal of members and presidents of both parties, sug-
gesting against oversight hearings on improper pay-
ments as political grandstanding.
IMPROPER PAYMENTS AT FEDERAL
BUREAUCRACIES
In order to measure the effectiveness of oversight, we
require a measure of bureaucratic outcomes such that
we can estimate the outcome with and without (or,
before and after) oversight. This requirement is
difficult to meet due to the nature of public policy.
Government bureaucracies often produce public
goods, which by their nature are difficult to value on
some common scale and therefore difficult to compare
across time and agencies.
We have identified one measure of bureaucratic
outcomes that is, at least to first approximation, com-
parable across time and agencies. Improper payments
are “any payment that should not have been made or
that was made in an incorrect amount under statutory,
contractual, administrative, or other legally applicable
requirement”(Paymentaccuracy.gov 2023). Payments
made by the bureaucracy are denominated in dollars.
Rate of improper payments made by federal agencies is
a fraction that can be compared within agencies over
time or between agencies. Below, we briefly summarize
actions the federal government attempted to reduce
improper payments. This history reveals that a biparti-
san over-time consensus exists that the rate of improper
payment should be reduced and that oversight should
be one tool to do so.
Both Congress and the executive have worked to
rein in improper payments made by federal bureaucra-
cies for almost 25 years. In 2022, Gerald E. Connolly,
Chair of the Subcommittee on Government Opera-
tions, opened a hearing on improper payments empha-
sizing continued prioritization by committees and
Congress as a whole, the ongoing challenge, and the
bipartisan nature of the goal (in referencing a former
chair of the opposite party):
Connolly: This is a subject of this subcommittee going way
back. In fact, one of my first hearings, I remember, was
with a former chair of this subcommittee, Todd Platts,
talking about improper payments almost 14 years ago…
Though improper payments have been a priority of Con-
gress since the beginning of the 21st century, they remain
high and they continue to grow…. (Committee on Over-
sight and Accountability 2022)
Improper payments rose to the congressional agenda
after the Government Management Reform Act of
1994 required major departments to prepare and have
audited agencywide financial statements (Government
Accountability Office 1999, 5). When it reviewed
nine audits from fiscal year 1998, the GAO identified
$19.1 billion in improper payments and concluded,
“Improper payments are much greater than have been
disclosed”(6). GAO made recommendations to the
Office of Management and Budget (OMB) to improve
internal controls and reduce improper payments.
The Senate held one hearing on improper payments
in fiscal year 2000 with witnesses from the GAO and
USAID. Congress’s first statutory effort came with its
August 2001 markup of H.R. 2586, the Defense Autho-
rization Act for Fiscal Year 2002. The House Armed
Services Committee inserted the “Erroneous Payments
Recovery Act of 2001”to the thousand-plus page bill.
Sections 812 and 813 directed executive agencies with
contracts of total value greater than $500 million to
conduct programs to identify and then recover errone-
ous payments made to federal contractors. Agencies
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would develop their own programs following guidelines
to be created by OMB. The bill passed the House and
went to conference with a Senate version without the
provision. The conference report included the provi-
sion and became Public Law 107-107 with the signature
of President George W. Bush on December 28, 2001.
The Improper Payments Information Act of 2002,
signed into law November 26, 2002, provided further
and more extensive guidance than the 2001 statute. The
new law directed any executive program with estimated
improper payments exceeding $10 million to audit and
estimate improper payments, report on causes, state
what infrastructure or information technology require-
ments would help reduce improper payments, and
describe what steps had been taken to reduce such
payments.
OMB issued guidance for agency implementation of
the 2001 and 2002 laws in January and May of 2003
(OMB memoranda M-03-07 and M-03-13). OMB
directed agencies to collect statistically valid samples
of payments to estimate improper payment rates and
report on the results to OMB and Congress effective
fiscal year 2004. In a 2006 memorandum, OMB director
Rob Portman updated and consolidated guidelines,
allowing “low-risk”programs to audit payments once
every 3 years rather than annually. High-risk programs
would continue to implement annual audits and annual
reports on efforts for remediation.
During the decade of the 2000s, Congress increased
oversight on improper payments. The House and Sen-
ate held a total of 13 hearings from fiscal 2003 to fiscal
2009.
On November 20, 2009, President Barack Obama
issued Executive Order (EO) 13520 “Reducing
Improper Payments.”The EO directed implementa-
tion of new executive actions more punitive than pre-
vious OMB guidance. Agencies would have to publish
annual information about improper payments, identify
by name an agency official accountable for improper
payments, and coordinate with other agencies to iden-
tify contractors and practices related to high improper
payment rates.
OMB Memorandum M-10-13 implemented EO
13520 directives on March 22, 2010. Agencies would
each have an “accountable official”to oversee and take
responsibility for improper payments and who would
issue an annual report to the agency’s inspector general
(IG). Programs would also have to publish target
reductions in improper payment rates and publish the
names of contractors who received improper payments
but failed to return them in a timely manner. M-10-13
also set out the consequence, “If a high-priority pro-
gram does not meet its supplemental targets for two
consecutive years, then it is required to submit a report
to the Director of OMB.”
The Improper Payments Elimination and Recovery
Act of 2010 (IPERA, July 22, 2010) codified many of
the requirements from M-10-13 in statute. IPERA
additionally required IGs to annually audit agencies
to assure compliance with all requirements and reduced
the threshold definition of “significant”overpayments.
OMB guidance (M-11-16, April 14, 2011) reduced the
threshold further from 2.5% to 1.5% improper pay-
ments as a percent of all payments, regardless of dollar
amount, beginning in fiscal year 2014.
Congress held 4, 15, and 11 hearings in fiscal years
2010, 2011, and 2012, with 80 witnesses from 13 differ-
ent agencies called to testify. This oversight culminated
in the Improper Payments Elimination and Recovery
Improvement Act of 2012, signed into law January
10, 2013, which codified many of the requirements from
M-11-16. It additionally required agencies to check
contract awardees against databases of death records,
excluded parties from the Government Services
Agency, credit risks, and excluded individuals from
Health and Human Services payments, along with
any other databases identified by OMB. The “Do Not
Pay Initiative”required all agencies to check all current
and future awards against the databases by June
1, 2013.
From fiscal 2013 to 2021, Congress held 37 hearings
with 93 witnesses from 12 different agencies. The Pay-
ment Integrity Information Act of 2019 (March 5, 2020)
consolidated previous improper payment acts and
allowed OMB to establish pilot programs to test poten-
tial accountability mechanisms for agencies. The bill
established an interagency working group on payment
integrity. Issuing guidance M-21-19 (March 5, 2021)
directed programs with annual outlays above $10 mil-
lion to conduct risk assessment at least once every three
years.
Members of Congress and witnesses from the
bureaucracy discuss the reporting, causes, and solutions
for reducing improper payments in the congressional
hearings on improper payments in our sample. In the
hearings, bureaucrats report that they are focusing on
improper payments, typically listing the resources and
effort agencies devote to reporting improper payments
and detailing the reasons or challenges standing in the
way of decreases. Bureaucrats also regularly report the
corrective actions that their agencies have implemen-
ted to reduce improper payments, accompanied by
either success stories or reasons why the actions have
been unsuccessful.
Congress uses the formal stature of the hearings to
signal to agencies that reducing improper payments
ought to be a bureaucratic priority. Members publicly
push bureaucrats to identify and take specific correc-
tive action. For example, in a September 22, 2016
hearing, the Chair of the Subcommittee on Govern-
ment Operations, Mark Meadows, was frustrated with
the Department of Health and Human Services for
blaming stakeholders and other parties for their
improper payments and wanted their Deputy Chief
Financial Officer to identify specific actions to try and
reduce improper payments:
Meadows: “So here’s what I would like…I need from you,
specifically, what we’re going to do different between now
and next year this time when we have this same report that
comes out where we start to reverse the trend. I need a
specific—not that ‘it’s important,’not that ‘it’s this.’I need
‘how are we going to address these particular issues?”’
(Committee on Oversight and Accountability 2016)
Pamela Ban and Seth J. Hill
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Both parties push agencies to take concrete steps;
Subcommittee Ranking Member Gerald Connolly
agreed with Meadows and declared oversight to be a
collaborative way for Congress to work with agencies
to effect material change.
Connolly: “The chairman asked that you come back to us
with strategies that we can sort of sink our teeth into in the
new year…So I think we approach this in the spirit of
trying to partner with you, that get our arms around this
collectively as a government, because a lot of good can
come out of this. And bad things happen when this is left
unaddressed. So I wish you’d get back to us with the fraud
estimates so that we have—we can work with you in
devising strategies and try to fight for getting the resources
you need for those strategies”(Committee on Oversight
and Accountability 2016).
Committee oversight staffers confirm that hearings
signal congressional priorities to agencies. In a back-
ground interview, the chief oversight counsel to a
congressional committee reported to us, “when we hold
a hearing, when we yell at the [agency], it actually does
matter, they need to know that there is some publicity,
heat, transparency, if they’re doing things that we think
are not appropriate.”
2
In another interview, the staff
director for oversight on a different committee also
reported that committees intend for hearings to help
leaders in the agency prioritize, emphasizing the impor-
tance of the publicity surrounding public hearings:
“Things aren’t prioritized without public attention…
hearings help them prioritize. If we make our opinion
known, especially in a hearing, it does seem to cause
more shepherding of the issue by senior executives.”
3
One might wonder how agencies could tackle the
thorny problem of improper payments. In the same
hearing as above, the Department of Health and
Human Services reported, “[W]e believe that the cor-
rective actions that could have the biggest impact on
preventing and reducing erroneous payments fall
under three distinct areas: leveraging technology,
strengthening partnerships, and exploring innovative
solutions.”We summarize two HHS programs that
improved their improper payment rates in Section F
of the Supplementary Material to give interested
readers a sense of what Corrective Action Plan pro-
cedures were used by programs who improved
improper payment rates. It appears that vendor educa-
tion and outreach to encourage appropriate documen-
tation and to clarify processes and procedures were
central to HHS remediation efforts.
The history of congressional and executive efforts to
reduce improper payments along with our interviews
and read of hearing transcripts indicate that improper
payments are a bureaucratic outcome of relevance to
Congress. This same set of evidence also explains why
oversight could motivate bureaucratic change—
because oversight signals to agencies how Congress
would like them to allocate their limited time and
resources.
The improper payments setting provides a unique
research opportunity because oversight hearings
invited witnesses from different agencies in different
fiscal years. This allows us to estimate the effect of
oversight hearings on improper payment rates at the
agency and program level by comparing rates of pro-
grams called to testify to rates of programs without
hearings across time.
Our empirical setting and measure of bureaucratic
outcome advance previous work evaluating congres-
sional oversight through circumvention of issues that
have hindered systematic assessment of the efficacy of
oversight. Previous work has focused on when over-
sight is conducted (e.g., Aberbach 1990; Lowande and
Potter 2021; MacDonald and McGrath 2016; McGrath
2013), outlined the need for a measure of oversight’s
effectiveness (Levin and Bean 2018), or used surveys of
bureaucratic opinion (Clinton, Lewis, and Selin 2014).
The history of actions on improper payments shows
that both Congress and the president, across both
parties, agree in what they want from agencies: lower
improper payments. This near-universal agreement in
the directives to agencies on the issue of improper
payments reduces the problems of multiple principals,
interbranch competition, and heterogeneous prefer-
ences that the literature on legislative control of the
bureaucracy highlights as challenges (e.g., Clinton,
Lewis, and Selin 2014; Gailmard 2009; Volden 2002;
Wilson 1989). In the next section, we describe our data,
research design, and strategy of identification.
DATA, RESEARCH DESIGN, AND
IDENTIFICATION
To evaluate the effect of congressional oversight on
improper payments in the bureaucracy, we compile
and link new data from federal fiscal years 2000 to
2021 on (1) improper payments by agency programs
and (2) congressional committee hearings on improper
payments.
Improper Payments
We collect data on improper payments using a combi-
nation of government sources. First, the OMB-run
website PaymentAccuracy.gov provides data on
improper payments for federal fiscal years 2015 and
forward. These data include the improper payment
amounts and rates at the program level for all programs
subject to statutory reporting requirements.
To extend these improper payments data earlier
than 2015, we collected annual financial reports for
each agency. This required scouring current and
archived versions of each agency’s internet pages to
locate a copy of the annual report. Each annual finan-
cial report includes fiscal year improper payments esti-
mates for at-risk programs in that agency. The starting
year of improper payments data differs by agency
based upon availability of archived financial reports.
2
Interview, 2024-01-11.
3
Interview, 2023-12-08.
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The earliest fiscal year for which coverage started was
2000 (Social Security Administration) and the latest
fiscal year for which coverage started was 2012
(12 agencies).
Table A1 in the Supplementary Material describes
the year coverage by agency of our resulting improper
payments dataset. Note that due to different years of
reporting and at-risk determinations, different agencies
and programs have different years of coverage.
4
It is important to note that our improper payments
data only cover programs subject to statutory reporting
requirements from the legislation and OMB guidance
discussed in the previous section. As a result, our
analysis estimates the effect of oversight for programs
deemed at-risk for substantial improper payments as
defined by Congress and the executive branch. While
this might not be the experiment one would design to
estimate the most general effect of oversight, we
believe the censored sample should be of limited con-
cern. The potential effect of oversight on the set of
programs deemed low-risk for improper payments
seems likely to be lower than the potential effect on
programs deemed at-risk. Low-risk programs have
lower (or zero) improper payment rates, and so there
is a ceiling on the efficacy of oversight on improving
performance for the programs excluded from our sam-
ple. Averaging this smaller effect of low-risk programs
excluded from our sample with a larger effect for at-risk
programs included in our sample would yield an aver-
age effect of oversight on all programs smaller than
what we estimate here. Because we conclude that the
effectiveness of oversight is limited, the full-sample
effect would likely demonstrate an even smaller effect
of oversight, strengthening rather than weakening our
conclusion.
In Figure 1, we present agency-level trends in
improper payments by year for the ten largest-outlay
agencies. The top frame presents improper payment
rate as a percentage of total payments, the bottom the
dollar amount of improper payments. The top frame
shows that the Department of the Treasury had the
highest rate of improper payments during this time
period with more than one out of every five dollars in
outlays deemed improper. This is because the IRS has a
hard time confirming the accuracy of payments for the
Earned Income Tax Credit program. Other agencies
with large rates of improper payments are Labor, Agri-
culture, and Health and Human Services (HHS), whose
improper payment rates are on the order of 5–10%.
While some agencies have relatively constant rates of
improper payments, others see year to year variability
and secular trends. Our research design will ask
whether congressional hearings predict these changes.
As an overall picture, however, one would probably not
conclude that Congress’s two decades of effort to rein
in improper payments have been successful. Typical
improper payment rates in 2020 are no lower than
typical rates in 2003. Our regression results confirm
this observation, suggesting limits to Congress’s ability
to control the bureaucracy.
The bottom frame presents total improper payments
by fiscal year and highlights the magnitude of the
problem. In recent fiscal years, HHS has improper
payments that exceed $100 billion, Labor above $50
billion, and Treasury above $10 billion. Somewhere
around one half of improper payments are eventually
recovered, so these numbers are larger than the total
losses to the taxpayer. But even cutting these numbers
in half indicates a large sum that one would imagine
many members of Congress would like to use for other
purposes.
5
Oversight Hearings
To identify congressional committee oversight hearings
on improper payments, we use data from Ban, Park,
and You (2023), which cover the names and affiliations
of the witnesses testifying and the transcripts of con-
gressional hearings. We identify hearings on improper
payments as hearings which mention a set of phrases
related to improper payments in at least one of four
fields that represent the focus of a hearing: title, sum-
mary, subjects, or testimony subjects of the hearing, as
specified by ProQuest Congressional.
6
By filtering for
mentions of improper payments in these four descrip-
tive fields of the hearings, we identify hearings that
committees held with the intent of reviewing and dis-
cussing improper payments.
7
Improper payment hearings invite testimony from
employees of executive agencies and programs. We use
the affiliations of the bureaucratic witnesses to identify
the agencies overseen in the hearing by matching wit-
nesses to the 15 executive departments and 55 indepen-
dent agencies in the federal government as defined by
the Office of Personnel Management (we use the word
“agency”to refer to the executive department or
4
With the exception of DHS (which did not begin operations until
2003 and only reported incomplete IP data until 2012), missing years
after 2006 tend to be smaller budget agencies such as the Consumer
Product Safety Commission, AmeriCorps, or Department of Justice
that did not have programs of sufficient size or risk to be subject to
(pre-2012 less stringent) reporting requirements. In our analysis,
agency fixed effects account for when an agency may enter into
reporting requirements. We also report an analysis subset to the time
period beginning in FY 2012, after all agencies in our sample entered
into our reporting data.
5
Recovery rate or amount recovered would be an outcome variable
of interest. However, not until fiscal 2013 did statute require compi-
lation of recovery numbers. More problematic is lack of direction as
to when and how to pursue recovery or how to define the denomi-
nator for recovered funds. Agencies are directed to pursue recovery if
they anticipate it to be “cost-effective,”whose definition is left to the
agency to determine. This means, in our view, the numbers are not
comparable across agencies or even necessarily within-agency across
time, unfortunately.
6
The phrases we use are “improper payment,”“payment integrity,”
“erroneous payment,”“fraudulent payment,”or “payment error.”
7
There are hearings in which a phrase about improper payments was
mentioned in the full hearing text but not in the four fields represent-
ing the focus of the hearing. This occurred if a witness or legislator
mentioned the issue off-hand. We exclude these hearings from our
categorization of hearings on improper payments because they most
likely do not reflect a committee conducting oversight on the issue.
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independent agency level).
8
Generally, these witnesses
are Assistant Secretary or Director level within an agency or the Chief Financial Officer, Controller,
Inspector General, or their deputies, of an agency or
FIGURE 1. Improper Payment Rates and Amounts by Fiscal Year and Agency, 10 Largest Agencies by
Total Outlays
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
0.1
0.2
0.5
1.0
2.0
5.0
10.0
20.0
Agency
improper
payment
rate
(percent)
DOL
ED
SSA
VA
DOD
DOT
HHS
OPM
DTRS
USD
A
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
0.1
0.5
1
5
10
25
50
100
Agency
improper
payments
(Billions $)
DOD
ED
SSA
VA
DOL
DOT
HHS
OPM
DTRS
USDA
Note:Y-axes on log scale.
8
There are three agencies who received an improper payments
hearing, but are not in the improper payments data from Paymen-
tAccuracy.gov: Department of State, Nuclear Regulatory Commis-
sion, and the Securities and Exchange Commission. Additionally,
employees from GAO and OMB appear in these hearings to testify
on the guidance they have issued on reducing improper payments;
since these two agencies are not the target of reducing such payments,
we do not count them as treated agencies.
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office within the agency. While hearings may mention
certain programs or discuss program-level details, the
witnesses invited have positions and job responsibilities
at the agency-level and so we view improper payments
hearings as agency-level stimulus. In Table 1, we sum-
marize improper payment hearings held by Congress
since 1968, tabulating the number of hearings, wit-
nesses, and agencies called to oversight by fiscal year
(summing across House and Senate). In Table A2 in
the Supplementary Material, we tabulate the count of
hearings by congressional committee, showing that
improper payment hearings are mostly, but not exclu-
sively, held by House and Senate oversight committees
and Ways and Means.
Research Design and Identification
To estimate the effect of improper payment hearings on
improper payment rates, we use a two-way fixed effects
identification strategy. Because we are uncertain about
how long it might take for agencies to enact reforms to
improve their improper payment problems, we esti-
mate a linear trend in improper payments in the years
following a hearing. Our specification is
Improper payment rate
fg
it
¼αiþδtþβHearingit
þγYears since last hearing
fg
it þεit
(1)
where fImproper payment rategit is the sample-
estimated improper payment rate of agency iin fiscal
year t,Hearingit takes the value 1 if a witness from agency
itestified in at least one oversight hearing on improper
payments in year t,fYears since last hearinggit counts
the number of fiscal years since a witness from that agency
was most recently called to testify (year of hearing equals
zero), and αand δare agency and fiscal year fixed effects.
These fixed effects capture time-invariant features of
agencies (policy domain, relative budget size, etc.) and
factors that affect all agencies in each fiscal year (new
statutes or executive orders, budget environment, eco-
nomic conditions, focus of presidential administration,
GAO involvement in hearings, etc.).
The coefficient βmeasures the effect of oversight
hearing on improper payments in the year of the hear-
ing.
9
Because agencies estimate improper payments by
sampling from payment databases in fiscal years sub-
sequent to that of the payments, the hearing might
influence the measurement of IP rate in the fiscal year
of the hearing. To estimate improper payments in fiscal
year 2010, in fiscal 2011 an agency samples from their
database of fiscal 2010 payments and then attempts to
verify the propriety of each sampled 2010 payment.
Thus a hearing in fiscal 2010 could influence either the
payment choices in the remainder of fiscal 2010 or
the evaluation efforts in fiscal 2010 or 2011. Because
of the multiple causal pathways influencing β, this
coefficient might be positive if the agency exerts addi-
tional efforts to identify improper payments following
the hearing, negative if the agency exerts additional
efforts to prevent improper payments following the
hearing, or some mixture of the two.
Due to the ambiguous predictions about βas well as
uncertain temporal dynamics of remediation, we also
estimate a time-forward linear effect of the hearing
with the coefficient γ. This specification is somewhat
unusual and so demands comment. Reforms to improve
improper payments tend to require long-term invest-
ments in training, technology, and procedures along with
learning about and revision to best practices. Thus
we expect theoretically that the attention prompted
by oversight hearings will not immediately improve
improper payment rates but would, instead, improve
rates as timepasses and the agency implements reforms.
Agency testimony supports this theoretical expectation,
suggesting that reforms can take multiple years before
fully effective.
10
TABLE 1. Improper Payments Hearings by Federal Fiscal Year
Fiscal year Hearings Agencies Witnesses Fiscal year Hearings Agencies Witnesses
1968–2002 15 34 42 2012 11 10 27
2003 3 5 8 2013 5 6 14
2004 1 2 2 2014 7 6 23
2005 2 4 6 2015 6 7 18
2006 2 6 9 2016 4 8 11
2007 2 6 8 2017 4 4 9
2008 2 7 7 2018 4 4 8
2009 1 3 4 2019 2 3 4
2010 4 4 11 2020 2 3 3
2011 15 11 42 2021 3 2 3
Note: Witness counts exclude non-bureaucratic witnesses.
9
An additional specification of interest would be to test whether
there is an effect of any kind of hearing on an agency (not just
hearings on improper payments), to see if there are any spillover
effects from any hearing in general on an agency’s improper pay-
ments. However, at least one witness testified before Congress in
every fiscal year from all but one of the agencies in our dataset (the
Corporation for National and Community Service [AmeriCorps]).
10
In a written statement HHS provided to the Committee on
Oversight and Government Reform on September 22, 2016, the
agency explained: “Due to the complexity of the corrective actions
Pamela Ban and Seth J. Hill
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The linear trend in time serves as an approximation
to the slowly unfolding process of agency reform. Thus
γserves as our key estimate of the efficacy of congres-
sional oversight. If oversight leads to improvement in
the agency’s payment procedures, improper payment
rate should improve (negative coefficient γ) in the years
following the hearing.
Some readers might object to the statistical assump-
tions surrounding the linear trend specification. We
add two alternative specifications—an intercept-shift
model and a semi-parametric dynamic model—to allay
concerns about specification error, which we discuss
below. Results from both alternatives are consistent
with the linear specification.
Improper payment rates are also estimated at the
level of programs (multiple programs per agency) and
so in a second specification, we complement the
agency-level analysis with a program-level regression
with the same specification but with iindexing pro-
grams instead of agencies. Program fixed effects cap-
ture all time-invariant features of programs including
program policy portfolio, relative program budget size,
and relative program use of contractors or type of
payments. Because, however, nearly all witnesses rep-
resent agencies (e.g., inspectors general, payment
administrators for the full agency) rather than individ-
ual programs, our hearing variables remain measured
with agency-level witnesses. We therefore cluster stan-
dard errors on the agency-year for all program-level
analysis.
Program fixed effects also address the concern that
Congress has differential concern about improper pay-
ments for different agencies. Congress might be more
lenient with improper payments for certain programs
that provide politically salient benefits such as FEMA
assistance, food stamps, or federal student aid. Program
fixed effects allow Congress to have different thresh-
olds of “acceptable”improper payment rates across
programs while also modeling oversight hearings as a
mechanism to return excess rates to different accept-
able levels. Suppose, for example, that Congress is
willing to accept an improper payment rate of 10%
for FEMA but 2% for the Small Business Administra-
tion because they are willing to take more improper
payments in exchange for FEMA grants being made
promptly with less paperwork than in exchange for
SBA loans being made promptly with less paperwork.
The program fixed effects hold constant these average
differences between the two programs. The regression
coefficient on hearings, therefore, measures the aver-
age change in improper payment rate relative to the
program-specific averages in response to a hearing with
a witness from that program’s agency.
Unbiased estimates of βand γrequire the usual two-
way fixed effects assumption of parallel trends, that the
path of improper payment rate for agencies called to
testify would have followed the path of agencies not
called to testify were the witness not invited to the
hearing. In the Supplementary Material, we offer two
evaluations of the parallel trends assumption. In
Figure A1 in the Supplementary Material, we plot
time-series of improper payment rates by program for
agencies with witnesses called to testify on improper
payments. The figure demonstrates no pattern of
improper payment rates in the years prior to a hearing.
In Table A3 in the Supplementary Material, we regress
an indicator for oversight hearing in that fiscal year on
lags of IP rate and IP amount. We find that lagged
changes in improper payments do not predict incidence
of oversight hearings, suggesting that our result is not
driven by selection to treatment issues.
LEGISLATIVE CONTROL AND OVERSIGHT
RESULTS
In Table 2, we present estimates from Equation 1 at the
agency (columns 1–3) and program (4–6) level. Col-
umn 1 presents results combining House and Senate
hearings into single variables. The coefficients indicate
that in each year following a hearing with a witness
from that agency, improper payment rate falls by about
0.1 percentage points.
11
In column 2, we estimate variability in effects by
whether the hearing was held under unified govern-
ment. Kriner and Schickler (2016) find oversight more
frequent during periods of divided government. While
the standard error is large, the point estimate suggests
that hearings held under unified government lead to
twice the decline in IP rate than hearings held under
divided government. Column 3 suggests that both
House and Senate hearings lead to subsequent declines
in improper payments. The two coefficients are −0.08
(House) and −0.09 (Senate) with standard errors that
do not allow us to distinguish between them.
Columns 4–6 present the same specifications for a
program-level analysis. We find that improper payment
rates decline, on average, by about 0.17 percentage
points each year following a hearing (column 4). We
do not find evidence that this decline varies by whether
the hearing happened under unified government
(column 5). Point estimates suggest that Senate hear-
ings are more consequential than House hearings at the
program level (column 6).
The results of Table 2 suggest that oversight hearings
lead to a subsequent decline in improper payment rates
for agencies with witnesses called to testify. Oversight
and program integrity initiatives, the results of these actions are
generally not immediately reflected in the error rate measurement
and can take years before the effect is realized. Furthermore, some
corrective actions (like strengthening program requirements) can
lead to short-term improper payment increases while programs and
stakeholders implement new business processes and change manage-
ment to meet new requirements”(Committee on Oversight and
Accountability 2016).
11
In the year of the hearing, the agency’s IP rate is about 0.6
percentage points higher, all else equal, but the standard error makes
this estimate highly uncertain. A few agencies had hearings on
erroneous payments decades ago. We top-code the years since
hearing variable at 20 years on the assumption that the effect of
hearings held more than 20 years ago is unlikely to be much greater
than zero.
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changes bureaucratic performance. However, the mag-
nitude of the effect is somewhat limited. For each year
beyond the hearing, improper payment rate improves
by 0.1% (agency) to 0.2% (program), on average.
We interpret the effect sizes as small in comparison
to overall levels of improper payment rates. The mean
improper payment rate in 2021 was 5.9% and the
dollar-weighted mean almost 8%. While a 0.1 or
0.2% improvement in the improper payment rate cor-
responds to millions of dollars of savings, such improve-
ments do not much dent the hundreds of billions of
dollars of improper payments. For example, the Fed-
eral Highway Administration’s (FHWA) Highway
Planning and Construction Program in the Department
of Transportation had an improper payment rate of
1.41% in 2021, or $697 million on $49 billion of outlays.
Our finding of oversight’s average program-level effect
of 0.2%, then, represents a predicted reduction of $99
million, leaving over $598 million remaining in
improper payments.
12
Robustness to Specification, Identification,
and Measurement Choices
In this section, we summarize efforts we have made to
probe the robustness of our results to the design choices
that underly our estimates in Table 2.
A first design choice is our specification of the effect of
an oversight hearing as linear in the years following the
hearing. To probe the empirical robustness of our result
to the linear specification, we estimate two alternative
regression specifications thatallow for different dynamic
effects of oversight hearings. InTable A4 in the Supple-
mentary Material, we first estimate an intercept-shift
model where instead of the effect of a hearing evolving
linearly in the years after the hearing, we instead esti-
mate an intercept-shift in average improper payment
rate in all years after the hearing. Both agency- and
program-level results suggest oversight leads to an aver-
age 1.5 percentage points lower improper payment rate
in the fiscal years following a hearing.
A second semi-parametric specification (columns
2 and 4) allowsthe dynamic effect of a hearing to unfold
in an arbitrary pattern in the years following a hearing.
Agency estimates of improper payment rates are higher
in the year of andthe year following a hearing relative to
the year prior to the hearing, but then decline in years
2, 3, and 4 after the hearing relativeto year of hearing. In
total, Table A4 in the Supplementary Material shows
our conclusions about oversight dynamics are robust to
the assumption of effects linear in time.
A second design choice is use of the two-way fixed
effects (TWFE) estimator. Recent econometrics schol-
arship has shown that the TWFE estimator in the
presence of staggered treatments leads to comparisons
between treated and already-treated units, which can
bias estimates. In Section C of the Supplementary
Material, we present results from a local projection
difference-in-differences estimator with the binary ver-
sion of treatment to remove comparison to already-
TABLE 2. Dynamic Effect of Hearings on Improper Payment Rate
Agency-level Program-level
123456
Years since last agency hearing −0.098*** −0.10*** −0.17*** −0.17***
(0.035) (0.038) (0.054) (0.060)
Years since last unified govt. hearing 0.0048 0.18
(0.072) (0.14)
Years since last House agency hearing −0.077** −0.051
(0.032) (0.042)
Years since last Senate agency hearing −0.091 −0.26**
(0.064) (0.12)
Agency hearing 0.59 0.65 1.14 0.25
(0.49) (0.56) (1.03) (1.08)
Agency hearing × unified government −0.16 3.40
(0.79) (2.34)
House agency hearing 0.95 1.10
(0.53) (1.10)
Senate agency hearing −0.63 0.40
(0.60) (0.70)
Fiscal year FE Yes Yes Yes Yes Yes Yes
Agency/program FE Yes Yes Yes Yes Yes Yes
No. of obs. 304 304 304 1,289 1,289 1,289
Note: Dependent variable is improper payment rate as a percent of all payments. Standard errors in parentheses; clustered on agency-year
for program-level analysis. **p<0:05, ***p<0:01:
12
The FHWA’s Highway Planning and Construction Program
improper payment rate has varied across the time period of study
with a standard deviation of 0.9%. The 0.2 average program-level
effect of oversight implies 22% of a standard deviation improvement
in improper payment rate.
Pamela Ban and Seth J. Hill
12
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treated units. The results from this alternative estima-
tor yield large standard errors on the effect of an
Agency Hearing and do not indicate a substantial effect
of oversight on improper payment rates.
The effect of oversight we estimate in Table 2 aver-
ages across all agencies (all programs) in the dataset.
Figure 1 shows, however, substantial variation in levels
of improper payment rates across agencies. For exam-
ple, while Treasury averages around 20%, OPM
averages less than 1%. It could be that achieving
improvement in improper payments is simpler for pro-
grams with large rates than for programs with rates that
are already small. In Table A7 in the Supplementary
Material, we partition our sample into agencies
(programs) with average improper payment rates below
and above the median agency (program) rate. The point
estimates do indicate that oversight hearings lead to
larger declines in improper payment rates for agencies
(programs) with higher average rates, though larger
standard errors limit confidence in that conclusion.
13
Our main specification focuses on the dynamic effect
of hearings with witnesses from the agency from a
single fiscal year. Agency effort on improper payments,
however, might be affected by other vectors of over-
sight. For example, effort might increase as a function
of the cumulative number of improper payment hear-
ings targeting the agency over multiple years, hearings
on improper payments targeting peer agencies, hear-
ings held in years with statutory action on improper
payments, or the proportion of hearings on improper
payments compared to other issues. We discuss and
address the possible effects of these vectors of oversight
in Section D of the Supplementary Material.
Overall, the results for the direct dynamic effect of
oversight remain robust when accounting for cumu-
lative number of hearings for an agency (columns
1 and 5 in Table A8 in the Supplementary Material),
oversight spillover among peer agencies (columns
2 and 6), hearings in years with statutory activity
(columns 3 and 7), proportion of hearings on
improper payments (columns 4 and 8), or congressio-
nal investment in agency resources (Table A9 in the
Supplementary Material). We find large standard
errors and small negative or near zero effects on a
peer agency’s improper payments in the years follow-
ing committee oversight spillover. Oversight hearings
have larger effects in years with statutory activity, but
standard errors are again quite large. We find null
results for the effect of proportion of oversight on
improper payments.
Moderators of Legislative Oversight
We next consider whether characteristics of hearings
moderate the effect on improper payments. We
collected four hearing characteristics that each try to
approximate higher quality of hearing or higher stim-
ulus to the agency: (1) the number of agency witnesses
called to testify across all hearings on improper pay-
ments in that fiscal year, (2) the length of hearings with
witnesses from that agency in that fiscal year measured
by log word count, (3) the number of total witnesses
(i.e., including non-agency witnesses such as those from
GAO or OMB in the count) called to testify in
improper payment hearings referencing that agency
in that fiscal year, and (4) the number of agency wit-
nesses who are political appointees called to testify in
that fiscal year. We also collected hearing characteris-
tics that capture higher exposure of the hearing for the
agency: (5) hearings at the full committee versus sub-
committee level and (6) hearings held during a presi-
dential election year. While none of these variables
perfectly measure the “strength of oversight”we would
like to capture, they each circle that target. The first two
moderators are perhaps the closest proxies, as the
number of agency witnesses called to testify and the
length of the hearing are directly increasing with
amount of attention and detail the committee gives to
the issue. Table 3 presents the results on the dynamic
effect of the first two moderators on improper payment
rates; Table A10 in the Supplementary Material pre-
sents results for the remaining.
None of the moderators in Table 3 offer clear
improvement in fit. Standard errors are generally
large. Point estimates offer some suggestive evidence
at the agency level that the length of the hearing leads
to an initial increase in estimated improper payment
rate in the first year following the hearing but then
leads to a decline in years after that. This is similar to
our main finding above but with larger sampling
uncertainty. Corresponding point estimates at the
program level, however, run counter to this pattern.
Point estimates for the number of agency witnesses
follow the pattern of the main finding at the program
level, but is negligible with large standard errors at
the agency level.
14
Large standard errors are also
found for the number of total witnesses, whether
the hearing was held at the subcommittee or
full committee level, and whether the hearing was
held during a presidential general election year
(Table A10 in the Supplementary Material). We find
some evidence that a hearing called with more agency
witnesses who are political appointees leads to
increases in improper payment rates at the agency
level.
OTHER METHODS OF LEGISLATIVE AND
EXECUTIVE CONTROL
Our main analysis centers on congressional committee
hearings as the tool of oversight, following existing
13
We also reestimate our main specification from Table 2 on the
subset of our data beginning in fiscal year 2012, when all agencies in
our dataset entered into our reporting data. Results from this subset,
in Table A6 in the Supplementary Material, yield negative point
estimates for the dynamic effect of hearings but with large standard
errors.
14
Large standard errors are also found for the number of total
witnesses and number of agency witnesses who are political appoin-
tees in Table A10 in the Supplementary Material.
Efficacy of Congressional Oversight
13
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literature that focuses on hearings (e.g., Aberbach
1990; Fowler 2015; Kriner and Schickler 2016; Mac-
Donald and McGrath 2016; McGrath 2013). Might
congressional oversight of improper payments, how-
ever, operate through other channels?
Congress, its committees, or individual members can
use non-hearing techniques to conduct oversight (Selin
and Moore 2023). The president also uses various
actions to mitigate the control problem within the
executive branch. In this section, we consider the use
of these other methods of legislative and executive
control to reduce improper payments.
We begin with the congressional practice of corre-
spondence as a method of control. Studies such as
Lowande (2018) and Ritchie (2018) focus on inquiries
(contacts) made by individual legislators to agencies.
This form of communication is informal and nonstatu-
tory but, as with hearings, can take the form of over-
sight as communication between legislature and agency
about legislative priorities.
Using data from Lowande and Ritchie (2020), we
examine all contacts between legislators and agencies
from the time period available that overlaps with our
main analysis, fiscal years 2005–14. We find that out of
the 11 agencies for which contacts data are available,
the description for 80 out of 34,419 total contacts refers
to a topic related to agency payment issues.
15
This
small number of contacts, less than our total count of
hearings, implies that while contacts between indi-
vidual legislators and agencies could be a channel
of oversight for some matters, correspondence is
not a medium for communication about improper
payments.
16
Comparison to Appropriations Committee
Reports, Statutes, and Executive Actions
The principals of the bureaucracy—Congress and the
president—have methods outside of what is typically
considered oversight to try and control agency behav-
ior. Congress can legislate and issue appropriation
committee reports. The president can issue executive
orders. OMB can issue memoranda and bureaucratic
guidance. We next compare the effectiveness of over-
sight to the effectiveness of congressional and executive
tools that could also influence improper payments.
17
TABLE 3. Dynamic Effect of Moderators on Improper Payment Rate
Agency-level Program-level
1234
Years since last agency hearing −0.087** −0.14 −0.18*** 0.052
(0.040) (0.11) (0.056) (0.12)
Years since last × length of hearing transcripts, fiscal year of last −0.0051 0.0069
(0.0081) (0.013)
Years since last × number agency witnesses, fiscal year of last 0.041 −0.22**
(0.100) (0.10)
Agency hearing −1.25 0.47 2.95 0.82
(1.85) (0.58) (2.24) (1.00)
Length of hearing transcripts (log words), this fiscal year 0.19 −0.18
(0.19) (0.26)
Number of agency witnesses, this fiscal year 0.092 0.15
(0.20) (0.17)
Constant 4.93*** 4.83*** 5.65*** 5.94***
(0.28) (0.26) (0.50) (0.47)
Fiscal year FE Yes Yes Yes Yes
Agency/program FE Yes Yes Yes Yes
No. of obs. 304 304 1,289 1,289
Note: Dependent variable is improper payment rate as a percent of all payments. Standard errors in parentheses; clustered on agency-year
for program-level analysis. **p <0:05, ***p <0:01:
15
We use the phrases from our dictionary used to identify hearings
on improper payments plus “payment issue,”“underpayment,”and
“overpayment.”The 11 agencies for which contacts data are avail-
able for fiscal years 2005–14 are: Labor, Energy, Environmental
Protection Agency, Equal Employment Opportunity Commission,
Federal Labor Relations Board, Legal Services Corporation, Merit
Systems Protection Board, National Science Foundation, Nuclear
Regulatory Commission, Armed Forces Retirement Home, and
United States Agency for International Development. While this
set of agencies is not an exact replica of agencies represented in
our improper payments dataset, we use these data to conclude that
individual correspondence between legislators and agencies is not
frequently used to discuss improper payments.
16
The low frequency of contacts about improper payments is in line
with findings that the correspondence between individual legislators
and agencies are largely driven by oversight issues that have constit-
uent or district interests (Lowande 2018); improper payments are a
bureaucratic issue with little-to-no constituent or district concern.
17
We note that because statutes, executive orders, and OMB mem-
oranda apply to all agencies, rather than the agency-year level as with
hearings and appropriation committee reports, there is less variation
and so a larger inferential challenge for these actions.
Pamela Ban and Seth J. Hill
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Scholars have characterized committee reports
issued during the appropriations process as a channel
through which the committees can instruct agencies on
priorities, reporting requirements, or requirements to
conduct certain activities or investigations (Bolton and
Thrower 2019; Kiewiet and McCubbins 1991). Bolton
(2022) and Schick (2008) argue that the appropriations
committees can indirectly sustain agency cooperation
through language in their annual reports.
We examine whether committee reports from the
House Appropriations Committee addressing improper
payments reduce subsequent improper payment rates.
We collect the text of all committee reports issuedby the
House Appropriations Committee in fiscal years 2000–
21 from Congress.gov. We classify committee reports as
addressing improper payments if the report text includes
one or more of the phrases relating to improper pay-
ments. This process yields 75 appropriations committee
reports addressing improper payments.
18
Appropriation committee reports addressing
improper payments can cover agencies in two ways.
The report can cover an agency and directly refer to the
agency’s own improper payments as needing attention.
Or, the report can cover an agency but not directly refer
to an agency’s improper payments, instead mentioning
improper payments in general or mentioning a differ-
ent agency’s improper payments (see Section D of the
Supplementary Material for an example of each case).
We manually code both of these instances for each
report. While some reports address improper payments
of specific programs within agencies, the majority of the
reports only mention improper payments at the agency
level.
19
Table A11 in the Supplementary Material presents
the results on the effect of appropriations committee
reports addressing improper payments on improper
payment rates. Columns 1, 2, 7, and 8 show the esti-
mated effect of an agency or program’s agency having
its improper payments directly mentioned in a report.
Point estimates are negative and small for both agency-
level and program-level improper payment rates.
20
There is wide sampling variability in all cases, suggest-
ing a lack of evidence for a definitive effect of appro-
priations reports on improper payments.
In Figure 2, we evaluate evidence on the efficacy of
executive actions (the Obama executive order and
significant OMB memoranda) and enacted statutes.
The top frame plots the government-wide improper
payment rate for fiscal years 2005–21. The solid line is
the mean rate across agencies, the dashed line a mean
weighted by outlay amounts. We plot vertical lines at
four fiscal years with salient executive or statutory
actions.
The fiscal year trends suggest some evidence of
influence following the fiscal 2010 actions. Notably,
the executive order and OMB guidance occur early
enough in the fiscal year (November 2009 and March
2010) to influence payment practices for much of fiscal
2010. Both dollar-weighted and raw means decline
from fiscal 2009 to fiscal 2010 and on to fiscal 2013
where they bottom out before beginning to rise after
fiscal 2016. That said, we see no evidence of declines
following the 2013, 2014, or 2020 executive actions and
statutes, and the decline following 2009 is from an
improper payment rate of around 5% to a rate of
around 3.75% in 2013.
The aggregate means do not account for changes in
composition of the programs reporting improper pay-
ments, which is a function of each program’s risk profile
and mandatory evaluation schedule. The bottom frame
attempts to fix the estimates by plotting the fiscal year
fixed effects (δtin Equation 1) from the models in
Table 1, which include agency or program fixed effects
(αiin Equation 1) to account for compositional changes.
Above each fiscal year on the x-axis, we plot the fixed
effect estimate from the agency-level model (solid
circle) and from the program-level model (solid square)
along with 95% confidence intervals.
The fixed effect point estimates from both models
replicate the pattern from the top frame, with the
pre-2010 fixed effects greater than the 2010–14 fixed
effects followed by an increase toward 2020. The point
estimates suggest a decline in improper payment rates
following fiscal 2018 at the program level. The size of
the confidence intervals, however, does not allow for
strong inferences about this pattern. Data from future
years will allow evaluation of this decline.
Overall, while there are some years in which non-
oversight congressional and executive actions may
have reduced improper payments, the effectiveness of
these actions has been muted and inconsistent. The
magnitude of the decline in improper payments is, at
most, 1.25 percentage points over a specific 4-year time
period (fiscal years 2009–13), which is not reproduced
in years following. Statutes, executive orders, and
OMB guidance appear to offer, at best, the same
limited efficacy of oversight hearings.
CONCLUSION
Congress holds the power and responsibility to conduct
oversight of the executive branch to produce effective
public policy. This oversight role has spawned many
theories of congressional influence on the bureaucracy.
On the one end, theories suggest Congress controls the
bureaucracy and can successfully address problems
with “fire alarm”oversight (Calvert, Moran, and Wein-
gast 1987; Fiorina 1981; McCubbins and Schwartz 1984;
Moran and Weingast 1982; Weingast 1984; Weingast
and Moran 1983). On the other end, critics of domi-
nance theories point out that congressional control of
the bureaucracy is suspect for many reasons. Moe
18
These reports were not exclusively on the topic of improper
payments, largely detailing the annual appropriations for agencies,
but included at least one section or subsection specifically addressing
improper payments.
19
Of the 75 committee reports addressing improper payments of
agencies, 20 of those reports included some reference to a program’s
improper payments.
20
In Table A11 in the Supplementary Material, we also examine
whether there is a large effect the first time such an issue appears in a
report in our dataset but find large standard errors.
Efficacy of Congressional Oversight
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(1987) reminds the literature that bureaucrats have
their own motivations and incentives that do not make
them always subservient to Congress, and questions the
efficacy of the tools practically available to Congress to
influence the bureaucracy.
Empirical scholars have worked to assess congres-
sional oversight. The majority of this work, however,
has focused on when and with how much effort Con-
gress conducts oversight. Oversight is primarily mea-
sured by the number of congressional hearings
(Aberbach 1990; Fowler 2015; Kriner and Schickler
2016; MacDonald and McGrath 2016; McGrath
2013). This literature, though, has remained squarely
on the occurrence of oversight, with only some case
FIGURE 2. Improper Payment Rate Trends and Model Fixed Effect Estimates by Fiscal Year
2005 2007 2009 2011 2013 2015 2017 2019 2021
3
4
5
6
7
8
Improper payment rate
Mean IP rate
Dollar weighted mean IP
Exec Order 13520,
OMB M 10 13,
IPERA 2010
IPERIA 2012
OMB
reduces
threshold
to 1.5%
PIIA 2019
2005 2007 2009 2011 2013 2015 2017 2019 2021
–6
–4
–2
0
2
4
Improper payment rate year fixed effect
Fiscal year
Fiscal year fixed effects
Agency model
Program model
Note: Lines in lower frame extend to 95% confidence intervals. Vertical lines match to the following events: Executive Order 13520, OMB
memorandum M-10-13, and IPERA 2010 statute (fiscal 2010); IPERIA 2012 statute (fiscal 2013); threshold defining significant
overpayments reduced to 1.5% (fiscal 2014); PIIA 2019 statute (fiscal 2020).
Pamela Ban and Seth J. Hill
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studies on the consequences of oversight. Understand-
ing the effectiveness of oversight activities is critical to
evaluating the congressional check on executive action,
yet before this study the literature presented virtually
no evidence on efficacy.
We provide an empirical study of the efficacy of
congressional oversight on an outcome that can be
measured across agencies and over time. By examining
improper payments, an outcome for which there is
near-universal support within Congress to reduce, we
can evaluate how much congressional oversight influ-
ences bureaucratic behavior.
The answer appears to be that oversight is quite
circumscribed. We find that oversight hearings on
improper payments first increase attention to the prob-
lem and then lead to subsequent declines in improper
payments. However, these declines are quite modest
relative to the scope of the problem, around 0.1 per-
centage points per year for an agency with witnesses
called to testify. We do not find that a second tool of
oversight, correspondence between legislators and
agencies, is used much at all. Statutes codifying report-
ing and recovery requirements, appropriation commit-
tee reports, and executive actions such as OMB
guidance and executive orders produce similar limited
muted effects.
Fixing improper payments even in the best case is a
difficult problem. Improper payments are an
entrenched problem with multiple causes and Congress
has other matters of importance demanding their time.
Some readers may thus view our finding of an incre-
mental downward movement in improper payments in
response to oversight hearings as evidence of effective
congressional oversight. We appreciate this view but
our conclusion is less sanguine. Multiple indicators
suggest that Congress is not getting what they wish
for from their oversight efforts. Congress has sustained
a relatively high level of attention to this issue for a
quarter of a century, spending valuable time to pass
multiple statutes, hold numerous hearings on the issue,
and include the topic in appropriation reports. Yet
members repeatedly state in hearings that they are
unsatisfied with agency performance. While some pro-
grams have achieved sizeable reductions in improper
payments, many others do not achieve such reductions
despite oversight attention from Congress. Finally,
improper payments remain a quarter-trillion dollar
annual drag on federal spending. We do not feel com-
fortable concluding oversight has achieved effective-
ness given that magnitude of problem.
That the improper payment setting is likely an oppor-
tunistic scenario for oversight also draws us to the
conclusion of limited effectiveness. The goal of reduc-
ing improper payments is bipartisan and shared by
individuals in both branches of government. That we
find such limited effect of oversight here begs the
question of how oversight proceeds when the execu-
tive’s goals diverge from the legislature, as in models
with ideological drift of the bureaucracy, or when
partisan disagreement in Congress yields mixed mes-
saging to the bureaucracy. On the other hand, perhaps
oversight is most effective when out-party members of
Congress use their oversight platform to embarrass the
bureaucratic efforts of the other party’s president. We
leave this open question to future research.
In finding that oversight at first generates a Hawthorne
effect—inducing additional attention to improper pay-
ments by agencies subjected to oversight—our contribu-
tion provides new insights on both the limitations and
prospects for oversight. Oversight hearings do not seem
to trigger substantial near-term mitigation or correction
of bureaucratic action from the perspective of Congress.
Instead, oversight leads to increased attention to the
bureaucratic deficiency and, ultimately, modest remedi-
ation of the problem.
Our findings have limitations and implications that
require future research. First, our study focuses on
hearings as Congress’s main tool for oversight, follow-
ing previous work. Congressional scholars have
recently worked to consider non-hearing techniques
used for oversight (e.g., Selin and Moore 2023); our
findings on the limited effectiveness of oversight
hearings suggests the importance of gaining a full
accounting of congressional oversight activities. While
we also examine the non-hearing techniques of corre-
spondence between legislators and agencies, appro-
priation committee reports, and executive actions, we
have still been unable to uncover strong evidence of
either legislative or executive control over bureau-
cratic deficiency. Additional work on other oversight
activities can help us understand if other legislative or
executive actions better motivate bureaucratic perfor-
mance.
Second, a critical interpretation of our result that
improper payment rates decline in the few years after
a hearing but do not globally improve across the
bureaucracy is that oversight generates short-term
attention by the agency. As time passes, however, the
agency subject to oversight might stop paying attention
to the issue. The timeframe and sampling variability of
our study make this interpretation difficult to evaluate.
Were it the case, it would imply oversight of even
smaller effect than what we conclude.
Finally, our study takes advantage of improper pay-
ments as a comparable measure across agencies and
time, as well as an issue that members of Congress from
both parties have tried to resolve for decades. One
possible drawback of improper payments, however, is
that they are not as electorally salient for members of
Congress as other issues. Members may choose to exert
more effective oversight on issues for which they can
credit claim in a particularistic or partisan way. On the
other hand, the fact that improper payments are a purely
bureaucratic issue that is relatively insulated from elec-
toral politics makes it a practical outcome to test the
effects of nonpartisan legislative oversight. Oversight
efforts on technical bureaucratic issues are less likely to
be a guise for grandstanding, position-taking, or other
partisan rhetoric that do not represent actual efforts to
change bureaucratic behavior. Future work should
examine other issues and incorporate member incentives
to probe whether effective oversightis driven by electoral
concerns, while carefully disentangling true oversight
efforts from when it is as simply a rhetorical prop.
Efficacy of Congressional Oversight
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Nevertheless, our findings suggest serious limits to
Congress’s best known tool for oversight on a standard
bureaucratic issue. This new understanding of over-
sight is especially crucial when viewed in light of the
enormous size of agency programs that touch many
facets of Americans’lives. Members of Congress seem
to legitimately want to decrease improper payments,
yet Medicare Part C by itself had improper payments of
$23 billion in fiscal year 2021. The National School
Lunch Program had $723 million and the Federal Pell
Grant Program $521 million. In total, the GAO esti-
mates improper payments in fiscal year 2022 of $247
billion with a cumulative total of $2.4 trillion since fiscal
2003 (Government Accountability Office 2023). These
numbers could understate the total problem as the GAO
found that only half of agencies were fully compliant
with improper payment reporting requirements in fiscal
2021 (Government Accountability Office 2023).
While investing in congressional capacity (see the
programs studied in Fong, Lowande, and Rauh 2024)
might foster more and more effective oversight, over-
sight on improper payments seems mostly to be an
information-gathering and information-production
exercise. Congress and OMB seem to have plenty of
information about the size and scope of the problem.
It is not clear that more information generated by
more effective oversight would be the solution to this
challenge.
Perhaps substantial sums of payments improperly
made are just the “cost of doing business”for a large
government pursuing complex societal-level goals. It is
certainly a large cost and, unfortunately, congressional
oversight does not appear to provide much relief,
offering only limited political control over bureaucratic
performance.
SUPPLEMENTARY MATERIAL
To view supplementary material for this article, please
visit https://doi.org/10.1017/S0003055424001242.
DATA AVAILABILITY STATEMENT
Research documentation and data that support
the findings of this study are openly available at the
American Political Science Review Dataverse: https://
doi.org/10.7910/DVN/7GG1MC.
ACKNOWLEDGMENTS
We thank Joe Colletti, Sam Kernell, Doug Kriner,
Frances Lee, Kenny Lowande, Ben Noble, Heather
Pajak at OMB, Jon Rogowski, Christina Schneider,
Sam Williams, Hye Young You, Nolan McCarty, and
audiences at APSA 2023, the University of Michigan,
Columbia University, the Harris School of Public Pol-
icy, UCSD, Princeton University, and the Levin Center
for Legislative Oversight and Democracy for feedback.
Analysis and conclusions are those of the authors
alone.
CONFLICT OF INTEREST
The authors declare no ethical issues or conflicts of
interest in this research.
ETHICAL STANDARDS
The authors claim exceptions to the APSA’s Principles
and Guidance for Human Subject Research (2020)
and provide reasoned justification in the appendix.
Although drawing on research with human partici-
pants, the authors claim exemption from organizational
ethical review and provide reasoned justification in the
appendix.
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