Treasury Says Most Stimulus Payments to the Dead Recouped

(Bloomberg) -- The Trump administration said it’s recovered almost 70% of $1.6 billion in relief payments mistakenly sent to dead people as the government rushed out stimulus money to blunt the economic impact of the coronavirus, according to a government watchdog.

The Government Accountability Office, in a brief update of its work to monitor the federal pandemic response, also said that as of the end of June the federal government still had about half of the $2.6 trillion that Congress approved in response to the coronavirus outbreak.

Monday’s filing following a June report that concluded the government’s quick action to issue stimulus payments led to more than a billion dollars of misdirected payments.

The June report made several recommendations, including that the Internal Revenue Service look at cost-effective options for notifying next-of-kin and others how to return almost 1.2 million in economic impact payments sent to deceased individuals.

The GAO said it wasn’t able to independently verify the Treasury Department’s statement about the amount recovered by the time it finished work on Monday’s report, but said that it’s working with Treasury to determine the number of payments.

“Treasury was considering sending letters to request the return of remaining outstanding payments but has not moved forward with this effort because, according to Treasury, Congress is considering legislation that would clarify or change payment eligibility requirements,” the report said.

The GAO also had recommended that Congress explicitly allow the Social Security Administration to share its full death data with the Treasury Department to prevent any future payments to ineligible individuals. The Senate passed a bill in June to do that, the report said.

Agencies are taking steps to respond to other recommendations, including that the Small Business Administration develop plans to identify and respond to risks and address potential fraud in the $669 billion Paycheck Protection Program, which offered forgivable loans to small firms, according to the report.

The SBA and Treasury have promised to review all loans of more than $2 million and potentially others as well. The SBA had approved more than 5.2 million loans totaling $525 billion when the program closed Aug. 8, and Congress is debating another round of PPP in next stimulus bill, though negotiations with the Trump administration are currently stalled.

Of the total $2.6 trillion in relief measures approved by Congress since the start of the pandemic, the GAO said that as of June 30, $1.5 trillion had been committed, with $1.3 trillion of that spent.

That includes money appropriated for supplemental unemployment insurance and public health and social services emergency spending.

©2020 Bloomberg L.P.