The US national audit institution, the Government Accountability Office, found that more than one million payments were mistakenly made to dead people, totalling about $1.4bn, by 30 April.
As the government raced to pay its citizens their ‘economic impact payments’, with $269.3bn having been paid by 31 May, its efforts were complicated by the Internal Revenue Service having access to death records while the Treasury agencies that distribute the money did not, the GAO said in a report.
The IRS’s legal interpretation of the stimulus legislation was that it did not have the authority to deny payments to people who did not file a tax return for 2019, even if they were dead.
According to the GAO, Treasury officials were unaware of payments being made to deceased people until it was reported in the media.
Both the IRS and the wider Treasury “still face challenges” around preventing improper payments and fraud, the report said.
The watchdog warned of “trade-offs” in the government response to the pandemic, during which officials have sacrificed some elements of good practice in favour of speed.
“Consistent with the urgency of responding to serious and widespread health issues and economic disruptions, agencies have giving priority to moving swiftly where possible to distribute funds and implement new programmes,” the report stated.
“As trade-offs were made, however, agencies have made only limited progress so far in achieving transparency and accountability goals.”
The US has so far committed $2.6trn in emergency assistance for people, the healthcare system, state and local governments and the private sector.
