House Oversight Committee Hearing on Preventing Improper Payments and Fraud

The Pervasive Problem of Improper Payments and Fraud

• 💸 Federal agencies have an estimated $2.8 trillion in improper payments since 2003, with $162 billion in fiscal year 2024 alone.
• ⚠️ While all fraudulent payments are improper, not all improper payments are fraud; improper payments are often errors, while fraud involves willful misrepresentation.
• 🎯 The Pandemic Response Accountability Committee (PRAC), created to oversee $5 trillion in relief funding, has identified billions in potential fraud and supported investigations.

Strategies for Prevention and Recovery

• 💡 Preventive controls are the most effective way to reduce improper and fraudulent payments, aiming to stop them before they occur.
• 🔑 Key preventive tools include the Treasury's 'Do Not Pay' system and assigning responsibility to senior-level officials for program integrity.
• 📉 While recovery of improper payments is possible, it is often costly and less effective than prevention.
• 🤖 Investments in technology, data analytics, and artificial intelligence can help identify suspicious patterns, but require accurate and reliable data.

Challenges and Recommendations

• ⚠️ A significant challenge is the dismissal of Inspectors General (IGs), who play a vital role in oversight, auditing, and identifying root causes of fraud and improper payments.
• 📊 Data sharing and access are critical, with recommendations to make Social Security Administration's full death data sharing with Treasury permanent.
• 🏛️ Congress can incentivize agencies through hearings, appropriations, and oversight processes to improve program integrity.
• 🛠️ Internal controls and robust data systems are fundamental to preventing improper payments, especially in large programs like Medicaid and SNAP.

Medicaid and SNAP Integrity

• ✅ The vast majority of Medicaid and SNAP recipients are eligible, with most improper payments stemming from paperwork errors rather than intentional fraud.
• ⚠️ Proposals like requiring Medicaid renewals every six months could increase errors and harm eligible families due to procedural issues and overwhelmed state staff.
• 🤝 Effective solutions include establishing accountability, facilitating collaboration, and providing technology and training targeted to root causes.