Rep. Malliotakis Questions GAO on AI for Combating Waste, Fraud, and Abuse

The Scale of Improper Payments and Fraud

• 💸 The GAO estimates a staggering $162 billion in improper payments for fiscal year 2025, with over $2.8 trillion since 2003.
• 📬 In Rep. Malliotakis's district alone, 400 constituent cases involved stolen federal checks totaling $5.4 million.
• ⚠️ This includes issues like stolen Treasury checks, check washing, reissuing, and cashing, representing a significant financial drain.

Potential Solutions and AI's Role

• 🏦 Moving recipients to direct deposit is a primary strategy to reduce physical check theft.
• 🔍 The IRS is being required to reissue payments via direct deposit, and there's interest in tracking checks to identify theft points.
• 🤖 Artificial intelligence (AI) is seen as a tool that can help track payments beyond just the check itself and verify receipt by the individual.
• ⚙️ The private sector utilizes analytics and AI for financial crimes, which could potentially be repurposed for government use.

Barriers to AI Implementation in Government

• 🗄️ A significant barrier is the partitioning of data, making it difficult for the anti-fraud community to track individuals and information across different government agencies.
• 📊 Another crucial barrier is the need for validated foundational data that accurately indicates fraud or improper payments.
• ✅ The government must ensure that data used for analytical models is validated through processes with Inspectors General to create a gold standard dataset for optimal outcomes.
• 🤝 Multi-agency data sharing, such as extending the Social Security Administration's authority to share its death master file with the Treasury, is also critical, though specific recovery figures were to be provided later.