Shifting Gears: Moving from Recovery to Prevention of Improper Payments and Fraud
House Subcommittee on Government Operations and the Federal Workforce
2025-03-11
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Summary
This hearing of the Subcommittee on Government Operations focused on identifying, preventing, and combating waste, fraud, and improper payments within federal programs, with a strong emphasis on finding bipartisan solutions to a long-standing issue impacting trillions of taxpayer dollars.[ 00:20:55 ]
Themes
Scale and Nature of Improper Payments and Fraud
The committee heard that improper payments are payment errors—overpayments, underpayments, or payments to ineligible recipients—while fraud involves willful misrepresentation to obtain something of value. Since 2003, federal agencies have made an estimated $2.8 trillion in improper payments, including $162 billion in fiscal year 2024 alone. Fraud estimates from 2018-2022 ranged from $233 billion to $531 billion annually, indicating a substantial problem across all federal programs. However, it was also clarified that in programs like Medicaid and SNAP, the vast majority of improper payments are due to paperwork errors, not intentional fraud by recipients.[ 00:49:07 ]
Emphasis on Prevention and Data-Driven Solutions
Witnesses stressed that the most effective way to reduce improper payments and fraud is to prevent them from happening in the first place, rather than attempting to recover funds afterward, a process described as "exorbitantly expensive." Key preventive controls include leveraging the Treasury's Do Not Pay system and ensuring it has access to comprehensive data, such as the Social Security Administration's full death data. The Pandemic Response Accountability Committee (PRAC) was highlighted as an example of successful data analytics to detect and prevent fraud, using a "big data approach" to identify complex schemes. Concerns were raised about the PRAC's impending sunset in September 2025 and the deletion of its valuable data.
Role and Impact of Inspector Generals (IGs)
The dismissal of Inspector Generals (IGs) was a point of concern, with the argument that IGs play a critical oversight role in auditing programs, identifying root causes of improper payments, and providing transparency to Congress.[ 00:30:18-00:30:36 ] It was noted that this loss of institutional knowledge and oversight capacity could exacerbate existing problems and reduce visibility into agency operations.[ 00:59:35 ] The importance of IGs in auditing state operations and investigating provider fraud in programs like Medicaid was also emphasized.[ 00:59:29-00:59:33 ]
Accountability and Enforcement
A recurring theme was the lack of clear accountability and enforcement mechanisms for agencies and agency heads regarding improper payments. While agencies are supposed to have accountable officials and attempt to recover improper payments, instances of agency heads being fired for such issues are not observed.[ 01:15:22 ] Suggestions were made for Congress to strengthen accountability through legislative action, including requiring agencies to report on prevention plans and utilizing appropriations to incentivize compliance.
Protection of Social Safety Net Programs
Discussions also touched upon the accuracy and importance of social safety net programs like Social Security, Medicaid, and SNAP. Social Security was cited as having a payment accuracy rate of over 99%, debunking claims that it is rife with fraud. Concerns were raised about mis- and disinformation, such as calling Social Security a "Ponzi scheme," which some fear could be used to justify cuts to vital programs. Cuts to staff in agencies like the Social Security Administration could lead to longer wait times and reduced services for eligible individuals.
Tone
The tone of the meeting was largely serious and focused, marked by a strong bipartisan consensus on the gravity of the improper payments and fraud problem and the urgent need for effective solutions. While there was general agreement on the problem, some moments of political tension arose concerning the dismissal of Inspector Generals and certain public statements about Social Security, leading to pointed exchanges about political responsibility and factual accuracy. Overall, the discussion conveyed a sense of urgency and a shared commitment from both sides of the aisle to develop concrete, bipartisan legislative action to address the issue effectively.[ 01:59:15-01:59:31 ]
Participants
Transcript
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