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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Source: Congress.gov

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 ]

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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 ]

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 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 ]

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 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 ]

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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 ]

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 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 ]

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Participants

Transcript

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We will start here in just a minute.  Mr. Nfume is on his way, and I have chosen to wait for the ranking member.  And so we'll get that started as soon as he walks in.  Thank you.
Good morning.  The Subcommittee on Government Operations will come to order, and I want to welcome everyone to this, what I think is going to be an important bipartisan hearing today.  Without objection, the Chair may declare recess at any time, and I recognize myself for making an opening statement to our witnesses that are here today and to the people who have taken time to come here.   to see today, as well as my colleagues, I want to really dispense with my opening statement, and without objection I'll enter that into the record.   But what I'd like to say is that this is a follow-up to the meetings which we have held for the last few years, where there was active discussion not just about what we were going to do to recognize what might be considered waste, fraud, or abuse, or money that was spent by the federal government that did not equal   that which it was intended to do, which kept money away from the real recipients and for people who would have benefited with congressional intent.  As you will recall, last year we held what was a meeting in October whereby we had GAO and others who came to speak with us   and they came up with what might be a three-year number of their ideas about inappropriate payments, then waste, fraud, and abuse, but things that were paid that we felt like were not permissible or following the intent of the law or the needs of the money.  Mr. Mfume and I at that time looked at each other and said, we are going to work together   We are going to challenge GAO to come back to us.
We are going to find within the government other particular people who have talent, data, information, and can lead us to a better solution.  I am pleased to say, Mr. Mfume, I believe this is the beginning   of that turning the corner to where we will then not just work together, but try and discover the things that reside within the government to gain the information that is necessary.  And I think today's hearing will prove that in.  So I'm delighted that you are here.  I'm going to put my opening statement in the record, but that is what I wanted to say.  This is about   identifying, preventing fraud, improper payments in federal programs.  And we're going to learn today how we're better prepared if we work together, if we find a way, and I think we will, not just to work together, but to use the important elements of this government for data information and lessons learned.   And I would say thank you for being here.  Distinguished gentlemen, wish to have time for an opening statement.  I do.
Gentlemen, it's recognized.  I do, Mr. Chairman.  Thank you very much.  Good morning to you.  Good morning to our witnesses who are here.  And I want to just personally thank Chairman Sessions for the manner in which we continue to meet each other halfway, even though we're on different sides of the aisle, to come together to find a way at least to   release the federal government of some of its ailments, particularly this whole notion of improper payments, waste, fraud, and abuse.  We did that throughout the 118th Congress, and my colleagues and I on this subcommittee all remain laser-focused on combating those matters.  And I think we also have always agreed that this is a nonpartisan matter, no matter where we are in our country or philosophically.   We agree that every dollar directed to every program ought to go to the intended purpose.  From the very beginning of this president's term, the so-called Department of Government Efficiency, and some of you know that I have referred to it as the Department of Government evil for my own particular purposes because of the way it's affected working men and working women and their families across this country.   I think hardworking, dedicated men and women exist in every congressional district throughout the country.  And while there is still no full, complete public accounting on all of them who have been dismissed other than numbers, we don't know the names and the faces and the families and the children and the mortgages and everything else that has been disrupted by this.  I have got no doubt that   among the hundreds of thousands of federal employees affected by the fork in the road email and the mass firings of probationary staff that many, many are experiencing a pain that we do not feel right now.  And that's not to even mention, as I'm sure the chairman would mention also, the 18 inspector generals that have been dismissed.

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