Curbing Federal Fraud: Examining Innovative Tools to Detect and Prevent Fraud in Federal Programs
House Subcommittee on Government Operations and the Federal Workforce
2026-01-13
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Source: Congress.gov
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The Subcommittee on Government Operations will come to order and I'd like to welcome everybody to the hearing today. Without objection, the chair may declare recess at any time. And I represent myself for making an opening statement. Welcome each of you today to our hearing where we are having a discussion about innovative tools to detect and prevent fraud in federal programs. Last week, we spent time highlighting a significant problem in state-administered programs. We exposed extensive fraud in Minnesota that went largely ignored until brave whistleblowers stepped forward. We saw that fraudsters are getting smarter and richer at the expense of the American taxpayer. These bad actors were exploiting loopholes and oversight, leaving us all to ask, why wasn't it stopped earlier? Why did we just now catch it? Well, today we're here to do the important work of bringing to the American people and each of you A group of people who are dedicated to this, who have longstanding answers, and who have thought through much of this, not only to prepare to be here today, but in their career. Finding a solution is a very important thing, and this is a persistent problem that not only must be addressed, but must be talked about openly, and as you see today with Mr. Nfume, and on a bipartisan basis. Last March, this subcommittee examined why fraud wasn't stopped earlier and learned that agencies are not incented to prevent fraud. They are incented to make quick payments and to try and figure things out later. As we have seen countless times, this approach needs to be looked at
and changed. I think you'll hear some of that change today, and you certainly will hear the resolve of people who believe that this is something that is within our mandate, not just something that exists that's good to talk about. Fraud should be detected before it happens. That's not a new concept, but it's gonna be widely discussed today. Government agencies must ensure that hard-earned taxpayer dollars are going to the right person for the right person from the very start. I've told the story many times about how I have a 31-year-old Down syndrome son who will find throughout his life as he continues that he needs to have help from many people. One of those might be the federal government or state government. but that the dollars that are intended for people who need them, who cannot take care of themselves, is part of the responsibility that we have to make sure that it goes to the right people. As we have seen recently in Minnesota, when there are no guardrails, bad actors enrich themselves over the taxpayer's dime. The Pandemic Response Accountability Committee was created to provide necessary oversight over pandemic problems. We are entering a new era where this oversight has been expanded to other agencies and other programs. Over the course of the past few years, the PRAC as it is called, has addressed data analytics capacities and capabilities that can show when bad actors are trying to hit the federal government in multiple programs, they can be found, they can be stopped, and we can do something about it before a check goes out the door.
They can determine when IP addresses are recommended and connected to others who too might be far away from eligibility for a specific program but are tied to a need for us to know more. They can alert programs to pause and move more carefully to review information before any payments go out the door. They can do this for free, but not everybody knows about it. A key collaborator in this effort is the Treasury's Bureau of Financial and Fiscal Services, which maintains the Do Not Pay system. The Treasury is the last barrier before payment is sent out, so they can initiate that pause before putting money into the wrong hands. But they're not always allowed to do so. Collaboration is key. However, there are some legislative challenges that, if solved, could strengthen these efforts to detect and prevent fraud. That is part of what we will also hear today. Currently, the PRAC is housed within the Council of Inspector General on Integrity and Efficiency, and its operations were extended in law until 2034. A permanent solution that maintains the analytic capacities and capabilities that have been built over the past six years is necessary and needed. Its database is billions of records deep and it has begun to pay for itself. But only because a proper not just management, but good oversight that is provided whereby we all work together. Treasury's Do Not Pay system has access to a large number of data sets, but more are needed to ensure that the system is comprehensive and truly innovative.
As we discussed innovative tools and collaboration, it's important that we also discuss not only how to make best use of these tools, but what barriers need to be removed so that they can be used. It's important that we discuss what needs to change with program design so that agency and programs are verifying the validity of information, not just confirming that documentation exists. Today, we will hear from distinguished subject matter experts in the field who can help us to understand what tools are available and what needs to be done to make us better at detecting and preventing fraud payments before they happen. In the coming weeks, I will be introducing legislation to address some of these issues, more specifically, the permanent solution for the PRAC.
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