Each year the federal government loses an estimated $233 billion to $521 billion to fraud. There is no single or simple solution to combat fraud in federal programs, including those administered by states. But, over the years, GAO has identified hundreds of actions federal agencies and Congress can take to better protect taxpayer money from fraudsters and increase public trust in government.
Today’s WatchBlog post looks at nine key actions Congress can take. These actions include passing new legislation, as well as increasing oversight of agency counter fraud efforts.
Millions of Americans receive payments from the federal government—including through Social Security and Medicare, as well as social safety net and disaster assistance programs.
But these payments and programs are susceptible to fraud from people or businesses either pretending to be someone they are not or applying for benefits they don’t qualify for. How can we stop them? We think there are four actions that Congress should take to help prevent fraudulent and erroneous payments.
Eliminate use of self-attestation to determine identity and eligibility for federal programs. Some federal programs allow applicants to self-attest or self-certify their identity and eligibility for benefits. This has helped agencies get money to those who need it as quickly as possible, because they aren’t spending time verifying information.
Self-attestation was used often during the COVID-19 pandemic—but the result was hundreds of billions of dollars lost to fraud. Much of this fraud could have been prevented or more quickly detected if Congress had required agencies to verify identities and information before making payments.
Expand use of Treasury’s “Do Not Pay” program. The Department of the Treasury manages the “Do Not Pay” program. This is a key resource for checking eligibility. It allows agencies to verify recipients against a variety of databases before making payments. But we recently found that only 4% of all federal programs fully use it. Others cite resource constraints and concerns about privacy and data protections as reasons why they don’t.
Additionally, state-administered programs that use federal funding (such as SNAP or TANF) also would benefit from using Do Not Pay. They can access it for free—but aren’t required to do so.
Congressional action could help agencies and states overcome the barriers to using this valuable data source for fraud prevention, while also protecting privacy. Congressional action could also grant the Do Not Pay program access to more data sources, making it an even more powerful resource to combat fraud.
Authorize greater access to the National Directory of New Hires to verify eligibility for federal programs. The National Directory of New Hires contains employment and wage data on nearly every working American, as well as people who receive unemployment benefits. This is an important resource for verifying program eligibility and determining benefit amounts. But very few programs and agencies are legally allowed to access it.
Increasing access to this database, with the appropriate privacy and data protections, wouldn’t only help fight fraud. It would also improve government-wide efforts to identify, prevent, and recover payments made in error (also known as improper payments).
Provide the Department of Health and Human Services (HHS) with authority to obtain information from states to estimate and report improper payments in Temporary Assistance for Needy Families (TANF). So far, we’ve discussed government-wide actions to combat fraud. But our work has also looked closely at specific programs. Among them is TANF, a $17 billion program annually. This program is an important resource for families that need help. But more should be done to protect funding from fraud and errors.
HHS oversees this program, which is administered by states. HHS says it lacks legal authority to require states to give it the information needed to estimate how much is loses to improper payments each year. Providing HHS with that authority would increase accountability over TANF payments and allow HHS to collect the information it needs to implement corrective actions and assess their effectiveness in reducing fraudulent and other improper payments.
Earlier this year, GAO experts testified before Congress about the importance of improving TANF oversight. Hear from them in the video below.
