Deploying artificial intelligence tools and improving agency data management and sharing could work to prevent fraudulent and improper payments made by the Federal government but reaching that goal also requires better agency accountability measures, witnesses told members of the House Oversight and Reform Committee’s Subcommittee on Government Operations on March 11.
Several witnesses emphasized that both Congress and agencies need to adopt better accountability measures in order to improve fraud and improper payment prevention.
Tuesday’s hearing followed the release of a new report from the Government Accountability Office (GAO) which said on Monday that the Federal government made a total of $162 billion in improper and fraudulent payments in 2024 – down $74 billion from the previous year, but still too high according to lawmakers and witnesses.
“Over the past two years, we have heard a number of suggestions to improve our program integrity capabilities, and more will be discussed today – but I must admit, I expected the Federal agencies to be further along,” Rep. Pete Sessions, R-Texas, chairman of the subcommittee, said in his opening statements.
“We hope through these discussions we will develop a clear understanding of laws, policies, processes, information technology system deficiencies, and other matters that must be addressed,” he said.
Subcommittee Ranking Member Kweisi Mfume, D-Md., agreed with Sessions, noting that “real progress relies on access to quality data, thoughtful partnerships with agency leaders, and investments in the technology and staff needed to create proper internal controls to prevent improper payments and fraud.”
Kristen Kociolek, managing director of Financial Management Assurance at GAO, told the subcommittee that since 2003, Federal agencies have made an estimated $2.8 trillion in improper payments. While the latest report from GAO showed the $162 billion number for fiscal year 2024, Kociolek noted that “the actual improper payments amount may be significantly higher.”
GAO has long been responsible for tracking the government’s improper payment rate – which doesn’t correlate on a top-line basis with payments determined to be fraudulent. In a report last summer, the watchdog agency defined improper payments as “ones that shouldn’t have been made, were made in an incorrect amount, or lacked sufficient supporting documentation.”
Improper and fraudulent payment prevention methods are necessary, said Ken Dieffenbach, executive director of the Pandemic Response Accountability Committee (PRAC), who explained that “pay and chase” is “not the solution,” and can be “exorbitantly expensive.”
“The government must pause and more closely review suspect claims before money is disbursed,” said Dieffenbach. “Fraudsters do not follow our government organizational charts, they steal from wherever it is easiest to steal. We must also responsibly leverage more data … to identify suspicious patterns and trends indicative of fraud schemes.”
While preventative measures are necessary, the accountability mechanisms and practices used to prevent fraud and improper payments are left up to individual agencies, Kociolek told lawmakers, while noting that Congress could establish greater oversight over agencies’ practices through appropriations and requiring agency officials to report and demonstrate their preventative controls.
Inspector generals (IGs) are crucial in preventing waste and fraud, several Democrat lawmakers noted, emphasizing – in reference to the firings of 18 agency IGs by the Trump administration – that their absence weakens accountability and oversight in agency programs.
“You’re going to have less transparency, less visibility on what’s actually occurring in agencies,” Dieffenbach said about losing IG oversight.
“The importance of having … good internal controls is … so that over the years – as emergencies are going to arise – you have those foundational controls in place, you have plans and controls ready to go,” Kociolek later said.
Reps. Mfume and Sessions noted that they will soon be introducing legislation to improve improper and fraudulent payment oversight.
“It’s going to take calm, clear thinking, [and] a resolute determination to make sure that whatever legislation we are able to come up with … really does get us to where we want to be,” said Rep. Mfume.
