At Subcommittee Hearing, Members Examine Strategies to Address Improper Payments, Effectively Deliver Government Services

Mar 31, 2022
Press Release

Washington, D.C. (March 31, 2022)—Today, Rep. Gerald E. Connolly, Chairman of the Subcommittee on Government Operations, held a hearing to examine the growth in agency improper payments and identify ways the federal government can tackle fraud, waste, and abuse in government programs without putting undue burden on the individuals and small businesses who rely on them.  

 

The federal government manages and allocates trillions of dollars each year to programs that help individuals, families, and businesses—whether that be Social Security, Medicare, Crop Insurance for farmers, school lunch benefits and health insurance for children, and a host of other essential programs.  But that money does not always go where Congress intends,” Chairman Connolly said in his opening statement.  “Today’s hearing examines the causes of these improper payments and explores solution for reducing them.” 

  

The Subcommittee heard testimony from Linda Miller, Principal of Advisory Services, Grant Thornton, Former Deputy Executive Director of the Pandemic Response Accountability Committee, and Former Assistant Director of the Government Accountability Office; Scott Jensen, CEO and Vice President of External Affairs at Research Improving People’s Lives and Former Director for the Rhode Island Department of Labor & Training; Adrian Haro, CEO of The Workers Lab; Parker Gilkesson, Senior Policy Analyst for Income and Work Supports at The Center for Law and Social Policy; and Rachel Greszler, Research Fellow in Economics, Budget and Entitlements at The Heritage Foundation.

Members and witnesses examined why improper payments, which include fraud, underpayments, and paperwork errors, have been skyrocketing over the past several years, reaching $281 billion in Fiscal Year 2021. 

 

  • “Improper payments have steadily grown since Congress first required their tracking and measurement under the Improper Payments Information Act of 2002,” explained Chairman Connolly.  “Congress has enacted at least five bills into law that sought to identify and reduce improper payments: in 2002, 2010, 2012, 2016, and 2019.  Despite these efforts, improper payments are at an all-time high.” 

 

  • “As of January 31, 2022, the federal government had obligated $4.2 trillion and expended $3.6 trillion, of the $4.6 trillion in funds from six COVID-19 relief laws,” said Ms. Miller.  “GAO recently reported that agencies had significant shortcomings in their application of fundamental internal controls and financial and fraud risk management practices in administering COVID-19 relief funds.  The program that suffered the largest fraud losses was the Pandemic Unemployment Assistance program.”

 

  • In response to a question from Rep. Davis, Ms. Miller continued:  “There is a framework.  GAO put the framework out in 2015; it’s called the Framework for Managing Fraud Risks in Federal Programs.  It outlines steps for taking a proactive, strategic approach to managing fraud risks.  If agencies had done these kinds of activities prior to the pandemic, they would have recognized that things like not collecting device identity information—IP addresses—was going to create significant fraud issues during a large event like the pandemic.”

 

Members and witnesses discussed the need for government to evolve its approach to prevent improper payments, while improving its ability to deliver government services all qualifying people and businesses can access.  

 

  • “Of course, no program can survive if it doesn’t take abuses seriously,” said Ms. Gilkesson.  “However, when actions to improve program integrity have a strong negative and racially skewed impact that decreases access to basic life necessities, policymakers have a moral obligation to find less harmful ways to fight fraud.  They also must repair the harm of these actions on innocent recipients’ dignity and trust in government.” 

 

  • “It is tempting to see a stark choice in [unemployment insurance] administration, a fundamental ‘either/or’—either pay claims quickly or protect against fraud,” said Mr. Jensen.  “Such an understanding is categorically mistaken.  By law, and because it is UI’s duty to stabilize our nation’s labor market, UI is, and must be, a ‘both/and.’  We must both expeditiously pay benefits and protect UI trust funds from the criminals who want to steal from them.” 

 

  • In response to a question from Congresswoman Norton, Haro testified:“You can actually do both—increase access to public benefits and, at the same time, also increase efficiency inside government simultaneously.  Like has been said before today, it’s a false tradeoff to say you have to sacrifice efficiency to increase access.  I believe that doing so can stifle innovation in the public sector, and we should be doing everything we can to encourage it.” 

 

Members and witnesses examined strategies the federal government can adopt to better address improper payments, including increasing the use of modern IT practices like automation and data sharing to proactively prevent improper payments before they happen.   

 

  • “I plan to introduce legislation...[to] establish an office dedicated to program integrity to implement robust oversight of federal agencies’ program integrity efforts,” said Chairman Connolly.  “Importantly, this office will shift from a compliance-based to an action-oriented approach by requiring federal programs with significant risk of improper payments to implement proactive, data-driven, and outcome-oriented antifraud controls.  In addition, the bill will ensure that agencies minimize the burden of their antifraud controls on the public.  By focusing its efforts on data collection, sharing, and analysis, this new office will enhance program integrity in the highest-priority federal programs without putting undue burden on those programs’ customers.” 
      
  • In response to a question from Rep. Raskin, Haro said“As government leaders continue to show interest in extending access to safety net benefits for gig workers through portable benefits proposals and initiatives like draft Senate legislation that would modernize the unemployment system and permanently offer benefits to gig workers, we can continue to lay the groundwork in multiple states.”   

 

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117th Congress