During a House Oversight Committee Hearing earlier this month, Rep. Virginia Foxx (R-NC) questioned witnesses about why federal agencies don't use certain databases to combat improper payments.
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NewsTranscript
00:00Thank you, Mr. Chairman, and I thank our witnesses for being here today.
00:05Ms. Kosilek, the Payment Integrity Information Act codified the Do Not Pay initiative, which
00:12provides agencies with access to certain databases that can assist in preventing improper payments
00:19and requires a review of the available databases prior to the release of funds.
00:25Despite this requirement, it is unclear that agencies are utilizing the Do Not Pay system.
00:32For example, the Department of Transportation Inspector General reported in November 2023
00:38that the agency did not use the Do Not Pay portal in prepayment processes as the law
00:44requires.
00:46In your opinion, why do agencies not use all the tools at their disposal to prevent improper
00:53payments, and do you believe that there are ways to improve the Do Not Pay system?
01:03Yes, I think there are ways to improve the Do Not Pay system.
01:06As I mentioned, making sure that full death master file is in there and that all relevant
01:14data sources are in there is key to making sure that that source of information is as
01:21complete and reliable as it can be.
01:24A way to encourage agencies to use it is really to think about how you would do reporting,
01:33I think.
01:34Right now, agencies report on the back end of what went wrong, thinking about how you
01:41would have agencies report about preventing.
01:44For instance, the Do Not Pay system and Treasury Payment Integrity tools can flag payments
01:51that potentially would have indicators that they may be improper.
01:55However, as noted, it really is up to the agencies to make decisions about whether a
02:00payment will be made.
02:02You could consider having agencies report on when those flags are not upheld, for example.
02:10If something is flagged in Do Not Pay but a payment is made anyway, having agencies
02:14track that, identify that, and report back when that is happening would help folks determine
02:20if there are instances where the payment should go ahead anyway or if truly that payment should
02:25have been stopped.
02:28Let me follow up with another question for you and Mr. Dieffenbach.
02:37Once an improper payment is made, what can an agency do to recover the payment and how
02:42much does it cost in human hours and dollars to recoup an improper payment?
02:49There are requirements for agencies to attempt to recover improper payments.
02:58I believe it is up to the agencies to determine when it is cost-beneficial to do so.
03:04There can be instances where an agency may determine it is not cost-beneficial to pursue
03:09all avenues in recovering that.
03:12You would hope that agencies would, but I think it is left to their determination to
03:15determine when it is cost-beneficial.
03:20Thank you for the question, Congresswoman.
03:22Agencies have a number of options for trying to recover improper payments.
03:26There are administrative possibilities and options.
03:29The Congress did just pass the Administrative False Claims Act in December, which is a significant
03:33new tool for agencies and OIGs to work with jointly that allows agencies to go through
03:39a very rigorous process where they can then recover funds and damages in some instances.
03:45To your point, recovering funds through the judicial system, the pay and chase model we
03:50have now, is exorbitantly expensive, which is why we and others in this hearing are focused
03:54on the prevention piece, because it is very expensive to do any of those recovery actions.
03:59What investments could agencies take to prevent improper payments?
04:04Could investments in artificial intelligence help lower the improper payment rate?
04:10Again, what we want to do is not have the payment go out to begin with by using what
04:16is available to the agencies now.
04:18I will start with you, Mr. Dieffenbach.
04:22Technology is part of the solution.
04:24Another piece of it is culture, is ownership.
04:27The Inspector General Act was passed in 1978 to create this community of watchdogs to prevent
04:32fraud.
04:33However, before 1978 and today, the agencies have the primary responsibility to do those
04:39things, to resource things properly, to exploit technology, as you just mentioned, and to
04:43ensure that they are doing good risk assessments and following through on those to make sure
04:47they are mitigating the biggest risks in their programs.
04:51Ms. Kozilek, any further comments?
04:54As you mentioned, prevention is really the key in this.
05:00Having the right data.
05:03Artificial intelligence can be helpful if you have the right data in the system.
05:08We do have recommendations to encourage agencies to collect all the necessary information that
05:14is needed to ensure the databases are complete, that they are accurate.
05:20If you are using artificial intelligence and other data mining tools but you have inaccurate
05:25or unreliable data in the systems, that is not going to be very helpful.