On March 20, President Donald Trump issued an executive order headlined as “stopping waste, fraud, and abuse by eliminating information silos.” The order directs federal agency heads to secure “full and prompt access to all unclassified agency records, data, software systems, and information technology systems,” while removing impediments to “the inter- or intra-agency sharing of unclassified information.” It also directs federal agency heads to ensure that “the Federal Government has unfettered access to comprehensive data from all State programs that receive Federal funding.” The intent is “eliminating bureaucratic duplication and inefficiency while enhancing the Government’s ability to detect overpayments and fraud.” The executive order doesn’t mention the Department of Government Efficiency, but echoes that agency’s efforts to “link together traditionally siloed government systems to search for duplicative or wasteful payments.”
That may sound technical, but the failure to effectively share and use data resulted in massive taxpayer losses in recent years. Consider the table below from the March 11 congressional testimony of Kristen Kociolek, Managing Director for Financial Management and Assurance at the nonpartisan Government Accountability Office (GAO). It lists the number one root cause of recent improper payments: programs’ “failure to access the appropriate information…even though such information exists and is accessible to the agency or entity making the payment.” That accounted for $590 billion in improper payments in the past four years—reflecting the enormous risk in not conducting broader data sharing and matching.
Note: Percentages may not sum to 100 percent and amounts may not sum to totals due to rounding. Root cause categories are defined by the Office of Management and Budget in guidance (M-21-19) provided to agencies on reporting improper payments.
As the table details, one concern involves when “an agency with access to the Social Security Administration’s death master file fails to utilize it and improperly sends payment to a deceased individual.” The early pandemic experience is instructive. A June 2020 GAO report notes the federal government “faced difficulties” accurately paying stimulus checks early in the pandemic, including “making improper payments to ineligible individuals, such as decedents.” Indeed, in the first few months of the pandemic, “almost 1.1 million payments totaling nearly $1.4 billion had gone to decedents.” That occurred because, as GAO noted, the “IRS has access to the Social Security Administration’s full set of death records, but Treasury and its Bureau of the Fiscal Service, which distribute payments, do not.”
That gap was addressed—but only belatedly and temporarily. As Kociolek testified, in December 2020 President Biden signed into law legislation that, after a three-year phase-in, “requires SSA to share its full death data with Treasury’s Do Not Pay system for a 3-year period.” That means that “the requirement for SSA to share its full death data with Do Not Pay will expire in December 2026,” requiring further action by Congress.
The President’s March 20 executive order also spotlights the need for improved data matching by the Department of Labor (DOL), which oversees state and federal unemployment programs. Those programs experienced massive losses to fraud during the pandemic, when they were attacked by everyone from rappers and big city gangs to international crime syndicates.
The associated misspending was staggering. According to GAO, fraud involving unemployment benefits during the pandemic “was likely between $100 billion and $135 billion.” The DOL inspector general estimated that the “low end” of improper payments (which goes beyond fraud) was $191 billion, while private experts see a high end of $400 billion. The Biden administration admitted that one of the most widely abused pandemic programs had a 36 percent improper payment rate.
The causes were many, including allowing claimants to self-certify their eligibility and paying benefits without first confirming their identity, work history, and more. As Kociolek’s March 11 testimony notes, fixing that requires “data matching and other techniques to verify self-reported information and other information necessary for determining eligibility.” The new executive order is right to promote such efforts, which should better prevent improper payments and minimize their cost to taxpayers.
The post Trump Executive Order Seeks Expanded Data Matching To Prevent Fraud and Abuse appeared first on American Enterprise Institute – AEI.
