Protecting the Integrity of Federal Payments JFMIP May 8, 2017

Improper Payments Elimination and Recovery Improvement Act of 2012 Creates the Do Not Pay Initiative The Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) required the Office of Management and Budget (OMB) to implement a “Working System” to assist agencies in identifying and preventing improper payments. OMB designated the responsibility of creating this system to Treasury, which operates the Do Not Pay Business Center (DNP). The Treasury Working System and DNP are elements of OMB’s larger government-wide Do Not Pay Initiative.

Bureau of the Fiscal Service DNP Is Part of the Bureau of the Fiscal Service Bureau of the Fiscal Service Our mission is to promote the financial integrity and operational efficiency of the U.S. government through exceptional accounting, financing, collections, payments, and shared services. The Bureau operates and maintains systems that are critical to the nation’s financial infrastructure, such as the disbursement of payments to the American public, revenue and debt collection, and the borrowing of funds necessary to run the federal government.

9/17/2018 DNP Goals and Services Provide timely, accurate, and actionable information about payees and payments to assist agencies in identifying, preventing, and stopping improper payments. Develop and assist agencies in implementing cutting edge techniques to monitor the integrity of payments. Innovate and introduce new tools and strategies to assist agencies in identifying and preventing a wider variety of improper payments. Provide outstanding service to DNP customers.

Payment Integrity Occurs throughout the Payment Lifecycle Pre-Award Pre-Payment Payment Post-Payment Continuous improvement through data analytics, coordination with law enforcement, and customer engagement

DNP Services Analytics Services: Conducts in-depth analyses of agency-specific business challenges related to improper payments. Tests analytics for adoption in the Portal. Portal: Online Automated Tools Online Search capabilities allow for searching a single name or entity. A computer matching agreement (CMA) is not needed to match against Privacy Act protected (a.k.a. restricted) data sources for searching a single name or entity. Batch Matching allows a comparison of an agency’s pre-award and pre-payment file; DNP matches files to available approved data sources and returns the results in the portal. Continuous Monitoring allows an ongoing comparison of an agency’s file against all data sources they are authorized to access. Payment Integration matches Payment Automation Management files against death and excluded parties data sources at the time of disbursement.

Reasons for Improper Payment Type of Improper Payment Root Cause Categories - FY2016 Results Reasons for Improper Payment Type of Improper Payment Overpayments ($ in Millions) Underpayments Total Program Design or Structural Issue $5,263.10 $14.23 $5,277.33 Inability to Authenticate Eligibility $33,294.50 $1,100.25 $34,394,75 Death Data $307.90 $14.54 $322.44 Financial Data $541.68 $52.46 $594.14 Excluded Party Data $22.24 $0 Prisoner Data $247.99 Other Eligibility Data $2,353.45 $72.70 $2,426.15 Federal Agency $2,269.82 $842.32 $3,112.14 State or Local Agency $23,572.78 $268.87 $23,841.65 Other Party (e.g., health care provider, participating lender) $13,706.89 $8147.82 $21,854.71 Medical Necessity $8,148.45 $5.17 $8,153.62 Insufficient Documentation to Determine $43,600.83 Other Reason $563.34 $33.22 $596.56 $133,892.97 $10,551.58 $144,444.55 Inability to Authenticate Eligibility Failure to Verify: Administrative or Process Error Made by: OMB granted the DoD an extension to complete the AFR for FY 2016. The completed report has not been posted as of 4/20/2017 Internal FR

Do Not Pay's Impact From November 2014 through February 2017, DNP has helped agencies to identify more than $108 million improper payments. This is not the full story of our impact.

An IPERIA Requirement and DNP Solutions Each agency shall review prepayment and preaward procedures and ensure that a thorough review of available databases with relevant information on eligibility occurs to determine program or award eligibility and prevent improper payments before the release of any Federal funds. -IPERIA (Section 5 Do Not Pay Initiative) DNP has tools to help agencies screen eligibility to meet this requirement: DNP provides automated batch matching and continuous monitoring that help agencies to monitor the eligibility status of payment recipients, vendors, and service providers, which can prevent improper payments. Analytics services help agencies identify payments at risk of being improper and determine whether there are opportunities to use data-centric internal controls to protect the integrity of payments.

An Improper Payment Challenge When a payment is disbursed, it is easy to count. Disburse to Jane Doe her $1000 monthly benefit payment Jane Doe matches a death record Agency initiates reclamation process to recover this improper payment What is the improper payment amount? When improper payments are prevented, the impact is difficult to monetize. Continuously monitor 150,000 vendors approved to contract with Agency X BadVendor, Inc., is removed from Agency X’s approved vendor list. Future contracts go to other vendors. BadVendor, Inc., matches an excluded parties record What value should we place on dollars we protected?

Contact Information Joah G. Iannotta, Ph.D. Director Do Not Pay Business Center Bureau of the Fiscal Service Department of Treasury Joah.Iannotta@fiscal.treasury.gov 202-504-3686 Do Not Pay Business Center Support donotpay@stls.frb.org 1-855-837-4391 www.donotpay.treas.gov