From the U.S. Government Accountability Office, www.gao.gov
Transcript for: U.S. Comptroller General Testifies to House on Waste,
Fraud and Abuse in Pandemic Recovery Programs.
Description: In his February 1, 2023, testimony to the U.S. House
Committee on Oversight and Accountability, U.S. Comptroller General Gene
L. Dodaro, head of the GAO, testified on factors that contributed to
increased fraud and other improper payments in pandemic recovery
programs. He discussed steps needed to increase transparency and
accountability and strengthen agency efforts to provide proper
stewardship of federal funds.
Related GAO Works: GAO-23-106556  
Released: February 2023
[ Gene Dodaro: ]
Thank you very much. Good morning, Mr. Chairman, Ranking Member Raskin,
members of the committee. I'm very pleased to be here. I commend you,
Mr. Chairman, for holding this hearing, and I'm very pleased to see the
attendance. I'd like to focus my comments this morning on four points
that I believe were the main causes of the widespread fraud that has
occurred and what could be done to deal with these issues.
First, agencies should have been much better prepared in order to
prevent fraud in the first place. We worked with the Congress back in
2016 and the Congress passed the Fraud Reduction and Data Analytics Act,
which required agencies to implement GAO's fraud risk framework to help
prevent fraud in the first place. Agencies were slow to implement this
legislation and therefore were not prepared properly when the
coronavirus emergency occurred. This needs greater attention and
oversight, I believe, from this committee. 
Secondly, the urgency in providing relief funds late led to trade-offs
that limited the ability to achieve accountability and transparency
goals of the legislation. These trade-offs included allowing
self-certifications and applications, limiting the amount of supporting
documentation that applicants had to apply, and these trade-offs, along
with internal control weaknesses within the agencies, made these
programs much more susceptible to fraud than otherwise would have been
the case.
Now, Congress rectified some of these trade-offs and subsequent
legislation. Agencies have begun to implement our recommendations, but
there's much more that needs to be done to deal with the remaining COVID
programs to catch people who have perpetrated fraud and may bring them
to justice. But we're also, unless we make these changes, we're not
better prepared for the future. For future emergencies would certainly
will come with disaster assistance and relief and other events that are
unforeseen, but certainly will come. 
Third, I'm advocating and I've done this before, that there's a
permanent Center for Excellence and Analytics in the Inspector General
community. Now, this first one was created back in the Recovery Act when
we had the Great Recession and that Recovery Operations Center helped
prevent fraud and it will enable the IGs to work together because a lot
of the fraudsters hit multiple programs as well. And this brought in
great data analytics experience. Unfortunately, this center was
terminated in 2015. I recommended Treasury had the ability to pick up
the center operations. They declined on that. I recommended the Congress
to make it permanent. At that point in time, it was not successful. I'm
at it again, and I think it makes sense to have this to deal with.
Fraud occurs in regular federal programs all the time, as well as
improper payments, which we talk about in our statement. If you had this
permanent capability, it would not only deal with regular fraud, but it
would be ready and there when emergencies occur and you won't waste time
standing up. Every day wasted is another day susceptible to fraud and
improper payments. This would help. 
Fourth, the government has an underlying improper payment problem. These
are payments that shouldn't have been made or were made in the wrong
amounts. And I've testified before this committee many, many times on
this problem over the years. It occurs in a wide range of federal
programs. It's pervasive across the government. So when you have that
type of problem that we're not dealing with on a regular basis and you
add additional spending of billions, hundreds of billions in this case
trillions of dollars, you're going to have these type of problems in
place.
So I have many recommendations in my testimony that I think would help
address this issue. And I've put forth at least ten legislative
suggestions for how Congress can act to make sure that this problem
doesn't happen again at the magnitude of which we've seen in this
particular case. So I'm looking forward to answering questions today.
I'm also looking forward to working with this committee to put solutions
in place that can guarantee when the federal government finds it
necessary in this case to provide funds for public health purposes and
the economic repercussions of disasters that it's done in a way that
gets the funds to the people who need it and not allow this type of
unknown fraudulent activity to plague our national programs. Thank you
very much, Mr. Chairman.
[ End ]
For more info, check out our report GAO-23-106556 at: GAO.gov