[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                    FOLLOW THE MONEY: TACKLING IMPROPER 
                                  PAYMENTS

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 OF THE

                   COMMITTEE ON OVERSIGHT AND REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 31, 2022

                               __________

                           Serial No. 117-75

                               __________

      Printed for the use of the Committee on Oversight and Reform
      
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]      


                       Available at: govinfo.gov,
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                             docs.house.gov
                             
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
45-132 PDF                 WASHINGTON : 2022                     
          
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                   COMMITTEE ON OVERSIGHT AND REFORM

                CAROLYN B. MALONEY, New York, Chairwoman

Eleanor Holmes Norton, District of   James Comer, Kentucky, Ranking 
    Columbia                             Minority Member
Stephen F. Lynch, Massachusetts      Jim Jordan, Ohio
Jim Cooper, Tennessee                Virginia Foxx, North Carolina
Gerald E. Connolly, Virginia         Jody B. Hice, Georgia
Raja Krishnamoorthi, Illinois        Glenn Grothman, Wisconsin
Jamie Raskin, Maryland               Michael Cloud, Texas
Ro Khanna, California                Bob Gibbs, Ohio
Kweisi Mfume, Maryland               Clay Higgins, Louisiana
Alexandria Ocasio-Cortez, New York   Ralph Norman, South Carolina
Rashida Tlaib, Michigan              Pete Sessions, Texas
Katie Porter, California             Fred Keller, Pennsylvania
Cori Bush, Missouri                  Andy Biggs, Arizona
Shontel M. Brown, Ohio               Andrew Clyde, Georgia
Danny K. Davis, Illinois             Nancy Mace, South Carolina
Debbie Wasserman Schultz, Florida    Scott Franklin, Florida
Peter Welch, Vermont                 Jake LaTurner, Kansas
Henry C. ``Hank'' Johnson, Jr.,      Pat Fallon, Texas
    Georgia                          Yvette Herrell, New Mexico
John P. Sarbanes, Maryland           Byron Donalds, Florida
Jackie Speier, California            Vacancy
Robin L. Kelly, Illinois
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts

                     Russell Anello, Staff Director
              Wendy Ginsberg, Subcommittee Staff Director
                    Amy Stratton, Deputy Chief Clerk

                      Contact Number: 202-225-5051

                  Mark Marin, Minority Staff Director
                                 ------                                

                 Subcommittee on Government Operations

                 Gerald E. Connolly, Virginia, Chairman
Eleanor Holmes Norton, District of   Jody B. Hice, Georgia Ranking 
    Columbia                             Minority Member
Danny K. Davis, Illinois             Fred Keller, Pennsylvania
John P. Sarbanes, Maryland           Andrew Clyde, Georgia
Brenda L. Lawrence, Michigan         Andy Biggs, Arizona
Stephen F. Lynch, Massachsetts       Nancy Mace, South Carolina
Jamie Raskin, Maryland               Jake LaTurner, Kansas
Ro Khanna, California                Yvette Herrell, New Mexico
Katie Porter, California
Shontel M. Brown, Ohio
                         
                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on March 31, 2022...................................     1

                               Witnesses

Ms. Linda Miller, Principal, Advisory Services; Grant Thornton, 
  Former Deputy Executive Director, Pandemic Response 
  Accountability Committee, Former Assistant Director, Government 
  Accountability Office
Oral Statement...................................................     6
Mr. Scott Jensen, Chief Executive Officer and Vice President of 
  External Affairs, Research Improving People's Lives, Former 
  Director, Rhode Island Department of Labor & Training
Oral Statement...................................................     8
Ms. Rachel Greszler, Research Fellow, The Heritage Foundation
Oral Statement...................................................     9
Ms. Parker Gilkesson, Senior Policy Analyst, Income and Work 
  Supports, The Center for Law and Social Policy
Oral Statement...................................................    11
Adrian Haro, Chief Executive Officer, The Workers Lab
Oral Statement...................................................    13

Written opening statements and statements for the witnesses are 
  available on the U.S. House of Representatives Document 
  Repository at: docs.house.gov.

                           Index of Documents

                              ----------                              

  * Report, GAO-15-593SP, A Framework for Managing Fraud Risks in 
  Federal Programs; submitted by Subcommittee Chairman Connolly.

  * Business Insider, article, ``A man was arrested after 
  allegedly spending $5 million in stolen COVID-19''; submitted 
  by Rep. Biggs.

  * News report, ``Biggest fraud in a generation: The looting of 
  the Covid relief plan known as PPP''; submitted by Rep. Biggs.

  * News reports, ``Criminals have stolen nearly $100 billion in 
  Covid relief funds, Secret Service says''; sbmitted by Rep. 
  Biggs.

  * News report, ``Dr. Rand Paul Stops Democrats Attempt to Give 
  Free Money to Planned Parenthood''; submitted by Rep. Biggs.

  * Austin American-Statesman, article, ``Fact-check Will 
  prisoners also receive $1,400 stimulus checks''; submitted by 
  Rep. Biggs.

  * CNBC News, news report, ``Florida business owner got $3.9 
  million in coronavirus relief money, allegedly spent''; 
  submitted by Rep. Biggs.

  * News report, ``Made out like bandits NY prisoners got $34M in 
  federal COVID stimulus funds''; submitted by Rep. Biggs.

  * NBC News, news report, ``Man who used Covid funds on $57,000 
  Pokemon card gets 3 years in prison''; submitted by Rep. Biggs.

  * The New Jersey Monitor, article, ``N.J. fisheries netted 
  $2.4M in improper COVID relief payments, watchdog says''; 
  submitted by Rep. Biggs.

  * News report, ``Stimulus turns political as SBA tries to claw 
  back funding from Planned Parenthood''; submitted by Rep. 
  Biggs.

  * News report, ``Trump Administration To Planned Parenthood: 
  Return Coronavirus Relief Funds''; submitted by Rep. Biggs.

  * Updated Data on Improper Payments; submitted by Rep. Biggs.

  * Washington Examiner, article, ``Planned Parenthood 
  `illegally' took $83 million in COVID stimulus: Senators''; 
  submitted by Rep. Biggs.

  * News report, ``Yes, Evers gave COVID relief money to Planned 
  Parenthood - but it's not used to fund abortions''; submitted 
  by Rep. Biggs.

  * Questions for the Record: to Gilkesson; submitted by Chairman 
  Connolly.

  * Questions for the Record: to Jensen; submitted by Chairman 
  Connolly.

  * Questions for the Record: to Haro; submitted by Chairman 
  Connolly.

  * Questions for the Record: to Miller; submitted by Chairman 
  Connolly.

The documents are available at: docs.house.gov.

 
              FOLLOW THE MONEY: TACKLING IMPROPER PAYMENTS

                              ----------                              


                        Thursday, March 31, 2022

                   House of Representatives
                  Committee on Oversight and Reform
                      Subcommittee on Government Operations
                                                   Washington, D.C.

    The subcommittee met, pursuant to notice, at 9:33 a.m., in 
room 2154, Rayburn House Office Building, and via Zoom; Hon. 
Gerald E. Connolly (chairman of the subcommittee) presiding.
    Present: Representatives Connolly, Norton, Davis, Sarbanes, 
Lynch, Raskin, Porter, Brown, Hice, Keller, Clyde, Biggs, and 
LaTurner.
    Mr. Connolly. The subcommittee will come to order.
    Without objection, the chair is authorized to declare a 
recess of the committee at any time.
    I welcome everybody to the hearing which seeks to 
introduce--I'm sorry, examine strategies the Federal Government 
could adopt to better address improper payments. This is a 
subject of this subcommittee going way back. In fact, one of my 
first hearings, I remember, was with a former chair of this 
subcommittee, Todd Platts, talking about improper payments 
almost 14 years ago. Hopefully things have improved, but we 
will see.
    The chair now recognizes himself for my opening statement.
    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, health insurance 
for children, and a host of other essential programs, but that 
money does not always go where Congress intends. For Fiscal 
Year 2021, 86 high-risk Federal programs estimated improper 
payments. Of their $3.9 trillion in outlays, 7.2 percent were 
paid improperly, it is estimated. That translates into $281 
billion, more than any other Fiscal Year since 2003. Today's 
hearing examines the causes of those improper payments and 
explores solutions for reducing them.
    The law defines an improper payment as ``any payment that 
should not have been made or that was made in an incorrect 
amount, including an overpayment or an underpayment, under a 
statutory, contractual, administrative, or other legally 
applicable requirement.'' Improper payments are an imperfect, 
but valuable, way of measuring program integrity. In short, 
they help us to answer the question, is the Federal Government 
distributing money in the way Congress intended. If Federal 
improper payments were low, the answer would clearly be 
``yes.'' Unfortunately, they are not.
    I should be clear. There are many causes of improper 
payments. Some improper payments could be attributed to fraud, 
but many are simply paperwork errors, for example, when an 
individual or business accidentally checks a box on a form 
perhaps because of confusing instructions, language barriers, 
or bad internet access, and by checking that box, it affects 
the amount provided. Some improper payments are even 
underpayments when the government pays less than the amount for 
which they, in fact, qualified.
    Unfortunately, more often than not, government does not 
know the cause of any particular improper payment. Not knowing 
a payment's error cause makes it difficult to distinguish fraud 
from anything else. And without good data to help us identify 
root causes of these improper payments, the government can't 
make evidence-driven decisions that enhance program integrity 
to prevent fraudsters from gaining unlawful access to 
government services and to ensure individuals and businesses 
access those services for which they qualify. In short, bad 
data and deteriorating IT infrastructure all too often makes 
it, in fact, near impossible to fix the problem we see today 
without reinvigorating our IT investments. History seems to 
agree.
    Though improper payments have been a priority of Congress 
since the beginning of the 21st century, they remain high and 
they continue to grow as that chart, which I hope will be up, 
as that chart shows.
    [Chart.]
    Mr. Connolly. Thank you, Joshua. If you look at the screen, 
you will see how improper payments have steadily grown since 
Congress first required tracking and measurement under the 
Improper Payments Information Act of 2002. As the figure shows, 
Congress has enacted five bills into law that sought to 
identify and reduce these improper payments in 2002, in 2010, 
in 2012, 2016, and 2019. Despite the efforts, improper payments 
are at an all-time high, so we have gotten better at reporting, 
not so good at reducing.
    According to the 2020 American Customer Satisfaction Index, 
the Federal Government ranks among the bottom of all industries 
in the United States in customer satisfaction. Public trust in 
government remains near a historic low. As of April of last 
year, only 24 percent of individuals expressed trust in 
government. These low scores are the result, all too often, of 
poor customer experience and excessive improper payments. We 
can and must do better to enhance program integrity in the 
Federal Government and ensuring Federal assistance goes to 
everyone Congress intended to receive it and nobody we didn't.
    Clearly, things have to change. To help enact such change, 
I hope today's hearing will hit home three main points. First, 
we must keep in mind our motivation for reducing improper 
payments. Put simply, it is to ensure that money goes where 
Congress intends. That means we must do everything we can to 
stop those elements from stealing government funds, those 
criminal syndicates who are organized to do that, and it also 
means we must ensure government funds go to everyone Congress 
intends to reach, in an accurate way. Second, there exists a 
false tradeoff in the minds of some between preventing fraud 
and designing accessible, intuitive, and equitable services. In 
fact, when done right, governments can deploy modern 
technologies that prevent fraud and improve the customer 
experience, designing more elegant and simple platforms by 
which families, and businesses, and individuals can apply for 
and access the services they need and for which they qualify. 
Government programs can combat waste, fraud, and abuse while 
they save and improve lives.
    Finally, I want to highlight that good-quality data and the 
modern IT infrastructure that can support its collection 
sharing and analysis are foundational to tackling improper 
payments. Data is key to reducing paperwork errors and fraud 
without putting a burden on the public. Using data as a 
solution is not a counter-visual thing. Last July, the Office 
of Management and Budget and the Pandemic Response 
Accountability Committee issued a payment integrity alert on 
the use of automation and data analytics to ``support agency 
missions while mitigating payment integrity risks.'' Using and 
matching datasets to identify potential improper payments, 
fraudulent or otherwise, is fundamental and nonpartisan. We 
need the will to make it happen.
    I plan to introduce legislation built upon these three 
principles. The bill will establish an office dedicated to 
program integrity to implement robust oversight of Federal 
agencies' program integrity efforts. Importantly, the 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 anti-fraud controls. In addition, the bill 
would ensure that agencies minimize the burden of their anti-
fraud controls on the public. By focusing efforts on data 
collection, sharing, and analysis, the new office would enhance 
program integrity in the highest-priority Federal programs 
without putting undue burdens on those programs' customers.
    At its core, the bill would be about getting money to the 
places Congress wants it to go and preventing that money from 
going to places we don't. Republicans or Democrats, I think, 
can all agree that that is our ultimate goal. I look forward to 
working with my colleagues on both sides of the aisle on this 
legislation and hope we can pass it into law to get these 
numbers down.
    I now recognize the ranking member for his opening 
statement.
    Mr. Hice. Thank you so much, Chairman Connolly. I 
appreciate you calling this long-overdue hearing. Republicans 
often are skeptical, I think it is fair to say, of government 
programs and how they will work, and my Democratic colleagues 
often hold a different view on these things. But we know with 
certainty that government assistance will be totally 
ineffective if those funds never even reach the intended 
recipients.
    Improper payments have been a thorn in the side of our 
government probably forever. The problem, however, is certainly 
getting worse, and it was getting worse even before COVID. But 
the trillions of dollars that were spent in pandemic assistance 
ushered in a wave of fraud, quite frankly, the likes of which 
we have never experienced before. Estimates literally range 
into the hundreds of billions of dollars, and much of that is 
feared to have been lost to organized crime in even countries 
like Nigeria, China, and Russia. For all we know, American tax 
dollars could actually be helping to fund Putin's war against 
Ukraine.
    Reports began to surface last year regarding the magnitude 
of the problem, and yet here we are over a year since the 
American Rescue Plan and another $2 trillion gone, signed into 
law, and this is the first hearing we have had on this subject. 
If the state and local funding of the American Rescue Plan is 
any guide, it appears the Democratic plan to fight fraud is 
simply to let people spend it any way they want to spend it: no 
rules, therefore, no fraud. Earlier this month, the White House 
put out a fact sheet on what they had done or what they were 
going to do around fraud and improper payments. That is good. 
That is fine. That is great. But it talks about how last May, 
they got a lot of people together from ARP, the coordinator, 
PRAC, IGs, GAO, NSC, and others, in order to discuss 
governmentwide steps to prevent individuals from defrauding 
public benefit programs.
    But the question is what has been done. We don't need more 
meetings. We need action to stop the fraud and the abuse that 
has been taking place. And, quite frankly with all, and I mean 
this sincerely, with all due respect to every one of our 
witnesses that are here today, frankly, Chairman, we should be 
hearing directly from the Biden administration today. And then 
there is this that was also in the fact sheet that I saw this 
morning: ``Reestablished respect for and transparency with the 
oversight community.'' I guess the result of that means more 
meetings, but in all honesty, give me a break. We literally 
have no idea what is being done on anything other than more 
talk that has been taking place.
    This should be a top priority. This should be considered an 
emergency for this administration. You know, appointing special 
prosecutors is fine, and I am sure Democrats will talk about 
how they have appropriated more money for inspectors generals, 
but, quite frankly, that is like slamming the door on the barn 
after the horse is already gone. The fact is the money is 
already gone. You might get a little back, might get a little 
back, but for all intents and purposes, the money is gone. 
There may have been funding for fraud prevention in the 
American Rescue Plan and the omnibus, but the question is how 
were those funds used. How will it be used? This is basic 
oversight. This is our responsibility, and so far, as I can 
tell, there has been no real oversight, nor is there any real 
oversight on the horizon.
    Again, I would like to thank Chairman Connolly for at least 
pulling together a conversation on this topic, and I am sure 
you are under certain constraints as to who you can call as 
witnesses. But I believe there is one thing that will be clear 
today is the tension between fraud prevention and getting money 
to the recipients as easily and quickly as possible. During the 
initial steps and stages of the pandemic when we were all 
facing unprecedented action that was needed to keep the economy 
afloat, it is understandable in that type of circumstance that 
we would have erred on the side of getting aid out. But as we 
will hear today, it does not have to be an either/or choice.
    There are actions that states could have taken, but they 
didn't. Why? We need to know. If we are talking about Federal 
dollars, how much do states even care about program integrity, 
especially if nobody is holding them accountable? There were 
certain things that Federal agencies could have done, but they 
didn't. Why not? Was it a question of focus, was it a question 
of resources, or was it a question of leadership? Congress 
first attempted to address improper payments some 20 years ago 
at least, but those solutions obviously are not working today. 
The pandemic laid bare the sorry state of fraud prevention and 
program integrity at all levels of our government. And to be 
very honest, this is true of Democratic administrations, and it 
is also true of Republican administrations, but something has 
to change.
    Since I came to Congress, I have been amazed at how a 
simple recitation of a problem is construed as insightful or is 
construed as, in itself, problem solving. It is not enough just 
to talk about a problem. We have got to take action, and the 
reality is that agencies don't share data. Agencies don't have 
access to data in many instances, and you can't do things 
across a whole of government. There are no incentives. We could 
go on and on and on and on with the problems that are out 
there, but, frankly, it is just admitting defeat. We have 
literally swung wide the door of our Treasury and invited our 
enemies to come in and help themselves, and if we are not 
willing to fix the problem now, I fear that we will never be 
ready to fix and address the problem. And, frankly, this is not 
an issue to slip in halfway through the State of the Union. 
This is a disgrace. It is an emergency. It is something that 
demands attention now. Chairman, we do hearings twice a year on 
FITARA. That is fine, but this is an issue that needs to be 
highlighted twice a year. We have got to do something about 
this problem.
    I look forward to hearing from our witnesses today, and I 
appreciate each of you for being here, but I really look 
forward to demanding answers from the administration and 
demanding action. And with that, Mr. Chairman, I yield back.
    Mr. Connolly. I thank the gentleman. Let me now introduce 
our witnesses.
    Our first witness today is Linda Miller, principal of 
advisory services at Grant Thornton. Formerly, Ms. Miller 
served as deputy executive director of the Pandemic Response 
Accountability Committee, and as assistant director of the 
Government Accountability Office where she worked over 10 years 
and specialized in fraud risk and program integrity. Next, we 
will hear from Scott Jensen, chief executive officer of 
Researching Improving People's Lives, a nonprofit that works 
with governments to help them use data, science, and technology 
to improve policy delivery. Formerly, Mr. Jensen served as the 
director of Rhode Island's Department of Labor and Training.
    Then we will hear from Adrian Haro, chief executive officer 
of The Workers Lab----
    Where is Adrian? I guess you are on virtually. Are you, 
Adrian? Yes, there you are. OK.
    --that invests in new ideas for the modern worker. And 
Adrian prefers to be addressed by his first name, ``Adrian.'' 
Then we will hear from Rachel Greszler, senior research fellow 
in economics, budgets, and entitlements at the Heritage 
Foundation. And finally, we will hear from Parker Gilkesson, 
senior policy analyst in the Income and Work Supports at the 
Center for Law and Social Policy.
    So if you, Adrian, could unmute yourself and raise your 
right hand. If you all would rise and raise your right hand to 
be sworn in.
    Do you swear or affirm that the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    [A chorus of ayes.]
    Mr. Connolly. Thank you. Let the record show the witnesses 
all answered in the affirmative.
    Without objection, your written statements will be entered 
into the record in full.
    With that, Ms. Miller, you are now recognized for your five 
minutes of summary testimony. Welcome.

STATEMENT OF LINDA MILLER, PRINCIPAL, ADVISORY SERVICES, GRANT 
 THORNTON, FORMER DEPUTY EXECUTIVE DIRECTOR, PANDEMIC RESPONSE 
   ACCOUNTABILITY COMMITTEE, AND FORMER ASSISTANT DIRECTOR, 
                GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Miller. Thank you, Chairman Connolly, and Ranking 
Member Hice, and esteemed members of the committee. It's a 
pleasure to be with you this morning.
    I'm a principal at Grant Thornton where I lead our Fraud 
and Financial Crimes Practice, but as Chairman Connolly 
mentioned, today I'm going to discuss my experience both an 
executive at GAO as well as my time spent being deputy 
executive director of the PRAC.
    Much has been written about the unprecedented fraud that 
occurred during the pandemic. I spent almost 20 years in the 
anti-fraud space, and there's no question that this was the 
largest fraud event in our Nation's history. It comes as no 
surprise, though, to those of us who have been working in the 
anti-fraud industry. We live in the age of the data breach 
where criminals now have data on literally every American 
citizen, and today's fraud actors are a sophisticated 
adversary. They take data purchased on the dark web, often for 
less than a dollar a piece, and they apply advanced tools and 
techniques: automated bots, artificial intelligence, and 
sophisticated counterfeiting tools, deep fake technology. 
They've honed their craft.
    And how do Federal and state agencies fight this adversary? 
With very limited data, with rudimentary analytics, with IT 
systems that run on software developed in the 1960's, with next 
to no leadership commitment. If the pandemic fraud alarmed 
people, that's simply because they haven't been paying 
attention. The fleecing that we saw was the direct result of 
years of inattention from senior leadership on the need for 
proactive fraud risk management.
    Three key areas must urgently be addressed. The first is 
data. By and large, agencies are struggling to effectively use 
data to fight fraud and improper payments. Even the most basic 
use of data--data matching--is not being done widely. 
California paid $810 million in pandemic unemployment benefits 
to 45,000 prisoners because they hadn't developed the capacity 
to match prisoner data with their claims data. And 11 years 
after Treasury created the Do Not Pay System, today, in 2022, 
that system still lacks the Social Security Administration's 
full death data or prisoner data.
    Let that sink in. The fraudsters have detailed information 
about you--your address, your date of birth, social security 
numbers, the passwords to your most sensitive accounts--and 
Treasury cannot even access data to find out if an applicant is 
alive. Our adversaries are using our own data against us. Those 
who say we must choose between fraud prevention and privacy are 
creating a false dichotomy. We have the technology to do both, 
but agencies need the will to make fraud prevention on par with 
privacy protection.
    The second area is leadership priority, which, I am afraid 
to say, is woefully lacking in this area. Agency leaders have 
few, if any, real incentives to prioritize integrity over the 
delivery of benefits. It makes sense because they only get an 
angry call from a citizen if a benefit has not been paid. 
Nobody calls to talk about fraud. When I was at GAO, agency 
officials directed us to the OIG when we wanted to talk about 
fraud risk management. They simply did not see fraud prevention 
as their responsibility.
    The third area is technology where government badly lags 
its private sector peers. The banking sector has been using 
tools, like Know Your Customer, that pull real-time, updated 
information instantly on applicants and customers, and these 
tools have been in place for years. What we saw during the 
pandemic was an almost total removal of the guardrails. We 
asked people if they were eligible for a benefit, and when they 
said ``yes,'' we gave it to them. Congress and the 
administration made the calculated decision that the need 
justified the profound risk but make no mistake. There was 
fraud and improper payments before the pandemic, and there will 
be even more fraud and improper payments after the pandemic if 
action is not taken.
    The current approach is simply not working. There have been 
five iterations of legislation focused on improper payments 
over the last 20 years, and during that time, the improper 
payment rate has steadily risen. As currently written, the 
Payment Integrity and Information Act creates burdensome 
compliance requirements while doing little to address the root 
cause of the problem. Most improper payments are caused by a 
lack of data verification, yet when we ask agencies to do 
check-the-box compliance, we fail to ask them to address the 
root cause of the problem.
    First and foremost, agency leadership needs to prioritize 
integrity of the funds they disperse almost as much as they 
prioritize getting those funds out the door. This imbalance 
must be addressed. And agencies need to proactively address the 
root causes of the problem, not with more burdensome compliance 
activities, but by using data and analytics that verifies the 
identity and eligibility of an applicant: technology like 
device fingerprinting, and threat intelligence from deep and 
dark web sources, and other tools. These are complex problems, 
and there are no easy answers. Therefore, a dedicated anti-
fraud office must be created to work on these issues solely. 
The United Kingdom established such an office in 2018 and has 
seen great success.
    Fraud is not going away with the end of the pandemic. 
Indeed these fraud actors are only emboldened, and they will 
continue to target these ill-prepared agencies. The time for 
action is now. Thank you.
    Mr. Connolly. Thank you, Ms. Miller.
    Mr. Jensen, you are now recognized for your five-minute 
opening statement.

  STATEMENT OF SCOTT JENSEN, CHIEF EXECUTIVE OFFICER AND VICE 
  PRESIDENT OF EXTERNAL AFFAIRS, RESEARCH IMPROVING PEOPLE'S 
LIVES, AND FORMER DIRECTOR, RHODE ISLAND DEPARTMENT OF LABOR & 
                            TRAINING

    Mr. Jensen. Thank you, Mr. Chairman and members of the 
committee. It is an honor to be here. My name's Scott Jensen. 
I'm the CEO of Research Improving People's Lives, but I think I 
am here today really to talk about my experience as the Rhode 
Island director of Labor and Training during the pandemic, 
leading the unemployment insurance effort there. In terms of 
leadership, that is all we did for two years. As the director, 
I led it right from the front, and I learned a lot, and I 
wanted to share just a couple of things to add some color to 
great ideas that, you know, I've heard today.
    To begin with this, it is not an either/or--either fraud or 
paying folks. It has to be a both/and, and the one thing about 
my experience in Rhode Island's pandemic was it was, I think, 
the hardest C-minus I've ever earned in my life. That was a 
very, very difficult time, and nobody, none of these programs 
were going to make it through in one piece just because of the 
massive scale of what we had to do during the pandemic. Five 
thousand people. It was the biggest week Rhode Island had ever 
had in unemployment insurance, and we were doing that every day 
for months: 5,000 new people, 5,000 new people.
    So the central challenge that I think we faced that allowed 
us to get a C-minus, and make it through the pandemic, and give 
decent service but also do a fairly decent job with fraud, was 
that, you know, we used UI data, the data the UI program itself 
generates, in order to improve the administration of the 
program. And let me try to explain that a little bit with some 
specificity.
    So the first thing, when we talk about technology and the 
old technology that UI programs are faced with, is absolutely 
true, of course. New technology is a necessary, but not 
sufficient, condition to solve the problems that we're looking 
at. You can't just buy an off-the-shelf new computer, put it 
in, and this problem is going to go away. So let me give you 
some context about how UI works and how we might do this.
    First off, there are three steps to unemployment insurance. 
Very simple. One, get information from somebody so you can 
figure out whether they are eligible or they're not eligible; 
two, use that information to make a judgment about the benefit; 
and three, either pay it or don't pay it. And while those three 
things seem rather straightforward, they're hard, and in some 
instances, it's very difficult. And there's tough cases and you 
need a real expert to take a look at that, and in other cases 
it's pretty straightforward: a straightforward ``yes'' or 
``no.''
    What we faced in Rhode Island and everywhere else was that 
effort, when you're relying on people to make judgments like 
that, it doesn't scale. So you have a lot of new claimants 
coming in, and you can't hire quick enough to train folks quick 
enough, to get them to be able to keep up with the volume, so 
then you begin to get swamped. You know, in all of your states, 
I'm sure you have a lot of experience with swamped UI programs.
    So what we tried to do, and it was a little naive, we tried 
to attack both fraud and deal with pain quickly. With fraud, 
when somebody comes to apply for unemployment insurance, they 
leave a footprint in the metadata of your system, and if you 
can distinguish between the fraudster and the right person by 
using sophisticated artificial intelligence and other 
techniques, it's like probable cause. You can really scrutinize 
somebody who's presenting as if they're a fraudster, and you 
can be a little bit more sure that somebody else who's 
presenting normally, you can get them paid quicker. So that was 
broadly the strategy on the fraud side. And on the payment 
side, we were trying very hard to distinguish between a clean 
claim, which is an obvious ``yes'' or ``no,'' and a complex 
claim that is going to require a person to solve it.
    Data is crucial to do either of those things, and they're 
both an enormous undertaking. If you don't have data, you can't 
make the difference between either one. And the biggest problem 
we had during the pandemic, we're one of those states with 
those old AS400 computer systems from the 1980's. In order to 
get data out of that thing, you had to code it from scratch, so 
a really, really inefficient way, impossible really, to do 
continuous improvement and change the way you're re 
administering these benefits.
    So it was clear to----
    Mr. Connolly. If you could sum up, Mr. Jensen. Your five 
minutes is up.
    Mr. Jensen. The summary is simply we have to use data 
better, and we need the technology to do it. But then the 
further step is continuous improvements so we can achieve the 
kind of customer service we're all getting used to in the 
private sector.
    Mr. Connolly. Thank you.
    Mr. Jensen. Yep.
    Mr. Connolly. And I got to admit, the image of a footprint 
in the metadata system will stick with me.
    Mr. Jensen. Good.
    Mr. Connolly. OK. Adrian, you are recognized, Mr. Adrian 
Haro, who prefers to be known by his first name, ``Adrian.'' 
Adrian, you are recognized for your five-minute opening 
statement. Adrian, you need to unmute yourself. Adrian, we 
cannot hear you. All right, Adrian. Let's try to work that 
technical problem out, and we will go to our next witness.
    Ms. Greszler, you are recognized for your five-minute 
opening statement. Welcome.

  STATEMENT OF RACHEL GRESZLER, RESEARCH FELLOW IN ECONOMICS, 
        BUDGET AND ENTITLEMENTS, THE HERITAGE FOUNDATION

    Ms. Greszler. Good morning and thank you for the 
opportunity to be here today.
    We've heard about the recent rise in improper payments, but 
I wanted to highlight this graph here to help convey the 
magnitude of that increase.
    [Chart.]
    Ms. Greszler. We have here a chart between 2005 and 2021, 
so on the bottom is GDP growth. That grew 76 percent, the green 
line there. Total program outlays grew by 221 percent. That's 
the green line, so those are the government payments. The red 
line skyrocketed 633 percent. That's improper payments, so 
improper payments grew at eight times the rate of GDP growth. 
If improper payments had their own budget category, it would've 
been the Federal Government's fifth largest expenditure in 
2021.
    Multiple factors have contributed to this rise, including 
the increased use of online government services, the failure of 
agencies to utilize sufficient security measures, and the pure 
enormity of government transfer payments. Three things are 
crucial to reducing improper payments. First is to identify 
that people are who they say they, second is to make sure that 
people are eligible for the benefits they claim, and third is 
to minimize the number of government programs that individuals 
have to rely on for their ordinary needs.
    The Pandemic Unemployment Insurance programs, which will 
likely go down as the biggest fraud in U.S. history, provides 
some important lessons. In March 2020, Congress passed a 
massive expansion in state unemployment benefit programs, and 
it was supposed to last for only four-and-a-half months but 
instead lasted for 18. These programs were highly problematic. 
The $600 bonus payments on top of existing state payments 
created a high-value target for fraud. Benefits were extended 
to people who weren't part of the unemployment system and for 
whom it was nearly impossible to verify their eligibility. And 
then broad qualifications meant that nearly anybody could come 
up with a seemingly legitimate claim. These expansions opened 
the floodgates to woefully outdated and ill-prepared state UI 
systems, inviting massive fraud and abuse, and allowing 
international crime rings, even state-sponsored Chinese 
hackers, to steal Americans' identities and taxpayers' money.
    I estimate that the pandemic unemployment benefits likely 
exceeded a 40-percent improper payment rate. That's based on 
the data that shows that we paid out 1.365 billion unemployment 
checks, but had we simply paid out 100 percent of people who 
are actually unemployed, that would've cost--required 807 
million checks. So what that means is those excess checks 
amounted to $357 billion of taxpayers' money that went above 
and beyond actually covering every single person who was 
unemployed. That is a $2,700 cost per household in the U.S. 
just for the pandemic unemployment fraud. Unfortunately, there 
are many other government programs that regularly impose 
massive improper payment bills on Americans. The earned income 
tax credit, Medicaid, and CHIP all have improper payment rates 
between 22 percent and 32 percent, and there's a total of $123 
billion in improper payments in those three programs alone.
    So what should be done? For starters, government programs 
should be required to follow security measures similar to the 
NIST standards. For example, Arizona had a time when it was 
receiving more unemployment insurance claims than it had people 
in its entire work force, but after it partnered with a NIST-
certified provider, its claims fell by 99 percent. There's a 
2019 OMB memo that requires Federal agencies to utilize these 
standards, but most are not doing it. Next, the Federal 
Government should optimize secure information sharing across 
government agencies through its Do Not Pay data base. Lawmakers 
need to improve eligibility verification and maintain a 
competitive market for cybersecurity so that taxpayers can 
benefit from the most responsive and innovative systems out 
there.
    Perhaps most important, however, is the need to limit the 
size and the scope of government programs. In 2022, the U.S. 
will spend $3.9 trillion in transfer payments. That is $4 out 
of every $5 tax dollars that we'll collect. Constantly 
expanding entitlement programs without any consideration of 
what they'll cost is unsustainable, and taking people's money 
and requiring them to jump through bureaucratic hoops to get 
some of it back from proposed government programs, like 
government-directed childcare, government-determined paid 
family leave, or purchasing government-approved electric 
vehicles, is inefficient, and it will leave people with lower 
incomes and less control over their lives.
    A few steps to reduce the Federal Government's tax and 
transfer footprint and empower people instead of bureaucrats 
include eliminating tax credits in favor of lowering overall 
tax rates, enacting universal savings accounts to make savings 
simpler and more affordable, rejecting new entitlement programs 
and reforming existing ones.
    Thank you.
    Mr. Connolly. Thank you very much, and you had time to 
spare. Great job.
    Have we solved with the problem Adrian? Have we solved the 
problem?
    Voice. Not yet.
    Mr. Connolly. Thank you. Ms. Gilkesson, you are recognized 
for your five-minute opening statement.

 STATEMENT OF PARKER GILKESSON, SENIOR POLICY ANALYST, INCOME 
    AND WORK SUPPORTS, THE CENTER FOR LAW AND SOCIAL POLICY

    Ms. Gilkesson. Good morning, Chairman Connolly, Ranking 
Member Hice, and distinguished members of this committee. Thank 
you for inviting me today. My name is Parker Gilkesson, and I'm 
senior policy analyst at the Center for Law and Social Policy. 
My experience as a North Carolina case worker led to my 
commitment to become a researcher/advocate and expert on SNAP, 
TANF, and Medicaid. CLASP is a national, nonpartisan, anti-
poverty nonprofit advancing policy solutions for people with 
low incomes. My testimony summarizes a detailed paper I 
published analyzing the racialized history of fraud in SNAP.
    I'd like to make four key points. One, the intense focus on 
fraud in SNAP is tied closely to a history of racist 
stereotypes; two, actual SNAP fraud is rare; three, the focus 
on fraud makes programs less effective at reducing hunger; and 
four, Federal and state agencies have many practical fixes to 
reduce the barriers to SNAP caused by unnecessary fraud 
provisions.
    Healthcare, food, secure housing, and a livable wage are 
basic human needs, and seeking the help you need to succeed is 
a statement of human dignity and justice. However, coded 
language, dog whistling, and racist stereotypes have reinforced 
the lie that folks receiving public benefits are exaggerating 
how poor they are and are likely committing fraud. The 
perception of fraudulence based on poverty and race has a long 
history here. Anti-black images borne out of slavery labeled 
black people as biologically inferior, inherently lazy, 
promiscuous, and untrustworthy. These harmful tropes were used 
to justify the forced labor of black people and are still 
reflected in many U.S. policies today.
    In the last 50 years, policymakers have used tropes like 
``welfare queen'' to insinuate that people experiencing 
poverty, especially black people, are fraudulent and must be 
forced to work. Legislators have used this dog whistle to 
justify benefit cuts while increasing spending to protect 
program integrity. Even those promoting expansions for public 
benefits have reinforced stereotypes by emphasizing how these 
programs would only benefit the so-called deserving poor.
    Fraud is quite rare, contrary to media portrayals, yet 
despite that rarity, Federal and state legislators prioritize 
fraud prevention with millions in grants and targeted funding 
for program integrity. States even have tip lines for the 
public to report suspected fraud, although most reports are 
based on personal vendettas or a belief that a person using 
SNAP is too nicely dressed to qualify for benefits. Also, due 
to complex SNAP rules, many honest mistakes get lumped in with 
fraud because recipients often misunderstand reporting rules. 
Eligibility workers are often better trained to look for fraud 
than to provide trauma-informed care or refer families to other 
necessary assistance based on the many challenges of living in 
poverty. This isn't surprising as Federal rules penalize states 
for any benefits granted in error but not for failing to help 
people in need. Also, difficult and time-consuming applications 
meant to catch people attempting to commit fraud often present 
barriers to applicants and caseworkers, reducing access and 
increasing stigma and shame.
    Of course no program can survive if it doesn't take abuses 
seriously. However, when actions taken 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. 
Recipients accused of fraud are often considered guilty until 
proven innocent. While they're supposed to be able to defend 
themselves in a hearing, they aren't entitled to 
representation, and some states have coerced people into 
signing away their rights by threatening criminal prosecution.
    Historically, anti-hunger advocates have been afraid to 
criticize the negative consequences of the focus on program 
integrity and its disproportionate impact on people of color 
for fear of being accused of defending fraud or legitimizing 
racist tropes. However, we must discuss and address fraud, 
program integrity, and the over policing of people experiencing 
poverty to achieve policies that reflect equity, trust, and 
truth, instead of mistrust, mistreatment, and systemic 
oppression.
    Here are just a few of the equitable solutions state and 
Federal policymakers should try: simplifying SNAP rules so 
clients understand what changes to their income need to be 
reported, especially for the growing share of workers in the 
gig economy. Many improper payments are caused by confusion and 
honest mistakes; rethinking quality controls so we measure 
timeliness and accuracy while also reaching all eligible 
households and ensuring customer service satisfaction; 
providing oversight and accountability to states for incorrect 
determinations of fraud sanctions and overpayments, as well as 
for violations of recipients' right to due process.
    For more detailed research, I would like my report to be 
officially submitted into the congressional record. Thank you, 
and I look forward to your questions.
    Mr. Connolly. Without objection, it is so ordered.
    Mr. Connolly. Perfect timing. You had one second left. 
Thank you, Ms. Gilkesson.
    [Laughter.]
    Mr. Connolly. Adrian, are you ready now?
    Adrian Haro. I believe I am, Chairman. Can you hear me?
    Mr. Connolly. Yes, you got it. You are recognized for your 
five-minute opening statement.
    Adrian Haro. OK. Terrific.

STATEMENT OF ADRIAN HARO, CHIEF EXECUTIVE OFFICER, THE WORKERS 
                              LAB

    Adrian Haro. Good morning, Chairman Connolly, Ranking 
Member Hice, and all the members of this Subcommittee on 
Government Operations. My name is Adrian Haro, and I'm the 
chief executive officer of an organization called The Workers 
Lab. Thank you for the opportunity to share how our work is 
contributing to the important enterprise of tackling improper 
payments.
    So many of the ways that we serve and take care of workers 
in this country are outdated and exclusive, so we need new 
ideas about how to better serve more and every kind of worker 
in this country. That's why at The Workers Lab we are on a 
mission to give new ideas for and with workers a chance to 
succeed. Over the last year, one of those ideas has been about 
how automating the process of verifying income in the 
administration of unemployment benefits could both increase the 
efficiency of the system and make it more equitable and 
accessible for non-traditional gig and contract workers that 
have historically been excluded. And what we're learning is 
that automating income verification in the administration of 
unemployment benefits can be a win-win, a win for gig workers 
in that it can make the process of applying for unemployment 
benefits faster and more user-friendly, and a win for 
government in that it can increase the efficiency of the 
process and allow for better service delivery to its 
constituents.
    Our learning journey started at the beginning of the 
pandemic when, for the first time ever, gig workers were made 
eligible for unemployment benefits, a tremendous and novel 
achievement but one that presented many administrative 
challenges for states all across the country. An estimated 57.3 
million Americans generate income from gig work, which 
represents 35 percent of the U.S. work force and is expected to 
grow to 50 percent by 2025. One of the biggest challenges for 
states was how to make sense of and verify income from gig 
work, which can often be generated from multiple sources at 
multiple times, sometimes even within the same day. Our 
unemployment system was simply not designed to verify income 
that looks like this. So we brought gig workers together with 
Steady, a platform that helps give workers track, understand, 
and optimize their income to develop what we call an Income 
Passport to help fix this problem.
    At The Workers Lab, we believe deeply in user-centered 
design and that any innovation for workers should be done in 
partnership with workers. The Income Passport automates an 
otherwise manual process for verifying income in unemployment 
benefits applications. Rather than relying on the often complex 
and sprawling paper trail that documents income generated from 
gig work, it instead pulls that income data directly from 
trusted financial sources. We tested the Income Passport with 
hundreds of workers in Alabama and Louisiana to demonstrate 
that automating income verification can make the process of 
administering unemployment benefits easier and more efficient 
for government staff and gig workers.
    Here is what we are learning about how automating the 
process of verifying income can help mitigate improper 
payments. First, the Income Passport reduces the potential for 
fraud. Because the solution safely and securely pulls income 
data directly from trusted sources and then transmits that 
income data directly to the state, it leaves very little room 
for fraudulent activity. Initial findings show that of 
applicants that chose not to use the passport, 90 percent of 
them were likely bad actors. Second, the Income Passport 
increases accuracy in the determination of benefit amounts for 
the state in that it has access to a trusted and tailored 
record of income generated from gig work, and for gig workers 
in that they have unprecedented access to see past income from 
multiple sources and, thus, more control over how their income 
is reported.
    Third, the Income Passport optimizes efficiency for states 
in that it automates an otherwise manual process, reducing the 
potential for human error, reducing processing time from as 
much as half an hour to 1 to 2 minutes and allowing for 
benefits payouts in less than 24 hours, and for workers in that 
it simplifies the daunting task of organizing income from gig 
work, thus enhancing the quality of the data submitted to the 
state. Finally, and perhaps most importantly, we're learning 
that the Income Passport holds promise beyond temporary 
pandemic assistance programs to automate the verification of 
income from gig work across the entire menu of public benefits 
programs in states all around the country.
    The Federal Government can do three things to help states 
make this happen. First, it should use its resources to 
evaluate potential technology solutions and support states that 
want to test them, providing funding and advice so that states 
can take advantage of innovation. Second, it can also establish 
policy guidelines and requirements across Federal agencies that 
incentivize states to adopt more innovative worker-centered 
technologies. And third, it can share best practices and 
successful technologies across states and help it to be adopted 
at scale through funding and other incentives. And, of course, 
The Workers Lab stands ready and willing to help.
    Thank you again for this opportunity, and I look forward to 
your questions.
    Mr. Connolly. Wow. You had five seconds left. Great job, 
Adrian. Thank you.
    Adrian Haro. Thank you, Chairman.
    Mr. Connolly. We now enter into member questioning. The 
chair recognizes the distinguished Congresswoman from the 
District of Columbia, Eleanor Holmes Norton, for her five 
minutes of questioning. Welcome, Eleanor.
    Ms. Norton. Hi. I appreciate the chair, my good friend, my 
next-door-neighbor recognizing me.
    Maybe we need--we have been thinking about improper 
payments all wrong. If solving the problem of improper payments 
means ensuring that government benefits, like Social Security 
and Medicare, military pay, reach those who Congress intended, 
perhaps we should focus more on those who cannot even access 
these benefits. Let me use a couple of examples. Nee Hall from 
Mount Hall, New Jersey was a victim of fraud and could not 
access unemployment insurance for seven months because the 
system locked him out. Refavo from Paris, Tennessee, a 45-year-
old retail worker who worked in both New Jersey and Tennessee, 
got laid off in July 2020. He is still waiting for the state of 
Tennessee to send the state of New Jersey information on his 
earnings so he can access benefits he qualifies for.
    Mr. Jensen, you have seen firsthand cases where incorrectly 
checked boxes, language barriers, agency processes and 
operations, and confusing program applications prevented an 
individual from accessing a benefit. In your experience, who 
are the individuals and families most hurt by byzantine 
applications or other barriers to program access?
    Mr. Jensen. Thanks for the question. I think that in the 
pandemic, one thing that we saw and so many people heard across 
the board: folks who couldn't use technology well, folks who 
weren't familiar with the byzantine structures that you are 
describing because they are byzantine. But we have to, as a 
number of folks have said here on this panel, focus on a user-
centered design when we are designing these programs because 
our mission has to be right down the middle.
    We have to make it easy and straightforward to get access 
to benefits when you are deserving of them, when you qualify 
for them, and keep others who aren't qualifying from getting 
paid. And that that really requires a lot more thinking about 
how we are going to make sure that folks who, just because they 
were confused by the technology, just because they were 
defrauded and had to wait for months and months for benefits. 
That is not acceptable.
    Ms. Norton. Ms. Miller, does the Federal Government even 
know how many people are eligible for benefits and cannot 
access them?
    Ms. Miller. No, the government has not undertaken any 
effort to try to estimate how many people would need to access 
benefits. That would be a very difficult calculation, I think, 
for the government to even try to undertake.
    Ms. Norton. I guess it would be. So, Adrian, in your 
testimony, you stated that your projects create a win-win for 
workers and the government. Can you talk a bit more about what 
you mean by ``win-win?''
    Adrian Haro. Absolutely. Thank you for the question. I 
guess I mean that what we have demonstrated in this project is 
that you can actually do both, right: increase access to public 
benefits, and, at the same time, also increase efficiency 
inside government simultaneously. Like it has been said before 
today, it is a false tradeoff to say that 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.
    Ms. Norton. Thank you very much. I yield back.
    Mr. Connolly. Thank you. Thank you, Ms. Norton.
    Mr. Hice, you are recognized for your five minutes of 
questioning.
    Mr. Hice. Thank you, Mr. Chairman. Ms. Greszler, let me 
start with you, and it may be kind of a loaded question because 
there is a lot to answer within this. But it is no secret the 
rampant fraud came about through the pandemic programs, but 
also unemployment insurance, Medicaid, and a host of other 
things. Are there any actions that the Federal Government could 
be taking that they just simply are not?
    Ms. Greszler. Yes, I think there are definitely standards 
out there that exist that say what are the right steps the 
program should be taking. They are simply not using them. I 
mean, they have been directed to do this, and yet they are not. 
And I think this comes down to an accountability problem 
because, at the end of the day, if there is no consequence for 
not reducing your own improper payments or staying within a 
limit, then the programs are not going to take them. I mean, in 
the UI payments, there were multiple problems there, and 
certainly the Federal Government put mandates on the states 
that they weren't capable of enforcing those identity checks 
and those eligibility checks.
    Looking to going forward with you UI, I think it would be 
very problematic to open this up to a group of workers who you 
really can't make those proper eligibility checks there. For 
those who don't have an employer, there is no verification in 
the process.
    Mr. Hice. OK. So they have been directed to take certain 
steps, but they have not, and there is no accountability. Why?
    Ms. Greszler. Well, and this gets to the nature of 
government programs. A lot of that $3.9 trillion is entitlement 
programs. The money is essentially there no matter what. It 
doesn't matter how many claims are made and improper payments 
come out of the door, there is unlimited access to taxpayer 
money even if it is deficit finance. You know, if you tell me I 
need to lock my door so that my money and my things don't get 
stolen, but I don't lock it and somebody comes in and robs me, 
but by the time I get back, all my money and my things have 
been replaced, I am not going to lock my door in the future. 
And so we need to have accountability in place. The standards 
exist, but if nothing happens when the programs don't meet 
those standards, we are not going to get to a better solution 
here.
    Mr. Hice. This is so infuriating to hear this kind of 
stuff. What needs to happen for our agencies to care? I mean, 
what is behind the lack of attention being directed toward 
fraud?
    Ms. Greszler. It is the lack of accountability. You know, 
you here in Congress are not in charge of micromanaging those 
agencies. You know, administrations are the ones that are in 
charge of running the programs, and they are not taking the 
measures they should, but what could you do is, Congress, you 
have the power of the purse. And so I would recommend that 
there need to be some limits placed on there, whether it is 
setting a pathway toward reducing improper payments and 
actually having penalties that happen if they don't achieve 
those standards.
    Mr. Connolly. Would the gentleman----
    Ms. Greszler. Unless there is a consequence----
    Mr. Connolly. I am sorry.
    Ms. Greszler. Go ahead.
    Mr. Hice. I will yield.
    Mr. Connolly. If the gentleman would yield without penalty, 
if we could freeze his time just for a second. I am also 
infuriated when I think about it, as Mr. Hice is. Ms. Miller 
suggested that one of the problems we face is that managers 
don't see it as their responsibility. That is someone else's 
problem, so I don't have to worry about improper payments, 
whether it be fraud or just mistakes. That goes to the IG or 
somebody else.
    Ms. Greszler. Mm-hmm.
    Mr. Connolly. Is that, from your point of view, a big part 
of the problem or at least part of the problem, and is that 
corrected somehow by our building in evaluation criteria so 
that, no, it is your problem. It isn't just someone else's 
problem. If the gentleman would allow me----
    Mr. Hice. Yes.
    Mr. Connolly [continuing]. Because I think this is 
consistent with where you are headed to. Thank you. Thank you 
for yielding.
    Ms. Greszler. Yes. I mean, at the end of the day, if 
whoever is in charge of that agency knows that there are going 
to be consequences--perhaps it is their job, perhaps it is a 
reduction in funding, and then they can't actually perform the 
service that they are supposed to do--then they are going to do 
more to reduce those improper payments. And it is unique across 
every program. It is not to say that there is one set of rules 
that should apply holistically because Medicaid is different 
than SNAP benefits, than the EITC, or the UI. Most agencies and 
programs need to have the flexibility to determine what are the 
right steps that they need to take. They have different 
eligibility criteria. They have different people they are 
serving. They have different ways of making the payments. So 
that flexibility still needs to be there, but it is the 
accountability that is missing.
    Mr. Hice. Thank you, Mr. Chairman. Listen, accountability 
starts right here in this committee, Mr. Chairman. We have got 
to do our business of oversight and hold accountable these 
agencies that are not doing their job to protect the American 
tax dollars. This is inexcusable to me. Ms. Miller, let me just 
ask your opinion. Is there anything you would add to this in 
terms of what are some of the obstacles that are keeping our 
agencies from protecting funds and preventing fraud?
    Ms. Miller. Yes. Look, I think people respond to whatever 
they are being measured on, right, and so most Federal agency 
leaders see themselves as their job is delivering the benefits. 
When you ask someone what is my mission in this agency, it is 
delivering benefits, getting benefits out the door. If you ask 
them is my mission to ensure that only eligible beneficiaries 
get it, they don't see that as much as their mission. They see 
it as, sure, of course, it is necessary. But if you are 
incentivizing people to adjudicate a certain number of 
applications in a given period of time, they aren't 
incentivized to slow down and look and see if this application 
looks like fraud and go check some things, because at the end 
of the day, it is the number of applications that they 
approved. So we have to change the incentive structure from the 
top all the way down.
    Mr. Hice. Absolutely. OK. So while you were at the PRAC, 
was there anything, any steps from Federal agencies that moved 
in the direction of preventing fraud and abuse?
    Ms. Miller. Yes. The Small Business Administration, when 
they went into the second round of PPP funding, they started 
employing some Know Your Customer tools that the banks employ, 
and that did help with identity theft. I think that Ms. 
Greszler is right. Identity theft was the biggest fraud issue 
in the pandemic, and so, you know, Know Your Customer, the 
concept that banks use, is an effective tool to identify 
whether someone is who they say they are. Identity theft is a 
growing problem in fraud, but I want to make sure that we are 
clear that the pandemic fraud is in the past, and we can talk 
about all of the problems that happened, but really, we are 
looking forward. How are agencies going to solve these problems 
going forward? They are going to have to take a much more 
proactive approach using data.
    Mr. Hice. Well, it is not in the past to ignore it. We 
can't go down that path, but thank you, Mr. Chairman. I yield 
back.
    Mr. Connolly. I thank the chair--I thank the gentleman and 
promise, let's find some common ground to look at metrics that 
actually incorporate responsibility and accountability for 
improper payments across the board so that managers have an 
incentive to pay attention to this, because right now they 
don't have much, as the data would show. I thank the gentleman.
    The gentleman from Illinois, Mr. Davis, is recognized for 
his five minutes of questioning.
    Mr. Davis. Thank you, Mr. Chairman, and I also want to 
thank all of the witnesses for their informative testimony.
    You know, during this year's State of the Union Address, 
President Biden announced his plan to appoint a chief 
prosecutor to focus on the most egregious forms of pandemic 
fraud by criminal syndicates. The White House published an 
estimate that between Fiscal Year 2020 and Fiscal Year 2021, 
the governmentwide improper payment rate rose from 5.6 percent 
to 7.2 percent. Clearly, addressing fraud then is important. 
Ms. Miller, let me ask you, what steps can Federal managers 
take to achieve a more strategic, risk-based approach to 
managing fraud and developing effective anti-fraud control?
    Ms. Miller. Sure. Well, there is a framework. GAO put the 
framework out in 2015. It is called the Framework for Managing 
Fraud Risks in Federal Programs, and 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. Fraud risk management needs to be proactive and 
needs to be at the management level, and it needs to be in a 
strategic, not after the fact, recovery focus, which is where 
we are now in the pay-and-chase mode.
    I also want to be a little provocative here and suggest 
that we might consider combining improper payments and fraud 
for the purposes of agencies' implementation because they see 
these as two unfunded mandates, and they don't take either of 
them seriously. They take a very compliance orientation to 
both. And if we were to reduce the separate and burdensome 
compliance activities around improper payments and fraud, 
combine them and require them to be more strategic, proactive, 
and outcome oriented, I think we could see a lot more progress.
    Mr. Davis. Well, thank you very much. You know, program 
integrity means more than just preventing fraud. It also means 
getting money to everyone Congress intended. Ms. Gilkesson, 
what happens to lifesaving Federal programs and the individuals 
and families who rely on them when policymakers focus solely on 
reducing fraud by adding to an application an eligibility 
review process?
    Ms. Gilkesson. Thank you so much for that question. When 
there is a focus on fraud, it causes unnecessary burdens on 
both clients and case workers, and, particularly, in terms of 
public benefits like SNAP, TANF, and Medicaid. Instead of 
spending time catering to the needs of their customers, case 
workers have to be hyper-vigilant about finding any fraud or 
risk losing their jobs. For example, I used to be a case worker 
for the state of North Carolina, and one thing that I do know 
is that quality control measures do exist, and states are held 
really tightly to that and are often held accountable to pay if 
they aren't held to that. But some of those quality control 
measures don't allow for people to be able to get their jobs 
done effectively.
    And one thing that I would say is that public benefit 
recipients have to endure over-policing, privacy invasions, 
difficult and time-consuming applications, unnecessary 
verifications, all to prove that they aren't committing fraud, 
and this burden causes errors and burdens to access. Thank you.
    Mr. Davis. Well, thank you very much, and let me just say 
that I think we surely need to spend as much time, energy, and 
effort on the big guys as we do the small guys, and much more 
needs to be done. Thank you both, and I yield back.
    Mr. Connolly. If the gentleman would yield to me for a 
minute. Let me just say I agree with you completely. We need to 
be looking at every level of improper payments. It is not just 
fraud. But Ms. Gilkesson, I would just say, and I think you 
would agree, there is an opportunity cost, however, when 
mistakes are made or fraud occurs. So if I have $100 for a good 
program and $20 of it is siphoned off improperly, whatever 
category that is $20 I am not providing to the people who need 
it. And so it seems to me that, you know, every effort we can 
make to try to make sure that the integrity of the program is 
preserved so that the benefits are flowing to those who need it 
and are eligible for it is a good public policy goal. And I am 
sure you agree with that.
    Ms. Gilkesson. Yes, absolutely.
    Mr. Davis. Thank you, Mr. Chairman, and I agree 
wholeheartedly.
    Mr. Connolly. Thank you, Mr. Davis. Yes, ma'am?
    Ms. Gilkesson. Yes, I definitely agree with that, and I 
want to make sure that we are understanding that having 
streamlined access for people to actually be able to have 
access to the programs is super important. And I love all of 
the technology fixes that a lot of my co-testimonials here are 
mentioning because it really is important to streamline access 
and make sure that people actually have the ability to get 
access, because there so many barriers with applications, with 
verifications, that folks just, some of them walk away and say 
they are not even going to try to go through with it
    Mr. Connolly. Yes.
    Ms. Gilkesson. And we want to make sure that all of the 
technology put in place is something that is encouraging people 
who are eligible to apply.
    Mr. Connolly. Yep. Thank you. I think that is an important 
point.
    The gentleman from Pennsylvania, Mr. Keller, is recognized 
for his five minutes of questioning.
    Mr. Keller. Thank you, Mr. Chairman, and thank you to 
Ranking Member Hice and all our witnesses for being here at 
today's hearing.
    Improper payments continue to be an area of concern in the 
Federal Government. According to the GAO, improper payments 
have been estimated to cost $1.7 trillion governmentwide from 
2003 through Fiscal Year 2019. These improper payments were 
concentrated in three program areas: Medicaid, Medicare, and 
the Earned Income Tax Credit. As spending for Medicare 
continues to increase, it is crucial that these funds are 
properly managed and distributed because, as it was mentioned, 
improper payments take benefits away from people who are truly 
in need.
    According to the Centers for Medicaid and Medicare 
Services, in Fiscal Year 2019, Medicaid made $57 billion in 
improper payments. This amount rose to $87 billion in Fiscal 
Year 2020, meaning more than 1 out of 5 payments under the 
Medicaid program was improper. I think we all agree it is 
unacceptable that any funds are going to ineligible recipients 
or made in incorrect amounts. We need more accountability and 
oversight of the outlay funds so we can ensure we are using 
taxpayer dollars appropriately. Reducing these improper 
payments is crucial to protecting Federal programs that serve 
Americans.
    So if we take a look at all the things that have happened, 
and I guess I will just ask Ms. Greszler. Have we seen payments 
increase over the years, or have we seen the scorecard getting 
any better with improper payments?
    Ms. Greszler. No. We have seen kind of a double whammy 
because both the number of payments that are going out are 
increasing, and also the rate of improper payments are also 
increasing there. And so that is why we have seen 633-percent 
growth in the number of improper payments, you know, just since 
2005.
    Mr. Keller. And this actually was happening prior to the 
pandemic.
    Ms. Greszler. Yes. The UI was specific to the pandemic 
because just the size and scope of it, but all these other 
improper payments were already increasing prior to.
    Mr. Keller. So had we put in place plans prior to the 
pandemic, we wouldn't have seen so much trouble through the 
pandemic in getting payments made properly?
    Ms. Greszler. Correct.
    Mr. Keller. OK. And that, I guess, is the point. We have 
these government agencies that are responsible to make 
payments. So the same people that run these programs and 
responsible for making the accurate payments, are they the same 
people that have been in charge of them for many years?
    Ms. Greszler. I think that the problem is that the people 
who are in charge of the program's mission, as Ms. Miller 
pointed out, are getting the payments out the door. And I see 
that problem in two ways.
    Mr. Keller. No, but I would disagree with that. Getting the 
payments out the door accurately is the mission.
    Ms. Greszler. It should be. It should be.
    Mr. Keller. Let me ask you a question. If you had an 
accountant that you were running a business and they were 
making improper payments, their mission is to get the payment 
out the door, right? But if your accountant isn't doing their 
job properly, would you continue to hire them and employ them?
    Ms. Greszler. And that is exactly the point here is that--
--
    Mr. Keller. OK.
    Ms. Greszler [continuing]. Is that we don't have the 
accountability. There is no consequence when improper payments 
are----
    Mr. Keller. Well, that goes back to my point. Is it the 
same people in these government agencies that have been 
overseeing these payments for years at the head of the 
agencies? I mean, I guess I am just----
    Ms. Greszler. Yes. I mean, they change with 
administrations, but the same ones are in there.
    Mr. Keller. Yes, and what needs to happen is some of them 
need to lose their jobs because they are not doing them 
properly. I mean, government is the only entity where we do 
less with more, right?
    Ms. Greszler. Mm-hmm.
    Mr. Keller. And we reward bad behavior. I mean, I guess I 
would just look at that, even with unemployment insurance. I am 
sure states have had issues. I know Pennsylvania has had 
issues. I toured Pennsylvania's Unemployment Division and 
Department of Labor when I was a state rep----
    Ms. Greszler. Mm-hmm.
    Mr. Keller [continuing]. And I looked at the inefficiencies 
there at that point in time. Would it be safe to say that some 
of the payments are made improperly because we hand the money 
over to the states, and then the states don't make sure that--
--
    Ms. Greszler. That was a big problem with the Pandemic 
Unemployment Insurance benefits is that it was Federal money, 
and there was no consequence to just simply approving those 
claims because they were paying the $600 and they were paying 
the ordinary benefit. And so even if you thought, well, hey, 
maybe some of this money is going to get spent in my economy in 
a good way as opposed to going to criminal enterprises 
overseas, the incentive was there to utilize those and to send 
the payments out the door.
    Mr. Keller. So would it make sense that when we give money 
to states, if the state isn't able to distribute that money 
effectively, they shouldn't get the dollars?
    Ms. Greszler. Exactly. There have to be requirements there 
that if you are getting this Federal money, you are going to be 
protecting Federal taxpayers through that.
    Mr. Keller. I mean, because we can talk about putting all 
this money out, but, ultimately, our kids and grandkids are 
going to be the ones paying it back because we are borrowing 
it. So I think it should be imperative on all of us, a priority 
of all of us to make sure it gets done effectively.
    So I am out of time. Thank you, Mr. Chairman.
    Mr. Connolly. Thank you. The gentleman from Maryland, Mr. 
Raskin, is recognized for his five minutes.
    Mr. Raskin. Mr. Chairman, thanks so much. You know, many of 
our Federal programs and benefit systems have not been updated 
to serve the needs of the contemporary economy and work force. 
Consider how different our service economy and work force are 
today compared to just 10 or 15 years ago. Many workers are in 
the gig economy now, like Uber drivers, graphic designers, 
freelance writers, web developers. The Fed estimated that 
nearly a third of adults engage in gig economy work. Ms. 
Miller, let me ask you. Are current Federal laws and benefit 
structures conducive to serving this population of today's 
workers?
    Ms. Miller. I don't believe they are. I mean, this is a 
very new area that we are moving into where we have got lots 
more people working remotely and gig workers. And, I mean, the 
systems that are in place now aren't even really set up all 
that well to work. They are traditional systems. So, no, I 
think we have a ways to go to adapt to this new work force.
    Mr. Raskin. Yes.
    Ms. Miller. And I don't think we are even close to where we 
need to be.
    Mr. Raskin. Well so, Secretary Jensen, it is good to see 
you. I assume that gig workers in Rhode Island benefited from 
some of the big improvements to state programs that took place 
under your leadership. How did you work with an existing state 
law or change state laws in order to design better systems to 
make it easier for people to access while also preserving the 
integrity of the programs?
    Mr. Jensen. Thanks for the question. What we did with the 
pandemic unemployment assistance verification was we did a data 
sharing agreement with the state income tax department and used 
cloud computing to check to make sure that gig workers, when 
they applied for PUA benefits, that their gross income was 
accurate. And if they were accurate, we were able to pay that 
person quickly, and if they weren't, that person had to go 
through a much more arduous process, which, you know, we were 
taking very seriously because fraud is something that, I think, 
my colleagues definitely cared about, and so did I, during the 
pandemic.
    Mr. Raskin. So, Ms. Gilkesson, can you tell us briefly what 
are the first steps Congress should take now to renovate our 
laws to make them more applicable to the real economic 
situation of workers, families, and businesses?
    Ms. Gilkesson. Thank you, Congressman. It is important for 
Congress to think about people who are benefiting from these 
programs. So many of them experience the worst moment of their 
lives seeking help because of sickness, a job loss, fleeing 
domestic violence, and so much more. They deserve to be treated 
with respect and dignity, and they deserve to be defined by who 
they are, not by stereotypes or false media portrayals. And 
last, they deserve to have a seat at the table, not just to 
share their stories but to share with you all policy changes 
that they know would help to serve them and their families. So 
it is also important to keep in mind how essential these 
programs are to people's livelihoods. They help to bring so 
many people out of poverty and really are programs that are 
helpful to people when they are going through some of the worst 
moments in their lives.
    So I think that Congress should consider really working 
along with their constituents to hear their thoughts on how 
they are being treated at the public benefits agencies, and 
really create policies that are centered in trust and truth and 
what they believe and deserve is best for them.
    Mr. Raskin. Thank you. And, Adrian, in your project on 
helping gig workers receive unemployment benefits, did you see 
an actual increase in people's access to the benefits, and did 
you see improper payments go down?
    Adrian Haro. Yes and yes.
    Mr. Raskin. And how do you make sure that the projects you 
are investing in are sustainable and effective in the long 
term?
    Adrian Haro. That is a great question, Congressman. Thank 
you. So really quickly, we follow the data, and in the case of 
gig work and this project, the data show that there will be 
growth in this part of the economy, right? We also know that 
these workers have very little access to public benefits 
programs because of challenges like verification of their 
income. So we stood up this project to help, both in the crisis 
moment but also over the long haul. And as I mentioned in my 
testimony, the Income Passport holds promise beyond the 
temporary pandemic assistance programs, right, to income across 
the entire menu of public benefits. That is everything from 
SNAP, to Medicaid, to TANF, CHIP, right?
    We could take the Medicaid example really quickly and just 
say, unlike unemployment benefits in which eligibility is tied 
to work status and dependent on employers paying in on behalf 
of workers, and where gig workers do not currently qualify for 
the most part, Medicaid, on the other hand, is largely depended 
on income level, not work status. So all forms of non-
traditional income--1099, self-employment, et cetera--count 
toward the thresholds for eligibility.
    So we need a better and more efficient way to verify this 
kind of income in these types of programs so that qualified 
people are getting the benefits they are legally entitled to, 
no more, no less.
    Mr. Connolly. Thank you.
    Mr. Raskin. Well, thank you. Thank you, Mr. Chairman, and I 
yield back.
    Mr. Connolly. I thank the gentleman.
    The gentleman from Arizona, Mr. Biggs, is recognized for 
five minutes.
    Mr. Biggs. Thanks, Mr. Chairman. I am grateful that you are 
having this hearing today. I think is an important topic.
    Ms. Greszler, is there a focus in our agencies, our 
executive agencies, on fraud prevention?
    Ms. Greszler. I think there is--you know, at a surface 
level they will say that they are looking into it, but I don't 
think at the core that they actually are. And I think that the 
problem there is that they are looking more toward serving 
customers, toward making sure that they are getting payments 
out as opposed to protecting the integrity of those payments.
    Mr. Biggs. So it is not--there is a superficial level. 
There is a verbal commitment but no actual commitment. Ms. 
Miller, would you agree with that?
    Ms. Miller. Absolutely.
    Mr. Biggs. So when I look at this, we currently have more 
than a $30 trillion national debt, and in 2021, there was more 
than $280 billion in improper payments. The recent omnibus gave 
DOJ $35 billion in discretionary funding. The legislative 
branch receives $6 billion. The President requested $773 
billion for an agency that wastes nearly one-third of it, the 
Department of Defense. And according to the White House's own 
analysis, between Fiscal Year 2020 and 2021, the governmentwide 
improper payment rate rose from 5.6 to 7.2 percent, and it 
really skyrocketed--UI fraud and improper payments--during the 
pandemic, which I never use that term, but from the 12-month 
non-pandemic compared to the 12-month normal period.
    So we look at this, and we say DOJ has brought over 1,000 
criminal cases related to pandemic relief programs totaling 
over a billion, another 1,800 civil cases for an additional $6 
billion, and, according to the Secret Service, more than $100 
billion was illegally obtained from COVID relief programs. So, 
one of the things that you testified to, Ms. Miller, is that we 
don't have a balance, and that is point I really want to get to 
today before I submit things for the record, but this balance 
of putting money or benefits out the door versus preventing 
fraud and improper payments.
    And you have said that there are, since 2015, a GAO fraud 
risk, basically a template. Tell me a bit about that, if you 
will.
    Ms. Miller. Sure. Yes. And I will say that, you know, in 
the private sector, I have a number of private sector clients, 
and they would go out of business, as has been mentioned 
earlier. It is not like you can't do this. It is not as though 
you can't safeguard taxpayer funding while also effectively 
getting benefits out the door. It is just a matter of the will 
to do so.
    The Fraud Risk Management Framework that GAO put out has 
four areas to focus on. The first one, frankly, the one that I 
would like to focus on the most is commit. That is the very 
first one. Designate an entity who will be committed to 
managing fraud risks. Every private sector company that I work 
with as a client has a dedicated fraud program. They have a 
fraud office. They have a special investigations unit, someone 
whose job it is to make sure that their money isn't getting 
stolen. No agency in any Federal agency, aside from the Center 
for Medicare and Medicaid Services, has such an entity. It is 
going to be really important to make this on par with getting 
benefits out the door if we want to see something change.
    Mr. Biggs. So when you mention that, implicit in that 
statement and something that Ms. Greszler talked about earlier 
as well is incentives to find and stop fraud. And there seems 
to be very little incentive within Federal agencies to stop 
fraud. They are rewarded, and Ms. Gilkesson actually testified 
to this as well. They are rewarded by moving benefits out, but 
there is no carrot and stick approach, quite frankly, to 
stopping improper payments and fraud.
    I think that this hearing, Mr. Chairman, and I am glad we 
are having it, but I think we need to expand this so we can 
actually get some more specific, concrete evidence. I mean, me 
trying to get five minutes, and then trying to get to everybody 
who is sitting there, and trying to get some response, this is 
not the most conducive way to tackle something, I think, is a 
really, really serious problem. And I am hoping that we will 
revisit this again, Mr. Chairman. I know you are going to say 
something. Do you want to respond to that?
    Mr. Connolly. I agree with you.
    Mr. Biggs. OK.
    Mr. Connolly. And let me just tell you, this has been one 
of my kind of pet topics, and I see Mr. Lynch is on. He will 
recall when Todd Platts, Republican chairman of this 
subcommittee, was heavily involved in this along with Mr. Lynch 
and got me involved. And here we are, four bills later, you 
know, 14 years later, and things are not better, and so we do 
need a new approach. And I do think this provides an 
opportunity for bipartisan cooperation to figure out what is 
that approach that hopefully will be efficacious and bring that 
number and percentage down and incentivize Federal managers to 
take this seriously.
    Mr. Biggs. Yes, I think that this is a nonpartisan issue. 
This is an American issue. And so I need to read into the 
record just a couple things. I yielded to you.
    Mr. Connolly. Absolutely.
    Mr. Biggs. Thanks. I want a piece from The New Jersey 
Monitor that says New Jersey fisheries net $2.4 million in 
improper COVID payments. This is a Business Insider piece that 
says a man was arrested after allegedly spending $5 million in 
COVID-19 relief money on a Ferrari, Bentley, and Lamborghini 
sports cars. At least he had good taste. Then we move to the 
next one, Austin American-Statesman says, ``Will prisoners also 
receive 1,400 stimulus checks? Mostly true.''
    Mr. Connolly. Is the gentleman seeking unanimous consent?
    Mr. Biggs. Yes, I am on these. I am sorry.
    Mr. Connolly. Without objection, it is so ordered, 
understanding, however, that when we are talking about improper 
payments, it is very rare. It is about a Lamborghini.
    [Laughter.]
    Mr. Biggs. And continuing on, Mr. Chairman.
    Mr. Connolly. Yes.
    Mr. Biggs. Another one. ``Rand Paul Stops Democrats' 
Attempt to Get Free Money to Planned Parenthood,'' and I have a 
series of pieces on that. Moving to, ``Stimulus Turns Political 
as SBA Tries to Claw Back Funding from Planned Parenthood.'' 
Some more on that. And then how about this one: ``Made Out Like 
Bandits: New York Prisoners Got $34 million in COVID Stimulus 
Funds''. ``Biggest Fraud in a Generation, the looting of the 
COVID Relief Plan Known as PPP.'' ``Criminals Have Stolen 
Nearly a Hundred Billion Dollars in COVID Relief Funds, Secret 
Service Says.'' That is from NBC.
    Another, NBC News, ``Man Who Used COVID Funds on a $57,000 
Pokemon Card Received 3 Years in Prison.'' What the heck, a 
Pokemon card. And then the next one from CNBC: ``Florida 
Businessowner Got $3.9 Million in Coronavirus Relief Money. 
Spent It on a Lamborghini and Luxury Hotels.'' And it goes on, 
and I got a whole stack of these things. They are just a small 
droplet in the big bucket of fraud and waste that occurred in 
the skyrocket of the last two years. But, believe me, as the 
testimony goes, Mr. Chairman, and you know this, this was on 
the rise before we ever hit the end of COVID relief.
    So thank you, Mr. Chairman.
    Mr. Connolly. Without objection, it is so ordered into the 
record.
    Mr. Connolly. I would also ask unanimous consent to enter 
the GAO's report, ``A Framework for Managing Fraud Risk in 
Federal Programs'' into the record as well.
    Without objection, it is so ordered.
    Mr. Connolly. The gentleman from Maryland, Mr. Sarbanes, is 
recognized for his five minutes. Welcome.
    Mr. Sarbanes. Yes, Mr. Chairman. Thanks very much, and I 
want to thank our witnesses.
    I want to make sure I understand something. Maybe, Ms. 
Miller, you could help with this. You know, there are obviously 
situations in which payments go out to people that are 
intending to commit fraud against the system, and recovering 
that becomes very important, and having accountability measures 
in place up front is vital. But a lot of this overpayment is 
going to people that are deserving of the dollars. It is just 
the efforts to get those out the door in a time-sensitive way. 
Some of the problems with the technologies and systems that are 
delivering those dollars are such that an overpayment may occur 
to someone who is deserving, and then we have the challenge of 
trying to recover it. Is that lion's share of what the 
overpayments look like, Ms. Miller?
    Ms. Miller. Well, I think the short answer is ``no'' and 
``no one really knows'' because I think estimation of improper 
payments and certainly root causes is extremely difficult, and 
agencies have been unsuccessful to date in doing that 
effectively. But I would argue that, in my experience at GAO, 
the majority of improper payments, while we don't know, and I 
don't think it is really important to try to understand 
someone's intent for the purposes of trying to make sure that 
money that someone is not getting a benefit that they are 
entitled to, all you really need to know is did they circumvent 
a control, advertently or inadvertently, that enabled them to 
get something they weren't entitled to. I think getting intent 
out of this discussion is actually helpful because we are 
really just trying to make sure we are safeguarding the 
integrity of the funds, not necessarily determining whether 
somebody had malintent.
    Mr. Sarbanes. Which is why building is these protections on 
the front end is so important because, as you indicate, you are 
not dependent on the intent in terms of the analysis you are 
doing around the overpayment. Mr. Jensen, why did the pay-and-
chase approach become the norm for governments? Give me your 
perspective on that.
    Mr. Jensen. Thanks, Congressman. I don't think it is the 
norm. I think that, daily, people running unemployment 
insurance programs, at least is what I am familiar with, are 
trying to do everything they can to stop improper payments. The 
entire UI system is meant to do that, and so is, you know, 
trying to catch identity fraudsters and others. You know, I 
think that we wind up in that circumstance too often similar 
to, you know, police departments trying to stop burglaries. 
But, you know, I think it is an overstatement to say that no 
one is motivated to stop fraud, and no one is doing it.
    Mr. Sarbanes. OK. Let me ask you and Ms. Miller this 
question. We have talked about if there was more accountability 
in terms of these program managers and others who are in a 
position to push dollars out the door, that that would be 
helpful, and then we also know that technology is a huge part 
of this. What is the relative impact of those two things? In 
other words, you could have program managers who know that they 
are, you know, they are accountable, and they could have a 
terrible system available to them in terms of the technology, 
and there is not a lot that they can do, and you could also 
have the alternative scenario. How much is the technology 
preventing us from getting to a place where, with real 
accountability in place, we would actually fix this problem? 
And, Ms. Miller, maybe you can start, and, Mr. Jensen, it would 
interesting to hear your perspective from the field.
    Ms. Miller. Sure. I think that technology is a significant 
limitation in doing more to prevent and detect fraud and 
improper payments. I think it is technology, and I think it is 
data. Honestly, data sharing is so broken in government right 
now that even if you had technology, frankly, you wouldn't 
really be able to use it very well because there is so little 
data that agencies can access and use to meaningfully 
understand the extent that a payment might be improper. But 
technology, from a perspective of, you know, the pandemic and 
the new wave that we are in now, the way that that fraud is 
happening through cyber channels. So fraudsters are using all 
kinds of very advanced techniques to steal identities, and the 
agencies are still using, in many cases, knowledge-based 
authentication. They are not even using multi-factor 
authentication to verify the identity of an applicant. So it is 
a technology and a data problem, absolutely.
    Mr. Connolly. Thank you.
    Mr. Sarbanes. Mr. Jensen?
    Mr. Connolly. Mr. Jensen, real briefly if you want to 
respond because the gentleman's time has expired.
    Mr. Jensen. Sure. I think it is an application of check 
technology challenge. So you need the technology, and you need 
to apply it prudently to what you are trying to do.
    Mr. Connolly. Thank you. We got to apply things.
    Mr. Sarbanes. Thank you.
    Mr. Connolly. That is another watchword, ``apply things 
prudently.'' We should all live by that.
    All right. The gentleman from Georgia, Mr. Clyde, is 
recognized.
    Mr. Clyde. Thank you, Chairman Connolly and Ranking Member 
Hice, for holding this very important hearing today.
    Part of this committee's mission is to look for and prevent 
government waste, fraud, and abuse, and today we are finally 
holding a hearing that is highlighting the Biden 
administration's failure to conduct oversight of government 
programs awarding improper payments, costing the Federal 
Government and American taxpayers billions of dollars every 
year.
    Improper payments have cost American taxpayers $281 billion 
alone in Fiscal Year 2021. This is an increase from $108 
billion in Fiscal Year 2012. Just imagine if the Federal 
Government spent more time ensuring proper payments were being 
made. Our national debt would probably not be as high as it is 
today. It is imperative that the Federal Government be good 
stewards of taxpayer funds as each improper payment further 
erodes the trust of the American people and the security in the 
Federal Government.
    While Federal agencies were quick to deliver financial 
relief to American taxpayers when COVID hit, it is extremely 
important to note that many of these agencies did not have the 
safeguards in place to forestall improper payments. In fact, in 
Fiscal Year 2020 and Fiscal Year 2021, the governmentwide 
improper payment rate rose from 5.6 percent to 7.2 percent, 
largely due to problems with COVID-related relief funds. For 
example, experts believe that millions of dollars of 
unemployment benefits went to bad actors, and there is proof of 
it. Just yesterday, a man in Rhode Island was indicted for 
using stolen identities of others to file for COVID-related 
unemployment benefits.
    Mr. Miller, a question for you, ma'am. During his State of 
the Union address, President Biden acknowledged that fraud 
within the Unemployment Insurance Program was egregious. What 
actions must the Biden administration immediately take to 
better investigate and to retrieve improperly received taxpayer 
funds distributed for Pandemic Unemployment Insurance?
    Ms. Miller. Well, I believe that there are a number of 
initiatives under way right now to do recovery. He obviously 
identified a Federal prosecutor that would be in charge of 
COVID funding. There are also several law enforcement agencies. 
I worked at one of those oversight entities, the PRAC, which 
coordinates the work of several law enforcement agencies. There 
is a fraud task force that PRAC has created. The DOJ has 
multiple task forces, Secret Service, FBI. There are a variety 
of law enforcement agencies currently going after the fraud in 
the pandemic.
    The problem is there is not a limited number of oversight. 
At this point, there is actually a limited number of people 
that can actually go back and do all of the investigative work 
that is going to be needed, time to build cases to get 
prosecutions, but, honestly, very little of that money is going 
to get to get recovered. Most of the pandemic spending was 
identity theft-based fraud. Identity theft, you are not going 
to recover that. Those guys are gone. They were not using 
identities that can be identified through a law enforcement 
investigation, unless they can find a criminal ring, which is 
extremely challenging for them to find, so especially when they 
are offshore.
    So, I mean, to me, I don't think it was a problem with the 
prosecutor, and I think it is great that we are going to try to 
claw back as much as we can. But going forward, I think the 
focus has to be on prevention and not so much on recovery.
    Mr. Clyde. Thank you, ma'am. So you think that pretty much 
what is out there that is gone is gone already, and there is 
not much chance of getting it back?
    Ms. Miller. I mean, I think some programs are more likely 
to recover more funding. PPP loans in particular are ones that 
are going to be more likely to get money back, but I think a 
lot of the unemployment assistance payments are going to be 
very difficult, if not impossible, to recover.
    Mr. Clyde. So, therefore, we need to increase the 
safeguards on those programs right now, make them much more 
robust. All right. Well, thank you. A question for Ms. 
Greszler. Do you believe the lack of safeguards implemented 
within the Unemployment Insurance Program made these programs 
more vulnerable to bad actors, or, if not, what do you think 
did make them more vulnerable?
    Ms. Greszler. Yes, I think it was absolutely that lack of 
safeguards and lack of any consequence when the payments went 
out the door. What I think is particularly troubling going 
forward is, yes, we have to address the existing improper 
payments within government programs already, but we are seeing 
from this Administration proposals to make Americans dependent 
on the government, not just for things like unemployment 
insurance and Social Security, but for every part of their 
life: for childcare, for paid family leave, for pre-K. And so 
the bigger that the government grows, the more improper 
payments that are out there, but it is also not helpful for 
people.
    We have heard from Ms. Gilkesson, these programs are not 
easy to navigate. Who wants to go and fill out a bunch of 
paperwork and submit medical information to be able to receive 
paid family leave with what we have seen in some of the states 
that have that? Washington state, for example, people were 
waiting weeks, if not months, when they weren't even able to 
apply until they had a need for leave, and so they didn't find 
out until months after they needed the money whether or not 
they were eligible for it. And so expanding government's reach 
into people's lives is not what empowers them. We need to look 
toward changing the nature of the programs that are out there 
and also toward not expanding them any further.
    Mr. Connolly. Thank you.
    Mr. Clyde. I would agree with that. Thank you very much, 
and with that, Mr. Chairman, I yield back.
    Mr. Connolly. Thank you, Mr. Clyde. Just for the record, I 
want to be clear that this hearing is not about any particular 
administration. It is a hearing in a long series of hearings 
this committee has had over the years looking at a chronic 
problem that has afflicted every administration, namely 
improper payments, and our hope is that we can arrive at some 
nonpartisan solutions that get at this. I thank the gentleman.
    The gentlelady from Ohio, and forgive me if I overlooked 
you previously, Ms. Brown. I didn't mean to do that. You are 
recognized for your five minutes of questioning. Welcome.
    Ms. Brown. No worries. Thank you, Chairman Connolly, for 
holding this hearing, and thank you to all the witnesses for 
joining us today.
    The Do Not Pay Program within the Bureau of the Fiscal 
Service at the Treasury Department enables agencies, and even 
states, to access data bases from across the government to 
verify payment criteria. Ms. Miller, can you please explain how 
Federal and state agencies can utilize Do Not Pay to identify 
and prevent improper payments?
    Ms. Miller. Yes. Well, agencies are encouraged, and 
actually almost required by the Payment Integrity Information 
Act, to use Do Not Pay to the extent that they can prior to 
making a payment. GAO has reported numerously over the years on 
agencies' limited ability to use Do Not Pay and the limitations 
within Do Not Pay. It is my opinion that Do Not Pay is broken 
and it needs significant enhancing, and if a centralized anti-
fraud office were created, I think it would be really important 
to assign responsibility for improving that dramatically.
    The Pandemic Response Accountability Committee, the PRAC, 
where I was a deputy executive director, created a center of 
excellence called the Pandemic Accountability Center of 
Excellence. And in just a short period of time, less than a 
year, the PACE, as it is known, has been able to pull in 
numerous data sources from the private sector and across 
government, including a lot of hotline data that has been 
really valuable to them in their oversight efforts. I believe 
that Do Not Pay really needs significant overhaul. The data 
bases in it need to be expanded, and agencies need to have more 
ability to access those datasets in order to be able to 
identify fraud because, right now, that system is not working 
anywhere nearly as well as it was intended to work.
    Ms. Brown. Do Not Pay has identified or prevented $780 
million in improper payments in its lifetime, and that is a lot 
of improper payments avoided. Yet only 40 percent of states, 
and not many more than 20 Federal agencies out of hundreds that 
exists, currently use the program. My question to this panel is 
why. Why are many states and so many Federal agencies choosing 
to forgo Do Not Pay?
    Ms. Miller. Well, I will just say that I think it is 
because a lot of them don't even know how to access it, and 
because, right now, there are only limited numbers of datasets 
that they could use to access them. But I think also, as Mr. 
Jensen has mentioned, a lot of times at the state level, the 
data systems that states use, and Mr. Jensen can probably speak 
better to this, can have challenges accessing some of these 
data sources that the Federal Government offers. There needs to 
be a lot better Federal and state data sharing and accessing 
each other's systems, and I think that would improve the use of 
Do Not Pay.
    Mr. Jensen. And data infrastructure as well. During the 
pandemic, there are other systems like that to check on wages 
that were earned in other states and unemployment insurance. 
That immediately crashed, and if you had a claim that was in 
two states, you were not going to get paid for months and 
months until that system came back up. So, to me, that is a 
function of not being on the cloud, not using contemporary 
technology.
    Ms. Gilkesson. One thing that I would also mention is that 
the states have a focus on fraud in terms of individual people, 
but like Ms. Miller has talked about today, she has mentioned 
identity stealing, cyberattacks. The technology that states 
have right now are not meant to catch people who are doing 
cyberattacks or who are stealing identities. It is meant to 
catch individual people. And oftentimes, the technology that is 
in place is catching people who are actually innocent.
    So there are a lot of people who are being accused of fraud 
who have benefits taken away from them who actually were 
eligible and didn't do anything wrong. But the systems that are 
set up are catching those individual people versus focusing on 
international rings that have been mentioned today. And I think 
that is important to have on the record because what we have 
that exists are solely based on, like I talked about in my oral 
testimony, stereotypes and things of that nature that are 
trying to catch people committing fraud that are not committing 
fraud, right?
    And so the increase in improper payments is based on not 
necessarily individual people who are all deserving, but based 
on, like Ms. Miller talked about, identity stealing, 
cyberattacks, the dark web. And right now, I can tell you that 
state systems are not equipped whatsoever to take on those 
threats and attacks.
    Ms. Brown. Thank you so much. My final question is for Ms. 
Miller. What can Congress do to encourage or require agency and 
state participation in Do Not Pay?
    Ms. Miller. Well, I am not sure that this is necessarily a 
Congress solution. I think that Treasury needs to improve the 
access to data that exists right now in Do Not Pay. I think OMB 
really needs to prioritize putting datasets into Do Not Pay, 
and Congress has already told agencies to use Do Not Pay prior 
to making payments. GAO has found that Do Not Pay actually 
matches payments after they are already made, so it is not even 
actually a prepayment system. So I am not sure, besides 
Congress dedicating funding and leadership to overhauling and 
fixing Do Not Pay, I am not sure how much more Congress can do.
    Mr. Connolly. Thank you. I thank my friend from Ohio.
    The gentleman from Kansas, Mr. LaTurner, is recognized for 
his five minutes.
    [No response.]
    Mr. Connolly. Mr. LaTurner is not here?
    Voice.
    [Inaudible.]
    Mr. Connolly. OK. All right. The gentleman from 
Massachusetts, Mr. Lynch, is recognized for his five minutes, a 
longtime proponent of addressing this subject, improper 
payments. Mr. Lynch.
    Mr. Lynch. You are too kind, Mr. Chairman. Thank you very 
much, and I want to compliment you as well for pulling together 
such great witnesses who have been very helpful.
    I do want to remind my colleagues on the other side of the 
aisle that they seem to have forgotten the CARES Act, $2 
trillion was actually signed into law and deployed by the Trump 
administration, so I appreciate the bipartisan tone that the 
chairman has set. There should be room for facts as well.
    After the CARES Act was passed, we got a report, I believe 
it was from GAO that 75 percent of the fraud committed in 
connection with that funding occurred on financial technology 
platforms and APIs. So I would like to know from Ms. Miller, 
are we focusing on that fact and targeting where most of this 
fraud occurred? Is there any hope that perhaps two-factor 
authentication might be required by recipients in order to more 
deeply secure the funding flow of people who are deserving of 
those benefits?
    Ms. Miller. Yes, I believe that multi-factor authentication 
is one of many tools that agencies need to employ to ensure 
that applicants are who they say they are. There has been some 
NIST guidance. I think there has been some White House 
executive orders recently that have required agencies to use 
multi-factor authentication as well as things like Zero Trust 
architecture. So there are a variety of cybersecurity 
initiatives underway.
    What I believe is there needs to be coordination between an 
anti-fraud entity that hopefully will exist at some point if 
some legislation is introduced that creates that office. That 
office needs to coordinate with the Cybersecurity Group, with 
CISA, and with NIST to make sure that there are anti-fraud 
controls that are required to be put in place, like the private 
sector currently has, things like device fingerprinting, things 
like IP address checking, to make sure that somebody who is 
using a phone, or a computer is who they say they are. You can 
even use more advanced tools like behavioral biometrics. And so 
it is really important, I think, for this coordination to 
happen between the cybersecurity offices and the anti-fraud 
effort in order to make sure that these technologies are put in 
place and being able to be used to their greatest effect.
    Mr. Lynch. Well, I appreciate that. Ms. Miller, I would 
just note that we have been at this, at least Mr. Connolly and 
I, for about 14 years. So, you know, my own observation is that 
the government has not been known for its speed in this area. 
You know, multi-factor authentication is something that we can 
adopt very simply. It is at the front end of this process. So 
while certainly the need for an anti-fraud agency won't go 
away, I think we can stop at the front end a lot of this 
happening. If 75 percent of the fraud occurred on these, you 
know, Fintech applications and Fintech platforms that should 
tell us something, right? The balance of it occurred, you know, 
through manual processes.
    You know, the SBA was trying to push out the money as 
quickly as possible. It was emergency funding and it needed to 
get out, so, you know, we own part of that because of the haste 
at which we acted and the President acted. But, Ms. Greszler, 
do you have any different perspective on, you know, multi-
factor authentication that might prevent some of this stuff at 
the front end?
    Ms. Greszler. I think just allowing the agencies and the 
programs to determine what steps are necessary in their unique 
program. Sometimes it is as simple as verifying an ID and an 
income that might be already on a W-2 form. Other cases it is 
verifying is this child, you know, the legal guardian of this 
person. Are they living in the household? It gets more and more 
complicated along the way across these various programs. And so 
ensuring that the agencies can have the flexibility to choose 
which metrics are right for them, but that at the end of the 
day they are held accountable to meet certain criteria to 
protect the integrity of those programs.
    Mr. Lynch. Thank you. And, Ms. Gilkesson, do you have any 
thoughts on this as well?
    Ms. Gilkesson. Thank you so much. Yes, I do. I think it is 
really important for us to begin to simplify access for people 
by streamlining eligibility. I think it is a really great point 
that you mentioned that 75 percent, just like I have mentioned 
before, of the fraud that was taking place was indeed 
technology systems. So I think it is important, as we simplify 
access for actual people and open the door for them to be able 
to have easier access, be able to submit their verifications 
more easily, that we can get access to folks better, and then 
be able to prevent those cybersecurity systems from causing 
fraud.
    Mr. Lynch. Thank you so much, Mr. Chairman. I yield back. 
Thank you.
    Mr. Connolly. I thank the gentleman and look forward to 
working with him on the legislation I mentioned a little bit 
earlier. You know, this is ground he has plowed before, and I 
know we all share the same goal of ultimately, in theory, 
trying to get improper payments down to zero. So we will work 
together in that. I thank him.
    The chair recognizes himself for his five minutes.
    Mr. Jensen, if you would put your state hat on for a 
minute. Does the Federal Government run Rhode Island's 
unemployment insurance system?
    Mr. Jensen. No.
    Mr. Connolly. Who runs it?
    Mr. Jensen. The state runs it.
    Mr. Connolly. Would that be true in, say, Georgia, too?
    Mr. Jensen. That would be true in every state.
    Mr. Connolly. Every state. So we have 50 different 
unemployment insurance systems. Is that correct?
    Mr. Jensen. That is right.
    Mr. Connolly. And how would you characterize the data base 
management, the IT systems, of those 50 states? Would you say 
they are in great shape and pretty efficient in catching 
errors?
    Mr. Jensen. They are old, many of them, and they are 
modernizing right now. And the virtue of some of the old ones 
is the people running those programs know how to use them, but 
there needs to be improvement in the tech.
    Mr. Connolly. I think you would concede, let's say you got 
a system based on COBOL. The population that knows COBOL is 
dwindling.
    Mr. Jensen. That is correct.
    Mr. Connolly. Yes, and I can tell you that, to Ms. 
Gilkesson's point, as someone doing constituent work, when we 
had the beginning of the pandemic when there were tens of 
millions of people filing for unemployment, even though it is a 
state responsibility, not a Federal responsibility, I was 
inundated. And all of the cases were people who qualify but 
weren't getting their benefits, to your point, Ms. Gilkesson. 
So, I mean, we can't lose sight while we are also trying to 
make sure every penny is accounted for, but there were lots of 
people desperate for that assistance. And because of the IT 
systems that could not handle the programming changes we made 
at the Federal level, and then the volume of demand, it just 
overwhelmed the system, and it was really quite problematic. I 
don't know if that reflected your experience.
    Mr. Jensen. Absolutely. That is why I referred to our 
experience in Rhode Island as the hardest C-minus I have ever 
earned.
    Mr. Connolly. Yes, thank you. I can tell you that was true 
in Virginia, too. Ms. Miller, talking about fraud, a few years 
ago, the U.S. attorney in Boston decided to make Medicare fraud 
a priority for her office. And in that one year, they 
identified and mostly recovered about $3 billion in Medicare 
fraud. Now, that is 1 of 99 U.S. attorneys across the country. 
Do you believe that U.S. attorneys are taking this kind of 
fraud, whether it be Medicare, or Medicaid, or anything else 
for that matter, seriously? I mean, is it a high enough 
priority, because when I saw that, I thought, well, that is 
pretty low-hanging fruit apparently, and could that be 
replicated in other offices. And are we missing an opportunity 
here to, in fact, both make a statement in terms of criminal 
prosecution to disincentivize people from cheating or frauding, 
but also recovering taxpayer dollars?
    Ms. Miller. I mean, I definitely think that there is no 
question that if you persevere and that is your focus, you are 
going to have results, and that is the main reason why we see 
such disparate results across agencies as well as, you know, 
U.S. attorneys or law enforcement agencies, U.S. attorneys' 
offices, from my experience at the PRAC, working with other law 
enforcement agencies to refer cases, you know, they are also, 
like many other agencies, very, very overwhelmed with cases. 
And so what they want is a really winnable case to get onto 
their desk.
    If we can develop really, really winnable cases to turn 
over to the U.S. attorney's office and the U.S. attorney makes 
that their priority, yes, I think we could see significant 
increases in prosecution. But, again, I do believe prevention 
is a better area for us to focus on.
    Mr. Connolly. I agree with you, but I am harkening back to 
something you also said. If we don't make this a priority for 
people, it won't be a priority. And it seems to me, you know, 
protecting taxpayer investments so that the people who need it 
are getting it as opposed to it being diverted by fraudulent 
characters or even just mistakes, is in the public interest.
    Ms. Miller. For sure, and I don't think it needs to be 
even, right? Like, I think there is this balance, and we are 
seeing agencies, the scale is toward get money out the door, 
and payment integrity, program integrity is very, very little. 
I don't think we are going to get it to 50/50, but we really 
need to move the needle. And again as Ms. Greszler was saying 
earlier, we don't see anyone sitting up here today, you know, 
having to be held to account for why their improper payments 
rates are continuing to rise. They are not addressing the root 
causes of these problems. They are just reporting higher and 
higher rates, and there needs to be more accountability, I 
agree. And there needs to be a focus on incentives and 
performance metrics that prioritize integrity to the degree 
that they also prioritize mission delivery.
    Mr. Connolly. And real briefly, if I could indulge just one 
more question for you. I mentioned that we have passed, you 
know, four bills in this time period that Mr. Lynch and 
others----
    I just see Ms. Porter coming. OK. I am going to recognize 
you in a second, Katie.
    OMB, pursuant to those laws, requires agencies to have a 
corrective action plan. Given your experience when you were at 
GAO, how well are those working, because we don't seem to see 
the numbers coming down, and have we just succeeded in sort of 
getting more accurate data about how bad it is as opposed to 
actually getting that number down, because that would seem to 
be what the charts, both Ms. Greszler's and my own, would seem 
to suggest.
    Ms. Miller. Yes, I would say that we have gotten better at 
admiring the problem, but we have made almost no progress in 
actually fixing the problem.
    Mr. Connolly. Thank you. My time has expired.
    Ms. Porter, you are recognized for your five minutes of 
questioning. Welcome.
    Ms. Porter. Thank you very much, and thank you, Mr. Chair 
and to our staff on the committee for pulling together this 
hearing. I really appreciate it.
    Policymakers and our minority witness often talked about 
the tradeoffs between fighting fraud and expanding access to 
programs. They say we can do one or the other but not both, but 
when done right, governments can design programs to prevent 
improper payments and fulfill customer needs. Adrian, our 
witness from The Workers Lab, stated that government and the 
people it serves can both win.
    In December, President Biden issued an executive order with 
the title, ``Transforming Federal Customer Experience and 
Service Delivery to Rebuild Trust in Government.'' The 
executive order directed Cabinet secretaries and 17 agencies to 
implement reforms to make government service easier to use and 
more transparent. These reforms have the potential to improve 
the Federal customer experience and reduce improper payments. 
This executive order is a great step forward that we should be 
building on. In the past, the government has been way too slow 
to adapt new technologies, to streamline government operations, 
make it easier to administer programs, and prevent fraud.
    Mr. Jensen, your organization is focused on helping the 
government use data and technology to improve programs. Mr. 
Jensen, can you provide an example of how technology can help 
the government reduce fraud while also providing benefits to 
those who qualify?
    Mr. Jensen. Sure. Thanks for the question. You know, I 
would like to congratulate Adrian on the solution they came up 
with because that is exactly the kind of thing that needs to be 
done. For example, you know, I mentioned this earlier, but to 
verify to verify income for the PUA program, we were able to 
configure a way on the cloud where both the labor department 
and the tax department could say with a straight face that PII 
was not being shared between the two, so that both departments 
could be safe just in terms of not having any data breaches in 
that context. It worked great. So what we need to do is 
prioritize the kind of performance metrics that do require both 
a fraud detection and service delivery, and it can be done.
    Ms. Porter. Ms. Miller, what private sector practices can 
government adopt or borrow to improve service delivery and 
program integrity?
    Ms. Miller. The private sector focuses on something called 
friction when they apply technology to consider their customer 
user experience. The goal is to reduce friction to the lowest 
level possible because you will lose a customer, right? If you 
make it too difficult to get onto your app on your phone, or to 
transfer a payment, or to access any kind of service or benefit 
in a private sector company, they run the risk of losing that 
customer. So that friction piece is incredibly important.
    The government can learn from the private sector in the 
tools that they have employed that reduce friction, and today, 
we can use real-time data checks. There are data providers out 
there that have an enormous amount of data on every American 
citizen, data that can be checked within milliseconds of when 
you apply for something. So as soon as you log into an 
application, onto a website, it can tell you really quickly 
whether or not that is me or not. And these kinds of tools, 
they are used every single day in private sector companies 
across the country and the globe.
    And these are the kinds of things we need to start to push 
government agencies to do so that they are not making it harder 
for citizens to access benefits, but at the same time, they are 
reducing the likelihood that they are actually a fraud actor 
and not a legitimate beneficiary.
    Ms. Porter. I completely agree, Ms. Miller. And, you know, 
the Federal Government has to store and process massive amounts 
of information, massive amounts of data created by applicants 
for Federal programs, but automation, data sharing, the 
techniques that you mentioned, including reducing friction, can 
help government agencies handle this challenge. There are just 
so many examples in this hearing of how government can use 
modern technology to both reduce fraud and improve customer 
experience for taxpayers.
    Ms. Gilkesson, can you give an example or talk about from, 
your perspective, is this possible? Can we reduce improper 
payments without making government services more difficult to 
access?
    Ms. Gilkesson. Absolutely. I definitely believe we can 
reduce--could you repeat the question one more time? I 
apologize.
    Mr. Connolly. I think the question was, can't we reduce the 
probability of fraud or improper diversion of payments without 
making it harder for people who need the benefits to apply and 
get them?
    Ms. Gilkesson. Absolutely. I think it goes back to the 
point that I made earlier of us shifting our focus on 
individual people who are innocent, and shifting our focus 
toward, like Ms. Miller talked about, the computer systems. And 
I love that you made the point about reducing friction--I am 
going to take that word, that phrase that you said--the ability 
to reduce friction and make it easier for folks to access 
benefits.
    In an OMB report, it reports that administrative burden and 
difficult applications often block those who need benefits the 
most from receiving them and exacerbates racial inequity. So 
making the application process, making it harder to access 
benefits, that is the issue that we are experiencing right now 
as to why improper payments are higher because it increases the 
error rate. So reducing friction, like Ms. Miller mentioned, I 
think will be great in helping to make sure that we reduce 
fraud and also increase access.
    Mr. Connolly. Thank you, and I thank the gentlelady.
    Mr. LaTurner, you are back. You are recognized----
    Mr. LaTurner. I am back, Mr. Chairman.
    Mr. Connolly. You are back, so you are recognized for your 
five minutes of questioning. Welcome.
    Mr. LaTurner. Thank you. Good morning, and thank you for 
having this hearing, Mr. Chairman. I really do appreciate it.
    My first questions are for Ms. Greszler. Ms. Greszler, the 
pandemic relief funds were disproportionately susceptible to 
fraud and abuse, which many of my Republican colleagues 
predicted prior to their passage. However, fraud and 
overpayments have been a consistent problem in other Federal 
programs for years. In your testimony, you use the Earned 
Income Tax Credit as one example, pointing out that, on 
average, about a quarter of EITC dollars were claimed 
incorrectly over the past decade. You talked about possible 
actions the administration could take, but what legislative 
actions have been taken in the past or could be taken now to 
mitigate these issues?
    Ms. Greszler. Yes. So specifically dealing with the Earned 
Income Tax Credit, it is verifying the income that was made, 
and it also depends on whether or not you are married and the 
number of children who are in the home, and so that that is 
where it gets difficult. And this is not an easy thing to 
design a government program and to get the benefits to the 
people you need when those needs get more specific in terms of 
what you want because it gets to the eligibility side. And so 
ID checks are pretty simple. That is something that across the 
board we should absolutely be doing. But then you have the 
eligibility standards unless we get to a point where people are 
going to be comfortable with the government having direct 
access to their bank account, having access to their medical 
records, perhaps even having a video into their home to see is 
this child who you say is living with you actually living 
there. You know, those are the types of things there has to be 
a check that that child exists, they are living there, and then 
also the income that is coming in, and not all the time is that 
income going to be on a W-2 Statement, you know.
    As Adrian mentioned, we have more than a third of the work 
force now that are working independently in these flexible type 
jobs. Some of the time, that will show up easily on an app if 
you are driving for Uber where all the money is in one place, 
but if you are doing things on the side through your own 
business and maybe it was a cash payment, it is a lot more 
difficult to track. And having to gather all of that 
information and to submit it is difficult, and that is where we 
hear it. People don't get the benefits that they may be 
entitled to because it is a cumbersome process, and oftentimes 
it is the people who need them most who find it the most 
difficult to do that, and it is the criminals who understand 
the system who can get access to the benefits easiest.
    Mr. LaTurner. Yes. No, I understand what you are saying, 
and it certainly is not without a lot of difficulty.
    At the beginning of this month, as I know you are aware, 
the White House released a statement which claimed the Biden 
administration had begun to take actions to combat fraud in the 
pandemic relief programs. Beyond implementing new retroactive 
reporting requirements and payment audits, how can we leverage 
existing Federal information security infrastructure to make 
more accurate eligibility determinations?
    Ms. Greszler. I think it is important that the 
administration tasks these agencies and the programs that they 
are running with clear standards and what is their expectation. 
If your improper payment rate is 22 percent this year, it 
should be expected to get down to 10 percent over X time 
period, and what will be the consequences if it doesn't in 
terms of your funding levels. There need to be actual teeth put 
on these so that people will be held accountable. Otherwise, 
you are just not going to get to the outcomes.
    Mr. LaTurner. I appreciate that and thank you for your 
time. Ms. Miller, I would like to speak to you on your 
experience as a former assistant director in the Forensic 
Audits and Investigative Services Division of the Government 
Accountability Office. When making eligibility determinations 
for Federal programs, agencies often need access to sensitive 
data--we were just talking about this--such as income, Social 
Security numbers, tax information. In your opinion, is our 
current cybersecurity infrastructure prepared to accommodate 
increased data sharing across Federal agencies?
    Ms. Miller. I don't think that data sharing is a 
cybersecurity issue. I think getting access to data and being 
able to create the secure portals to use that data, the ability 
to mask personally identifiable information, none of this is 
beyond the capabilities of Federal agencies. They are all able 
to do this. The key is to require them to do it, and the 
challenge that they have is these data sharing agreements, they 
take a very long time to access.
    I mean I was speaking with my former chief data officer at 
the PRAC, and he said anytime I ask for a dataset, the first 
answer is always ``no.'' They start with ``no,'' and then we 
try to get to ``yes.'' I mean, that is what so challenging. We 
are not setting up a system for data sharing in the government 
that encourages it. There is a deep discouragement of sharing 
data, and you have to have enormous amounts of will to overcome 
the political, the legislative, and the technological and 
bureaucratic barriers in order to be able to do it, and we have 
to remove those barriers. So what can Congress do? Help remove 
those barriers.
    Mr. LaTurner. I understand what you are saying, and my time 
is running out, but really quickly. I don't want to 
mischaracterize what you were saying, but we have the ability 
to do it and we should do more of it, but you don't have 
concerns about the security of that data once we have it or 
once we have more of it.
    Ms. Miller. I don't want to get technical here, but we can 
hash data. Many agencies hash data now. IRS hashes data. So 
there are tools that Federal agencies can use to mask 
personally identifiable information to encrypt it so it can be 
only used--you can use public encryption keys. Agencies have 
the technology right now. It is not that they don't have that 
technology. It is that they aren't using it.
    Mr. LaTurner. Thank you. Thank you, Mr. Chairman. I yield 
back.
    Mr. Connolly. I thank you Mr. Turner, and to your point, 
Ms. Miller, I remember when the OPM--the Office of Personnel 
Management--breach occurred two administrations ago. They had 
not yet installed the Einstein 2 encryption that could have 
helped prevent the breach or mitigated the breach. And as a 
result, of course, the data of 24 million fellow citizens was 
compromised.
    Ms. Miller. I do want to note that data breaches are going 
to happen. They are just a fact of life. We aren't going to be 
able to say--the solution is not let's not share personally 
identifiable information because we don't want to be 
compromised.
    Mr. Connolly. Right.
    Ms. Miller. It is going to get compromised, and every 
single U.S. citizen's data has already been compromised and for 
sale right now on the dark web. The important thing here today, 
I think, is to understand that they are already using this 
data. They have the data. They are using the data against us, 
and we are limiting our ability to fight them by protecting 
privacy to the degree that we are protecting it right now at 
the expense of being able to use technology to fight fraud.
    Mr. Connolly. Thank you. Anything for the record, Mr. Hice?
    Mr. Hice. No, I am good.
    Mr. Connolly. Seeing and hearing none, without objection, 
all members will have five days in which to submit through the 
chair additional questions for our witnesses. And I would ask 
should such questions be presented to you, if you could try to 
answer them in an expeditious fashion for the record that would 
be great.
    Mr. Connolly. If there is nothing else to come before us, 
we are adjourned. I thank our witnesses.
    [Whereupon, at 11:42 a.m., the subcommittee was adjourned.]

                                 [all]