Preventing Improper Payments Before They Happen
Preventing fraud is much more effective if it is done before money is spent rather than chasing it afterwards. Since the Government Accountability Office (GAO) first identified improper payments as a systemic government-wide issue in 1997, the enactment of the Improper Payments Act of 2002 and three related bills through 2019 did not stop them from proliferating. GAO’s April 27, 2026, improper payments report revealed that such payments totaled “about $3 trillion” since 2003, but some agencies that have identified programs subject to improper payments have not provided any estimates, so the “actual amount of improper payments may be significantly higher.”
The GAO report revealed that improper payments increased by $24.3 billion, or 15 percent, from $161.5 billion in fiscal year (FY) 2024 to $185.8 billion in FY 2025. The continued growth is due in part to government agencies spending more time trying to recover money that has already been misspent instead of adopting preventive measures to ensure it is spent as intended. The lack of efficiency in the “pay and chase” approach led Congress to pass the Improper Payments Elimination and Recovery Improvement Act of 2012. Since the legislation established the Do Not Pay system (DNP) to allow (but not require) agencies to verify recipient eligibility before making payments, the DNP process was strengthened by legislation that was enacted into law in 2015 and 2019.
An October 16, 2016, GAO report found that federal agencies use the DNP “in limited ways,” particularly noting agencies’ lack of access to Social Security Administration’s (SSA) death data and prisoner records. President Donald Trump’s focus on eliminating fraud invigorated efforts to expand the use of the DNP system. On March 25, 2025, he signed Executive Order (EO) 14249, “Protecting America’s Bank Account against Fraud, Waste, and Abuse.” On February 10, 2026, President Trump signed into law S. 269, the Ending Improper Payments to Deceased People Act, as Public Law No. 119-77, making the Department of the Treasury’s access to SSA’s death file permanent.
On October 6, 2026, the Treasury announced progress on preventing fraud and improper payments, including the streamlining of the DNP onboarding process and interagency data sharing, with a goal of granting 99 percent of all federal programs access to the DNP by the end of FY 2026, a 95 percent increase from the 4 percent identified by the GAO report in FY 2025. The expanded DNP access has already allowed Treasury to screen more than 2.3 billion records against DNP data sources in FY 2026, 1.659 billion more than 641 million records in FY 2025. The new safeguards helped to verify $3.7 trillion in federal payments and returned $175 million to taxpayers which would otherwise have gone to deceased individuals.
Expanding the availability and requiring the use of the DNP system is a significant improvement in the efforts to prevent taxpayer dollars from being wasted. If the government continues to focus on preventing fraud upfront instead of “paying and chasing,” more money will get to the people who are eligible to receive those funds; and taxpayers will benefit from less of this type of waste, fraud, abuse, and mismanagement.
