House Oversight panel backs bill to expand Treasury fraud payment controls

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House backs Treasury fraud bill

Highlights

The Stopping Fraudulent Payments Act, backed by the House Oversight Committee, would require agencies to conduct fraud checks before submitting federal payment requests.
The bill authorizes Treasury to stop and return payments flagged as fraudulent, addressing annual fraud losses estimated between $233 billion and $521 billion across federal programs.
Agencies must promptly resolve high-risk payments, and Treasury would regularly report to Congress on returned payments, corrective actions, and cost savings to ensure oversight.

Bill ties fraud findings to Treasury authority

As reported by the House Committee on Oversight and Accountability, Chairman James Comer is urging the House to pass the Stopping Fraudulent Payments Act, saying current federal payment procedures do not give Treasury enough power to block suspicious disbursements. He says the measure follows the committee's investigation into fraud in several state social welfare programs, with particular focus on Minnesota.

In prepared floor remarks, Comer says the federal government loses between $233 billion and $521 billion a year to fraud across programs and operations, citing the Government Accountability Office. He argues agencies can still issue payments even after warnings from Treasury's Do Not Pay system or other fraud detection tools, because existing law requires Treasury to process requested payments.

The bill would require agencies to carry out fraud prevention checks before submitting payment requests. It also would authorize Treasury to halt and return payments flagged for fraud risks so agencies can review and correct them before funds are issued.

Oversight, savings and wider policy impact

Comer says the legislation is designed to improve confidence that federal money reaches the right recipient and in the right amount, while keeping program administration within the responsible agency. He also says the measure could help identify cases in which a legitimate recipient's identity is stolen and used in fraudulent claims.

Under the proposal, agencies would have to quickly review and resolve payments marked as having elevated fraud risk unless another law requires otherwise. Treasury also would provide Congress with summaries of returned payments, corrective outcomes and associated cost savings, giving lawmakers a regular oversight mechanism for the reforms.

The push comes as Republicans frame payment integrity as a taxpayer protection issue and link it to broader concerns about waste, fraud and abuse in federal and state-administered programs. Comer says the legislation offers what he calls common-sense safeguards intended to reduce losses and prompt wider reform of the federal payments process.

Our earlier coverage of a House Financial Services subcommittee hearing examined how HUD administers long-term disaster aid through the Community Development Block Grant–Disaster Recovery (CDBG-DR) program and why lawmakers say the structure can slow down the delivery of funds. The discussion also highlighted oversight and accountability concerns, including the need for clearer statutory authority and stronger safeguards to limit waste, fraud and abuse after money is spent.

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