A Prepared Federal Government: Preventing Fraud and Improper Payments in Emergency Funding

When the government distributes supplemental funding to address various national emergencies such as the global pandemic, time is of the essence. Putting money quickly in the hands of Americans in need benefits vulnerable segments of the American population and stabilizes the nation in a time of crisis. At the same time, transparency and accountability mechanisms are essential to safeguard these taxpayer dollars and maintain public trust.

Rapid program delivery and program integrity are not mutually exclusive, but it can be difficult to establish the appropriate controls and checks and balances and produce the desired outcome in a fast-moving crisis. With a combination of new programs, additional funding, and broader program eligibility, the risk of waste, fraud, and improper payments increases significantly.

This report began with a roundtable discussion of experts in government fraud and improper payments in December 2023. Leaders and experts from the budget, financial management, data and oversight communities came together with those with experience in implementing efficient, effective, and lawful tracking and safeguarding of taxpayer dollars during emergency situations. These roundtable discussions generated insights on how the government can ensure integrity while meeting policy and programmatic goals in increasingly frequent emergency situations.

This report documents the challenges that governments experience with fraud and improper payments, especially during a national emergency. It also profiles the many collaborative initiatives currently underway to create lasting solutions to reduce fraud and improper payments. In addition to these initiatives, this report recommends others to provide a holistic capacity for the next funding emergency. It includes 27 recommendations that Congress and federal agencies can use to ensure the integrity, efficacy, and protection of funds distributed in increasingly frequent emergency situations.

This report builds on prior reports about government funding released by the IBM Center, including Risk Management and Reducing Improper Payments: A Case Study of the U.S. Department of Labor by Dr. Robert Greer and Justin B. Bullock; The Partnership Fund for Program Integrity Innovation by Jonathan C. Tucker; and Managing Recovery: A View from Inside by G. Edward DeSeve.

We hope that the insights and findings in this report help government leaders and stakeholders as they continue to mature their emergency funding capabilities, while ensuring effective safeguards and oversight methods.