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OMB Director Peter Orszag on Fraud-Fighting Initiatives

Obama and OrzagThe Office of Management and Budget last week introduced two initiatives that will help reduce fraud and improper payments made to entities and individuals, cut government waste and create a more transparent government responsive to the American public, according to OMB Director Peter R. Orszag.

Last week, President Barack Obama issued a memorandum calling for the creation of a Do Not Pay List, which would help agencies check the status of a potential contractor or individual. Oftentimes, an agency does not check all the databases the government has or finds it hard to do so, which prevents agencies from verifying information they need to determine, for example, whether an individual is alive or dead, or if a contractor had been debarred, according to Orszag.

Over the past three years, federal auditors have reported the government paid out benefits totaling more than $180 million to approximately 20,000 Americans who were dead; and more $230 million in benefits to approximately 14,000 fugitive felons or those in jail and who are not eligible for benefits, the OMB director wrote in a blog post June 18.

“The Do Not Pay List will allow federal agencies to access this information in a more timely and cost effective manner and will help reduce improper payments made by the government and help save taxpayer dollars,” he said.

The second initiative that will ensure Recovery Act funds are well spent and not wasted through fraud, error or abuse consists in deploying a fraud-mapping tool that leverages the latest technologies in data capture and analytics to identify potential fraud and error. Developed by the Recovery Accountability and Transparency Board, the tool collects significant quantities of real-time information that then gets analyzed to identify indicators of possible fraud or error, Orszag said.

The new technology will be rolled out for use across government, with the Centers for Medicare & Medicaid Services being the first place to get it. Orszag said CMS was a natural place to start as Medicare and Medicaid combined had nearly $65 billion in improper payments in 2009, including about $47 billion in Medicare alone.

“These efforts today illustrate what I spoke about last week: that we pay a price in allowing the IT gap between the public and private sectors to persist,” Orszag said. “The technology for this fraud-mapping tool and a Do Not Pay List database exist, yet the government was not using it. With the steps we have taken this morning, we have narrowed that gap even just a bit, cutting waste and modernizing government for the benefit of the American people.”

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