Overview
Title
To amend title 31, United States Code, to establish the Federal Real Anti-fraud Unified Directorate, to require agencies implement anti-fraud controls for programs susceptible to significant improper payments and high-priority programs, and for other purposes.
ELI5 AI
The bill wants to create a special team to help stop bad people from taking money they're not supposed to from government programs. It plans to give a lot of money to make sure these programs work correctly, but some people are worried that it might spend too much or not work well.
Summary AI
H.R. 9537 proposes the creation of the Federal Real Anti-fraud Unified Directorate (FRAUD), an office within the Office of Management and Budget, to coordinate anti-fraud efforts across federal agencies. The bill mandates that agencies implement anti-fraud controls in programs that are prone to large amounts of improper payments or are considered high-priority. It requires the use of proactive analytics to prevent fraud and improve transparency through a public dashboard. Additionally, the bill outlines processes for designating programs vulnerable to fraud and supports agencies with funding from a designated Program Integrity Fund to implement these measures.
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AnalysisAI
General Summary of the Bill
The "Strengthening Tools to Obstruct and Prevent Fraud Act of 2024," also known as the "STOP Fraud Act of 2024," is a legislative proposal aimed at enhancing fraud prevention across federal agencies. It seeks to amend parts of the United States Code to establish the Federal Real Anti-fraud Unified Directorate (FRAUD) within the Office of Management and Budget. This new office will coordinate federal anti-fraud efforts, implement proactive data analytics, and support agencies in preventing improper payments. The bill mandates annual identification of programs susceptible to fraud and improper payments, requiring these programs to adopt anti-fraud controls and proactive analytics. Additionally, it authorizes a Program Integrity Fund to provide financial resources for these initiatives.
Summary of Significant Issues
A key issue with the bill is the creation of the FRAUD office, which may duplicate the efforts of existing agencies that already handle fraud prevention, potentially leading to unnecessary expenditure. There is also no specified budget for this new office, raising questions about financial transparency. The proposed $1 billion appropriation for the Program Integrity Fund lacks sufficient justification, leaving it open to potential misuse.
The bill gives broad authority to the FRAUD Administrator, which could lead to overreach or inefficient bureaucracy without clear checks and balances. Furthermore, the requirement for agencies to have IT systems capable of delivering real-time data could impose considerable financial burdens, especially on smaller agencies ill-equipped for such transformations.
Impact on the Public
For the general public, the bill aims to protect taxpayer dollars by reducing wasteful and fraudulent expenditures in government programs. However, the effectiveness of this protection hinges on the precise and efficient implementation of the bill's measures. The public may benefit from improved transparency and accountability in government spending if the bill results in decreased fraud and improper payments. Yet, if the measures lead to excessive bureaucracy or duplicative efforts, it could conversely result in inefficiency and increased administrative costs funded by taxpayers.
Impact on Stakeholders
Government Agencies: Agencies are likely to face increased pressure to allocate resources towards implementing new anti-fraud technologies and adapting to additional oversight procedures. This could especially strain smaller agencies with limited budgets.
Administrators and Inspectors General: The roles of the FRAUD Administrator and inspectors general might overlap, causing potential conflicts in accountability and authority. Clear delineation of roles is essential to avoid inefficient coordination between the FRAUD and existing oversight bodies.
Data Privacy Advocates: The bill's encouragement of proactive analytics and the use of deep web intelligence raises concerns regarding data privacy and the potential for overreach into individuals' data. Proper safeguards must be established to protect citizens' privacy rights.
Congress and Taxpayers: Members of Congress are tasked with ensuring the bill's provisions are implemented effectively and that the substantial funding allocations are justified and used effectively. Taxpayers have a vested interest in seeing reductions in fraud and waste, but will also be wary of the cost of implementing the bill's measures.
In conclusion, while the STOP Fraud Act of 2024 seeks to strengthen anti-fraud measures and enhance accountability in federal spending, it must carefully balance these goals with considerations of efficiency, privacy, and the effective allocation of resources. The ultimate success of the bill will depend on its careful implementation and oversight.
Financial Assessment
The bill discussed, H.R. 9537, presents a comprehensive financial structure aimed at enhancing federal anti-fraud mechanisms through the establishment and operation of the Federal Real Anti-fraud Unified Directorate (FRAUD) and the implementation of various financial controls within federal programs.
Financial Allocations and Provisions
A significant financial component of the bill is the authorization of $1,000,000,000 for the Program Integrity Fund. This fund is designed to support federal agencies in implementing anti-fraud controls and proactive analytics for programs identified as vulnerable to fraud or as high-priority due to their large financial outlays. The funding is intended to be available until expended, providing flexibility over the fiscal year 2025 and beyond.
Relation to Identified Issues
Potential for Wasteful Expenditure: The allocation of $1 billion raises concerns about potential wasteful spending, as referenced in the issues. Without clear justification or a detailed plan outlining how these funds will specifically address fraud, there is a risk of inefficient use. Efficient, transparent allocation plans would be necessary to mitigate this risk.
Lack of Specified Budget for FRAUD: The bill proposes the establishment of the FRAUD office within the Office of Management and Budget; however, it does not specify funding sources or budget allocations for this new office's operations. This omission could lead to concerns about financial transparency and management efficiency, potentially overlapping existing agencies' efforts and increasing redundant spending.
Imposition on IT Systems: The requirement for agency IT systems to provide "real-time data" can impose substantial financial burdens, particularly on smaller agencies that may not have the necessary infrastructure or funding. This could lead to increased costs as agencies strive to comply with the new technological standards set forth in the bill.
Bureaucratic Overreach: The Administrator's broad authority to demand information and implement regulations might introduce inefficiencies if not carefully managed. The financial allocations do not address how these oversight mechanisms will be financially supported or controlled to prevent overreach.
Accountability and Transparency Concerns
The financial operations of this bill hinge heavily on the program's effectiveness in reducing fraud and improper payments. However, there is no clear accountability for financial mismanagement if reductions in improper payments and fraud do not materialize. Such an outcome could lead to inefficient use of allocated funds without tangible benefits, underscoring the need for strict oversight and evaluation.
In summary, while the bill outlines considerable financial investments to combat fraud, the lack of detailed budgeting for the FRAUD office and insufficient justification for the substantial Program Integrity Fund allocation invite scrutiny. Clear strategies for accountability and transparency must be established to ensure that these funds are utilized effectively and serve their intended purpose of reducing fraud in federal programs.
Issues
The establishment of the Federal Real Anti-fraud Unified Directorate (FRAUD) might result in redundant spending if existing agencies already address similar anti-fraud measures. There is no specified budget or source of funding for the FRAUD office, leading to concerns about financial transparency. (Sections 2, 508)
There is a significant appropriation of $1,000,000,000 for the Program Integrity Fund without detailed justification or analysis, raising questions about potential wasteful expenditure. (Sections 3, 3360)
The broad authority given to the Administrator to promulgate regulations and require agency information submissions may lead to bureaucratic overreach or inefficiency if not properly managed. (Sections 2, 508)
The requirement for IT systems capable of delivering 'real-time data' could impose unnecessary burdens or costs on agencies, especially smaller agencies not currently equipped with such capabilities. (Section 3)
The language used in discussing proactive analytics and reports is complex, making it difficult for even well-versed readers to fully comprehend, which could hinder proper implementation and accountability. (Sections 3, 3359)
The use of deep web and dark web intelligence raises ethical and operational concerns, particularly regarding privacy and the legality of such methods. (Section 3360)
There are no clear accountability measures for failure to reduce improper payments and fraud, and it relies heavily on the submission of plans and reports, which may not be sufficient. (Sections 3, 3359, 3360)
The overlapping roles and responsibilities of the Administrator and existing inspectors general create ambiguity, potentially complicating accountability structures. (Sections 2, 508)
The removal of specific assurance on annual compliance in section 3353(a) could weaken regular oversight, potentially leading to reduced diligence in preventing improper payments and fraud. (Section 4)
Delegating broad functions to the Administrator of the FRAUD without explicit accountabilities or boundaries may be problematic and raise concerns about checks and balances. (Section 4)
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states its title, which is the âStrengthening Tools to Obstruct and Prevent Fraud Act of 2024,â also known as the âSTOP Fraud Act of 2024.â
2. Federal Real Anti-fraud Unified Directorate Read Opens in new tab
Summary AI
The text establishes the Federal Real Anti-fraud Unified Directorate (FRAUD) within the Office of Management and Budget, led by an Administrator appointed by the President. The Administrator's duties include coordinating fraud prevention activities, establishing a public dashboard for transparency, referring fraud cases to Inspectors General, and providing technical assistance to agencies, with authority to require data from agencies managing programs prone to improper payments and to offer additional support for implementing proactive analytics.
508. Federal Real Anti-fraud Unified Directorate Read Opens in new tab
Summary AI
The Federal Real Anti-fraud Unified Directorate (FRAUD) is a newly established office within the Office of Management and Budget, led by an Administrator appointed by the President. It focuses on reducing fraud and improper payments by coordinating efforts across federal agencies, creating a public dashboard to track program analytics and cost savings, and assisting agencies with data collection and technical support.
3. Anti-fraud controls for programs susceptible to significant improper payments and high-priority programs Read Opens in new tab
Summary AI
The section outlines the need for executive agencies to identify programs vulnerable to improper payments and establish anti-fraud measures, such as proactive analytics, to reduce these payments. It also mandates the creation of a Program Integrity Fund to support the implementation of anti-fraud plans and requires agencies to report on their progress and challenges in mitigating fraud.
Money References
- Subchapter IV of chapter 33 of title 31, United States Code, is amended by adding at the end the following: ⧠3359. Proactive analytics with respect to programs susceptible to significant improper payments â(a) Designation of programs susceptible to significant improper payments.âNot later than October 1 of each year, for that fiscal year and the next fiscal year, the head of each executive agency shall designate as a program susceptible significant improper payments each program that meets the following criteria: â(1) With respect any program of the agency established during the preceding two fiscal years, any such program making more than $100,000,000 in payments in any one fiscal year. â(2) For any program of the agency not established during the preceding two fiscal years, any such program that had outlays that exceeded $1,500,000,000 in the preceding fiscal year.
- â(E) Estimates ofâ â(i) any costs avoided and dollars saved by the implementation of sections 3359 and 3360; â(ii) any change in administrative burden because of the implementation of sections 3359 and 3360; and â(iii) the number of persons eligible to obtain a thing of value that did not receive such thing of value because of the implementation of sections 3359 and 3360. â
- Anti-fraud controls for high-priority programs â(a) Designation.âBy January 31 of each fiscal year, the Administrator shall designate for the remainder of that fiscal year and the next full fiscal year, any program with outlays in an amount equal to or in excess of $50,000,000,000 with respect to the preceding fiscal year as a high-priority program.
- â(4) AUTHORIZATION OF APPROPRIATIONS.âThere are authorized to be appropriated $1,000,000,000 for fiscal year 2025 for the Program Integrity Fund, to remain available until expended.
3359. Proactive analytics with respect to programs susceptible to significant improper payments Read Opens in new tab
Summary AI
Each year, government agencies must identify programs likely to make significant improper payments. These agencies are required to use proactive analytics to address these risks and report on efforts to reduce fraud and improper payments, detailing their strategies and outcomes, within two years of such designation.
Money References
- (a) Designation of programs susceptible to significant improper payments.âNot later than October 1 of each year, for that fiscal year and the next fiscal year, the head of each executive agency shall designate as a program susceptible significant improper payments each program that meets the following criteria: (1) With respect any program of the agency established during the preceding two fiscal years, any such program making more than $100,000,000 in payments in any one fiscal year.
- (2) For any program of the agency not established during the preceding two fiscal years, any such program that had outlays that exceeded $1,500,000,000 in the preceding fiscal year.
- (c) Reports on Actions To reduce improper payments.âNot later than two years after a head of an agency has designated a program as susceptible to improper payments, the head of the agency administering the program shall submit a report on efforts of the agency to reduce and prevent improper payments and fraud with respect to the program, including the following: (1) With respect to a program that is not a high-priority program at the time of the submission of the report, the following: (A) A description of the proactive analytics implemented in the two fiscal years preceding the submission of the report to reduce improper payments and fraud with respect to such program. (B) Metrics demonstrating the effectiveness of the proactive analytics implemented. (C) An analysis of whether the agency anticipates the program will remain âsusceptible to improper paymentsâ and require continued designation as such. (D) A plan forâ (i) continuing to use proactive analytics with respect to that program; (ii) improving the proactive analytics used with respect to that program; and (iii) identifying, in consultation with the Administrator of the FRAUD, additional fraud and improper payment mitigation strategies, that could be employed by the agency if the program is redesginated as a program susceptible to significant improper payments. (2) With respect to a program that is a high-priority program at the time of the submission of the report, the following: (A) A copy of the plan approved under section 3359 for the program. (B) Analysis of whether implementation of that plan has reduced and prevented improper payments and fraud. (C) If the plan has not reduced or prevented improper payments or fraudâ (i) an explanation of why the plan has not reduced or prevented improper payments or fraud; and (ii) a new plan with a different strategy developed in consultation with the Administrator of the FRAUD, to reduce or prevent improper payments or fraud. (D) A statement of whether the agency has what is needed with respect to internal controls, human capital, and information systems and other infrastructure, to implement the requirements described in sections 3359 and 3360. (E) Estimates ofâ (i) any costs avoided and dollars saved by the implementation of sections 3359 and 3360; (ii) any change in administrative burden because of the implementation of sections 3359 and 3360; and (iii) the number of persons eligible to obtain a thing of value that did not receive such thing of value because of the implementation of sections 3359 and 3360.
3360. Anti-fraud controls for high-priority programs Read Opens in new tab
Summary AI
The section describes the Anti-fraud controls for high-priority programs, requiring the designation of programs with large budgets as "high-priority". These programs must develop anti-fraud plans using digital identity-proofing, threat intelligence, and data analytics to reduce fraud. An Administrator reviews and approves these plans, and a special fund supports their implementation to prevent improper payments.
Money References
- (a) Designation.âBy January 31 of each fiscal year, the Administrator shall designate for the remainder of that fiscal year and the next full fiscal year, any program with outlays in an amount equal to or in excess of $50,000,000,000 with respect to the preceding fiscal year as a high-priority program.
- , the Administrator shall consider the extent to which the plan approved by the Administrator under subsection (b) of the agencyâ (i) implements the use of proactive analytics; (ii) is likely to significantly reduce or prevent improper payments and fraud; and (iii) considers the administrative burden of implementing the plan, including whether there is a clear indication that the agency considered whether there are any anti-fraud controls other than the anti-fraud controls to be implemented under the plan that could be implemented by the agency with less of an administrative burden on individuals who interact with the program. (4) AUTHORIZATION OF APPROPRIATIONS.âThere are authorized to be appropriated $1,000,000,000 for fiscal year 2025 for the Program Integrity Fund, to remain available until expended. (d) Definitions.âIn this section: (1) ADMINISTRATOR.âThe term âAdministratorâ means the Administrator of the FRAUD. (2) ADMINISTRATIVE BURDEN.âThe term âadministrative burdenâ means a cost that a person incurs in interacting with the agency to obtain a thing of value from the agency, including the following: (A) The amount of time and effort expended by the person to learn aboutâ (i) the nature of the thing of value; and (ii) how to gain access to the thing of value, includingâ (I) any program or service of the agency through which the person may obtain the thing of value from the agency; and (II) any requirement and condition that must be satisfied for the person to obtain and maintain possession of the thing of value from the government program or service. (B) The amount of time it takes toâ (i) provide information and documentation to satisfy requirements to obtain and maintain possession of the thing of value; and (ii) respond to discretionary requests of program administrators for the purpose of obtaining and maintaining possession of the thing of value. (C) Any financial cost to access services that may be necessary to receive the thing of value (such as fees, legal representation, and travel costs). (3) AGENCY ADMINISTERING A PROGRAM SUSCEPTIBLE TO SIGNIFICANT IMPROPER PAYMENTS.âThe term âagency administering a program susceptible to significant improper paymentsâ means an agency that is responsible for administering at least one program that is designated as susceptible to significant improper payments under section 3359. (4) AGENCY ADMINISTERING A HIGH-PRIORITY PROGRAM.âThe term âagency administering a high-priority programâ means an agency that is responsible for administering at least one program that is designated as high-priority under this section.
4. Amendments related to improper payments provisions Read Opens in new tab
Summary AI
The amendments to Chapter 33 of title 31 in the U.S. Code aim to improve how federal agencies manage improper payments by requiring them to use better analytics, update compliance reports less often, and improve fraud prevention strategies. Furthermore, they allow the Office of Management and Budget to delegate tasks related to identifying and reducing fraud to the FRAUD Administrator while outlining how recovered funds should be handled.
Money References
- (a) In general.âChapter 33 of subtitle III of title 31, United States Code, is amendedâ (1) in section 3351â (A) in paragraph (2), by adding at the end the following: â(D) has satisfied the requirements of section 3360 with respect to each high-priority program administered by the agency; and â(E) has implemented proactive analytics for one high-risk area in accordance with section 3359(b).â; (B) by redesignating paragraphs (4), (5), (6), (7), and (8) as paragraphs (5), (6), (8), (9), and (10), respectively; (C) by inserting after paragraph (3) the following: â(4) HIGH-PRIORITY PROGRAM.âThe term âhigh-priority programâ means a program designated under section 3360(a).â; and (D) by inserting after paragraph (6), as so redesignated, the following: â(7) PROGRAM SUSCEPTIBLE TO SIGNIFICANT IMPROPER PAYMENTS.âThe term âprogram susceptible to significant improper paymentsâ means a program designated under section 3359(a).â; (2) in section 3352â (A) by striking subsections (a), (b), (d), and (e); (B) by redesignating subsections (c), (f), (g), (h), and (i) as subsections (a), (b), (c), (d), and (e), respectively; (C) in subsection (a)(1), as so redesignated, by striking âWith respect to each program and activity identified under subsection (a)(1), the head of the relevant executive agency shallâ and inserting âWith respect to each program or activity with outlays exceeding $1,500,000,000, the head of the relevant executive agency shall?â; (D) in subsection (b)(2), as so redesignatedâ (i) in subparagraph (A), by striking âand recovery actionsâ; (ii) in subparagraph (D), by striking â; andâ and inserting a semicolon; (iii) in subparagraph (E), by striking the period at the end and inserting â; andâ; and (iv) by inserting after subparagraph (E), the following: â(F) Governmentwideâ â(i) any cost avoided by implementing sections 3359 and 3360; â(ii) any change in administrative burden by implementing sections 3359 and 3360; and â(iii) the number of persons eligible to obtain a thing of value that did not receive such thing of value because of the implementation of sections 3359 and 3360.â; and (E) in subsection (e), as so redesignatedâ (i) in paragraph (1)(A), by striking âshallâ and inserting âmayâ; (ii) by striking paragraph (3); (iii) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively; and (iv) in paragraph (4), as so redesignated, by striking âparagraph (4)â and inserting âparagraph (3)â; (3) in section 3353(a)â (A) by striking âAnnualâ before âComplianceâ; and (B) in paragraph (1), by striking âEach fiscal yearâ and inserting âNot less frequently than once every 3 fiscal yearsâ; (4) by striking section 3355; and (5) by amending section 3357(d) to read
5. Technical and conforming amendments Read Opens in new tab
Summary AI
The amendments to the United States Code include changes to section numbers and terms used in laws related to financial programs and anti-fraud measures. It also updates the table of contents to reflect new sections focusing on fraud prevention and improper payment analytics.