GAO outlines strategies to combat federal fraud and improve AI application

The Joint Economic Committee convened on April 10, 2025, to discuss strategies for reducing waste, fraud, and abuse in government through innovation, particularly focusing on the application of artificial intelligence (AI) and data analytics. The meeting highlighted the urgent need for effective measures to address significant financial losses attributed to improper payments within federal programs.

The session began with a presentation emphasizing the importance of enhancing traditional anti-fraud efforts. A key statistic shared was that the federal government reported an estimated $162 billion in payment errors for fiscal year 2024, a figure likely to be an underestimate. The Government Accountability Office (GAO) suggested that Congress could take immediate action by making permanent the Social Security Administration's authority to share its death list with the Treasury's Do Not Pay system, which could help prevent fraud without the need for new technology.

The discussion then shifted to the thoughtful application of AI in identifying fraud. Experts cautioned that the effectiveness of AI is heavily dependent on the quality of data used. The phrase "garbage in, garbage out" was highlighted, stressing that poor data leads to poor results. The GAO presented an AI accountability framework that outlines principles for responsible AI use, advocating for solutions that achieve desired outcomes with minimal complexity. An example cited was the Small Business Administration's use of a rules-based tool to screen Paycheck Protection Program loans, which successfully identified $4.7 billion in loans to ineligible recipients without employing AI.

The meeting also addressed the necessity of a skilled federal workforce to implement these innovations effectively. Despite the potential of AI, agencies face challenges in hiring and retaining staff with advanced technical skills. Recommendations included establishing a permanent Analytics Center of Excellence and a digital services academy to enhance the government's capacity to leverage technology.

Dr. Miller, another speaker at the meeting, focused on operational solutions for Medicare and Medicaid programs, which account for over $1.5 trillion in annual spending. He emphasized the need for reengineering processes within government health programs to combat improper payments, particularly in light of the challenges posed by the COVID-19 pandemic.

In conclusion, the committee underscored the dual imperative of harnessing technological advancements while ensuring a foundation of reliable data and a skilled workforce. The discussions set the stage for future actions aimed at improving government efficiency and safeguarding taxpayer dollars.