The U.S. Department of the Treasury has announced a significant success in preventing and recovering over $4 billion in fraudulent and improper payments during the fiscal year 2024, a substantial increase from the $652.7 million recovered in the previous year. This milestone, achieved through the use of enhanced fraud detection processes and cutting-edge technologies like machine learning AI, highlights the Treasury’s growing role in safeguarding taxpayer money.
The Treasury’s Office of Payment Integrity (OPI), which operates under the Bureau of the Fiscal Service, spearheaded these efforts. Since the pandemic, there has been an uptick in improper payments and fraud, driving the need for more robust fraud detection and prevention mechanisms. OPI has responded by employing more advanced tools to improve efficiency and identify high-risk transactions.
In a statement, Deputy Secretary of the Treasury Wally Adeyemo emphasized the department’s ongoing commitment to protecting taxpayer funds. “Treasury takes seriously our responsibility to serve as effective stewards of taxpayer money. Helping ensure that agencies pay the right person, in the right amount, at the right time is central to our efforts,” Adeyemo said. “We’ve made significant progress during the past year in preventing over $4 billion in fraudulent and improper payments.”
The $4 billion in prevented and recovered funds for fiscal year 2024 can be attributed to several key efforts:
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- Risk-based screening: By expanding screening processes, Treasury successfully prevented $500 million in fraudulent transactions.
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- Prioritizing high-risk transactions: Treasury’s ability to identify and focus on high-risk transactions resulted in the prevention of $2.5 billion in improper payments.
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- Machine learning AI in fraud detection: By incorporating machine learning AI, Treasury accelerated its ability to identify Treasury check fraud, leading to the recovery of $1 billion.
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- Efficient payment processing: The implementation of streamlined payment processing schedules helped prevent an additional $180 million in improper payments.
One of the key innovations that contributed to the success in fraud prevention and recovery is Treasury’s adoption of machine learning AI. By leveraging this technology, the OPI can now more quickly identify suspicious activity and take corrective action. This use of AI has been especially impactful in combating Treasury check fraud, one of the most prevalent forms of financial fraud.
In addition to technological advancements, the Treasury has focused on building partnerships with federal agencies and other high-risk programs. A notable example is a data-sharing partnership established in May 2024 with the Department of Labor. This initiative provides state unemployment agencies with access to the Do Not Pay Working System’s data sources, enabling these agencies to better prevent fraud in unemployment insurance programs. Such collaborations are expected to further strengthen the government’s overall efforts in mitigating fraud and improper payments.
Treasury’s role as the federal government’s central disbursing agency is crucial, as it securely processes around 1.4 billion payments each year, valued at over $6.9 trillion. This makes it a key player in the fight against financial fraud. With online payment fraud projected to surpass $362 billion by 2028, the Treasury’s proactive efforts to enhance its fraud detection processes are critical in protecting federal funds.
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