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.
How the Treasury Strengthened Fraud Detection
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.”
Breakdown of the $4 Billion in Prevented and Recovered Funds
Treasury points to several actions that produced the gains:
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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.
The Role of AI in Detecting Fraud Faster
Machine learning AI remains one of Treasury’s most effective new tools. It allows analysts to flag suspicious behavior in seconds instead of hours. It has also become a key part of the fight against Treasury check fraud, which continues to be one of the most common types of financial fraud.
Expanding Partnerships to Reduce Fraud
Treasury has also strengthened partnerships across government. In May 2024, it launched a new data-sharing initiative with the Department of Labor. The agreement gives state unemployment agencies access to the Do Not Pay Working System, helping states reduce fraud in unemployment insurance programs. Treasury expects these partnerships to improve fraud prevention even further.
Why This Matters for the Federal Government
As the federal government’s central disbursing agency, Treasury processes 1.4 billion payments each year, totaling more than $6.9 trillion. Its ability to detect fraud early is crucial, especially as online payment fraud is projected to exceed $362 billion by 2028. Treasury’s continued upgrades to fraud-detection systems will play a major role in protecting federal funds as digital transactions grow.
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