Following the fraud scandal in Minnesota, President Donald Trump created a national task force to prevent fraud in government programs. The administration’s latest move is to propose a sweeping overhaul of federal grant-making rules, including by requiring state governments to screen beneficiaries to verify eligibility before payments are made.
This is a welcome change. But governors don’t need to wait for the rulemaking to be finalized to use data to prevent fraud and misspending. Blue and red states—and even New York City—have proven that partnering with the federal government to screen benefits can lead to substantial savings.
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Since 2019, all states have been authorized to use the Treasury Department’s Do Not Pay (DNP) tool. Originally created by the Obama administration, it allows government agencies to use data-screening tools to verify an individual’s information before payments are made. DNP serves as a first line of defense against fraud and misspending—at no cost to the states. The Treasury Department estimates that the tool helped agencies “prevent, detect, and recover” nearly $12 billion last year.
Nonetheless, the Bureau of the Fiscal Service recently told me that state adoption of the system has been “limited”: only “19 states have access to the Do Not Pay Web Portal for at least one state component/office,” according to a Treasury Department spokesperson. States’ failure to leverage this tool is likely resulting in substantial waste, fraud, and abuse.
Oregon offers a promising case study. It was one of the first states authorized to use Do Not Pay. Since 2020, the state has saved $15 million in improper payments by using the tool. The cost of implementing this extra screening has been minimal: every dollar of staff time has saved the state $126.
Other states that use Do Not Pay are also reporting sizable savings. Alabama identified 300 dead people receiving unemployment benefits, costing taxpayers over $1 million. In 2022, Tennessee quantified more than $400,000 in improper payments made to individuals on behalf of deceased people.
New York City has shown how municipalities can use Do Not Pay. A 2021 Comptroller audit used the tool to identify 39 dead people who had been receiving adoption subsidies from the city’s Administration for Children’s Services. Altogether, the audit revealed almost $3.5 million in improper payments. The Comptroller recommended that the agency routinely use Do Not Pay or similar services. Mayor Zohran Mamdani’s new Commission on Government Efficiency should consider these findings and apply this recommendation to other city agencies.
As the federal rule-making process unfolds, the Trump administration, Congress, and state and local financial officers have an opportunity to learn from these experiences, identify best practices, and improve pre-payment screening processes.
For example, a Tennessee audit manager explained that “working with Do Not Pay was an excellent experience,” adding that it provided access to federal data sources that are generally unavailable to states. The state used the tool to vet unemployment benefits claims during the pandemic.
The audit manager said that the Do Not Pay team was “highly organized, prepared, and very responsive,” but noted several ways that both federal and state partners could make it easier for states to use DNP. Specifically, the Treasury Department could provide more resources to help states get started, such as checklists, a preparation guide, sample agreement templates, and data formatting requirements.
Congress is actively considering legislation that would strengthen Do Not Pay, mandate its use, and provide training to help government employees use it. The House Oversight and Government Reform Committee recently approved the Pre-Payment Fraud Prevention and Treasury Data Access Act by a vote of 35 to 1. The bill would allow the Treasury to add additional data sources to Do Not Pay to improve vetting. It would also require state and local governments administering federal funds to pre-screen payments. A separate bill to require fraud prevention training for federal program administrators passed the committee unanimously.
While these bills enjoy broad bipartisan support, it will still take Washington months to debate enacting these changes and for the new rulemaking to be finalized. But governors and state financial officers can begin cracking down on fraud today by following the lead of states like Oregon and Tennessee and cities like New York by using Do Not Pay.