Data analytics could prevent billions in fraud, says US oversight committee
The US Pandemic Response Accountability Committee (PRAC) is calling for the government to learn lessons from COVID-19 and use data analytics to prevent fraud.
New PRAC analysis estimates that the US government could have saved almost US$80bn if it had implemented data analytics to prevent pandemic-related fraud.
In a fraud alert issued earlier this month, the committee claims that lack of effective pre-award vetting by major pandemic relief programmes resulted in approximately US$79bn of potential identity fraud involving the use of 1.4m potentially stolen or invalid social security numbers (SSNs).
The PRAC was established by the CARES Act in 2020 to promote transparency and support independent oversight of the funds provided by the CARES Act and other related emergency spending bills.
As well as coordination and oversight responsibilities, the PRAC has established the Pandemic Analytics Center of Excellence (PACE), a data analytics platform for fraud detection.
The PRAC said its latest analysis “demonstrates how cross-agency partnerships and innovative data analytics… can improve programme integrity by verifying identities and flagging potential anomalies in applications before taxpayer funds are sent to fraudsters”.
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Cross-agency checks
To conduct the analysis, PACE randomly sampled 662,000 identity records from 67.5m funded applications across major pandemic relief programmes. The team asked the Social Security Administration (SSA) to verify whether the SSN was valid; if the name and date of birth associated with an SSN matched SSA records; and if the SSN on the application was associated with a deceased individual.
This process flagged nearly 24,000 of the 662,000 sampled records as potentially fraudulent, meaning that either the SSN was never issued or didn’t match the applicant’s name or date of birth, “indicating that they were either stolen or being used without authorisation”. In addition, over 11,000 sampled records were associated with individuals who were deceased as of the date SSA responded to the PRAC’s request. These loans were excluded because some of the individuals may have been alive at the time of application.
“Our oversight work during the past five years has detailed federal agencies’ inability to use data to effectively prevent pandemic-related fraud. By contrast, the PRAC’s sophisticated data analytics capabilities allow us to look across federal agencies and programmes to identify potential fraud before it occurs by comparing agency and other data with applicant-provided information, such as IP addresses, dates of birth, bank accounts, and home addresses,” said PRAC chair Michael E. Horowitz. “As today’s report demonstrates, this data analytics capability can strengthen programme integrity and prevent billions of dollars in fraud, ensuring taxpayer funds are paid to legitimate applicants.”
Future in doubt
The PRAC and PACE are scheduled to close automatically on 30 September 2025 and the PRAC has called for legislation to sustain PACE beyond this date.
“The sustainment of the PACE and its capabilities will ensure that the federal oversight community is equipped with the necessary resources and data to better detect and prevent fraud across federal programmes,” said Horowitz in testimony before the House Oversight Subcommittee on Government Operations and the Federal Workforce in September last year.
“In light of the PRAC’s scheduled statutory sunset in September 2025, we urge Congress to pass legislation retaining this critical antifraud analytics centre to bolster oversight of federal expenditures and to help us protect taxpayer funds and fight identity fraud. Failure to do so will result in the oversight community once again losing invaluable analytic capabilities and resources.”
About Sarah Wray
Sarah has over 15 years’ experience as a journalist with a specialism in the public sector and topics such as digitalisation and climate action. Sarah was formerly the editor of Cities Today and Smart Cities World, as well as a specialist video-based publication in the aerospace sector. She has also written for publications including Smart Cities Dive, Mobile Europe, Mobile World Live and Computer Weekly.
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