Washington, DC — Michael E. Horowitz, Chair of the Pandemic Response Accountability Committee (PRAC), testified before the U.S. House of Representatives Committee on Oversight and Accountability, Government Operations and the Federal Workforce Subcommittee, on Tuesday, September 10, 2024, at a hearing titled, “Where Do We Go From Here? Examining a Path Forward to Assess Agencies’ Efforts to Prevent Improper Payments and Fraud.”
In his testimony, Chair Horowitz described how the Pandemic Analytics Center of Excellence (PACE) has prevented improper payments and fraud, and urged Congress to act on the Government Accountability Office’s Comptroller General’s recommendation to sustain its capabilities past the PRAC’s scheduled sunset in September 2025 and to expand its jurisdiction to all federal spending. Among Chair Horowitz’s comments:
“The PACE has proven to be extraordinarily successful in identifying improper payments and fraud in pandemic relief programs.”
“It allows Offices of Inspectors General (OIGs) to assess applications for fraud indicators before funds are disbursed, which is critical because, as we saw during the pandemic, every dollar that goes to a fraudster doesn't go to small businesses, the unemployed, and others Congress intended to help.”
“If the PRAC and its data analytics function are allowed to sunset on September 30, 2025, we believe the federal government will no longer have an entity capable of proactively conducting cross-program, cross-agency analysis to help prevent improper payments in high-risk programs across federal agencies.”
Chair Horowitz emphasized in his testimony:
The PRAC uses its law enforcement and CARES Act authorities to partner on data-driven investigations, hold wrongdoers accountable, and protect taxpayer dollars from fraud and improper payments.
The PACE’s law enforcement authority sets it apart from other data analytics platforms, allowing it to access law enforcement-sensitive data to find hidden connections involving multi-program criminal schemes, such as the use of shared bank account information, email addresses, and phone numbers, helping to find fraud that would otherwise stay hidden.
“In developing the PACE, we've been highly mindful of privacy interests, and we've been transparent with Congress about what data we hold and what we do with it,” said Chair Horowitz. “We've also made data security paramount for the PRAC.”
As of August 2024, the PACE has provided investigative support to 48 federal law enforcement and OIG partners on 935 pandemic-related investigations with over 22,000 subjects and an estimated fraud loss of more than $2.25 billion.
Using its CARES Act authority, the PRAC issued a Fraud Alert in January 2023 that highlighted the use of over 69,000 questionable Social Security Numbers to obtain $5.4 billion in Small Business Administration (SBA) pandemic loans and grants. Had the PACE existed at the outset of the pandemic, the PRAC could have flagged the suspicious applications for SBA and SBA OIG before money was distributed by SBA, potentially saving taxpayers hundreds of millions—if not over a billion dollars.
The PRAC urges Congress to support bipartisan legislation to sustain the PACE and allow investigators to fully pursue fraud.
The investigative work of the PACE has resulted in recoveries that far exceed its operating costs, demonstrating a significant return on Congress’ initial $40 million investment. Sustaining and expanding the PACE would save taxpayers billions of dollars by eliminating the need to recreate a data analytics center in response to the next crisis and continuing the critical work of preventing fraud and improper payments. Beyond emergency relief funding, the PACE’s successor would provide advanced data analytics services to OIGs on an ongoing, permanent basis, allowing them to assist the agencies they oversee in screening applicants for benefits programs, detecting fraud, and facing avoidable oversight risks.
In addition, the PRAC strongly supports legislative actions that would bolster the oversight community and law enforcement partners’ investigative abilities. First, an extension of the statute of limitations for all pandemic-related fraud from five to 10 years; and, second, reform to the Program Fraud Civil Remedies Act to raise the jurisdictional limit for administrative recoveries of “smaller” false or fraudulent claims from $150,000 to $1 million. If signed into law, these critical pieces of legislation would ensure investigators can effectively and efficiently hold accountable those who defrauded pandemic relief programs.
Now is the time to prepare for future emergencies and safeguard annual federal spending.
The PRAC issued the first chapter and second chapter of its Blueprint for Enhanced Program Integrity in April 2024 and August 2024 respectively. The Blueprint will comprise five chapters featuring best practices from the PRAC’s oversight partners, highlighting the need for program administrators and policymakers to apply pandemic lessons learned when designing future government programs to enhance program integrity on behalf of taxpayers.
Read the Chair's full statement.
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The PRAC was established by the CARES Act to promote transparency and support independent oversight of the funds provided by the CARES Act and other related emergency spending bills. In addition to its coordination and oversight responsibilities, the PRAC is tasked with supporting efforts to “prevent and detect fraud, waste, abuse, and mismanagement [and] mitigate major risks that cut across program and agency boundaries.”
If you have additional questions, please contact Lisa Reijula at lisa.reijula@cigie.gov