HR8464-119

What This Bill Does

The Stopping Fraudulent Payments Act adds title 31 section 3337 on pausing and segmenting payments. Agency heads that administer federally funded financial assistance or public benefit programs must temporarily delay, condition, or segment a disbursement request before voucher certification when a designated official determines the payment presents elevated fraud risk based on objective fraud-risk indicators or improper-payment estimates, or when Treasury issues a corrective-action order. Treasury must notify certifying officials, return certified payment vouchers, and issue corrective-action orders when payments present elevated fraud risk or a payee is flagged in Do Not Pay or another Treasury payment, account, or payee validation program. Agency corrective action must be based on objective documented fraud-risk indicators, narrowly applied to the risky portion of the payment, and limited to the minimum time needed to verify eligibility or accuracy. Agencies must provide prompt payee notice where appropriate, identify the nature of the pause, and follow procedures for verification, response, and resolution. Treasury, consulting OMB, must issue regulations and guidance for implementation.

Who Benefits and How

Federal taxpayers benefit because agencies can stop suspicious payments before disbursement. Treasury payment validation staff benefit from authority to return vouchers and issue corrective-action orders. Agency fraud prevention officials benefit from a clear legal basis to pause, condition, or segment risky payments. Honest benefit recipients benefit if fraud controls preserve program funds. Inspectors general benefit from better documentation of objective fraud-risk indicators. OMB improper-payment officials benefit from governmentwide rules on time-limited payment pauses.

Who Bears the Burden and How

Agency heads must designate officials, apply corrective action, notify payees, verify eligibility, and resolve paused payments. Agency certifying officials must respond to Treasury voucher-return orders. Payees flagged by Do Not Pay or other validation systems may experience payment delays, conditions, or segmentation. Treasury officials must issue corrective-action orders and implementation guidance. Public benefit program administrators must balance fraud controls against timely benefits. Federal payment staff must document objective indicators and limit pauses to the minimum necessary period.

Key Provisions

• Requires agencies to pause, condition, or segment disbursement requests with elevated fraud or improper-payment risk.
• Directs Treasury to return vouchers and issue corrective-action orders for high-risk payments or flagged payees.
• Requires corrective actions to be objective, documented, narrow, and time-limited.
• Requires prompt payee notice and procedures for verification, response, and resolution.
• Requires Treasury and OMB regulations and guidance for implementation.