A substantive narrowing of data access and a shift in authority. v3 removes provisions that would have granted the Treasury direct access to specific IRS and Social Security Administration data for the Do Not Pay system and deletes the entire section on Treasury data access. It also shifts lead responsibility for certain regulations and guidance from the Secretary of the Treasury to the Director of the Office of Management and Budget, while extending some implementation deadlines.
Pre-Payment Fraud Prevention and Treasury Data Access Act
- Sponsor
- Rep. Comer, James [R-KY-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jun 9, 2026
Bottom line
This bill aims to significantly reduce financial losses to the government from fraud and improper payments by strengthening pre-payment verification and post-award reporting mechanisms across federal agencies.
What it actually does
This bill establishes government-wide requirements for federal agencies to prevent fraud and improper payments before disbursing funds. It mandates pre-certification checks for payment vouchers, enhances the Treasury's "Do Not Pay" system by expanding data access and streamlining data matching, and requires a one-time post-award report from first-time federal award recipients on how funds are used. The aim is to proactively identify and stop financial losses to the government.
Proponents argue
Proponents argue the bill will save taxpayer money by proactively stopping fraud and improper payments, rather than attempting to recover them after the fact. They emphasize the importance of modernizing government financial controls, improving data sharing between agencies, and ensuring accountability for federal funds. They believe the enhanced Do Not Pay system and new reporting requirements will create a more secure and efficient payment ecosystem.
Opponents contend
Opponents might raise concerns about potential increases in administrative burden for federal agencies and award recipients, particularly small entities or state/local governments, due to new reporting and verification requirements. They might also express apprehension regarding the expansion of data sharing and matching programs, citing potential privacy implications or the risk of erroneous denials of legitimate payments if systems are not perfectly accurate.
The bill is moderately complex, requiring careful reading to understand the technical amendments to existing law and the implications for data sharing and agency procedures.
Section 2(a), amending 31 U.S.C. Chapter 33 by inserting Section 3325a
Mandatory Pre-Certification Requirements for Payment Vouchers
This provision requires federal agencies to perform specific checks before certifying a payment voucher. These checks include confirming fund availability, verifying payee and amount accuracy, ensuring a valid identification number (SSN, TIN, EIN, etc.) is provided, confirming the correct appropriation, and verifying the payee is not deceased. The Secretary of the Treasury is tasked with issuing regulations for these requirements.
Supporters argue
Supporters argue this provision is critical for stopping fraud at the source, preventing improper payments before they occur, and safeguarding taxpayer dollars. It standardizes essential checks that should already be in place across all federal agencies.
Critics contend
Critics might argue that these new pre-certification requirements could slow down legitimate payment processing, create administrative bottlenecks, and increase operational costs for agencies, potentially impacting the timely delivery of services or payments.
Tradeoffs
This provision balances the need for robust fraud prevention with the desire for efficient government operations and timely payments.
Section 2(c), amending 31 U.S.C. 3325(e)
Bank Account Verification for Disbursements
This provision requires agencies, before certifying a voucher to a disbursing official, to take necessary actions to accurately disburse payments. This includes verifying the accuracy of the bank account information to which a payment is to be disbursed and comparing it to other payment records available to the agency, "to the extent practicable." The Secretary of the Treasury is directed to issue guidance to carry out this subsection.
Section 2(d), amending 31 U.S.C. 3351 and 3352
Mandating Fraud-Risk Indicators in Agency Risk Assessments
This provision amends existing definitions to formally include "fraud-risk indicator," which is defined as an objective data point or analytic signal indicating anomalous payment patterns, data mismatches, network anomalies, or matches identified by the Do Not Pay system. It then requires agencies to design and apply these fraud-risk indicators to their programs that are identified for improper payment risk assessments.
Section 3(a), amending 31 U.S.C. 3354
Expansion and Modernization of the Do Not Pay System
This provision renames the "Do Not Pay Initiative" to the "Do Not Pay System" and mandates that executive agencies use it for pre-award and pre-payment screening against expanded data assets. It outlines strict limitations on data use, confidentiality requirements, and penalties for unlawful disclosure. Crucially, it also streamlines the process for agencies to enter into data matching agreements, making the system more accessible and effective.
Section 4(a), amending 31 U.S.C. Chapter 61 by adding Section 6107
Post-Award Reporting for First-Time Federal Award Recipients
This provision requires first-time recipients of federal awards of $50,000 or more (in fiscal year 2027 constant dollars) to submit a one-time report within 180 days on how the funds were used. The report must enable agencies to verify proper use, detect fraud-risk indicators, and aggregate sub-recipient information. Agencies are mandated to update award terms and provide user-friendly guidance. Non-compliance by a recipient can lead to the halting of further disbursements.
These subsections establish strict limitations on how information obtained through the Do Not Pay system can be used (solely for fraud prevention/recovery or law enforcement/investigative purposes) and accessed (match-based queries returning limited responses, no browsing of underlying records). They also mandate that the Secretary of the Treasury maintain the same level of confidentiality as the source data and limit access to authorized persons.
Section 3(a)(5) and (6), amending 31 U.S.C. 3354(a)
Why it matters:This is standard legislative practice for detailing operational constraints and safeguards within a larger programmatic section. It's not necessarily evasive but requires careful reading to fully grasp the implications.
Case for: Proponents argue these limitations are essential to protect individual privacy and prevent misuse of sensitive data, ensuring the Do Not Pay system operates within strict ethical and legal boundaries. They are a necessary counterpoint to the expanded data sharing.
Case against: Some critics might argue that even with these limitations, the sheer volume and sensitivity of data accessible through the Do Not Pay system still pose inherent risks, and that such limitations are difficult to fully enforce in practice.
Estimated impact: High impact on data privacy and security for individuals whose information is part of federal records, potentially affecting millions.
This provision directs the Director of OMB and the Secretary of the Treasury to create a standard computer matching agreement template for the Do Not Pay system. Agencies adopting this template are deemed to satisfy Privacy Act requirements without the need for review by a Data Integrity Board. It also mandates quarterly publication in the Federal Register of a consolidated listing of all such agreements, satisfying individual matching program notice requirements.
Section 3(a)(4)(B) and (C), amending 31 U.S.C. 3354(d)
Why it matters:This is a technical legislative solution to a known bureaucratic hurdle (Privacy Act compliance for data matching). It aims to streamline a process that can otherwise be very slow, which is a common legislative practice.
Case for: Supporters contend this provision is vital for the efficient and widespread adoption of the Do Not Pay system, removing significant administrative overhead for agencies and accelerating fraud prevention efforts.
Case against: Critics might suggest that streamlining this process, even with a template, could reduce the rigor of independent oversight of data matching programs, potentially increasing the risk of privacy infringements or errors if the template is not sufficiently robust.
Estimated impact: High impact on the speed and ease of establishing data sharing agreements across federal agencies, affecting hundreds of potential agreements.
This provision defines "covered award" for the new post-award reporting requirement as a federal award of "not less than $50,000 (based on fiscal year 2027 constant dollars)." This means the threshold for reporting will be adjusted for inflation over time.
Section 4(g)(2), adding 31 U.S.C. 6107(g)(2)
Why it matters:This is standard legislative practice for defining terms, but the inflation adjustment is a significant detail that determines the long-term scope and impact of the reporting requirement. Its placement is typical for definitions.
Case for: Proponents would argue that indexing the threshold to inflation ensures the reporting requirement remains relevant and targets awards of comparable real value over time, preventing administrative burdens from expanding to increasingly smaller awards due to inflation.
Case against: Opponents might argue that any threshold, even an inflation-adjusted one, could still disproportionately affect smaller entities that receive awards just above the threshold, or that the adjustment mechanism itself could be complex to administer for agencies and recipients.
Estimated impact: Medium impact on the scope and administrative burden of the new reporting requirement over time, affecting potentially thousands of federal awards annually.