Centralizing Access to Data to Prevent Improper Payments: A Discussion of the Do Not Pay Data System

Improper payments can result from government agencies making errors and mistakes during the payment process, including failing to detect fraud. The result is payments that should not have been made and a diversion of public monies. Curbing improper payments is often of interest to policymakers because reducing improper payments may net savings or offset additional spending. In general, policymakers and a variety of other stakeholders believe that improper payments are largely preventable. Data access issues are among the root causes of improper payments. In cases where data access issues are a root cause, policymakers and others believe that if the data were accessible or the access issue were otherwise corrected, then improper payments would be prevented. Some of the policies enacted by Congress to curb improper payments are intended to make it easier for agencies to access and use data. The Payment Integrity Information Act of 2019 (PIIA) codifies the Do Not Pay Initiative, which enables agencies to access and use certain databases to verify payment eligibility prior to awarding or releasing any federal funds. In practice, the Do Not Pay (DNP) system provides agencies with centralized access to the databases agencies may use under the PIIA, and agencies are required to review payments for eligibility using the DNP system. The Bureau of the Fiscal Service within the Department of the Treasury operates the DNP system with assistance from certain Federal Reserve Banks. The Government Accountability Office (GAO) states that the DNP system is a “key resource for preventing improper payments” and that preventative activities are generally the most cost-efficient use of agency resources. The DNP system relies on data matching. The presumption behind the use of the DNP system is that if an agency discovers that it is slated to make a payment to an entity (e.g., a person) that matches to information in a database that is part of the DNP system, then the agency will further examine whether that entity is in fact eligible to receive such payment. The DNP system itself does not automatically stop a payment transaction from occurring. Matching an intended payment recipient to a DNP system database does not necessarily mean that the payment recipient is in fact ineligible to receive a payment. Certain policies can inform an agency’s decisionmaking around the issuance of certain types of payments and financial awards if a match in the DNP system occurs. Use of the DNP system, including data matching, occurs within the compliance framework established by the Privacy Act of 1974, which governs how a federal agency may disclose information that identifies an individual to another federal agency. Executive Order (E.O.) 14249, Protecting America’s Bank Account Against Fraud, Waste, and Abuse, issued in March 2025, directs executive branch agencies to complete certain administrative processes specified by the Privacy Act to ensure that agencies can disclose information (e.g., Social Security numbers and names) on intended payment recipients to the Treasury Department for the purpose of using the DNP system. The executive order presumes that by reducing administrative barriers to the sharing of payment recipient information with the DNP system, more agencies will use the DNP system, which will presumably increase the detection of improper payments. In August 2025, the Office of Management and Budget stated that the DNP system, “to date, has failed as a tool for comprehensive screening for improper payments to protect against waste, fraud, and abuse.” While the PIIA mandates agencies to review certain databases before disbursing payments, not all agencies report using the DNP system, and a proportion of those agencies that do use the system indicate that it is not effective in reducing improper payments for them. The DNP system does not necessarily contain all information that is needed by an agency to verify eligibility for a particular type of payment, such as a loan, and the DNP system may be one of several data systems used to establish eligibility. The costs and benefits of integrating use of the DNP system into payment processing workflows, which are largely automated, may vary by agency and by program.