March 25, 2025 Protecting America’s Bank Account Against Fraud, Waste, and Abuse - Executive Order
- Fact Seeker
- Jul 6
- 2 min read
Purpose:
The Executive Order seeks to improve financial integrity, transparency, efficiency, and security in the Federal Government’s disbursement operations. It enhances the Department of the Treasury’s ability to monitor and verify payments, aiming to prevent fraud, waste, and abuse in the use of public funds.
🔹 Key Figures & Facts:
In FY 2024, the U.S. General Fund processed:
$33.9 trillion in inflows
$33.6 trillion in outflows, including $5.87 trillion in payments (excluding net interest)
Estimated annual fraud losses across federal programs: $233 to $521 billion (per Government Accountability Office)
Non-Treasury Disbursing Offices (NTDOs) made 181 million payments totaling $1.5 trillion, or ~22% of all federal disbursements
🔹 Problems Identified:
Fragmented disbursing authority leads to inefficiencies, opaque financial reporting, and security vulnerabilities.
Lack of standardized systems across agencies prevents unified oversight.
The Treasury lacks tools and data to determine whether payments are legitimate.
Agencies’ underinvestment in technology and data quality exacerbates fraud risks.
🔹 Major Policy Actions:
1. Verification and Oversight Enhancements
Treasury and agencies must verify payments before disbursement using pre-certification checks.
Agencies must comply with standards under 31 U.S.C. 3321, 3351–3354 (e.g., "Do Not Pay" system).
Verification must confirm:
Funds availability
Correct payee identifiers (SSN, TIN, etc.)
Valid account and contract info
Compliance with Treasury formats
That payees are not deceased
2. System and Data Integration
Agencies must:
Update their Privacy Act of 1974 notices to permit Treasury data access
Submit payment data early for Treasury’s fraud checks
Decommission internal disbursing systems where applicable
3. Consolidation of Financial Systems
OMB must direct agencies to:
Consolidate financial systems within 180 days
Use shared financial services via the Financial Management Marketplace
Follow Treasury standards for accounting/reporting
4. Reduction of NTDOs
Treasury to reassess all disbursing delegations and revoke where appropriate
NTDOs (excluding the Supreme Court and non-Executive entities) must transition disbursement duties to Treasury, except for classified payments
Treasury to establish a transition and staffing plan for agencies affected
5. Agency Reporting Requirements
Within 90 days, all agencies must submit a compliance plan covering:
Transitioning payment authority
Integrating with Treasury systems
Improper payment data sharing
Treasury must provide a progress report to the President within 180 days
🔹 Legal & Administrative Notes:
Treasury may waive certain data-sharing restrictions under 5 U.S.C. 552a(o) for fraud prevention, as allowed by law.
Exemptions to requirements can be granted where justified and documented.
The order does not create new legal rights or override existing agency authorities.
🔹 References & Legal Citations:
31 U.S.C. 3321, 3351–3354: Governs disbursements, fraud prevention, and payment verification
5 U.S.C. 552a (Privacy Act of 1974): Governs personal data use and disclosures
CFO Act agencies under 31 U.S.C. 901(b): Subject to more stringent consolidation requirements
🔹 Impact:
This Executive Order marks a significant shift toward centralized, standardized, and technologically modernized financial management across the federal government, aiming to reduce billions in annual losses, streamline agency operations, and restore public trust in federal financial accountability.
Writer's Note: Summary made with the use of AI tools for editing and quick processing, facts checked against the order before publishing.
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