Program integrity activities may encompass a broad range of  activities, such as identifying improper payments or improper access to  federal programs or benefits. Commercial Data and Data Services

Throughout this report, we refer to commercial data and data service  providers. Figure 1 shows examples of the types of  data that agencies may obtain from data service providers. Selected Federal Agencies Report Using Commercial Data Services to Access Data and Improve the Efficiency of Program Integrity Activities

Officials from SSA, the Department of Labor (DOL), the U.S. Department  of Homeland Security (DHS), GSA, and IRS told us that using commercial  data services can help their agencies to access proprietary private sector  data that are not available from government sources and improve the  efficiency of program integrity activities. Commercial bank account  information from private financial institutions may not be available from  government sources, and this proprietary private sector information may  help a federal agency to identify improper payments. For example, IRS  officials told us that using commercial data service providers to provide  web and phone-based services to help authenticate certain taxpayers’  identities allowed their staff to focus on other work rather than deal with  large volumes of in-person requests for identity authentication. Selected Agencies Consider Factors Such as Completeness and Accuracy When Determining Whether Data from Commercial Data Services Meet Information Requirements for Program Integrity Activities

Factors agencies may consider in determining whether data from  nongovernmental data services meet their information requirements for  conducting program integrity activities include the accuracy of data; the  currency and timeliness of data; the completeness of data; and technical  aspects of using the data for these purposes, according to officials we  spoke with. As mentioned, our work was based on a nonprobability  sample of agencies and nongovernmental entities, and the information  and perspectives that we obtained are not generalizable to other federal  agencies and data service providers. As part of our review, OMB staff described provisions of the Computer  Matching and Privacy Protection Act of 1988 (“Computer Matching Act”)  designed to mitigate the risk of agencies using inaccurate data in  conducting program integrity activities. For example, DOL officials told us  that state UI agencies could likely improve their ability to identify and  prevent improper UI payments to claimants who return to work by  obtaining wage data from Equifax’s Work Number system, which are  generally more recent than quarterly wage data that UI agencies receive  from employers. In April 2016, DOL officials told us that the agency is currently working  with three states and Equifax to conduct a pilot project to examine the use  of Equifax’s Work Number data to identify improper payments to UI  recipients with disqualifying income from work. The DOL officials expect  the pilot project to last for up to 4 months. Agencies May Consider Technical Aspects of Commercial Data Services When Conducting Program Integrity Activities

Officials from IRS, SSA, and GSA told us that federal agencies also  consider technical aspects of commercial data services when determining  whether commercial data meet their information requirements for  conducting program integrity activities, such as restrictions on batch  versus manual data processing. Commercial data service providers may also place restrictions on how  agencies can use data. Agency Comments

We are not making recommendations in this report.
Why GAO Did This Study

Federal agencies may use commercial data services in conducting program integrity activities designed to identify fraud and improper payments, which pose a significant risk to the integrity of federal programs. For example, federal agencies may obtain commercial data—subject to applicable laws and protections—that identifies individuals' deaths, income and assets, or other information that may help the agency determine whether individuals or entities are eligible for a government program or benefit.
GAO was asked to review issues surrounding the use of commercial data in conducting program integrity activities. This report identifies and describes the views of selected agency officials and commercial data service providers regarding (1) reasons selected agencies have used commercial data services in conducting program integrity activities; and (2) factors agencies may consider in determining whether commercial data services meet their information requirements for conducting program integrity activities.
To do this, GAO reviewed documents and conducted interviews with federal agency officials and representatives of commercial data service providers selected as part of a nonprobability sample of 12 entities selected to represent a range of program integrity activities and commercial data services. The information and perspectives that GAO obtained are not generalizable to other agencies and providers.
GAO is making no recommendations in this report, which incorporates various technical comments from the agencies.

What GAO Found

Officials from selected federal agencies told GAO that using commercial data services can help their agencies improve the efficiency of program integrity activities. For example, Internal Revenue Service (IRS) officials told GAO that using commercial data service providers to provide web and phone-based services to help authenticate certain taxpayer's identities likely allowed their staff to focus on other work rather than deal with large volumes of in-person requests for identity authentication. Commercial data services can also provide federal agencies access to private sector data, such as bank deposit information, that is not available from federal government sources. This financial information may help agencies to determine whether individuals have income from work or assets that indicate they are not eligible for certain programs, such as disability programs. Applicable laws generally require that agencies independently verify instances of matching data identified by computer matching programs before taking action and provide minimum notice to affected individuals. The figure below shows examples of the types of data that agencies may obtain from data service providers.
Federal agencies may consider various factors in determining whether data from commercial data services meet their information requirements for conducting program integrity activities. These factors include the accuracy of data; the currency and timeliness of data; the completeness of data; and technical aspects of using the data for these purposes, according to officials from agencies in GAO's nonprobability sample. For example, Department of Labor (DOL) officials told GAO that state Unemployment Insurance (UI) agencies could likely improve their ability to identify and prevent improper UI payments to claimants who return to work by obtaining commercially available wage data from a data service provider that are generally more recent than quarterly wage data that UI agencies receive directly from employers. DOL officials also told GAO that the agency is currently working with three states and a provider to conduct a pilot project to examine the use of the provider's payroll data to identify improper payments to UI recipients with disqualifying income from work. DOL expects the pilot to last up to 4 months.