A "Do Not Pay" List?

The headline on this White House memorandum got our attention: Enhancing Payment Accuracy Through a "Do Not Pay List".  The June 18th memorandum announces a new policy that is intended to prevent payments to deadbeats - individuals or entities that owe the Government money. Its not as draconian as it sounds, it simply requires that prior to payments, disbursing offices consult with a number of available Government databases to ensure that the payee doesn't owe the Government money from back taxes or other liabilities.

The premise for this new policy is to prevent payment errors before they occur. While its important to recapture improper payments, its more effective to avoid payment errors in the first place. As the memorandum states:

"...where data available to agencies clearly shows that a potential recipient of a Federal payment is ineligible for it, subsequent payment to that recipient is unacceptable. We must ensure that such payments are not made.

Federal agencies maintain many databases containing information of a recipient's eligibility to receive Federal benefits payments or Federal awards, such as grants and contracts. By checking these databases before making payments or awards, the Administration believes that agencies will be able to identify ineligible recipients and prevent improper payments from being made in the first place.

Agencies will now be required to review the following databases before they release any Federal funds:

• Social Security Administration's Death Master File (we guess that if you're dead, you should not be contracting with the Government)
• General Services Administration's Excluded Parties List System
• Department of the Treasury's Debt Check Database
• Department of Housing and Urban Development's Credit Alert System or Credit Alert Interactive Voice Response System
• Department of Health and Human Services' Office of Inspector General's List of Excluded Individuals/Entities.

This network of databases, and additional databases so designated by the Director of the Office of Management and Budget (OMB) in consultation with agencies, shall be collectively known as the "Do Not Pay List."

The remainder of the White House memo deals with timelines, coordination between agencies, and coming up with some best practices for implementation to disseminate to all Government Agencies. To read the entire memorandum, click here.