Why It Matters

The federal government lacks basic standards to ensure that data about who can receive federal money actually works across agencies. The result: billions in taxpayer dollars flow to ineligible recipients, fraudsters exploit gaps between systems, and the government cannot use artificial intelligence to catch problems in real time.

A new Government Accountability Office report exposes the sprawl. Over 100 federal data sources exist to verify eligibility for federal programs. They don't talk to each other. They contain conflicting information. They have missing and duplicate records. And there's no one in charge of fixing it.

The findings matter because federal data interoperability directly shapes whether the government can prevent improper payments and fraud. Without it, agencies make awards to excluded vendors and ineligible beneficiaries. Without it, the government cannot leverage modern analytics to detect waste before money leaves the Treasury.

The Big Picture

Federal agencies have been operating under general data interoperability requirements for more than 30 years. Yet those requirements never produced specific rules for recipient eligibility data across the government. Instead, agencies built systems to manage their own programs, not to share information.

The result is fragmentation. The GAO examined nine eligibility data sources in depth: all nine had data quality issues, including missing, invalid, and duplicate records. Seven of the nine had inconsistencies with each other, such as overlapping information that should have been mutually exclusive.

Most of these data sources were created to comply with legal requirements or manage specific federal programs rather than to support eligibility determinations for other agencies. The System for Award Management (SAM), which tracks excluded vendors and entities, doesn't always require unique identifiers. The USAspending.gov database, which tracks federal awards, could only link to most SAM entity information but struggled with exclusion records.

This fragmentation has tangible consequences. When the GAO tested data from fiscal years 2023 and 2024, it identified 2,074 awards to recipients that were listed in the SAM Exclusion data source at the time of the transaction. While those awards don't by themselves indicate fraud or waste, they signal that basic eligibility checks failed to prevent them.

The Data Quality Crisis

Insufficient or improperly documented validation rules across systems created the data quality problems the GAO documented. Federal agencies never established a governance body or mandatory rules to ensure recipient eligibility data is interoperable across systems. The Payment Integrity Information Act of 2019 requires agencies to reduce improper payments using the Do Not Pay (DNP) working system, yet only 28 federal data sources were in DNP or designated for inclusion as of September 2025.

That's a fraction of the over 100 data sources available. The implication is clear: most federal eligibility data sits outside any coordinated fraud prevention framework. Agencies checking eligibility for federal awards and payments cannot access most available data sources in a standardized way.

The absence of federal data interoperability also limits the government's ability to leverage artificial intelligence and advanced analytics to identify and prevent improper awards and payments. Modern fraud detection relies on connecting data points across systems and spotting anomalies. The government cannot do that when its data sources are isolated, inconsistent, and incomplete.

Congressional Action

The GAO made one matter for congressional consideration: Congress should assign the Department of the Treasury explicit authority to lead, in coordination with the Chief Data Officer Council and in consultation with the Office of Management and Budget, the development and implementation of government-wide data standards and interoperability requirements for recipient eligibility data sources.

The Bureau of the Fiscal Service, a Treasury bureau, agreed with the GAO's findings. It stated that the Treasury would require clear authority to lead standardization related to eligibility data designated for use in DNP. The Office of Management and Budget did not provide comments on the report.

The General Services Administration, which owns SAM, and the Department of Health and Human Services Office of Inspector General, which owns selected data sources, were both interviewed by the GAO as part of the review.

The Bottom Line

Federal data interoperability is not merely a technical problem. It directly affects whether the government can protect taxpayer dollars. The current system allows improper payments to flow undetected. It prevents agencies from using modern tools to catch fraud. And it ensures that the government will continue to operate with incomplete information about who is eligible to receive federal funds.

The GAO report, published on June 16, was requested as part of broader efforts to review how the government can better leverage USAspending.gov and other data sources to enhance monitoring of federal spending and potential fraud, waste, and abuse. Congress now has a roadmap for action. Whether it acts will determine whether federal data systems remain fragmented or finally operate as an integrated whole.

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