The Office of Management and Budget (OMB) has released new guidance aimed at strengthening the federal government’s ability to prevent fraud and improper payments. The memorandum, Preventing Improper Payments and Protecting Privacy Through Do Not Pay, provides agencies with updated rules on how they can share information with the Department of the Treasury for payment verification and fraud prevention.
Under the memo, agencies must update their System of Records Notices (SORNs) to explicitly allow information sharing with Treasury for identifying, preventing, or recouping improper payments. These updates classify information sharing with Treasury as a “routine use” under the Privacy Act.
The guidance also grants agencies a four-year waiver from the requirement to enter into formal computer matching agreements for Do Not Pay screening, unless otherwise required by law. This waiver is intended to reduce administrative barriers while maintaining safeguards for privacy.
The release follows Executive Order 14249, Protecting America’s Bank Account Against Fraud, Waste, and Abuse, signed by President Trump on March 25, 2025. That order directs executive branch agencies to make more effective use of Treasury’s Do Not Pay system, a centralized portal designed to help agencies screen potential recipients of federal payments, contracts, and benefits against databases that confirm eligibility.
Do Not Pay was established under the Payment Integrity Information Act of 2019, which requires agencies to use available data to prevent improper payments before releasing federal funds. While the system has been in place for several years, OMB notes that its impact has been limited, and the new guidance is intended to expand its use and improve results.
At the same time, the memo emphasizes the need for privacy protections. It directs agencies to follow existing law and policy to safeguard personally identifiable information while making data more accessible for fraud prevention.
The guidance complements previous OMB directives on Do Not Pay and is accompanied by detailed instructions for agencies on updating SORNs and implementing the four-year waiver.
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