Improper Payments Elimination and Recovery Act of 2008 - Amends the Improper Payments Information Act of 2002 to require the head of each federal agency to: (1) annually review all agency programs and identify those programs and activities that may be susceptible to significant improper payments; and (2) report on agency actions to reduce and recover improper payments. Defines "improper payment" as any payment that should not have been made, that was made in an incorrect or duplicate amount, or that was made to an ineligible recipient.
Requires the Director of the Office of Management and Budget (OMB) to: (1) provide guidance to agencies for reducing improper payments, addressing risks, and establishing appropriate prepayment and postpayment internal controls; and (2) prepare an annual report with an identification of the compliance status of each agency in identifying improper payments and the delinquent programs responsible for the agency's status.
Requires federal agencies with outlays of $1 million or more to conduct a recovery audit of all programs and activities to assist in recouping improper payments.
Requires: (1) each agency's Inspector General to report each fiscal year on agency compliance with the Improper Payments Information Act of 2002 and this Act; (2) the head of an agency determined not to be in compliance for two consecutive fiscal years to reprogram available funds to achieve compliance; and (3) an agency determined not to be in compliance for three consecutive fiscal years, with a delinquent program reported for two of those years consecutively, to transfer 5% of the appropriations for each of delinquent program to the Treasury.
Suspends appropriations to agencies that have a program that reports an improper payment rate greater than 15% for three consecutive fiscal years until the agency's Inspector General certifies that sufficient changes have been implemented to warrant resumed authorization of appropriations.
[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5467 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 5467
To amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) in order to prevent the loss of billions in taxpayer dollars.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 14, 2008
Mr. Patrick J. Murphy of Pennsylvania (for himself and Mr. Bilbray)
introduced the following bill; which was referred to the Committee on
Oversight and Government Reform
_______________________________________________________________________
A BILL
To amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) in order to prevent the loss of billions in taxpayer dollars.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improper Payments Elimination and
Recovery Act of 2008''.
SEC. 2. IMPROPER PAYMENTS ELIMINATION AND RECOVERY.
(a) Susceptible Programs and Activities.--Section 2 of the Improper
Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by
striking subsection (a) and inserting the following:
``(a) Identification of Susceptible Programs and Activities.--
``(1) In general.--The head of each agency shall, in
accordance with guidance prescribed by the Director of the
Office of Management and Budget, annually review all programs
and activities that the relevant agency head administers and
identify all such programs and activities that may be
susceptible to significant improper payments.
``(2) Annual risk assessment.--
``(A) Definition.--In this paragraph the term
`significant' means that improper payments in the
program or activity in the preceding fiscal year
exceeded--
``(i) 2.5 percent of all program or
activity payments made during that fiscal year;
or
``(ii) $10,000,000.
``(B) Risk assessment.--The review under paragraph
(1) shall include a risk assessment that includes--
``(i) a systematic process for producing a
statistically valid estimate of the level of
improper payments being made by the agency; and
``(ii) an identification of the factors
contributing to each assessment under clause
(i).''.
(b) Reports on Actions To Reduce Improper Payments.--Section 2 of
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is
amended by striking subsection (c) and inserting the following:
``(c) Reports on Actions To Reduce Improper Payments.--With respect
to any program or activity of an agency with estimated improper
payments under subsection (b), the head of the agency shall provide
with the estimate under subsection (b) a report on what actions the
agency is taking to reduce any improper payments, including--
``(1) a description of the causes of the improper payments
identified, actions planned or taken to correct those causes,
and the planned or actual completion date of the actions taken
to address those causes;
``(2) in order to reduce improper payments to a level below
which further expenditures to reduce improper payments would
cost more than the amount such expenditures would save in
prevented or recovered improper payments, a statement of
whether the agency has what is needed with respect to--
``(A) the internal controls, including information
systems;
``(B) the human capital; and
``(C) other infrastructure;
``(3) if the agency does not have sufficient internal
controls under paragraph (2)(A), a description of the resources
the agency has requested in its budget submission to establish
such internal controls;
``(4) a description of the steps the agency has taken to
ensure that agency managers are held accountable for
establishing sufficient internal controls, including an
appropriate control environment, that prevent improper payments
from occurring and promptly detect and recover improper
payments made; and
``(5) a statement of whether or not the agency has--
``(A) developed and implemented improper payment
control plans; and
``(B) implemented appropriate improper payment
detection, investigation, reporting, and data
collection procedures and processes.''.
(c) Reports on Recovery Actions and Governmentwide Reporting.--
(1) In general.--Section 2 of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) is amended--
(A) by striking subsection (e);
(B) by redesignating subsections (d) and (f) as
subsections (f) and (g), respectively; and
(C) by inserting after subsection (c) the
following:
``(d) Reports on Actions To Recover Improper Payments.--With
respect to any improper payments identified in recovery audits
conducted under section 2(g) of the Improper Payments Elimination and
Recovery Act of 2008, the head of the agency shall provide with the
estimate under subsection (b) a report on what actions the agency is
taking to recover improper payments, including--
``(1) the types of errors from which improper payments
resulted;
``(2) a discussion of the methods used by the agency to
recover improper payments;
``(3) the amounts recovered, outstanding, and determined to
not be collectable, including the percent these amounts
represent of the total improper payments of the agency; and
``(4) an aging schedule of the amounts outstanding.
``(e) Governmentwide Reporting of Improper Payments.--
``(1) Department of the treasury.--The Secretary of the
Treasury shall include in each report submitted under section
331(a) of title 31, United States Code, the improper payment
information reported by the agencies on a governmentwide basis.
``(2) Office of management and budget.--The Director of the
Office of Management and Budget shall--
``(A) coordinate with the Secretary of the Treasury
in the preparation of the information to be reported
under paragraph (1); and
``(B) prescribe regulations for--
``(i) the information required to be
reported; and
``(ii) a format of reporting such
information on a governmentwide basis to be
used by agencies.''.
(2) Technical and conforming amendment.--Section 331(a) of
title 31, United States Code, is amended--
(A) in paragraph (6), by striking ``and'' after the
semicolon;
(B) in paragraph (7), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(8) the improper payments information required under
section 2(e) of the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note).''.
(d) Definitions.--Section 2 of the Improper Payment Information Act
of 2002 (31 U.S.C. 3321 note) is amended by striking subsections (f)
(as redesignated by this section) and inserting the following:
``(f) Definitions.--In this section:
``(1) Agency.--The term `agency' means an executive agency,
as that term is defined in section 102 of title 31, United
States Code.
``(2) Improper payment.--The term `improper payment'--
``(A) means any payment that should not have been
made or that was made in an incorrect amount (including
overpayments and underpayments) under statutory,
contractual, administrative, or other legally
applicable requirements; and
``(B) includes any payment to an ineligible
recipient, any payment for an ineligible good or
service, any duplicate payment, payments for services
not received, and any payment that does not account for
credit for applicable discounts.
``(3) Payment.--The term `payment' means any transfer or
commitment for future transfer of cash, in-kind benefits,
goods, services, loans and loan guarantees, insurance
subsidies, and other items of value between Federal agencies
and their employees, vendors, partners, and beneficiaries, and
parties to contracts, grants, leases, cooperative agreements,
or any other procurement mechanism, that is--
``(A) made by a Federal agency, a Federal
contractor, or a governmental or other organization
administering a Federal program or activity; and
``(B) derived from Federal funds or other Federal
resources or that will be reimbursed from Federal funds
or other Federal resources.
``(4) Payment for an ineligible good or service.--The term
`payment for an ineligible good or service' shall include a
payment for any good or service that is in violation of any
provision of any contract, grant, lease, cooperative agreement,
or any other procurement mechanism, including any provision
relating to quantity, quality, or timeliness.''.
(e) Guidance by the Office of Management and Budget.--Section 2 of
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is
amended by striking subsection (g) (as redesignated by this section)
and inserting the following:
``(g) Guidance by the Office of Management and Budget.--
``(1) In general.--Not later than 6 months after the date
of enactment of the Improper Payments Elimination and Recovery
Act of 2008, the Director of the Office of Management and
Budget shall prescribe updated guidance to implement and
provide for full compliance with the requirements of this
section. The guidance shall not include any exemptions not
specifically authorized by this section.
``(2) Contents.--The updated guidance under paragraph (1)
shall prescribe--
``(A) the form of the reports on actions to reduce
improper payments, recovery actions, and governmentwide
reporting; and
``(B) strategies for addressing risks and
establishing appropriate prepayment and postpayment
internal controls.''.
(f) Internal Controls.--
(1) Report on effectiveness of a-123 implementation.--The
President's Council on Integrity and Efficiency shall conduct a
study of the effectiveness of implementation of the Office of
Management and Budget's Circular No. A-123 (revised),
Management's Responsibility for Internal Control at preventing
improper payments or addressing internal control problems that
contribute to improper payments, and not later than 1 year
after the date of enactment of this Act, submit a report on the
study to--
(A) the Committee on Homeland Security and
Governmental Affairs of the Senate;
(B) the Committee on Oversight and Government
Reform of the House of Representatives;
(C) the Director of the Office of Management and
Budget; and
(D) the Comptroller General.
(2) Consultation and cooperation.--The President's Council
on Integrity and Efficiency shall consult and cooperate with
the committees and director described under paragraph (1) to
ensure the nature and scope of the study under paragraph (1)
will address the needs on those committees and the Director of
the Office of Management and Budget, including how the
implementation of Circular No. A-123 (revised) has helped to
identify, report, prevent, and recover improper payments.
(3) Determination of agency readiness for opinion on
internal control.--Not later than 1 year after the date of
enactment of the Improper Payments Elimination and Recovery Act
of 2008, the Director of the Office of Management and Budget
shall develop--
(A) specific criteria as to when an agency should
initially be required to obtain an opinion on internal
control over financial reporting; and
(B) criteria for an agency that has demonstrated a
stabilized, effective system of internal control over
financial reporting, whereby the agency would qualify
for a multiyear cycle for obtaining an audit opinion on
internal control over financial reporting, rather than
an annual cycle.
(g) Recovery Audits.--An agency with outlays of $1,000,000 or more
in any fiscal year shall conduct a recovery audit (as that term is
defined by the Director of the Office of Management and Budget under
section 3561 of title 31, United States Code) of all programs and
activities, if the agency determines that a prior audit has identified
improper payments that can be recouped and it is cost beneficial for a
recovery activity to recapture those funds.
(h) Report on Recovery Auditing.--Not earlier than 1 year after the
date of the enactment of this Act, the Chief Financial Officers Council
established under section 302 of the Chief Financial Officers Act of
1990 (31 U.S.C. 901 note) and the President's Council on Integrity and
Efficiency established under Executive Order 12805 of May 11, 1992, in
consultation with recovery audit experts, shall--
(1) jointly conduct a study of the costs and benefits of
agency recovery audit activities, including those under
subsection (g), and including the effectiveness of using the
services of--
(A) private contractors;
(B) agency employees;
(C) cross-servicing from other agencies; or
(D) any combination of the provision of services
described under subparagraphs (A) through (C); and
(2) submit a report on the results of the study to--
(A) the Committee on Homeland Security and
Governmental Affairs of the Senate;
(B) the Committee on Oversight and Government
Reform of the House of Representatives; and
(C) the Comptroller General.
SEC. 3. COMPLIANCE.
(a) Definitions.--In this section:
(1) Agency.--The term ``agency'' has the meaning given
under section 2(f) of the Improper Payments Information Act of
2002 (31 U.S.C. 3321 note) as redesignated by this Act.
(2) Compliance.--The term ``compliance'' means that the
agency--
(A) has published a performance report for the most
recent fiscal year and posted that report on the agency
website;
(B) has conducted a program specific risk
assessment for each program or activity that--
(i) is in compliance with section 2(a) the
Improper Payments Information Act of 2002 (31
U.S.C. 3321 note); and
(ii) is included in the performance report;
(C) publishes program specific improper payments
estimates for all programs and activities identified
under section 2(b) of the Improper Payments Information
Act of 2002 (31 U.S.C. 3321 note) in the performance
report;
(D) publishes programmatic corrective action plans
prepared under section 2(c) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) that the
agency may have in the performance report;
(E) publishes Office of Management and Budget
approved improper payments reduction targets in the
performance report for each program assessed to be at
risk, and is determined by the Office of Management and
Budget to be actively meeting such targets; and
(F) publishes the compliance report under
subsection (c) in the performance report.
(3) Delinquent program.--The term ``delinquent program''
means a program which is partially or wholly responsible for
the determination of an agency being not in compliance.
(4) Performance report.--The term ``performance report''
means the performance and accountability report referred to
under section 3516(b) of title 31, United States Code, or a
program performance report under section 1116 of that title.
(b) Annual Compliance Report by OMB.--
(1) In general.--Each year, the Director of the Office of
Management and Budget shall prepare a report with an
identification of--
(A) the compliance status of each agency under this
section; and
(B) the delinquent programs responsible for that
status.
(2) Inclusion in budget submission.--The Director of Office
of the Management and Budget shall include the report described
under paragraph (1) in the annual budget submitted under
section 1105 of title 31, United States Code.
(c) Annual Compliance Report by Agency Inspectors General.--
(1) In general.--Each fiscal year, the Inspector General of
each agency shall determine whether the agency is in compliance
with the Improper Payments Information Act of 2002 (31 U.S.C.
3321 note) and this Act and submit a report to the head of the
agency on that determination.
(2) Preparation of report.--The Inspector General of each
agency may enter into contracts and other arrangements with
public agencies and with private persons for the preparation of
financial statements, studies, analyses, and other services in
preparing the report described under paragraph (1).
(3) Inclusion in performance report.--The head of each
agency shall include the report of the agency Inspector General
described under paragraph (1) in the performance report.
(d) Remediation Assistance.--
(1) Voluntary remediation assistance.--If an agency is
determined by the agency Inspector General not to be in
compliance under subsection (c) in a fiscal year, the head of
the agency may reprogram funds from any available
appropriations of that agency for expenditure on intensified
compliance for any delinquent program (notwithstanding any
appropriations transfer authority limitation in any other
provision of law).
(2) Required remediation assistance.--If an agency is
determined by the agency Inspector General not to be in
compliance under subsection (c) for 2 consecutive fiscal years,
the head of the agency shall reprogram funds from any available
appropriations of that agency necessary to achieve full
compliance (notwithstanding any appropriations transfer
authority limitation in any other provision of law).
(3) Remediation rescission.--
(A) In general.--If an agency is determined by the
agency Inspector General not to be in compliance under
subsection (c) for a period of 3 consecutive fiscal
years and any delinquent program is included in the
report under that subsection for 2 consecutive years
during that 3-fiscal year period, the head of the
agency shall transfer 5 percent of the available
appropriations for each of those delinquent programs,
as determined by the head of the agency, to
miscellaneous receipts of the United States Treasury.
(B) Continuation of transfers.--The head of an
agency shall make transfers at least once annually
under subparagraph (A) until the agency is determined
to be in compliance under subsection (b).
(4) Stop-loss provision.--If an agency has a program that
reports under section 2(b) of the Improper Payments Information
Act of 2002 (31 U.S.C. 3321 note) an improper payment rate
greater than 15 percent for 3 consecutive fiscal years
(regardless of the whether the program is a delinquent
program)--
(A) not later than 30 days after that
determination, the head of agency shall submit to
Congress proposals for statutory changes or other
relevant actions determined necessary to stop the
financial loss by the program; and
(B) no further appropriations for such program
shall be authorized until such time as the inspector
general of that agency submits a certification to
Congress that sufficient changes in the program
(whether those proposed by agency or otherwise) have
been implemented to warrant resumed authorization of
appropriations.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Oversight and Government Reform.
Referred to the Subcommittee on Government Management, Organization, and Procurement.
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