Payment Integrity Information Act of 2018
This bill modifies and establishes various requirements for federal agencies related to identifying and reducing improper payments.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2948 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
2d Session
S. 2948
To improve efforts to identify and reduce Governmentwide improper
payments, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 24, 2018
Mrs. McCaskill (for herself, Mr. Johnson, and Mr. Carper) introduced
the following bill; which was read twice and referred to the Committee
on Homeland Security and Governmental Affairs
_______________________________________________________________________
A BILL
To improve efforts to identify and reduce Governmentwide improper
payments, and for other purposes.
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 ``Payment Integrity Information Act of
2018''.
SEC. 2. IMPROPER PAYMENTS.
(a) In General.--Chapter 33 of title 31, United States Code, is
amended by adding at the end the following:
``Subchapter IV--Improper Payments
``Sec. 3351. Definitions
``In this subchapter:
``(1) Annual financial statement.--The term `annual
financial statement' means the annual financial statement
required under section 3515 of this title or similar provision
of law.
``(2) Compliance.--The term `compliance' means that an
executive agency--
``(A) has--
``(i) published improper payments
information with the annual financial statement
of the executive agency for the most recent
fiscal year; and
``(ii) posted on the website of the
executive agency that statement and any
accompanying materials required under guidance
of the Office of Management and Budget;
``(B) if required, has conducted a program specific
risk assessment for each program or activity that
conforms with the requirements under section 3352(a);
``(C) if required, publishes improper payments
estimates for all programs and activities identified
under section 3352(a) in the accompanying materials to
the annual financial statement;
``(D) publishes programmatic corrective action
plans prepared under section 3352(d) that the executive
agency may have in the accompanying materials to the
annual financial statement;
``(E) publishes improper payments reduction targets
established under section 3352(d) that the executive
agency may have in the accompanying materials to the
annual financial statement for each program or activity
assessed to be at risk, and has demonstrated
improvements and developed a plan to meet the reduction
targets; and
``(F) has reported an improper payment rate of less
than 10 percent for each program and activity for which
an estimate was published under section 3352(c).
``(3) Do not pay initiative.--The term `Do Not Pay
Initiative' means the initiative described in section 3354(b).
``(4) 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
an overpayment or underpayment, under a statutory,
contractual, administrative, or other legally
applicable requirement; and
``(B) includes--
``(i) any payment to an ineligible
recipient;
``(ii) any payment for an ineligible good
or service;
``(iii) any duplicate payment;
``(iv) any payment for a good or service
not received, except for those payments where
authorized by law; and
``(v) any payment that does not account for
credit for applicable discounts.
``(5) Payment.--The term `payment' means any transfer or
commitment for future transfer of Federal funds such as cash,
securities, loans, loan guarantees, and insurance subsidies to
any non-Federal person or entity or a Federal employee, that is
made by a Federal agency, a Federal contractor, a Federal
grantee, or a governmental or other organization administering
a Federal program or activity.
``(6) Payment for an ineligible good or service.--The term
`payment for an ineligible good or service' includes a payment
for any good or service that is rejected under any provision of
any contract, grant, lease, cooperative agreement, or other
funding mechanism.
``(7) Recovery audit.--The term `recovery audit' means a
recovery audit described in section 3352(i).
``(8) State.--The term `State' means each State of the
United States, the District of Columbia, each territory or
possession of the United States, and each Federally recognized
Indian tribe.
``Sec. 3352. Estimates of improper payments and reports on actions to
reduce improper payments
``(a) Identification of Susceptible Programs and Activities.--
``(1) In general.--The head of each executive agency shall,
in accordance with guidance prescribed by the Director of the
Office of Management and Budget--
``(A) periodically review all programs and
activities that the head of the executive agency
administers; and
``(B) identify all programs and activities with
outlays exceeding the statutory threshold dollar amount
described in paragraph (3)(A)(i) that may be
susceptible to significant improper payments.
``(2) Frequency.--A review under paragraph (1) shall be
performed for each program and activity that the head of an
executive agency administers not less frequently than once
every 3 fiscal years.
``(3) Risk assessments.--
``(A) Definition of significant.--In this
paragraph, the term `significant' means that, in the
preceding fiscal year, the sum of a program or
activity's improper payments and payments whose
propriety cannot be determined by the executive agency
due to lacking or insufficient documentation may have
exceeded--
``(i) $10,000,000 of all reported program
or activity payments of the executive agency
made during that fiscal year and 1.5 percent of
program outlays; or
``(ii) $100,000,000.
``(B) Scope.--If conducting a review under
paragraph (1), the head of each executive agency shall
take into account those risk factors that are likely to
contribute to a susceptibility to significant improper
payments, such as--
``(i) whether the program or activity
reviewed is new to the executive agency;
``(ii) the complexity of the program or
activity reviewed;
``(iii) the volume of payments made through
the program or activity reviewed;
``(iv) whether payments or payment
eligibility decisions are made outside of the
executive agency, such as by a State or local
government;
``(v) recent major changes in program
funding, authorities, practices, or procedures;
``(vi) the level, experience, and quality
of training for personnel responsible for
making program eligibility determinations or
certifying that payments are accurate;
``(vii) significant deficiencies in the
audit report of the executive agency or other
relevant management findings that might hinder
accurate payment certification;
``(viii) similarities to other programs or
activities that have reported improper payment
estimates or been deemed susceptible to
significant improper payments;
``(ix) the accuracy and reliability of
improper payment estimates previously reported
for the program or activity, or other indicator
of potential susceptibility to improper
payments identified by the Inspector General of
the executive agency, the Government
Accountability Office, other audits performed
by or on behalf of the Federal, State, or local
government, disclosures by the executive
agency, or any other means;
``(x) whether the program or activity lacks
information or data systems to confirm
eligibility or provide for other payment
integrity needs; and
``(xi) the risk of fraud as assessed by the
executive agency under the Standards for
Internal Control in the Federal Government
published by the Government Accountability
Office (commonly known as the `Green Book').
``(C) Annual report.--Each executive agency shall
publish an annual report that includes--
``(i) a listing of each program or activity
identified under paragraph (1), including the
date on which the program or activity was most
recently assessed for risk under paragraph (1);
and
``(ii) a listing of any program or activity
for which the executive agency makes any
substantial changes to the methodologies of the
reviews conducted under paragraph (1).
``(b) Improving the Determination of Improper Payments.--
``(1) In general.--The Director of the Office of Management
and Budget shall on an annual basis--
``(A) identify a list of high-priority Federal
programs for greater levels of oversight and review--
``(i) in which the highest dollar value or
highest rate of improper payments occur; or
``(ii) for which there is a higher risk of
improper payments; and
``(B) in coordination with the executive agency
responsible for administering a high-priority program
identified under subparagraph (A), establish annual
targets and semi-annual or quarterly actions for
reducing improper payments associated with the high-
priority program.
``(2) Report on high-priority improper payments.--
``(A) In general.--Subject to Federal privacy
policies and to the extent permitted by law, each
executive agency with a program identified under
paragraph (1)(A) shall on an annual basis submit to the
Inspector General of the executive agency and the
Office of Management and Budget, and make available to
the public, including through a website, a report on
that program.
``(B) Contents.--Each report submitted under
subparagraph (A)--
``(i) shall describe any action the
executive agency--
``(I) has taken or plans to take to
recover improper payments; and
``(II) intends to take to prevent
future improper payments; and
``(ii) shall not include--
``(I) any referrals the executive
agency made or anticipates making to
the Department of Justice; or
``(II) any information provided in
connection with a referral described in
subclause (I).
``(C) Public availability on central website.--The
Office of Management and Budget shall make each report
submitted under subparagraph (A) available on a central
website.
``(D) Availability of information to inspector
general.--Subparagraph (B)(ii) shall not prohibit any
referral or information being made available to an
Inspector General as otherwise provided by law.
``(E) Assessment and recommendations.--The
Inspector General of each executive agency that submits
a report under subparagraph (A) shall, for each program
of the executive agency that is identified under
paragraph (1)(A)--
``(i) review--
``(I) the assessment of the level
of risk associated with the program and
the quality of the improper payment
estimates and methodology of the
executive agency relating to the
program; and
``(II) the oversight or financial
controls to identify and prevent
improper payments under the program;
and
``(ii) submit to the appropriate
authorizing and appropriations committees of
Congress recommendations, which may be included
in another report submitted by the Inspector
General to Congress, for modifying any plans of
the executive agency relating to the program,
including improvements for improper payments
determination and estimation methodology.
``(F) Annual meeting.--Not less frequently than
once every year, the head of each executive agency with
a program identified under paragraph (1)(A), or a
designee of the head of the executive agency, shall
meet with the Director of the Office of Management and
Budget, or a designee of the Director, to report on
actions taken during the preceding year and planned
actions to prevent improper payments.
``(c) Estimation of Improper Payments.--
``(1) Estimation.--With respect to each program and
activity identified under subsection (a)(1), the head of the
relevant executive agency shall--
``(A) produce a statistically valid estimate, or an
estimate that is otherwise appropriate using a
methodology approved by the Director of the Office of
Management and Budget, of the improper payments made by
the program or activity; and
``(B) include the estimates described in
subparagraph (A) in the accompanying materials to the
annual financial statement of the executive agency and
as required in applicable guidance of the Office of
Management and Budget.
``(2) Lacking or insufficient documentation.--
``(A) In general.--For the purpose of producing an
estimate under paragraph (1), when the executive agency
cannot determine, due to lacking or insufficient
documentation, whether a payment is proper or not, the
payment shall be treated as an improper payment.
``(B) Separate report.--The head of an executive
agency may report separately on what portion of the
improper payments estimate for a program or activity of
the executive agency under paragraph (1) is
attributable to lacking or insufficient documentation.
``(d) Reports on Actions To Reduce Improper Payments.--With respect
to any program or activity of an executive agency with estimated
improper payments under subsection (c), the head of the executive
agency shall provide with the estimate required under subsection (c) a
report on what actions the executive agency is taking to reduce
improper payments, including--
``(1) a description of the causes of the improper payments,
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 those expenditures would save in
prevented or recovered improper payments, a statement of
whether the executive agency has what is needed with respect
to--
``(A) internal controls;
``(B) human capital; and
``(C) information systems and other infrastructure;
``(3) if the executive agency does not have sufficient
resources to establish and maintain effective internal controls
under paragraph (2)(A), a description of the resources the
executive agency has requested in the budget submission of the
executive agency to establish and maintain those internal
controls;
``(4) program-specific and activity-specific improper
payments reduction targets that have been approved by the
Director of the Office of Management and Budget;
``(5) a description of the steps the executive agency has
taken to ensure that executive agency managers, programs, and,
where appropriate, States and localities are held accountable
through annual performance appraisal criteria for--
``(A) meeting applicable improper payments
reduction targets; and
``(B) establishing and maintaining sufficient
internal controls, including an appropriate control
environment, that effectively--
``(i) prevent improper payments from being
made; and
``(ii) promptly detect and recover improper
payments that are made; and
``(6) a description of how the level of planned or
completed actions by the executive agency to address the causes
of the improper payments matches the level of improper
payments, including a breakdown by category of improper payment
and specific timelines for completion of those actions.
``(e) Reports on Actions To Recover Improper Payments.--With
respect to improper payments identified in a recovery audit, the head
of the executive agency shall provide with the estimate required under
subsection (c) a report on all actions the executive agency is taking
to recover the improper payments, including--
``(1) a discussion of the methods used by the executive
agency to recover overpayments;
``(2) the amounts recovered, outstanding, and determined to
not be collectable, including the percent those amounts
represent of the total overpayments of the executive agency;
``(3) if a determination has been made that certain
overpayments are not collectable, a justification of that
determination;
``(4) an aging schedule of the amounts outstanding;
``(5) a summary of how recovered amounts have been disposed
of;
``(6) a discussion of any conditions giving rise to
improper payments and how those conditions are being resolved;
and
``(7) if the executive agency has determined under
subsection (i) that performing recovery audits for any
applicable program or activity is not cost-effective, a
justification for that determination.
``(f) Governmentwide Reporting of Improper Payments and Actions To
Recover Improper Payments.--
``(1) Report.--Each fiscal year, the Director of the Office
of Management and Budget shall submit a report with respect to
the preceding fiscal year on actions that executive agencies
have taken to report information regarding improper payments
and actions to recover overpayments 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 of the United States.
``(2) Contents.--Each report required under paragraph (1)
shall include--
``(A) a summary of the reports of each executive
agency on improper payments and recovery actions
submitted under this section;
``(B) an identification of the compliance status of
each executive agency, as determined by the Inspector
General of the executive agency under section 3353, to
which this section applies;
``(C) Governmentwide improper payment reduction
targets;
``(D) a Governmentwide estimate of improper
payments; and
``(E) a discussion of progress made towards meeting
Governmentwide improper payment reduction targets.
``(g) Guidance by the Office of Management and Budget.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Director of the Office of
Management and Budget shall prescribe guidance for executive
agencies to implement the requirements of this section, which
shall not include any exemptions to those requirements that are
not specifically authorized by this section.
``(2) Contents.--The 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.
``(h) Determinations of Agency Readiness for Opinion on Internal
Control.--The criteria required to be developed under section 2(g) of
the Improper Payments Elimination and Recovery Act of 2010, as in
effect on the day before the date of enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) may be modified as determined appropriate by the
Director of the Office of Management and Budget.
``(i) Recovery Audits.--
``(1) In general.--
``(A) Conduct of audits.--Except as provided under
paragraph (3) and if not prohibited under any other
provision of law, the head of each executive agency
shall conduct recovery audits with respect to each
program and activity of the executive agency that
expends $1,000,000 or more annually if conducting the
audits would be cost effective.
``(B) Procedures.--In conducting a recovery audit
under this subsection, the head of an executive
agency--
``(i) shall give priority to the most
recent payments and to payments made in any
program identified as susceptible to
significant improper payments under subsection
(a);
``(ii) shall implement this subsection in a
manner designed to ensure the greatest
financial benefit to the Federal Government;
and
``(iii) may conduct the recovery audit
directly, by using other departments and
agencies of the United States, or by procuring
performance of recovery audits by private
sector sources by contract, subject to the
availability of appropriations, or by any
combination thereof.
``(C) Recovery audit contracts.--With respect to a
recovery audit procured by an executive agency by
contract--
``(i) subject to subparagraph (B)(iii), and
except to the extent such actions are outside
the authority of the executive agency under
section 7103 of title 41, the head of the
executive agency may authorize the contractor
to--
``(I) notify entities, including
individuals, of potential overpayments
made to those entities;
``(II) respond to questions
concerning potential overpayments; and
``(III) take other administrative
actions with respect to an overpayment
claim made or to be made by the
executive agency; and
``(ii) the contractor shall not have the
authority to make a final determination
relating to whether any overpayment occurred or
whether to compromise, settle, or terminate an
overpayment claim.
``(D) Contract terms and conditions.--
``(i) In general.--The executive agency
shall include in each contract for procurement
of performance of a recovery audit a
requirement that the contractor shall--
``(I) provide to the executive
agency periodic reports on conditions
giving rise to overpayments identified
by the contractor and any
recommendations on how to mitigate
those conditions;
``(II) notify the executive agency
of any overpayments identified by the
contractor pertaining to the executive
agency or to any other executive agency
that are beyond the scope of the
contract; and
``(III) report to the executive
agency credible evidence of fraud or
vulnerabilities to fraud and conduct
appropriate training of personnel of
the contractor on identification of
fraud.
``(ii) Reports on actions taken.--Each
executive agency shall, on an annual basis,
include in annual financial statement of the
executive agency a report on actions taken by
the executive agency during the preceding
fiscal year to address the recommendations
described in clause (i)(I).
``(E) Agency action following notification.--Each
executive agency shall--
``(i) take prompt and appropriate action in
response to a report or notification by a
contractor under subclause (I) or (II) of
subparagraph (D)(i) to collect an overpayment;
and
``(ii) forward to other executive agencies
any information that applies to that executive
agency.
``(2) Disposition of amounts recovered.--
``(A) In general.--Amounts collected by executive
agencies each fiscal year through recovery audits shall
be treated in accordance with this paragraph.
``(B) Distribution.--The head of an executive
agency shall determine the distribution of collected
amounts described in subparagraph (A), less amounts
needed to fulfill the purposes of section 3562(a) of
this title, in accordance with subparagraphs (C), (D),
and (E).
``(C) Use for financial management improvement
program.--Not more than 25 percent of the amounts
collected by an executive agency through recovery
audits--
``(i) shall be available to the head of the
executive agency to carry out the financial
management improvement program of the executive
agency under paragraph (3);
``(ii) may be credited, if applicable, for
the purpose described in clause (i) by the head
of an executive agency to any executive agency
appropriations and funds that are available for
obligation at the time of collection; and
``(iii) shall be used to supplement and not
supplant any other amounts available for the
purpose described in clause (i) and shall
remain available until expended.
``(D) Use for original purpose.--Not more than 25
percent of the amounts collected by an executive agency
through recovery audits--
``(i) shall be credited to the
appropriation or fund, if any, available for
obligation at the time of collection for the
same general purposes as the appropriation or
fund from which the overpayment was made;
``(ii) shall remain available for the same
period and purposes as the appropriation or
fund to which credited; and
``(iii) if the appropriation from which an
overpayment was made has expired, shall be
newly available for the same time period as the
funds were originally available for obligation,
except that any amounts that are recovered more
than 5 fiscal years from the last fiscal year
in which the funds were available for
obligation shall be deposited in the Treasury
as miscellaneous receipts, except that in the
case of recoveries of overpayments that are
made from trust or special fund accounts, those
amounts shall revert to those accounts.
``(E) Use for inspector general activities.--Not
more than 5 percent of the amounts collected by an
executive agency through recovery audits--
``(i) shall be available to the Inspector
General of that executive agency for--
``(I) the Inspector General to
carry out this Act; or
``(II) any other activities of the
Inspector General relating to
investigating improper payments or
auditing internal controls associated
with payments; and
``(ii) shall remain available for the same
period and purposes as the appropriation or
fund to which credited.
``(F) Remainder.--Amounts collected that are not
applied in accordance with subparagraph (B), (C), (D),
or (E) shall be deposited in the Treasury as
miscellaneous receipts, except that in the case of
recoveries of overpayments that are made from trust or
special fund accounts, those amounts shall revert to
those accounts.
``(G) Discretionary amounts.--This paragraph shall
apply only to recoveries of overpayments that are made
from discretionary appropriations, as defined in
section 250(c)(7) of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 900(c)(7)), and
shall not apply to recoveries of overpayments that are
made from discretionary amounts that were appropriated
before the date of enactment of the Improper Payments
Elimination and Recovery Act of 2010, as in effect on
the day before the date of enactment of this section.
``(H) Application.--This paragraph shall not apply
to the recovery of an overpayment if the appropriation
from which the overpayment was made has not expired.
``(3) Financial management improvement program.--
``(A) Requirement.--The head of each executive
agency shall conduct a financial management improvement
program consistent with rules prescribed by the
Director of the Office of Management and Budget.
``(B) Program features.--In conducting a program
described in subparagraph (A), the head of an executive
agency--
``(i) shall, as the first priority of the
program, address problems that contribute
directly to executive agency improper payments;
and
``(ii) may seek to reduce errors and waste
in other executive agency programs and
operations.
``(4) Privacy protections.--Any nongovernmental entity
that, in the course of recovery auditing or recovery activity
under this subsection, obtains information that identifies an
individual or with respect to which there is a reasonable basis
to believe that the information can be used to identify an
individual, may not disclose the information for any purpose
other than the recovery auditing or recovery activity and
governmental oversight of the activity, unless disclosure for
that other purpose is authorized by the individual to the
executive agency that contracted for the performance of the
recovery auditing or recovery activity.
``(5) Rule of construction.--Except as provided under
paragraph (4), nothing in this subsection shall be construed as
terminating or in any way limiting authorities that are
otherwise available to executive agencies under existing
provisions of law to recover improper payments and use
recovered amounts.
``Sec. 3353. Compliance
``(a) Annual Compliance Report by Inspectors General of Executive
Agencies.--
``(1) In general.--Each fiscal year, the Inspector General
of each executive agency shall--
``(A) determine whether the executive agency is in
compliance; and
``(B) submit a report on the determination made
under subparagraph (A) to--
``(i) the head of the executive agency;
``(ii) the Committee on Homeland Security
and Governmental Affairs of the Senate;
``(iii) the Committee on Oversight and
Governmental Reform of the House of
Representatives; and
``(iv) the Comptroller General of the
United States.
``(2) Development or use of a central website.--The Council
of the Inspectors General on Integrity and Efficiency (in this
subsection referred to as the `Council') shall develop a public
central website, or make use of a public central website in
existence on the date of enactment of this section, to contain
individual compliance determination reports issued by
Inspectors General under paragraph (1)(B) and such additional
information as determined by the Council.
``(3) OMB guidance.--Not later than 180 days after the date
of enactment of this section, the Director of the Office of
Management and Budget, in consultation with the Council and
with consideration given to the available resources and
independence of individual Offices of Inspectors General, shall
develop and promulgate guidance for the compliance
determination reports issued by the Inspectors General under
paragraph (1)(B), which shall require that--
``(A) the reporting format used by the Inspectors
General is consistent;
``(B) Inspectors General evaluate and take into
account the adequacy of executive agency risk
assessments, improper payment estimates methodology,
and executive agency action plans to address the causes
of improper payments;
``(C) Inspectors General take into account whether
the executive agency has correctly identified the
causes of improper payments and whether the actions of
the executive agency to address those causes are
adequate and effective;
``(D) Inspectors General evaluate the adequacy of
executive agency action plans on how the executive
agency addresses the causes of improper payments; and
``(E) as part of the report, Inspectors General
include an evaluation of executive agency efforts to
prevent and reduce improper payments and any
recommendations for actions to further improve that
prevention and reduction.
``(4) CIGIE guidance.--Not later than 180 days after the
date of enactment of this section, the Council shall, with
consideration given to the available resources and independence
of individual Offices of Inspectors General, develop and
promulgate guidance that specifies procedures for compliance
determinations made by the Inspectors General under paragraph
(1)(A), which shall describe procedures for Inspectors
General--
``(A) to make the determinations consistent
regarding compliance; and
``(B) to evaluate--
``(i) for compliance with the requirement
described in section 3351(2)(B), the risk
assessment methodology of the executive agency,
including whether the audits, examinations, and
legal actions of the Inspector General indicate
a higher risk of improper payments or actual
improper payments that were not included in the
risk assessments of the executive agency
conducted under section 3352(a);
``(ii) for compliance with the requirement
described in section 3351(2)(C), the accuracy
of the rate estimates and whether the sampling
and estimation plan used is appropriate given
program characteristics;
``(iii) for compliance with the requirement
described in section 3351(2)(D), the corrective
action plans and whether the plans are adequate
and focused on the true causes of improper
payments, including whether the corrective
action plans are--
``(I) reducing improper payments;
``(II) effectively implemented; and
``(III) prioritized within the
executive agency;
``(iv) the adequacy of executive agency
action plans to address the causes of improper
payments;
``(v) executive agency efforts to prevent
and reduce improper payments, and any
recommendations for actions to further improve;
and
``(vi) whether an executive agency has
published an annual financial statement in
accordance with the requirement described in
section 3351(2)(A).
``(b) Remediation.--
``(1) Noncompliance.--
``(A) In general.--If an executive agency is
determined by the Inspector General of that executive
agency not to be in compliance under subsection (a) in
a fiscal year with respect to a program or activity,
the head of the executive agency shall submit to the
appropriate authorizing and appropriations committees
of Congress a plan describing the actions that the
executive agency will take to come into compliance.
``(B) Plan.--The plan described in subparagraph (A)
shall include--
``(i) measurable milestones to be
accomplished in order to achieve compliance for
each program or activity;
``(ii) the designation of a senior
executive agency official who shall be
accountable for the progress of the executive
agency in coming into compliance for each
program or activity; and
``(iii) the establishment of an
accountability mechanism, such as a performance
agreement, with appropriate incentives and
consequences tied to the success of the
official designated under clause (ii) in
leading the efforts of the executive agency to
come into compliance for each program or
activity.
``(2) Noncompliance for 2 fiscal years.--
``(A) In general.--If an executive agency is
determined by the Inspector General of that executive
agency not to be in compliance under subsection (a) for
2 consecutive fiscal years for the same program or
activity, the executive agency shall propose to the
Director of the Office of Management and Budget
additional program integrity proposals that would help
the executive agency come into compliance.
``(B) Additional funding.--
``(i) In general.--If the Director of the
Office of Management and Budget determines that
additional funding would help the executive
agency come into compliance, the head of the
executive agency shall obligate additional
funding, in an amount determined by the
Director, to intensified compliance efforts.
``(ii) Reprogramming or transfer
authority.--In providing additional funding
under clause (i)--
``(I) the head of an executive
agency shall use any reprogramming or
transfer authority available to the
executive agency; and
``(II) if after exercising the
reprogramming or transfer authority
described in subclause (I), additional
funding is necessary to obligate the
full level of funding determined by the
Director of the Office of Management
and Budget under clause (i), the
executive agency shall submit a request
to Congress for additional
reprogramming or transfer authority.
``(3) Reauthorization and statutory proposals.--If an
executive agency is determined by the Inspector General of that
executive agency not to be in compliance under subsection (a)
for 3 consecutive fiscal years for the same program or
activity, the head of the executive agency shall, not later
than 30 days after the date of that determination, submit to
the appropriate authorizing and appropriations committees of
Congress and the Comptroller General of the United States--
``(A)(i) reauthorization proposals for each program
or activity that has not been in compliance for 3 or
more consecutive fiscal years; and
``(ii) proposed statutory changes necessary to
bring the program or activity into compliance; or
``(B) if the head of the executive agency
determines that clauses (i) and (ii) of subparagraph
(A) will not bring the program or activity into
compliance, a description of the actions that the
executive agency is undertaking to bring the program or
activity into compliance and a timeline of when the
compliance will be achieved.
``(4) Plan and timeline for compliance.--If an executive
agency is determined by the Inspector General of that executive
agency not to be in compliance under subsection (a) for 4 or
more consecutive fiscal years for the same program or activity,
the head of the executive agency shall, not later than 30 days
after such determination, submit to the appropriate authorizing
and appropriations committees of Congress a report that
includes--
``(A) the activities taken to comply with the
requirements for 1, 2, 3, 4, or more years of
noncompliance;
``(B) a description of any requirements that were
fulfilled for 1, 2, or 3 consecutive years of
noncompliance that are still relevant and being pursued
as a means to bring the program or activity into
compliance and prevent and reduce improper payments;
``(C) a description of any new corrective actions;
and
``(D) a timeline for when the program or activity
will achieve compliance based on the actions described
within the report.
``(5) Annual report.--Each executive agency shall submit to
the appropriate authorizing and appropriations committees of
Congress and the Comptroller General of the United States--
``(A) a list of each program or activity that was
determined to not be in compliance under paragraph (1),
(2), (3), or (4); and
``(B) actions that are planned to bring the program
or activity into compliance.
``(c) Compliance Enforcement Pilot Programs.--The Director of the
Office of Management and Budget may establish 1 or more pilot programs
that shall test potential accountability mechanisms with appropriate
incentives and consequences tied to success in ensuring compliance with
this section and eliminating improper payments.
``(d) Improved Estimates Guidance.--The guidance required to be
provided under section 3(b) of the Improper Payments Elimination and
Recovery Improvement Act of 2012, as in effect on the day before the
date of enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) may be modified as determined appropriate by the
Director of the Office of Management and Budget.
``Sec. 3354. Do Not Pay Initiative
``(a) Prepayment and Preaward Procedures.--
``(1) In general.--Each executive agency shall review
prepayment and preaward procedures and ensure that a thorough
review of available databases with relevant information on
eligibility occurs to determine program or award eligibility
and prevent improper payments before the release of any Federal
funds.
``(2) Databases.--At a minimum and before issuing any
payment and award, each executive agency shall review as
appropriate the following databases to verify eligibility of
the payment and award:
``(A) The death records maintained by the
Commissioner of Social Security.
``(B) The System for Award Management Exclusion
Records, formerly known as the Excluded Parties List
System, of the General Services Administration.
``(C) The Debt Check Database of the Department of
the Treasury.
``(D) The Credit Alert System or Credit Alert
Interactive Voice Response System of the Department of
Housing and Urban Development.
``(E) The List of Excluded Individuals/Entities of
the Office of Inspector General of the Department of
Health and Human Services.
``(F) Information regarding incarcerated
individuals maintained by the Commissioner of Social
Security under sections 202(x) and 1611(e) of the
Social Security Act (42 U.S.C. 402(x), 1382(e)).
``(b) Do Not Pay Initiative.--
``(1) In general.--There is the Do Not Pay Initiative,
which shall include--
``(A) use of the databases described in subsection
(a)(2); and
``(B) use of other databases designated by the
Director of the Office of Management and Budget, or the
designee of the Director, in consultation with
executive agencies and in accordance with paragraph
(2).
``(2) Other databases.--In making designations of other
databases under paragraph (1)(B), the Director of the Office of
Management and Budget, or the head of any executive agency
designated by the Director, shall--
``(A) consider any database that substantially
assists in preventing improper payments; and
``(B) provide public notice and an opportunity for
comment before designating a database under paragraph
(1)(B).
``(3) Access and review.--
``(A) In general.--For purposes of identifying and
preventing improper payments, each executive agency
shall have access to, and use of, the Do Not Pay
Initiative to verify payment or award eligibility in
accordance with subsection (a).
``(B) Matching programs.--
``(i) In general.--The head of the agency
operating the Working System may, in
consultation with the Office of Management and
Budget, waive the requirements of section
552a(o) of title 5 in any case or class of
cases for computer matching activities
conducted under this section.
``(ii) Guidance.--The Director of the
Office of Management and Budget may issue
guidance that establishes requirements
governing waivers under clause (i).
``(C) Other entities.--Each State and any
contractor, subcontractor, or agent of a State,
including a State auditor or State program responsible
for reducing improper payments of a federally funded
State-administered program, and the judicial and
legislative branches of the United States, as defined
in paragraphs (2) and (3), respectively, of section
202(e) of title 18, shall have access to, and use of,
the Do Not Pay Initiative for the purpose of verifying
payment or award eligibility for payments.
``(D) Consistency with privacy act of 1974.--To
ensure consistency with the principles of section 552a
of title 5 (commonly known as the `Privacy Act of
1974'), the Director of the Office of Management and
Budget may issue guidance that establishes privacy and
other requirements that shall be incorporated into Do
Not Pay Initiative access agreements with States,
including any contractor, subcontractor, or agent of a
State, and the judicial and legislative branches of the
United States, as defined in paragraphs (2) and (3),
respectively, of section 202(e) of title 18.
``(4) Payment otherwise required.--When using the Do Not
Pay Initiative, an executive agency shall recognize that there
may be circumstances under which the law requires a payment or
award to be made to a recipient, regardless of whether that
recipient is identified as potentially ineligible under the Do
Not Pay Initiative.
``(5) Annual report.--The Director of the Office of
Management and Budget shall submit to Congress an annual
report, which may be included as part of another report
submitted to Congress by the Director, regarding the operation
of the Do Not Pay Initiative, which shall--
``(A) include an evaluation of whether the Do Not
Pay Initiative has reduced improper payments or
improper awards; and
``(B) provide the frequency of corrections or
identification of incorrect information.
``(c) Initial Working System.--The working system required to be
established under section 5(d) of the Improper Payments Elimination and
Recovery Improvement Act of 2012, as in effect on the day before the
date of enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) shall require each executive agency to review all
payments and awards for all programs and activities of that
executive agency through the working system.
``(d) Facilitating Data Access by Federal Agencies and Offices of
Inspectors General for Purposes of Program Integrity.--
``(1) Computer matching by executive agencies for purposes
of investigation and prevention of improper payments and
fraud.--
``(A) In general.--Except as provided in this
paragraph, in accordance with section 552a of title 5
(commonly known as the `Privacy Act of 1974'), the head
of each executive agency may enter into computer
matching agreements with other heads of executive
agencies that allow ongoing data matching, which shall
include automated data matching, in order to assist in
the detection and prevention of improper payments.
``(B) Review.--Not later than 60 days after the
date on which a proposal for an agreement under
subparagraph (A) has been presented to a Data Integrity
Board established under section 552a(u) of title 5 for
consideration, the Data Integrity Board shall respond
to the proposal.
``(C) Termination date.--An agreement described in
subparagraph (A)--
``(i) shall have a termination date of less
than 3 years; and
``(ii) during the 3-month period ending on
the date on which the agreement is scheduled to
terminate, may be renewed by the executive
agencies entering the agreement for not more
than 3 years.
``(D) Multiple agencies.--For purposes of this
paragraph, section 552a(o)(1) of title 5 shall be
applied by substituting `between the source agency and
the recipient agency or non-Federal agency or an
agreement governing multiple agencies' for `between the
source agency and the recipient agency or non-Federal
agency' in the matter preceding subparagraph (A).
``(E) Cost-benefit analysis.--A justification under
section 552a(o)(1)(B) of title 5 relating to an
agreement under subparagraph (A) is not required to
contain a specific estimate of any savings under the
computer matching agreement.
``(2) Guidance and procedures by the office of management
and budget.--The guidance, rules, and procedures required to be
issued, clarified, and established under paragraphs (3) and (4)
of section 5(e) of the Improper Payments Elimination and
Recovery Improvement Act of 2012, as in effect on the day
before the date of enactment of this section--
``(A) shall continue to be in effect on and after
the date of enactment of this section; and
``(B) may be modified as determined appropriate by
the Director of the Office of Management and Budget.
``(3) Compliance.--The head of each executive agency, in
consultation with the Inspector General of the executive
agency, shall ensure that any information provided to an
individual or entity under this subsection is provided in
accordance with protocols established under this subsection.
``(4) Rule of construction.--Nothing in this subsection
shall be construed--
``(A) to affect the rights of an individual under
section 552a(p) of title 5; or
``(B) to impede the exercise of an exemption
provided to Inspectors General or by an executive
agency in coordination with an Inspector General under
section 6(j) of the Inspector General Act of 1978 (5
U.S.C. App.).
``(e) Plan To Curb Federal Improper Payments to Deceased
Individuals by Improving the Quality and Use by Federal Agencies of the
Social Security Administration Death Master File and Other Death
Data.--
``(1) Establishment.--In conjunction with the Commissioner
of Social Security and in consultation with relevant
stakeholders that have an interest in or responsibility for
providing the data, and each State, the Director of the Office
of Management and Budget shall conduct a study and update the
plan required to be established under section 5(g) of the
Improper Payments Elimination and Recovery Improvement Act of
2012, as in effect on the day before the date of enactment of
this section, for improving the quality, accuracy, and
timeliness of death data maintained by the Social Security
Administration, including death information reported to the
Commissioner under section 205(r) of the Social Security Act
(42 U.S.C. 405(r)).
``(2) Additional actions under plan.--The plan described in
this subsection shall include recommended actions by executive
agencies to--
``(A) increase the quality and frequency of access
to the Death Master File and other death data;
``(B) achieve a goal of at least daily access as
appropriate;
``(C) provide for all States and other data
providers to use improved and electronic means for
providing data;
``(D) identify improved methods by executive
agencies for determining ineligible payments due to the
death of a recipient through proactive verification
means; and
``(E) address improper payments made by executive
agencies to deceased individuals as part of Federal
retirement programs.
``(3) Report.--Not later than 120 days after the date of
enactment of this section, the Director of the Office of
Management and Budget shall submit a report to Congress on the
plan described in this subsection, including recommended
legislation.
``Sec. 3355. Improving recovery of improper payments
``The Director of the Office of Management and Budget shall
determine--
``(1) current and historical rates and amounts of recovery
of improper payments, or, in cases in which improper payments
are identified solely on the basis of a sample, recovery rates
and amounts estimated on the basis of the applicable sample,
including a list of executive agency recovery audit contract
programs and specific information of amounts and payments
recovered by recovery audit contractors; and
``(2) targets for recovering improper payments, including
specific information on amounts and payments recovered by
recovery audit contractors.
``Sec. 3356. Improving the use of data by executive agencies for
curbing improper payments
``(a) Prompt Reporting of Death Information by the Department of
State and the Department of Defense.--The procedure required to be
established under section 7(a) of the Improper Payments Elimination and
Recovery Improvement Act of 2012, as in effect on the day before the
date of enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) may be modified as determined appropriate by the
Director of the Office of Management and Budget.
``(b) Prompt Reporting of Death Information by the Department of
Veterans Affairs and the Office of Personnel Management.--Not later
than 1 year after the date of enactment of this section, the Secretary
of Veterans Affairs and the Director of the Office of Personnel
Management shall establish a procedure under which the Secretary and
the Director--
``(1) shall promptly and on a regular basis submit
information relating to the deaths of individuals, including
stopped payments data as applicable, to each executive agency
for which the Director of the Office of Management and Budget
determines receiving and using such information would be
relevant and necessary; and
``(2) to facilitate the centralized access of death data
for the use of reducing improper payments, may identify
additional Federal sources of death data and direct the data
owner to provide that data to 1 or more executive agencies for
that purpose.
``(c) Guidance to Executive Agencies Regarding Data Access and Use
for Improper Payments Purposes.--The guidance required to be issued
under section 7(b) of the Improper Payments Elimination and Recovery
Improvement Act of 2012, as in effect on the day before the date of
enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) may be modified as determined appropriate by the
Director of the Office of Management and Budget.
``Sec. 3357. Financial and administrative controls relating to fraud
and improper payments
``(a) Definition.--In this section, the term `agency' has the
meaning given the term in section 551 of title 5.
``(b) Guidelines.--The guidelines required to be established under
section 3(a) of the Fraud Reduction and Data Analytics Act of 2015, as
in effect on the day before the date of enactment of this section--
``(1) shall continue to be in effect on and after the date
of enactment of this section; and
``(2) may be periodically modified by the Director of the
Office of Management and Budget, in consultation with the
Comptroller General of the United States, as the Director and
Comptroller General may determine necessary.
``(c) Requirements for Controls.--The guidelines described in
subsection (b) shall include--
``(1) conducting an evaluation of fraud risks and using a
risk-based approach to design and implement financial and
administrative control activities to mitigate identified fraud
risks;
``(2) collecting and analyzing data from reporting
mechanisms on detected fraud to monitor fraud trends and using
that data and information to continuously improve fraud
prevention controls; and
``(3) using the results of monitoring, evaluation, audits,
and investigations to improve fraud prevention, detection, and
response.
``(d) Report.--For each of fiscal years 2018 and 2019, each agency
shall submit to Congress, as part of the annual financial report of the
agency, a report of the agency on--
``(1) implementing--
``(A) the financial and administrative controls
required to be described in subsection (b);
``(B) the fraud risk principle in the Standards for
Internal Control in the Federal Government published by
the Government Accountability Office (commonly known as
the `Green Book'); and
``(C) Office of Management and Budget Circular A-
123, or any successor thereto, with respect to the
leading practices for managing fraud risk;
``(2) identifying risks and vulnerabilities to fraud,
including with respect to payroll, beneficiary payments,
grants, large contracts, and purchase and travel cards; and
``(3) establishing strategies, procedures, and other steps
to curb fraud.
``Sec. 3358. Interagency working group for Governmentwide payment
integrity improvement
``(a) Working Group.--
``(1) Establishment.--Not later than 90 days after the date
of enactment of this section, there is established an
interagency working group on payment integrity--
``(A) to improve--
``(i) State-administered Federal programs
to determine eligibility processes and data
sharing practices;
``(ii) the guidelines described in section
3357(b) and other best practices and techniques
for detecting, preventing, and responding to
improper payments, including improper payments
that are the result of fraud; and
``(iii) the sharing and development of data
analytics techniques to help prevent and
identify potential improper payments, including
those that are the result of fraud; and
``(B) to identify any additional activities that
will improve payment integrity of Federal programs.
``(2) Composition.--The interagency working group
established under paragraph (1) shall be composed of--
``(A) the Director of the Office of Management and
Budget;
``(B) 1 representative from each of the agencies
described in paragraphs (1) and (2) of section 901(b)
of this title; and
``(C) any other representatives of other executive
agencies determined appropriate by the Director of the
Office of Management and Budget, which may include the
Chief Information Officer, the Chief Procurement
Officer, the Chief Risk Officer, or the Chief Operating
Officer of an executive agency.
``(b) Consultation.--The working group established under subsection
(a)(1) may consult with Offices of Inspectors General and Federal and
non-Federal experts on fraud risk assessments, administrative controls
over payment integrity, financial controls, and other relevant matters.
``(c) Meetings.--The working group established under subsection
(a)(1) shall hold not fewer than 4 meetings per year.
``(d) Report.--Not later than 240 days after the date of enactment
of this section, the working group established under subsection (a)(1)
shall submit to Congress a report that includes--
``(1) a plan containing tangible solutions to prevent and
reduce improper payments; and
``(2) a plan for State agencies to work with Federal
agencies to regularly review lists of beneficiaries of State-
managed Federal programs for duplicate enrollment between
States, including how the Do Not Pay Business Center and the
data analytics initiative of the Department of the Treasury
could aid in the detection of duplicate enrollment.''.
(b) Technical and Conforming Amendment.--The table of sections for
chapter 33 of title 31, United States Code, is amended by adding at the
end the following:
``subchapter iv--improper payments
``3351. Definitions.
``3352. Estimates of improper payments and reports on actions to reduce
improper payments.
``3353. Compliance.
``3354. Do Not Pay Initiative.
``3355. Improving recovery of improper payments.
``3356. Improving the use of data by executive agencies for curbing
improper payments.
``3357. Financial and administrative controls relating to fraud and
improper payments.
``3358. Interagency working group for Governmentwide payment integrity
improvement.''.
SEC. 3. REPEALS.
(a) In General.--
(1) Improper payments information act of 2002.--The
Improper Payments Information Act of 2002 (31 U.S.C. 3321 note)
is repealed.
(2) Improper payments elimination and recovery act of
2010.--The Improper Payments Elimination and Recovery Act of
2010 (Public Law 114-204; 124 Stat. 2224) is repealed.
(3) Improper payments elimination and recovery improvement
act of 2012.--The Improper Payments Elimination and Recovery
Improvement Act of 2012 (31 U.S.C. 3321 note) is repealed.
(4) Fraud reduction and data analytics act of 2015.--The
Fraud Reduction and Data Analytics Act of 2015 (31 U.S.C. 3321
note) is repealed.
(b) Technical and Conforming Amendments.--
(1) Government charge card abuse prevention act of 2012.--
Section 6(a) of the Government Charge Card Abuse Prevention Act
of 2012 (5 U.S.C. 5701 note) is amended by striking ``section
3512 of title 31, United States Code, or in the Improper
Payments Information Act of 2002 (31 U.S.C. 3321 note)'' and
inserting ``section 3512 or subchapter IV of chapter 33 of
title 31, United States Code''.
(2) Homeland security act of 2002.--Section 2022(a) of the
Homeland Security Act of 2002 (6 U.S.C. 612(a)) is amended--
(A) in paragraph (1)(C), by striking ``Consistent
with the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note)'' and inserting ``Consistent with
subchapter IV of chapter 33 of title 31, United States
Code''; and
(B) in paragraph (5), by striking ``section 2(h) of
the Improper Payments Elimination and Recovery Act of
2010 (31 U.S.C. 3321 note)'' and inserting ``section
3352(i) of title 31, United States Code,''.
(3) Social security act.--Section 2105 of the Social
Security Act (42 U.S.C. 1397ee(c)) is amended by striking
``Improper Payments Information Act of 2002'' each place that
term appears and inserting ``subchapter IV of chapter 33 of
title 31, United States Code''.
(4) Title 31.--Section 3562(a) of title 31, United States
Code, is amended, in the matter preceding paragraph (1)--
(A) by striking ``section 3561'' and inserting
``section 3352(i)''; and
(B) by striking ``agency for the following
purposes:'' and all that follows through ``To
reimburse'' and inserting ``agency to reimburse''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Committee on Homeland Security and Governmental Affairs. Ordered to be reported without amendment favorably.
Committee on Homeland Security and Governmental Affairs. Reported by Senator Johnson with amendments. With written report No. 115-445.
Committee on Homeland Security and Governmental Affairs. Reported by Senator Johnson with amendments. With written report No. 115-445.
Placed on Senate Legislative Calendar under General Orders. Calendar No. 736.
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