[116th Congress Public Law 117]
[From the U.S. Government Publishing Office]
[[Page 134 STAT. 113]]
Public Law 116-117
116th Congress
An Act
To improve efforts to identify and reduce Governmentwide improper
payments, and for other purposes. <<NOTE: Mar. 2, 2020 - [S. 375]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Payment
Integrity Information Act of 2019. 31 USC 3301 note.>>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Payment Integrity Information Act of
2019''.
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 <<NOTE: 31 USC 3351 prec.>> IV--Improper Payments
``Sec. 3351. <<NOTE: 31 USC 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
[[Page 134 STAT. 114]]
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. <<NOTE: 31 USC 3352.>> Estimates of improper
payments and reports on actions to reduce
improper payments
``(a) Identification of Susceptible Programs and Activities.--
``(1) <<NOTE: Guidance.>> 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) <<NOTE: Review.>> 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.
[[Page 134 STAT. 115]]
``(2) <<NOTE: Time period.>> 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.--In 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
[[Page 134 STAT. 116]]
Accountability Office (commonly known as the
`Green Book').
``(C) <<NOTE: Lists.>> 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) <<NOTE: Time period.>> In general.--The Director of
the Office of Management and Budget shall on an annual basis--
``(A) <<NOTE: Lists.>> 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) <<NOTE: Coordination.>> 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) <<NOTE: Time period. Public information. Web
posting.>> 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.
[[Page 134 STAT. 117]]
``(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) <<NOTE: Review.>> 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
under 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
[[Page 134 STAT. 118]]
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
as described in 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 local governments 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 improper payments;
``(2) the amounts recovered, outstanding, and determined to
not be collectable, including the percent those amounts
represent of the total improper payments of the executive
agency;
``(3) <<NOTE: Determination.>> if a determination has been
made that certain improper payments are not collectable, a
justification of that determination;
``(4) an aging schedule of the amounts outstanding;
[[Page 134 STAT. 119]]
``(5) <<NOTE: Summary.>> 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) <<NOTE: Determination.>> 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 improper payments to--
``(A) the Committee on Homeland Security and
Governmental Affairs of the Senate;
``(B) the Committee on Oversight and 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) <<NOTE: Summary.>> 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) <<NOTE: Estimate.>> 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) <<NOTE: Deadline.>> 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) <<NOTE: Extension.>> shall continue to be in effect
on and after the date of enactment of this section; and
[[Page 134 STAT. 120]]
``(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) <<NOTE: Reports.>> 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) <<NOTE: Recommenda- tions.>>
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) <<NOTE: Notification.>>
notify the executive agency of any
overpayments identified by the
contractor pertaining to the executive
agency or to any other executive
[[Page 134 STAT. 121]]
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) <<NOTE: Determination.>> 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--
[[Page 134 STAT. 122]]
``(I) in the case of recoveries of
overpayments that are made from a trust
or special fund account, shall revert to
that account; and
``(II) in the case of other
recoveries of overpayments--
``(aa) for 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; and
``(bb) for other amounts,
shall be newly available for the
same time period as the funds
were originally available for
obligation.
``(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) <<NOTE: Applicability.>> 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) <<NOTE: Regulations.>> 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
[[Page 134 STAT. 123]]
``(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. <<NOTE: 31 USC 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) <<NOTE: Determination.>> 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 Reform
of the House of Representatives; and
``(iv) the Comptroller General of the United
States.
``(2) <<NOTE: Public information.>> 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) <<NOTE: Deadline. Consultation. Evaluations.>> 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
[[Page 134 STAT. 124]]
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) <<NOTE: Deadline. Procedures.>> 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) <<NOTE: Determination.>> to make the
determinations consistent regarding compliance; and
``(B) <<NOTE: Evaluation. Compliance.>> 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) <<NOTE: Determination. Plan.>> 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
[[Page 134 STAT. 125]]
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) <<NOTE: Determination. Proposal.>> 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) <<NOTE: Determination.>> In general.--
If the Director of the Office of Management and
Budget determines that additional funding would
help an executive agency described in subparagraph
(A) 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) <<NOTE: Determination. Deadline.>> 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
[[Page 134 STAT. 126]]
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) <<NOTE: Deadline. Report.>> 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) <<NOTE: Lists.>> 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) <<NOTE: Extension.>> 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. <<NOTE: 31 USC 3354.>> Do Not Pay Initiative
``(a) Prepayment and Preaward Procedures.--
[[Page 134 STAT. 127]]
``(1) <<NOTE: Review.>> 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) <<NOTE: Review.>> Databases.--At a minimum and before
issuing any payment or 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) <<NOTE: Consultation.>> 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) <<NOTE: Public information.>> 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) <<NOTE: Consultation. Waiver
authority.>> 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.
[[Page 134 STAT. 128]]
``(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) <<NOTE: Guidance.>> 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) <<NOTE: Evaluation.>> 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) <<NOTE: Extension.>> shall continue to be in effect
on and after the date of enactment of this section; and
``(2) <<NOTE: Requirements. Review.>> 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
[[Page 134 STAT. 129]]
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) <<NOTE: Deadline.>> 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) <<NOTE: Applicability.>> 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) <<NOTE: Extension.>> 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) <<NOTE: Consultation.>> 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
[[Page 134 STAT. 130]]
Agencies of the Social Security Administration Death Master File and
Other Death Data.--
``(1) <<NOTE: Consultation. Study.>> 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) <<NOTE: Recommenda- tions.>> 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. <<NOTE: 31 USC 3355.>> Improving recovery of
improper payments
``The <<NOTE: Determinations.>> 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. <<NOTE: 31 USC 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
[[Page 134 STAT. 131]]
of 2012, as in effect on the day before the date of enactment of this
section--
``(1) <<NOTE: Extension.>> 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) <<NOTE: Extension.>> 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. <<NOTE: 31 USC 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) <<NOTE: Extension.>> shall continue to be in effect
on and after the date of enactment of this section; and
``(2) <<NOTE: Consultation.>> 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) <<NOTE: Evaluation.>> 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) <<NOTE: Data.>> 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
[[Page 134 STAT. 132]]
``(3) using the results of monitoring, evaluation, audits,
and investigations to improve fraud prevention, detection, and
response.
``(d) Report.--For each of fiscal years 2019 and 2020, 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
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. <<NOTE: 31 USC 3358.>> Interagency working group for
Governmentwide payment integrity improvement
``(a) Working Group.--
``(1) <<NOTE: Deadline.>> 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) <<NOTE: Data.>> 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) <<NOTE: Assessment.>> Consultation.--The working group
established under subsection (a)(1) may consult with Offices of
Inspectors General and
[[Page 134 STAT. 133]]
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) <<NOTE: Plans.>> 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 <<NOTE: 31 USC 3301 prec.>> 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 <<NOTE: 31 USC 3301 note, 3321 notes.>> (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--
[[Page 134 STAT. 134]]
(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--
(A) in the matter preceding paragraph (1)--
(i) by striking ``section 3561'' and inserting
``section 3352(i)''; and
(ii) by striking ``agency for the following
purposes:'' and all that follows through ``To
reimburse'' and inserting ``agency to reimburse'';
and
(B) by striking paragraph (2).
Approved March 2, 2020.
LEGISLATIVE HISTORY--S. 375:
---------------------------------------------------------------------------
SENATE REPORTS: No. 116-35 (Comm. on Homeland Security and Governmental
Affairs).
CONGRESSIONAL RECORD:
Vol. 165 (2019):
July 16, considered and passed
Senate.
Vol. 166 (2020):
Feb. 5, considered and passed House.
<all>