[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1409 Referred in House (RFH)]
112th CONGRESS
2d Session
S. 1409
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 2, 2012
Referred to the Committee on Oversight and Government Reform
_______________________________________________________________________
AN ACT
To intensify efforts to identify, prevent, and recover payment error,
waste, fraud, and abuse within Federal spending.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improper Payments Elimination and
Recovery Improvement Act of 2012''.
SEC. 2. DEFINITIONS.
In this Act--
(1) the term ``agency'' means an executive agency as that
term is defined under section 102 of title 31, United States
Code; and
(2) the term ``improper payment'' has the meaning given
that term in section 2(g) of the Improper Payments Information
Act of 2002 (31 U.S.C. 3321 note), as redesignated by section
3(a)(1) of this Act.
SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY FEDERAL
AGENCIES.
(a) In General.--Section 2 of the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note) is amended--
(1) by redesignating subsections (b) through (g) as
subsections (c) through (h), respectively;
(2) by inserting after subsection (a) the following:
``(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 agency responsible
for administering the high-priority program, establish
annual targets and semi-annual or quarterly actions for
reducing improper payments associated with each 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
agency with a program identified under paragraph (1)(A)
on an annual basis shall submit to the Inspector
General of that agency, and make available to the
public (including availability through the Internet), a
report on that program.
``(B) Contents.--Each report under this paragraph--
``(i) shall describe--
``(I) any action the agency--
``(aa) has taken or plans
to take to recover improper
payments; and
``(bb) intends to take to
prevent future improper
payments; and
``(ii) shall not include any referrals the
agency made or anticipates making to the
Department of Justice, or any information
provided in connection with such referrals.
``(C) Public availability on central website.--The
Office of Management and Budget shall make each report
submitted under this paragraph 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 agency that submits a report
under this paragraph shall, for each program of the
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 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 Congress recommendations,
which may be included in another report
submitted by the Inspector General to Congress,
for modifying any plans of the agency relating
to the program, including improvements for
improper payments determination and estimation
methodology.'';
(3) in subsection (d) (as redesignated by paragraph (1) of
this subsection), by striking ``subsection (b)'' each place
that term appears and inserting ``subsection (c)'';
(4) in subsection (e) (as redesignated by paragraph (1) of
this subsection), by striking ``subsection (b)'' and inserting
``subsection (c)''; and
(5) in subsection (g)(3) (as redesignated by paragraph (1)
of this subsection), by inserting ``or a Federal employee''
after ``non-Federal person or entity''.
(b) Improved Estimates.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Director of the Office of Management
and Budget shall provide guidance to agencies for improving the
estimates of improper payments under the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note).
(2) Guidance.--Guidance under this subsection shall--
(A) strengthen the estimation process of agencies
by setting standards for agencies to follow in
determining the underlying validity of sampled payments
to ensure amounts being billed are proper; and
(B) instruct agencies to give the persons or
entities performing improper payments estimates access
to all necessary payment data, including access to
relevant documentation;
(C) explicitly bar agencies from relying on self-
reporting by the recipients of agency payments as the
sole source basis for improper payments estimates;
(D) require agencies to include all identified
improper payments in the reported estimate, regardless
of whether the improper payment in question has been or
is being recovered;
(E) include payments to employees, including
salary, locality pay, travel pay, purchase card use,
and other employee payments, as subject to risk
assessment and, where appropriate, improper payment
estimation; and
(F) require agencies to tailor their corrective
actions for the high-priority programs identified under
section 2(b)(1)(A) of the Improper Payments Information
Act of 2002 (31 U.S.C. 3321 note) to better reflect the
unique processes, procedures, and risks involved in
each specific program.
(c) Technical and Conforming Amendments.--The Improper Payments
Elimination and Recovery Act of 2010 (Public Law 111-204; 124 Stat.
2224) is amended--
(1) in section 2(h)(1) (31 U.S.C. 3321 note), by striking
``section 2(f)'' and all that follows and inserting ``section
2(g) of the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note).''; and
(2) in section 3(a) (31 U.S.C. 3321 note)--
(A) in paragraph (1), by striking ``section 2(f)''
and all that follows and inserting ``section 2(g) of
the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note).''; and
(B) in paragraph (3)--
(i) by striking ``section 2(b)'' each place
it appears and inserting ``section 2(c)''; and
(ii) by striking ``section 2(c)'' each
place it appears and inserting ``section
2(d)''.
SEC. 4. IMPROPER PAYMENTS INFORMATION.
Section 2(a)(3)(A)(ii) of the Improper Payments Information Act of
2002 (31 U.S.C. 3321 note) is amended by striking ``with respect to
fiscal years following September 30th of a fiscal year beginning before
fiscal year 2013 as determined by the Office of Management and Budget''
and inserting ``with respect to fiscal year 2014 and each fiscal year
thereafter''.
SEC. 5. DO NOT PAY INITIATIVE.
(a) Prepayment and Preaward Procedures.--
(1) In general.--Each 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 agency shall review as appropriate the
following databases to verify eligibility of the payment and
award:
(A) The Death Master File of the Social Security
Administration.
(B) The General Services Administration's Excluded
Parties List System.
(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.
(b) Do Not Pay Initiative.--
(1) Establishment.--There is established the Do Not Pay
Initiative which shall include--
(A) use of the databases described under subsection
(a)(2); and
(B) use of other databases designated by the
Director of the Office of Management and Budget in
consultation with 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 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 by agencies.--For purposes of
identifying and preventing improper payments, each agency shall
have access to, and use of, the Do Not Pay Initiative to verify
payment or award eligibility in accordance with subsection (a)
when the Director of the Office of Management and Budget
determines the Do Not Pay Initiative is appropriately
established for the agency.
(4) Payment otherwise required.--When using the Do Not Pay
Initiative, an 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) Database Integration Plan.--Not later than 60 days after the
date of enactment of this Act, the Director of the Office of Management
and Budget shall provide to the Congress a plan for--
(1) inclusion of other databases on the Do Not Pay
Initiative;
(2) to the extent permitted by law, agency access to the Do
Not Pay Initiative; and
(3) the multilateral data use agreements described under
subsection (e).
(d) Initial Working System.--
(1) Establishment.--Not later than 90 days after the date
of enactment of this Act, the Director of the Office of
Management and Budget shall establish a working system for
prepayment and preaward review that includes the Do Not Pay
Initiative as described under this section.
(2) Working system.--The working system established under
paragraph (1)--
(A) may be located within an appropriate agency;
(B) shall include not less than 3 agencies as users
of the system; and
(C) shall include investigation activities for
fraud and systemic improper payments detection through
analytic technologies and other techniques, which may
include commercial database use or access.
(3) Application to all agencies.--Not later than June 1,
2013, each agency shall review all payments and awards for all
programs of that agency through the system established under
this subsection.
(e) Facilitating Data Access by Federal Agencies and Offices of
Inspectors General for Purposes of Program Integrity.--
(1) Definition.--In this subsection, the term ``Inspector
General'' means an Inspector General described in subparagraph
(A), (B), or (I) of section 11(b)(1) of the Inspector General
Act of 1978 (5 U.S.C. App.).
(2) Computer matching by federal 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,
United States Code (commonly known as the Privacy Act
of 1974), each Inspector General and the head of each
agency may enter into computer matching agreements 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 a
proposal for an agreement under subparagraph (A) has
been presented to a Data Integrity Board established
under section 552a(u) of title 5, United States Code,
for consideration, the Data Integrity Board shall
respond to the proposal.
(C) Termination date.--An agreement under
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 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, United States
Code, 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, United States Code,
relating to an agreement under subparagraph (A) is not
required to contain a specific estimate of any savings
under the computer matching agreement.
(F) Guidance by the office of management and
budget.--Not later than 6 months after the date of
enactment of this Act, and in consultation with the
Council of Inspectors General on Integrity and
Efficiency, the Secretary of Health and Human Services,
the Commissioner of Social Security, and the head of
any other relevant agency, the Director of the Office
of Management and Budget shall--
(i) issue guidance for agencies regarding
implementing this paragraph, which shall
include standards for--
(I) reimbursement of costs, when
necessary, between agencies;
(II) retention and timely
destruction of records in accordance
with section 552a(o)(1)(F) of title 5,
United States Code;
(III) prohibiting duplication and
redisclosure of records in accordance
with section 552a(o)(1)(H) of title 5,
United States Code;
(ii) review the procedures of the Data
Integrity Boards established under section
552a(u) of title 5, United States Code, and
develop new guidance for the Data Integrity
Boards to--
(I) improve the effectiveness and
responsiveness of the Data Integrity
Boards; and
(II) ensure privacy protections in
accordance with section 552a of title
5, United States Code (commonly known
as the Privacy Act of 1974); and
(III) establish standard matching
agreements for use when appropriate;
and
(iii) establish and clarify rules regarding
what constitutes making an agreement entered
under subparagraph (A) available upon request
to the public for purposes of section
552a(o)(2)(A)(ii) of title 5, United States
Code, which shall include requiring publication
of the agreement on a public website.
(G) Corrections.--The Director of the Office of
Management and Budget shall establish procedures
providing for the correction of data in order to
ensure--
(i) compliance with section 552a(p) of
title 5, United States Code; and
(ii) that corrections are made in any Do
Not Pay Initiative database and in any relevant
source databases designated by the Director of
the Office of Management and Budget under
subsection (b)(1).
(H) Compliance.--The head of each agency, in
consultation with the Inspector General of the 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.
(I) Rule of construction.--Nothing in this
subsection shall be construed to affect the rights of
an individual under section 552a(p) of title 5, United
States Code.
(f) Development and Access to a Database of Incarcerated
Individuals.--Not later than 1 year after the date of enactment of this
Act, the Attorney General shall submit to Congress recommendations for
increasing the use of, access to, and the technical feasibility of
using data on the Federal, State, and local conviction and
incarceration status of individuals for purposes of identifying and
preventing improper payments by Federal agencies and programs and
fraud.
(g) 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.--
(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 the States, the Director of the Office of Management
and Budget shall establish a plan 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 established
under this subsection shall include recommended actions by
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 agencies for
determining ineligible payments due to the death of a
recipient through proactive verification means; and
(E) address improper payments made by agencies to
deceased individuals as part of Federal retirement
programs.
(3) Report.--Not later than 120 days after the date of
enactment of this Act, the Director of the Office of Management
and Budget shall submit a report to Congress on the plan
established under this subsection, including recommended
legislation.
SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.
(a) Definition.--In this section, the term ``recovery audit'' means
a recovery audit described under section 2(h) of the Improper Payments
Elimination and Recovery Act of 2010.
(b) Review.--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 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.
Passed the Senate August 1, 2012.
Attest:
NANCY ERICKSON,
Secretary.