[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 375 Enrolled Bill (ENR)]
S.375
One Hundred Sixteenth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Friday,
the third day of January, two thousand and twenty
An Act
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
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 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.--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
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 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 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) 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;
``(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 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) 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--
``(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) 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 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 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) 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
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) 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 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. 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--
(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).
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.