HR 4053 IH
H. R. 4053
To intensify efforts to identify, prevent, and recover payment error, waste, fraud, and abuse within Federal spending.
IN THE HOUSE OF REPRESENTATIVES
February 16, 2012
February 16, 2012
Mr. TOWNS (for himself, Mr. PLATTS, Mr. SCHRADER, Mr. CONNOLLY of Virginia, Mr. ALTMIRE, Mr. BARROW, Mr. BISHOP of Georgia, Mr. BOREN, Mr. BOSWELL, Mr. CARDOZA, Mr. COOPER, Mr. DONNELLY of Indiana, Mr. HOLDEN, Mr. MATHESON, Mr. MCINTYRE, Mr. MICHAUD, Mr. PETERSON, Mr. ROSS of Arkansas, Mr. DAVID SCOTT of Georgia, Mr. SHULER, and Mr. THOMPSON of California) introduced the following bill; which was referred to the Committee on Oversight and Government Reform
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. DEFINITION.
In this Act, the term ‘agency’ means an executive agency as that term is defined under section 102 of title 31, United States Code.
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 frequency 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--
‘(I) the assessment of the level of risk associated with the applicable program, and the quality of the improper payment estimates and methodology of the agency; and
‘(II) the oversight or financial controls to identify and prevent improper payments; and
‘(ii) provide recommendations, for modifying any plans of the agency, 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)’; and
(4) in subsection (e) (as redesignated by paragraph (1) of this subsection), by striking ‘subsection (b)’ and inserting ‘subsection (c)’.
(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.
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 consist of--
(A) the databases described under subsection (a)(2); and
(B) any other database designated by the Director of the Office of Management and Budget in consultation with agencies.
(2) OTHER DATABASES- In making designations of other databases under paragraph (1)(B), the Director of the Office of Management and Budget shall consider any database that assists in preventing improper payments.
(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 determine payment or award eligibility 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 on the Do Not Pay Initiative.
(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 January 1, 2013, each agency shall review all payments and awards for all programs of that agency through the system established under this subsection.
(e) Multilateral Data Use Agreements-
(1) IN GENERAL- Not later than 60 days after the date of enactment of this Act, the Director of the Office of Management and Budget shall develop a plan to establish a multilateral data use agreement authority to carry out this section, including access to databases such as the New Hire Database under section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
(2) PRIVACY ACT MATCHING AGREEMENTS- Section 552a(o)(1) of title 5, United States Code, is amended in the matter preceding subparagraph (A), by inserting ‘or an agreement governing multiple agencies’ before ‘specifying’.
(3) GENERAL PROTOCOLS AND SECURITY-
(A) IN GENERAL- In developing the multilateral data use agreements, the Director of the Office of Management and Budget shall establish implementing regulations and guidelines that include streamlined interagency processes to ensure agency access to data, and provide for appropriate transfer and storage of any transferred data, in a manner consistent with relevant privacy, security, and disclosure laws.
(B) CONSULTATION- The Director of the Office of Management and Budget shall consult with--
(i) the Council of Inspectors General on Integrity and Efficiency before implementing this paragraph; and
(ii) the Secretary of Health and Human Services, the Social Security Administrator, and the head of any other agency, as appropriate.
(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) In General- 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 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.
(c) Recovery Audit Contractor Programs-
(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 plan for no less than 10 Recovery Audit Contracting programs for the purpose of identifying and recovering overpayments and underpayments in 10 agencies.
(2) RANGE OF RECOVERY AUDIT CONTRACTING TYPES- Programs established under paragraph (1) shall be representative of different types of--
(A) programs, including programs that differ in size, payment types, and recipient types (such as beneficiaries and vendors or contractors) across the Federal Government; and
(B) recover audit contracting (including individual payments review and demographic analysis).
(3) INITIAL OPERATION OF PROGRAMS- Not later than 1 year after the plan under paragraph (1) is established, each applicable agency shall establish the programs included in that plan which shall be conducted for not more than a 3-year period.
(A) IN GENERAL- Not later than 2 years after establishing a program under the plan established under paragraph (1), the head of the agency conducting the program shall submit a report on the program to Congress.
(B) CONTENTS- Each report under this paragraph shall include--
(i) a description of the impact of the program on savings and recoveries; and
(ii) such recommendations as the head of the agency considers appropriate on extending or expanding the program.