109 HR 6378 IH: September 11th Lessons Learned in Preventing Waste, Fraud, and Abuse Implementation Act of 2006 U.S. House of Representatives 2006-12-06 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 2d Session H. R. 6378 IN THE HOUSE OF REPRESENTATIVES December 6, 2006 Mr. Rogers of Alabama (for himself, Mr. Meek of Florida, Mr. King of New York, Mr. Thompson of Mississippi, Mr. Pascrell, Mr. McCaul of Texas, Mr. Pearce, Mr. Souder, Ms. Jackson-Lee of Texas, Mr. Jindal, and Ms. Harris) introduced the following bill; which was referred to the Committee on Homeland Security, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Homeland Security Act of 2002 to direct the Secretary of Homeland Security to ensure all agencies of the Department of Homeland Security that administer Federal assistance develop and maintain proper internal management controls to prevent and detect waste, fraud, and abuse, and for other purposes.

1.

Short title

This Act may be cited as the September 11th Lessons Learned in Preventing Waste, Fraud, and Abuse Implementation Act of 2006.

2.

Findings

The Congress finds the following: (1)A number of allegations have been raised publicly regarding the waste, fraud, abuse, and lax management of Federal assistance funds provided to help New York City respond to and recover from the terrorist attacks of September 11, 2001. (2)In order to review these allegations, House of Representatives Committee on Homeland Security Chairman Peter T. King of New York requested an examination by the Homeland Security Subcommittee on Management, Integration, and Oversight. (3)Under the leadership of the Homeland Security Subcommittee on Management, Integration, and Oversight Chairman Mike Rogers of Alabama and Ranking Member Kendrick B. Meek of Florida, the Subcommittee conducted a six-month bipartisan review, including a retrospective examination of funding already expended on initial response and recovery, and a prospective review of fraud controls in place for the balance of funding to be used on rebuilding Lower Manhattan’s infrastructure. (4)As part of its review, the Subcommittee held a series of three hearings focusing on Response, Recovery, and Rebuilding on July 12 through 13, 2006. Committee Members received testimony from senior Federal officials, Inspectors General, State and city development agencies, local investigators, private integrity monitors, Federal and local prosecutors, the American Red Cross, community advocates, and a victims’ organization. (5)The Subcommittee submitted a report of its findings to the Committee on Homeland Security in August 2006 for official publication. (6)This Act reflects the lessons learned through the Subcommittee’s examination of the administration of Federal financial assistance to New York to respond to and recover from the terrorist attacks of September 11, 2001. (7)This Act includes disaster assistance reforms that will significantly contribute to controlling fraud and saving taxpayers’ dollars in the future.

3.

Waste, fraud, and abuse controls

(a)

In general

Title VII of the Homeland Security Act of 2002 (6 U.S.C. 341 et seq.) is amended— (1)by inserting before section 701 the following: A

General Provisions

; and (2)by adding at the end the following: B

Waste, Fraud, and Abuse Controls

721.

Requirement to establish fraud controls

(a)

In general

The Secretary shall take such actions as are necessary to ensure that— (1)all agencies of the Department administering Federal assistance to respond to acts of terrorism, natural disasters, or other emergencies shall develop and maintain proper internal management controls to detect, prevent, and deter waste, fraud, and abuse; (2)databases used by the Department to collect information on eligible recipients of such Federal assistance must be integrated with disbursement and payment records; and (3)such integration is designed to identify ineligible applications. (b)

Audits and reviews required

Not later than one year after the date of enactment of this section, the Inspector General of the Department shall review each relevant database for Federal assistance programs administered by the Department in effect on the date of the enactment of this section to assess the implementation of the internal controls required under this section. The Inspector General of the Department shall immediately report to Congress each recommendation or finding under this subsection. (c)

Certification required

The Secretary shall certify to Congress on a biennial basis that internal controls required under this section are in place and operational. The first such certification shall be made within 90 days after the date of enactment of this section.

722.

Enhanced accountability for Federal assistance

(a)

Recipients of Federal Assistance

Each State, local, tribal, and non-profit entity that receives Federal assistance funds in response to an act of terrorism, natural disaster, or other emergency shall report to the disbursing Federal agency six months after the initial disbursement of resources and every six months thereafter regarding the expenditure of such funds. (b)

Contents

The report shall include a description of— (1)each project or program that received Federal assistance; (2)the entity administering the program or project; and (3)the dates and amounts disbursed, allocated, and expended.

723.

Utilization of Private Integrity Monitors

(a)

In general

The Secretary may utilize Private Integrity Monitors to monitor and provide greater accountability for Department of Homeland Security contracts using Federal funding provided in response to a major disaster, act of terrorism, or other emergency, including contracts for debris removal and the repair or reconstruction of damaged infrastructure. (b)

Reporting

The Private Integrity Monitor shall submit periodic reports to the Secretary and the Inspector General of the Department, as determined by the Secretary. (c)

Private Integrity Monitor defined

In this section the term “Private Integrity Monitor” means an independent, private sector firm with specialized legal, auditing, investigative, and loss prevention expertise necessary to ensure compliance with relevant laws and regulations to detect, prevent, and deter waste, fraud, and abuse by a contractor or subcontractor.

724.

Fraud prevention training program

(a)

Training program required

The Secretary shall develop and implement a program to provide training on the detection and prevention of waste, fraud, and abuse of Federal assistance funds and services during the response to or recovery from acts of terrorism, natural disasters, or other emergencies. (b)

Individuals eligible for training

Under the training program required under subsection (a), the Secretary shall provide training to— (1)employees and contractors of the Department; (2)employees, contractors, and volunteers of any State, local, or tribal government entity; and (3)employees, contractors, and volunteers of non-profit organizations that assist in the administration of Federal assistance funds and services provided in response to acts of terrorism, natural disasters, or other national emergencies.

725.

Confirmation of identity and eligibility of applicants

(a)

In general

Any Federal, State, local, or tribal agency that disburses Federal grants, loans, services, and other assistance in response to or for the recovery from acts of terrorism, natural disasters, or other emergencies, shall make reasonable efforts to confirm the identity and eligibility of the applicant for such assistance without placing undue burden on the applicant. (b)

Information sharing

Any State, local, or tribal government entity or non-profit entity that administers Federal assistance funds or services to individuals affected by acts of terrorism, natural disasters, or other emergencies shall share information with the Department for purposes of making eligibility determinations, disseminating benefits, connecting families, locating missing persons, and preventing waste, fraud, and abuse, in a manner consistent with Federal protections under section 552a of title 5, United States Code, popularly known as the Privacy Act of 1974, about any recipient of such assistance, as necessary. (c)

Enhanced Information Sharing between Federal, State, Local, Tribal and Nonprofit Organizations in the Disbursement of Federal Assistance Funds

The Secretary shall ease the burden for individuals in need of assistance due to acts of terrorism, natural disasters, or other Federal emergencies and enhance accountability by initiating a single application for assistance that can be shared among agencies providing assistance. The single application shall include clear language on, and acknowledgment by the applicant of, the penalties for providing false statements under section 1001 of title 18, United States Code, to ensure veracity of information provided. The Secretary shall maintain the information collected in a database to enable data-matching for eligibility determination and avoidance of duplicative payments.

726.

Oversight of loan applicant eligibility

(a)

Lender documentation of applicant eligibility

The Administrator of the Small Business Administration, in carrying out any loan program of the Administration to help individuals and businesses recover from a terrorist attack, natural disaster, or other emergency, shall ensure that each lender participating in the program— (1)collects, verifies, and maintains information regarding the eligibility of each loan applicant; and (2)produces such information whenever the Administrator so requests. (b)

Oversight required

The Administrator, in carrying out the loan programs referred to in subsection (a), shall conduct oversight of lenders participating in those programs to ensure that each recipient of a loan under such a program is in fact eligible for that loan, as provided under law and under the regulations and guidelines of the Administration. The oversight required by this subsection shall include audits and document reviews, and may include any other means that the Administrator considers appropriate.

727.

Determining small business for eligibility purposes

The head of any Federal agency, in carrying out any program of that agency to help individuals and businesses recover from a terrorist attack, natural disaster, or other emergency, shall, to the extent the purpose of the program is to help small businesses, ensure that the determination whether an individual or business is considered a small business is made under the regulations and guidelines of the Small Business Administration.

728.

Assessment of judicial needs

The Secretary shall encourage local communities to assess the financial and resource needs of the community to prosecute cases of fraud and provide necessary legal services in advance of an act of terrorism, natural disaster, or other emergency.

729.

Strengthening the contract review process

(a)

Information regarding contract performance

Before awarding, renewing, or extending a contract, including those awarded to a contractor that has previously provided or currently provides goods or services to the Department, the Secretary, acting through the appropriate contracting officer or officers of the Department, shall require the contractor to submit information regarding the contractor’s past and current performance of Federal, State, and local government and private sector contracts. The information shall include— (1)reviews of the contractor’s performance on Federal, State, local, or tribal government contracts during the 3-year period preceding the submission by the contractor of an offer for the contract concerned; (2)decisions by any procurement entity to terminate a contract with the contractor; and (3)decisions evincing a refusal during such period to exercise a renewal option with the contractor. (b)

Contact of Relevant Officials

As part of any review of a contractor’s past performance conducted under subsection (a), the Secretary, acting through an appropriate contracting officer of the Department, shall contact the relevant office that administered or oversaw any contract performed by that contractor during the 3-year period preceding the date on which the review begins. (c)

Consideration of Contractor Past Performance

In awarding a contract to a contractor, the Secretary shall require the past performance of that contractor, based on the review conducted under subsection (a), be a factor in the decision to award the contract concerned.

730.

Small business database for Federal contracting related to major disasters and emergency assistance activities

(a)

Establishment of database

The Secretary shall establish and maintain a database that contains information about small business entities for purposes of Federal contracting related to assistance activities conducted in response to and recovery from acts of terrorism, natural disasters, and other emergencies. (b)

Included information

The database under subsection (a) shall include the following information about each small business entity included in the database: (1)The name of the small business entity. (2)The location of the small business entity. (3)The area served by the small business entity. (4)The type of good or service provided by the small business entity. (5)Whether the small business entity is— (A)a small business entity owned and controlled by socially and economically disadvantaged individuals; (B)a small business entity owned and controlled by women; or (C)a small business entity owned and controlled by service-disabled veterans. (c)

Source of information

(1)

Submission

The database may only contain such information about a small business entity as is submitted by the small business entity or added by the Department. (2)

Attestation

Each small business entity submitting information to the database shall submit— (A)an attestation that the information submitted is true; and (B)documentation supporting such attestation. (3)

Verification

The Secretary shall verify only that the documentation submitted by each small business entity supports the information submitted by that small business entity. (d)

Availability of database

The Secretary shall make the database generally available on the Internet website of the Department. (e)

Consultation of database

Before awarding a Federal contract for a disaster-related activity, a component of the Department shall consult the database established under this section. (f)

Database integration

The Secretary shall integrate the database established under this section into any other procurement-related database maintained by the Secretary. (g)

Definitions

For purposes of this section, the terms small business entity, small business entity owned and controlled by socially and economically disadvantaged individuals, small business entity owned and controlled by women, and small business entity owned and controlled by service-disabled veterans shall have the meanings given the terms small business concern, small business concern owned and controlled by socially and economically disadvantaged individuals, small business concern owned and controlled by women, and small business concern owned and controlled by service-disabled veterans, respectively, under the Small Business Act (15 U.S.C. 631 et seq.).

731.

Maintaining Federal proprietary rights

The Secretary shall ensure that contracts awarded by the Department, as appropriate, include a clause maintaining proprietary rights to materials produced using Federal funding, including contracts for videos and photographs related to acts of terrorism, natural disasters, or other emergencies.

. (b)

Clerical amendment

The table of contents in section 1(b) of such Act is amended— (1)by inserting before the item relating to section 701 the following: Subtitle A—General Provisions; and (2)by adding at the end of the items relating to title VII the following: Subtitle B—Waste, Fraud, and Abuse Controls Sec. 721. Requirement to establish fraud controls. Sec. 722. Enhanced accountability for Federal assistance. Sec. 723. Utilization of Private Integrity Monitors. Sec. 724. Fraud prevention training program. Sec. 725. Confirmation of identity and eligibility of applicants. Sec. 726. Oversight of loan applicant eligibility. Sec. 727. Determining small business for eligibility purposes. Sec. 728. Assessment of judicial needs. Sec. 729. Strengthening the contract review process. Sec. 730. Small business database for Federal contracting related to major disasters and emergency assistance activities. Sec. 731. Maintaining Federal proprietary rights. .

4.

Deputy Inspector General for response and recovery

(a)

In general

Subtitle B of title VIII of the Homeland Security Act of 2002 is amended by adding at the end the following:

813

Deputy Inspector General for Response and Recovery

(a)

Establishment

There is established the position of Deputy Inspector General for Response and Recovery within the Office of the Inspector General of the Department. (b)

Appointment

The Deputy Inspector General for Response and Recovery shall be appointed— (1)by the Inspector General of the Department; and (2)solely on the basis of integrity and demonstrated ability in auditing, financial analysis, law, management analysis, public administration, or investigations. (c)

Reporting and Status as SES Position

The Deputy Inspector General for Response and Recovery— (1)shall report to, and be under the direct authority and supervision of, the Inspector General; and (2)shall serve as a career member of the Senior Executive Service. (d)

Duties

(1)

Audits and investigations

The Deputy Inspector General for Response and Recovery shall, in coordination with Inspectors General of other Federal departments, as appropriate, conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated or otherwise made available for response to and recovery from an act of terrorism, natural disaster, or other emergency by the Federal Government, and of the programs, operations, and contracts carried out utilizing such funds, including— (A)the oversight and accounting of obligations and expenditures; (B)the monitoring and review of reconstruction activities; (C)the monitoring and review of contracts and grants; (D)the monitoring and review of the transfer of such funds and associated information sharing between and among departments, agencies, and entities of the United States, and private nongovernmental entities; and (E)the maintenance of records on the use of such funds to facilitate future audits and investigations. (2)

Audits of Federal disaster assistance funds

The Deputy Inspector General for Response and Recovery shall conduct regular audits, not less than every six months, of departmental entities administering Federal disaster assistance funds and their disbursements of such funds until the entire amount appropriated to the agency has been disbursed or until the project is completed, whichever is later. (3)

Establishment of a fraud task force

The Deputy Inspector General for Response and Recovery shall establish, as appropriate, a Fraud Task Force to detect, prevent, and deter waste, fraud, and abuse with respect to Federal disaster assistance provided to respond to an act of terrorism, natural disaster, or other emergency. The Deputy Inspector General for Response and Recovery shall coordinate with the Department of Justice, and with other Federal, State, local, and tribal entities, as appropriate, regarding representation on the Fraud Task Force. (4)

Fraud tip line

The Inspector General of the Department shall maintain the Fraud Tip Line of the Department to facilitate the collection of allegations of waste, fraud, and abuse of Federal assistance funds. Immediately after an act of terrorism, natural disaster, or other emergency the Inspector General shall take reasonable steps to expand and publicize the Fraud Tip Line. (5)

Avoidance of duplication

The Inspector General of the Department shall ensure, to the greatest extent possible, that the activities of the Deputy Inspector General for Response and Recovery do not duplicate audits and investigations of Inspectors General and other auditors of Federal departments and agencies, and State and local government entities. (e)

Financial Management Matters

In order to assist the Deputy Inspector General for Response and Recovery in carrying out this section, the heads of all departmental entities receiving or distributing Federal funds to respond to acts of terrorism, natural disasters, or other emergencies shall establish and maintain budgetary procedures to distinguish funds related to response and relief efforts from other agency funds. (f)

Funding

(1)

Authorization of appropriations

There is authorized to be appropriated for operations of the Office of the Deputy Inspector General for Response and Recovery $15,000,000 for each fiscal year. (2)

Transfers of funds

In addition to amounts authorized by paragraph (1), there shall be transferred to the Inspector General not less than 0.005 percent of the first $5,000,000,000 of the amount appropriated for response to or recovery from an act of terrorism, natural disaster, or other emergency, in order to carry out the duties of the Inspector General to audit and execute oversight of such funds, as appropriate. Amounts transferred under this paragraph shall remain available until expended. (3)

Authorization of additional appropriations

If more than $5,000,000,000 is appropriated for response to or recovery from an act of terrorism, natural disaster, or other emergency, there are authorized to be appropriated to the Inspector General such additional sums as may be appropriate to audit and execute oversight of such funds.

. (b)

Clerical Amendment

The table of contents in section 1(b) of such Act is further amended by inserting after the item related to section 812 the following: Sec. 813. Deputy Inspector General for Response and Recovery.. (c)

Deadline for Appointment

The Inspector General of the Department of Homeland Security shall appoint the Deputy Inspector General for Response and Recovery under this section not later than 90 days after the date of enactment of this Act.