[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4053 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                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

   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

_______________________________________________________________________

                                 A BILL


 
 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) review--
                                    ``(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.
            (4) Reports.--
                    (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.
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