[Congressional Record Volume 147, Number 100 (Wednesday, July 18, 2001)]
[Extensions of Remarks]
[Pages E1355-E1356]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF LEGISLATION TO REQUIRE FEDERAL AGENCIES TO IDENTIFY 
           AND RECOVER ERRONEOUS PAYMENTS MADE TO CONTRACTORS

                                 ______
                                 

                            HON. DAN BURTON

                               of indiana

                    in the house of representatives

                        Wednesday, July 18, 2001

  Mr. BURTON of Indiana. Mr. Speaker, today I am introducing the 
``Erroneous Payments Recovery Act of 200l.'' This bill would require 
Federal departments and agencies to use a process called recovery 
auditing to identify and recover overpayments made to government 
contractors.

[[Page E1356]]

  Overpayments occur for a variety of reasons, including duplicate 
payments, pricing errors, missed discounts, and fraud. They are 
payments that should not have been made or that were made for incorrect 
amounts. They are a serious problem. They waste tax dollars and detract 
from the efficiency and effectiveness of Federal operations by 
diverting resources from their intended uses.
  Since most agencies do not identify, estimate and report their 
improper payments, the full extent of the Federal government's 
overpayment problem is unknown. However the General Accounting Office 
has reported that each year the Department of Defense alone overpays 
its contractors by hundreds of millions of dollars.
  My bill would require Federal agencies procuring more than 
$500,000,000 in goods and services each year to carry out recovery 
auditing programs. Agencies could either conduct recovery audits in-
house, or they could use private contractors, whichever is most 
efficient. Part of the money recovered would be used to pay for the 
recovery audits and to credit appropriations accounts from which the 
erroneous payments were made. Amounts recovered would also be used by 
agencies to improve management practices and would be refunded to the 
General Treasury.
  In the last Congress, the Congressional Budget Office estimated that 
the ``Erroneous Payments Recovery Act'' would save taxpayers $100 
million per year by giving agencies the tools and the incentive to 
implement recovery auditing programs to detect mistaken payments. The 
bill passed the House in March of 2000, but it stalled in the Senate 
and didn't make it to the President's desk for his signature before 
Congress adjourned.
  Recovery auditing is an established private sector business practice 
with demonstrated financial returns. It has also been successfully used 
in a few Federal programs. Also, President Bush has identified reducing 
payment errors as one of a series of management reforms to be pursued 
by the Office of Management and Budget.
  The ``Erroneous Payments Recovery Act of 2001'' would expand the 
Federal government's use of recovery auditing to ensure that the 
hundreds of millions of dollars overpaid each year, that would 
otherwise remain undetected, are identified and recovered.
  I urge my colleagues to cosponsor this legislation.

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