[Congressional Record Volume 148, Number 137 (Thursday, October 17, 2002)]
[Senate]
[Page S10752]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                IMPROPER PAYMENTS REDUCTION ACT OF 2002

  Mr. REID. Mr. President, I ask unanimous consent that the Senate 
proceed to the consideration of calendar No. 727, H.R. 4878.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (H.R. 4878) to provide for estimates and reports of 
     improper payments by Federal agencies.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Governmental Affairs, 
with an amendment.
  [Strike the part shown in black brackets and insert the part shown in 
italic.]

                               H.R. 4878

       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 
     Information Act of 2002''.

     [SEC. 2. ESTIMATES OF IMPROPER PAYMENTS AND REPORTS ON 
                   ACTIONS TO REDUCE THEM.

       [(a) Identification of Susceptible Programs and 
     Activities.--The head of each agency shall, in accordance 
     with guidance prescribed by the Director of the Office of 
     Management and Budget, annually review all programs and 
     activities that it administers and identify all such programs 
     and activities that may be susceptible to significant 
     improper payments.
       [(b) Estimation of Improper Payment.--With respect to each 
     program and activity identified under subsection (a), the 
     head of the agency concerned shall--
       [(1) estimate the annual amount of improper payments; and
       [(2) include that estimate in its annual budget submission.
       [(c) Reports on Actions to Reduce Improper Payments.--With 
     respect to any program or activity of an agency with 
     estimated improper payments under subsection (b) that exceed 
     one percent of the total program or activity budget or 
     $1,000,000 annually (whichever is less), the head of the 
     agency shall provide with the estimate under subsection (b) a 
     report on what actions the agency is taking to reduce the 
     improper payments, including--
       [(1) a statement of whether the agency has the information 
     systems and other infrastructure it needs in order to reduce 
     improper payments to minimal cost-effective levels;
       [(2) if the agency does not have such systems and 
     infrastructure, a description of the resources the agency has 
     requested in its budget submission to obtain the necessary 
     information systems and infrastructure; and
       [(3) a description of the steps the agency has taken to 
     ensure that agency managers (including the agency head) are 
     held accountable for reducing improper payments.
       [(d) Definitions.--For the purposes of this section:
       [(1) Agency.--The term ``agency'' means an executive 
     agency, as that term is defined in section 102 of title 31, 
     United States Code.
       [(2) 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 overpayments 
     and underpayments) under statutory, contractual, 
     administrative, or other legally applicable requirements; and
       [(B) includes any payment to an ineligible recipient, any 
     payment for an ineligible service, any duplicate payment, 
     payments for services not received, and any payment that does 
     not account for credit for applicable discounts.
       [(3) Payment.--The term ``payment'' means any payment 
     (including a commitment for future payment, such as a loan 
     guarantee) that is--
       [(A) made by a Federal agency, a Federal contractor, or a 
     governmental or other organization administering a Federal 
     program or activity; and
       [(B) derived from Federal funds or other Federal resources 
     or that will be reimbursed from Federal funds or other 
     Federal resources.
       [(e) Application.--This section--
       [(1) applies with respect to the administration of 
     programs, and improper payments under programs, in fiscal 
     years after fiscal year 2002; and
       [(2) requires the inclusion of estimates under subsection 
     (b)(2) only in annual budget submissions for fiscal years 
     after fiscal year 2003.
       [(f) Guidance by the Office of Management and Budget.--The 
     Director of the Office of Management and Budget shall 
     prescribe guidance to implement the requirements of this 
     section.]

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Improper Payments 
     Information Act of 2002''.

     SEC. 2. ESTIMATES OF IMPROPER PAYMENTS AND REPORTS ON ACTIONS 
                   TO REDUCE THEM.

       (a) Identification of Susceptible Programs and 
     Activities.--The head of each agency shall, in accordance 
     with guidance prescribed by the Director of the Office of 
     Management and Budget, annually review all programs and 
     activities that it administers and identify all such programs 
     and activities that may be susceptible to significant 
     improper payments.
       (b) Estimation of Improper Payment.--With respect to each 
     program and activity identified under subsection (a), the 
     head of the agency concerned shall--
       (1) estimate the annual amount of improper payments; and
       (2) submit those estimates to Congress before March 31 of 
     the following applicable year, with all agencies using the 
     same method of reporting, as determined by the Director of 
     the Office of Management and Budget.
       (c) Reports on Actions To Reduce Improper Payments.--With 
     respect to any program or activity of an agency with 
     estimated improper payments under subsection (b) that exceed 
     $10,000,000, the head of the agency shall provide with the 
     estimate under subsection (b) a report on what actions the 
     agency is taking to reduce the improper payments, including--
       (1) a discussion of the causes of the improper payments 
     identified, actions taken to correct those causes, and 
     results of the actions taken to address those causes;
       (2) a statement of whether the agency has the information 
     systems and other infrastructure it needs in order to reduce 
     improper payments to minimal cost-effective levels;
       (3) if the agency does not have such systems and 
     infrastructure, a description of the resources the agency has 
     requested in its budget submission to obtain the necessary 
     information systems and infrastructure; and
       (4) a description of the steps the agency has taken to 
     ensure that agency managers (including the agency head) are 
     held accountable for reducing improper payments.
       (d) Definitions.--For the purposes of this section:
       (1) Agency.--The term ``agency'' means an executive agency, 
     as that term is defined in section 102 of title 31, United 
     States Code.
       (2) 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 overpayments 
     and underpayments) under statutory, contractual, 
     administrative, or other legally applicable requirements; and
       (B) includes any payment to an ineligible recipient, any 
     payment for an ineligible service, any duplicate payment, 
     payments for services not received, and any payment that does 
     not account for credit for applicable discounts.
       (3) Payment.--The term ``payment'' means any payment 
     (including a commitment for future payment, such as a loan 
     guarantee) that is--
       (A) made by a Federal agency, a Federal contractor, or a 
     governmental or other organization administering a Federal 
     program or activity; and
       (B) derived from Federal funds or other Federal resources 
     or that will be reimbursed from Federal funds or other 
     Federal resources.
       (e) Application.--This section--
       (1) applies with respect to the administration of programs, 
     and improper payments under programs, in fiscal years after 
     fiscal year 2002; and
       (2) requires the inclusion of estimates under subsection 
     (b)(2) only in annual budget submissions for fiscal years 
     after fiscal year 2003.
       (f) Guidance by the Office of Management and Budget.--Not 
     later than 6 months after the date of enactment of this Act, 
     the Director of the Office of Management and Budget shall 
     prescribe guidance to implement the requirements of this 
     section.

  Mr. REID. Mr. President, I ask unanimous consent that the committee 
substitute be agreed to, the bill, as amended, be read a third time and 
passed, the motion to reconsider be laid upon the table, with no 
intervening action or debate, and that any statements relating to the 
measure be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendment in the nature of a substitute was agreed to.
  The bill (H.R. 4878), as amended, was read a third time and passed.

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