[Congressional Record Volume 156, Number 104 (Wednesday, July 14, 2010)]
[House]
[Pages H5553-H5558]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IMPROPER PAYMENTS ELIMINATION AND RECOVERY ACT OF 2010
Mr. DAVIS of Illinois. Mr. Speaker, I move to suspend the rules and
pass the bill (S. 1508) to amend the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note) in order to prevent the loss of billions
in taxpayer dollars.
The Clerk read the title of the bill.
The text of the bill is as follows:
S. 1508
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 Act of 2010''.
SEC. 2. IMPROPER PAYMENTS ELIMINATION AND RECOVERY.
(a) Susceptible Programs and Activities.--Section 2 of the
Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) is amended by striking subsection (a) and inserting the
following:
``(a) Identification of Susceptible Programs and
Activities.--
``(1) In general.--The head of each agency shall, in
accordance with guidance prescribed by the Director of the
Office of Management and Budget, periodically review all
programs and activities that the relevant agency head
administers and identify all programs and activities that may
be susceptible to significant improper payments.
``(2) Frequency.--Reviews under paragraph (1) shall be
performed for each program and activity that the relevant
agency head administers during the year after which the
[[Page H5554]]
Improper Payments Elimination and Recovery Act of 2010 is
enacted and at least once every 3 fiscal years thereafter.
For those agencies already performing a risk assessment every
3 years, agencies may apply to the Director of the Office of
Management and Budget for a waiver from the requirement of
the preceding sentence and continue their 3-year risk
assessment cycle.
``(3) Risk assessments.--
``(A) Definition.--In this subsection the term
`significant' means--
``(i) except as provided under clause (ii), that improper
payments in the program or activity in the preceding fiscal
year may have exceeded--
``(I) $10,000,000 of all program or activity payments made
during that fiscal year reported and 2.5 percent of program
outlays; or
``(II) $100,000,000; and
``(ii) 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, that
improper payments in the program or activity in the preceding
fiscal year may have exceeded--
``(I) $10,000,000 of all program or activity payments made
during that fiscal year reported and 1.5 percent of program
outlays; or
``(II) $100,000,000.
``(B) Scope.--In conducting the reviews under paragraph
(1), the head of each agency shall take into account those
risk factors that are likely to contribute to a
susceptibility to significant improper payments, such as--
``(i) whether the program or activity reviewed is new to
the agency;
``(ii) the complexity of the program or activity reviewed;
``(iii) the volume of payments made through the program or
activity reviewed;
``(iv) whether payments or payment eligibility decisions
are made outside of the agency, such as by a State or local
government;
``(v) recent major changes in program funding, authorities,
practices, or procedures;
``(vi) the level, experience, and quality of training for
personnel responsible for making program eligibility
determinations or certifying that payments are accurate; and
``(vii) significant deficiencies in the audit report of the
agency or other relevant management findings that might
hinder accurate payment certification.''.
(b) Estimation of Improper Payments.--Section 2 of the
Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) is amended by striking subsection (b) and inserting the
following:
``(b) Estimation of Improper Payments.--With respect to
each program and activity identified under subsection (a),
the head of the relevant agency shall--
``(1) produce a statistically valid estimate, or an
estimate that is otherwise appropriate using a methodology
approved by the Director of the Office of Management and
Budget, of the improper payments made by each program and
activity; and
``(2) include those estimates in the accompanying materials
to the annual financial statement of the agency required
under section 3515 of title 31, United States Code, or
similar provision of law and applicable guidance of the
Office of Management and Budget.''.
(c) Reports on Actions To Reduce Improper Payments.--
Section 2 of the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note) is amended by striking subsection (c)
and inserting the following:
``(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), the head of
the agency shall provide with the estimate under subsection
(b) a report on what actions the agency is taking to reduce
improper payments, including--
``(1) a description of the causes of the improper payments,
actions planned or taken to correct those causes, and the
planned or actual completion date of the actions taken to
address those causes;
``(2) in order to reduce improper payments to a level below
which further expenditures to reduce improper payments would
cost more than the amount such expenditures would save in
prevented or recovered improper payments, a statement of
whether the agency has what is needed with respect to--
``(A) internal controls;
``(B) human capital; and
``(C) information systems and other infrastructure;
``(3) if the agency does not have sufficient resources to
establish and maintain effective internal controls under
paragraph (2)(A), a description of the resources the agency
has requested in its budget submission to establish and
maintain such internal controls;
``(4) program-specific and activity-specific improper
payments reduction targets that have been approved by the
Director of the Office of Management and Budget; and
``(5) a description of the steps the agency has taken to
ensure that agency managers, programs, and, where
appropriate, States and localities are held accountable
through annual performance appraisal criteria for--
``(A) meeting applicable improper payments reduction
targets; and
``(B) establishing and maintaining sufficient internal
controls, including an appropriate control environment, that
effectively--
``(i) prevent improper payments from being made; and
``(ii) promptly detect and recover improper payments that
are made.''.
(d) Reports on Actions To Recover Improper Payments.--
Section 2 of the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note) is amended--
(1) by striking subsection (e);
(2) by redesignating subsections (d) and (f) as subsections
(f) and (g), respectively; and
(3) by inserting after subsection (c) the following:
``(d) Reports on Actions To Recover Improper Payments.--
With respect to any improper payments identified in recovery
audits conducted under section 2(h) of the Improper Payments
Elimination and Recovery Act of 2010 (31 U.S.C. 3321 note),
the head of the agency shall provide with the estimate under
subsection (b) a report on all actions the agency is taking
to recover improper payments, including--
``(1) a discussion of the methods used by the agency to
recover overpayments;
``(2) the amounts recovered, outstanding, and determined to
not be collectable, including the percent such amounts
represent of the total overpayments of the agency;
``(3) if a determination has been made that certain
overpayments are not collectable, a justification of that
determination;
``(4) an aging schedule of the amounts outstanding;
``(5) a summary of how recovered amounts have been disposed
of;
``(6) a discussion of any conditions giving rise to
improper payments and how those conditions are being
resolved; and
``(7) if the agency has determined under section 2(h) of
the Improper Payments Elimination and Recovery Act of 2010
(31 U.S.C. 3321 note) that performing recovery audits for any
applicable program or activity is not cost-effective, a
justification for that determination.
``(e) Governmentwide Reporting of Improper Payments and
Actions To Recover Improper Payments.--
``(1) Report.--Each fiscal year the Director of the Office
of Management and Budget shall submit a report with respect
to the preceding fiscal year on actions agencies have taken
to report information regarding improper payments and actions
to recover improper overpayments to--
``(A) the Committee on Homeland Security and Governmental
Affairs of the Senate; and
``(B) the Committee on Oversight and Government Reform of
the House of Representatives.
``(2) Contents.--Each report under this subsection shall
include--
``(A) a summary of the reports of each agency on improper
payments and recovery actions submitted under this section;
``(B) an identification of the compliance status of each
agency to which this Act applies;
``(C) governmentwide improper payment reduction targets;
and
``(D) a discussion of progress made towards meeting
governmentwide improper payment reduction targets.''.
(e) Definitions.--Section 2 of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) is amended by
striking subsections (f) (as redesignated by this section)
and inserting the following:
``(f) Definitions.--In 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 good or service, any duplicate
payment, any payment for a good or service not received
(except for such payments where authorized by law), and any
payment that does not account for credit for applicable
discounts.
``(3) Payment.--The term `payment' means any transfer or
commitment for future transfer of Federal funds such as cash,
securities, loans, loan guarantees, and insurance subsidies
to any non-Federal person or entity, that is made by a
Federal agency, a Federal contractor, a Federal grantee, or a
governmental or other organization administering a Federal
program or activity.
``(4) Payment for an ineligible good or service.--The term
`payment for an ineligible good or service' shall include a
payment for any good or service that is rejected under any
provision of any contract, grant, lease, cooperative
agreement, or any other funding mechanism.''.
(f) Guidance by the Office of Management and Budget.--
Section 2 of the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note) is amended by striking subsection (g)
(as redesignated by this section) and inserting the
following:
``(g) Guidance by the Office of Management and Budget.--
``(1) In general.--Not later than 6 months after the date
of enactment of the Improper Payments Elimination and
Recovery Act of 2010, the Director of the Office of
Management and Budget shall prescribe guidance for agencies
to implement the requirements of this section. The guidance
shall not include any exemptions to such requirements not
specifically authorized by this section.
``(2) Contents.--The guidance under paragraph (1) shall
prescribe--
[[Page H5555]]
``(A) the form of the reports on actions to reduce improper
payments, recovery actions, and governmentwide reporting; and
``(B) strategies for addressing risks and establishing
appropriate prepayment and postpayment internal controls.''.
(g) Determinations of Agency Readiness for Opinion on
Internal Control.--Not later than 1 year after the date of
enactment of this Act, the Director of the Office of
Management and Budget shall develop--
(1) specific criteria as to when an agency should initially
be required to obtain an opinion on internal control over
improper payments; and
(2) criteria for an agency that has demonstrated a
stabilized, effective system of internal control over
improper payments, whereby the agency would qualify for a
multiyear cycle for obtaining an audit opinion on internal
control over improper payments, rather than an annual cycle.
(h) Recovery Audits.--
(1) Definition.--In this subsection, the term ``agency''
has the meaning given under section 2(f) of the Improper
Payments Information Act of 2002 (31 U.S.C. 3321 note) as
redesignated by this Act.
(2) In general.--
(A) Conduct of audits.--Except as provided under paragraph
(4) and if not prohibited under any other provision of law,
the head of each agency shall conduct recovery audits with
respect to each program and activity of the agency that
expends $1,000,000 or more annually if conducting such audits
would be cost-effective.
(B) Procedures.--In conducting recovery audits under this
subsection, the head of an agency--
(i) shall give priority to the most recent payments and to
payments made in any program or programs identified as
susceptible to significant improper payments under section
2(a) of the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note);
(ii) shall implement this subsection in a manner designed
to ensure the greatest financial benefit to the Government;
and
(iii) may conduct recovery audits directly, by using other
departments and agencies of the United States, or by
procuring performance of recovery audits by private sector
sources by contract (subject to the availability of
appropriations), or by any combination thereof.
(C) Recovery audit contracts.--With respect to recovery
audits procured by an agency by contract--
(i) subject to subparagraph (B)(iii), and except to the
extent such actions are outside the agency's authority, as
defined by section 605(a) of the Contract Disputes Act of
1978 (41 U.S.C. 605(a)), the head of the agency may authorize
the contractor to notify entities (including persons) of
potential overpayments made to such entities, respond to
questions concerning potential overpayments, and take other
administrative actions with respect to overpayment claims
made or to be made by the agency; and
(ii) such contractor shall have no authority to make final
determinations relating to whether any overpayment occurred
and whether to compromise, settle, or terminate overpayment
claims.
(D) Contract terms and conditions.--
(i) In general.--The agency shall include in each contract
for procurement of performance of a recovery audit a
requirement that the contractor shall--
(I) provide to the agency periodic reports on conditions
giving rise to overpayments identified by the contractor and
any recommendations on how to mitigate such conditions;
(II) notify the agency of any overpayments identified by
the contractor pertaining to the agency or to any other
agency or agencies that are beyond the scope of the contract;
and
(III) report to the agency credible evidence of fraud or
vulnerabilities to fraud, and conduct appropriate training of
personnel of the contractor on identification of fraud.
(ii) Reports on actions taken.--Not later than November 1
of each year, each agency shall submit a report on actions
taken by the agency during the preceding fiscal year to
address the recommendations described under clause (i)(I)
to--
(I) the Office of Management and Budget; and
(II) Congress.
(E) Agency action following notification.--An agency shall
take prompt and appropriate action in response to a report or
notification by a contractor under subparagraph (D)(i)(I) or
(II), to collect overpayments and shall forward to other
agencies any information that applies to such agencies.
(3) Disposition of amounts recovered.--
(A) In general.--Amounts collected by agencies each fiscal
year through recovery audits conducted under this subsection
shall be treated in accordance with this paragraph. The
agency head shall determine the distribution of collected
amounts, less amounts needed to fulfill the purposes of
section 3562(a) of title 31, United States Code, in
accordance with subparagraphs (B), (C), and (D).
(B) Use for financial management improvement program.--Not
more than 25 percent of the amounts collected by an agency
through recovery audits--
(i) shall be available to the head of the agency to carry
out the financial management improvement program of the
agency under paragraph (4);
(ii) may be credited, if applicable, for that purpose by
the head of an agency to any agency appropriations and funds
that are available for obligation at the time of collection;
and
(iii) shall be used to supplement and not supplant any
other amounts available for that purpose and shall remain
available until expended.
(C) Use for original purpose.--Not more than 25 percent of
the amounts collected by an agency--
(i) shall be credited to the appropriation or fund, if any,
available for obligation at the time of collection for the
same general purposes as the appropriation or fund from which
the overpayment was made;
(ii) shall remain available for the same period and
purposes as the appropriation or fund to which credited; and
(iii) if the appropriation from which the overpayment was
made has expired, shall be newly available for the same time
period as the funds were originally available for obligation,
except that any amounts that are recovered more than five
fiscal years from the last fiscal year in which the funds
were available for obligation shall be deposited in the
Treasury as miscellaneous receipts, except that in the case
of recoveries of overpayments that are made from trust or
special fund accounts, such amounts shall revert to those
accounts.
(D) Use for inspector general activities.--Not more than 5
percent of the amounts collected by an agency shall be
available to the Inspector General of that agency--
(i) for--
(I) the Inspector General to carry out this Act; or
(II) any other activities of the Inspector General relating
to investigating improper payments or auditing internal
controls associated with payments; and
(ii) shall remain available for the same period and
purposes as the appropriation or fund to which credited.
(E) Remainder.--Amounts collected that are not applied in
accordance with subparagraph (A), (B), (C), or (D) shall be
deposited in the Treasury as miscellaneous receipts, except
that in the case of recoveries of overpayments that are made
from trust or special fund accounts, such amounts shall
revert to those accounts.
(F) Discretionary amounts.--This paragraph shall apply only
to recoveries of overpayments that are made from
discretionary appropriations (as that term is defined by
paragraph 7 of section 250 of the Balanced Budget and
Emergency Deficit Control Act of 1985) and shall not apply to
recoveries of overpayments that are made from discretionary
amounts that were appropriated prior to enactment of this
Act.
(G) Application.--This paragraph shall not apply to
recoveries of overpayments if the appropriation from which
the overpayment was made has not expired.
(4) Financial management improvement program.--
(A) Requirement.--The head of each agency shall conduct a
financial management improvement program, consistent with
rules prescribed by the Director of the Office of Management
and Budget.
(B) Program features.--In conducting the program, the head
of the agency--
(i) shall, as the first priority of the program, address
problems that contribute directly to agency improper
payments; and
(ii) may seek to reduce errors and waste in other agency
programs and operations.
(5) Privacy protections.--Any nongovernmental entity that,
in the course of recovery auditing or recovery activity under
this subsection, obtains information that identifies an
individual or with respect to which there is a reasonable
basis to believe that the information can be used to identify
an individual, may not disclose the information for any
purpose other than such recovery auditing or recovery
activity and governmental oversight of such activity, unless
disclosure for that other purpose is authorized by the
individual to the executive agency that contracted for the
performance of the recovery auditing or recovery activity.
(6) Other recovery audit requirements.--
(A) In general.--(i) Except as provided in clause (ii),
subchapter VI of chapter 35 of title 31, United States Code,
is repealed.
(ii) Section 3562(a) of title 31, United States Code, shall
continue in effect, except that references in such section
3562(a) to programs carried out under section 3561 of such
title, shall be interpreted to mean programs carried out
under section 2(h) of this Act.
(B) Technical and conforming amendments.--
(i) Table of sections.--The table of sections for chapter
35 of title 31, United States Code, is amended by striking
the matter relating to subchapter VI.
(ii) Definition.--Section 3501 of title 31, United States
Code, is amended by striking ``and subchapter VI of this
title''.
(iii) Homeland security grants.--Section 2022(a)(6) of the
Homeland Security Act of 2002 (6 U.S.C. 612(a)(6)) is amended
by striking ``(as that term is defined by the Director of the
Office of Management and Budget under section 3561 of title
31, United States Code)'' and inserting ``under section 2(h)
of the Improper Payments Elimination and Recovery Act of 2010
(31 U.S.C. 3321 note)''.
(7) Rule of construction.--Except as provided under
paragraph (5), nothing in this section shall be construed as
terminating or in any way limiting authorities that are
otherwise available to agencies under existing
[[Page H5556]]
provisions of law to recover improper payments and use
recovered amounts.
(i) Report on Recovery Auditing.--Not later than 2 years
after the date of the enactment of this Act, the Chief
Financial Officers Council established under section 302 of
the Chief Financial Officers Act of 1990 (31 U.S.C. 901
note), in consultation with the Council of Inspectors General
on Integrity and Efficiency established under section 7 of
the Inspector General Reform Act of 2009 (Public Law 110-409)
and recovery audit experts, shall conduct a study of--
(1) the implementation of subsection (h);
(2) the costs and benefits of agency recovery audit
activities, including--
(A) those activities under subsection (h); and
(B) the effectiveness of using the services of--
(i) private contractors;
(ii) agency employees;
(iii) cross-servicing from other agencies; or
(iv) any combination of the provision of services described
under clauses (i) through (iii); and
(3) submit a report on the results of the study to--
(A) the Committee on Homeland Security and Governmental
Affairs of the Senate;
(B) the Committee on Oversight and Government Reform of the
House of Representatives; and
(C) the Comptroller General.
SEC. 3. COMPLIANCE.
(a) Definitions.--In this section:
(1) Agency.--The term ``agency'' has the meaning given
under section 2(f) of the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note) as redesignated by this Act.
(2) Annual financial statement.--The term ``annual
financial statement'' means the annual financial statement
required under section 3515 of title 31, United States Code,
or similar provision of law.
(3) Compliance.--The term ``compliance'' means that the
agency--
(A) has published an annual financial statement for the
most recent fiscal year and posted that report and any
accompanying materials required under guidance of the Office
of Management and Budget on the agency website;
(B) if required, has conducted a program specific risk
assessment for each program or activity that conforms with
section 2(a) the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note); and
(C) if required, publishes improper payments estimates for
all programs and activities identified under section 2(b) of
the Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) in the accompanying materials to the annual financial
statement;
(D) publishes programmatic corrective action plans prepared
under section 2(c) of the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note) that the agency may have in the
accompanying materials to the annual financial statement;
(E) publishes improper payments reduction targets
established under section 2(c) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) that the agency
may have in the accompanying materials to the annual
financial statement for each program assessed to be at risk,
and is meeting such targets; and
(F) has reported an improper payment rate of less than 10
percent for each program and activity for which an estimate
was published under section 2(b) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note).
(b) Annual Compliance Report by Inspectors General of
Agencies.--Each fiscal year, the Inspector General of each
agency shall determine whether the agency is in compliance
and submit a report on that determination to--
(1) the head of the agency;
(2) the Committee on Homeland Security and Governmental
Affairs of the Senate;
(3) the Committee on Oversight and Governmental Reform of
the House of Representatives; and
(4) the Comptroller General.
(c) Remediation.--
(1) Noncompliance.--
(A) In general.--If an agency is determined by the
Inspector General of that agency not to be in compliance
under subsection (b) in a fiscal year, the head of the agency
shall submit a plan to Congress describing the actions that
the agency will take to come into compliance.
(B) Plan.--The plan described under subparagraph (A) shall
include--
(i) measurable milestones to be accomplished in order to
achieve compliance for each program or activity;
(ii) the designation of a senior agency official who shall
be accountable for the progress of the agency in coming into
compliance for each program or activity; and
(iii) the establishment of an accountability mechanism,
such as a performance agreement, with appropriate incentives
and consequences tied to the success of the official
designated under clause (ii) in leading the efforts of the
agency to come into compliance for each program and activity.
(2) Noncompliance for 2 fiscal years.--
(A) In general.--If an agency is determined by the
Inspector General of that agency not to be in compliance
under subsection (b) for 2 consecutive fiscal years for the
same program or activity, and the Director of the Office of
Management and Budget determines that additional funding
would help the agency come into compliance, the head of the
agency shall obligate additional funding, in an amount
determined by the Director, to intensified compliance
efforts.
(B) Funding.--In providing additional funding described
under subparagraph (A), the head of an agency shall use any
reprogramming or transfer authority available to the agency.
If after exercising that reprogramming or transfer authority
additional funding is necessary to obligate the full level of
funding determined by the Director of the Office of
Management and Budget under subparagraph (A), the agency
shall submit a request to Congress for additional
reprogramming or transfer authority.
(3) Reauthorization and statutory proposals.--If an agency
is determined by the Inspector General of that agency not to
be in compliance under subsection (b) for more than 3
consecutive fiscal years for the same program or activity,
the head of the agency shall, not later than 30 days after
such determination, submit to Congress--
(A) reauthorization proposals for each program or activity
that has not been in compliance for 3 or more consecutive
fiscal years; or
(B) proposed statutory changes necessary to bring the
program or activity into compliance.
(d) Compliance Enforcement Pilot Programs.--
(1) In general.--The Director of the Office of Management
and Budget may establish 1 or more pilot programs which shall
test potential accountability mechanisms with appropriate
incentives and consequences tied to success in ensuring
compliance with this Act and eliminating improper payments.
(2) Report.--Not later than 5 years 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 findings associated with any pilot programs conducted
under paragraph (1). The report shall include any legislative
or other recommendations that the Director determines
necessary.
(e) Report on Chief Financial Officers Act of 1990.--Not
later than 1 year after the date of the enactment of this
Act, the Chief Financial Officers Council established under
section 302 of the Chief Financial Officers Act of 1990 (31
U.S.C. 901 note) and the Council of Inspectors General on
Integrity and Efficiency established under section 7 of the
Inspector General Reform Act of 2009 (Public Law 110-409), in
consultation with a broad cross-section of experts and
stakeholders in Government accounting and financial
management shall--
(1) jointly examine the lessons learned during the first 20
years of implementing the Chief Financial Officers Act of
1990 (31 U.S.C. 901) and identify reforms or improvements, if
any, to the legislative and regulatory compliance framework
for Federal financial management that will optimize Federal
agency efforts to--
(A) publish relevant, timely, and reliable reports on
Government finances; and
(B) implement internal controls that mitigate the risk for
fraud, waste, and error in Government programs; and
(2) jointly submit a report on the results of the
examination to--
(A) the Committee on Homeland Security and Governmental
Affairs of the Senate;
(B) the Committee on Oversight and Government Reform of the
House of Representatives; and
(C) the Comptroller General.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Davis) and the gentleman from Utah (Mr. Chaffetz) each
will control 20 minutes.
The Chair recognizes the gentleman from Illinois.
General Leave
Mr. DAVIS of Illinois. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, the Office of Management and Budget recently reported
that the Federal Government made $98 billion in improper and
overpayments last year. This is a staggering amount and completely
unacceptable. No family or business in America would tolerate being
charged twice or overbilled for anything, and neither should our
government.
We need to do everything we can to ensure that the government spends
every tax dollar in the most responsible way possible. In fact, we have
an obligation to the taxpayers to fight waste, fraud and abuse and to
ensure that if the government overpays for something, it has the means
to recover those precious tax dollars.
The bill we're now considering, S. 1508, the Improper Payments
Elimination and Recovery Act of 2010, will provide the government with
the means to fulfill this obligation to the taxpayers.
[[Page H5557]]
Senate 1508 amends the Improper Payments Information Act of 2002 to
require the head of each Federal agency to review agency programs and
activities every 3 fiscal years and identify those programs that may be
susceptible to significant improper payments. If agency heads determine
that significant overpayments have occurred, they must then recover
them by following the procedures in the act.
The bill also requires the agencies which make significant improper
payments to implement internal controls and other procedures to help
eliminate any future improper payments.
{time} 1040
The House passed a companion bill, H.R. 3393, the Improper Payments
Elimination Act of 2009, introduced by Representative Patrick Murphy on
April 28, 2010, by a voice vote. S. 1508 has small but important
changes from the base text in H.R. 3393. S. 1508 strengthens the bill
by requiring recovery audit contractors to report the fraud they find
and to conduct appropriate training on the means and methods to do so.
S. 1508 also requires the agencies to report to Congress and OMB their
actions and plans to address the recommendations they receive from the
audit recovery contractors.
S. 1508 provides the Federal Government with the tools needed to
prevent mistakes and overpayments in the first place, and recover funds
that are paid in error. It makes Federal agencies more accountable for
properly managing taxpayer funds. The bill requires agencies to develop
and report corrective action plans based on measured error rates, and
creates incentives for meeting their goals and penalties for failure.
Importantly, the bill also gives the agency the means to go after the
funds they have overpaid, which will make the taxpayer, agencies,
programs, and activities which relied on those appropriations whole.
We are living in a time when our government is living under extreme
fiscal demands, and we need to do everything possible to ensure that
every tax dollar goes to where it is needed. To ensure this takes
place, we need to provide our Federal agencies with the tools to
properly manage their spending. We also need to give the agencies the
ability to follow through with their oversight and provide them with
the ability to recover erroneous payments. However, we cannot stop
there. We must do everything we can to ensure that Federal agencies
that make improper payments fix the problems that allowed the improper
payments in the first place.
I would like to thank Representatives Murphy, Bilbray, Towns, and
Issa for working together in a truly bipartisan manner to get this
important piece of legislation enacted into law. S. 1508 is a
commonsense, good government bill, and I encourage my colleagues to
join me in supporting it.
Mr. Speaker, I reserve the balance of my time.
Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of Senate bill 1508, the Improper
Payments Elimination and Recovery Act of 2010. The amount of waste,
fraud, and abuse of taxpayer dollars by Federal agencies is absolutely
staggering. The Office of Management and Budget, the OMB, has reported
that nearly $100 billion is wasted each year as a result of mistakes by
our Federal agencies when paying for products and services. Last year,
roughly $98 billion was lost in improper payments, $98 billion, the
result of fraud or poor financial management. Half of this came from
Medicare and Medicaid programs alone.
Ninety-eight billion dollars is more than double the budget of the
Department of Homeland Security. At a time when our country is facing
record budget deficits, we cannot afford to lose billions of dollars
each year to mistakes and fraud.
Mr. Speaker, in April of this year, the House passed H.R. 3393, the
companion to Senate bill 1508. The Senate has since made improvements
to the legislation that will strengthen our ability to eliminate
improper payments and recover lost funds. Like H.R. 3393, Senate bill
1508 helps prevent improper payments by requiring agencies to report
their corrective action plans and improper payment reduction targets
used to remedy their payment error problems, lowers the reporting
threshold for improper payments, and expands the use of recovery
auditing by requiring that all agencies with outlays of more than $1
million perform recovery audits on their programs and activities to
increase the recovery of overpayments.
Senate bill 1508 strengthens H.R. 3393 by requiring additional
reporting and training related to fraud, and ensures that agencies take
action to mitigate overpayment vulnerabilities by requiring agencies to
report to the OMB and the Congress on the measures that they are
taking.
Mr. Speaker, I urge all of my colleagues to support this important
piece of legislation to help stop the waste, fraud, and abuse of the
taxpayer dollars. We should expect nothing less.
Mr. Speaker, I yield such time as he may consume to one of the key
people in the development of this legislation, my colleague from
California (Mr. Bilbray).
Mr. BILBRAY. I would like to thank the gentleman from Utah for
yielding.
Mr. Speaker, I enjoyed working with Patrick Murphy, the gentleman
from Pennsylvania, developing this bill, really looking at creating a
transparent process so the American people can finally see what they
have been telling Washington for a long time existed.
While this is a small step, it is a good example of what the American
people have been demanding over the years, but especially just
recently. I think all of us that go home and talk to our constituents
understand that the exchanges with the average citizen for a Member of
Congress has been let's just say brisk to say the least. And one of the
greatest things that the American people are upset about is the feeling
that their money is not being handled appropriately, that the dollars
and cents that the Federal Government is taking from them after they
work hard for every dollar and cent is not being handled in an
appropriate way that they feel confident with.
Today we are going to take an action that is a small step. It's not
going to solve the problem, but it is very much an indication of the
kind of action the American people have been demanding. The fact is
it's time that the bipartisan forces in this Congress and in future
Congresses understand that our greatest responsibility and obligation
is not to the party leaders of either Republican or Democrat, but to
the taxpayers who pay our salary, but more importantly, trust us with
their hard-earned money to use it appropriately and responsibly.
Mr. Speaker, when we talk about this year facing a $1.3 trillion
deficit, I think that we have got to recognize it's time that we start
doing what the American people are demanding. Ending improper payments
is the low-hanging fruit right now. Basically, it's there for the
picking. And that's probably why we are able to do it today.
Frankly, according to the Office of Management and Budget, we are
talking about approximately $98 billion. Now, $98 billion seems to be
an abstract, but consider the fact that that is almost twice what we
spend on the homeland security budget. We talk about defending our
neighborhoods, trying to secure our borders, trying to make sure
terrorism stays out of our communities, we talk a lot about that. But
when we recognize that we are now giving away, wrongly, twice as much
money as we spend on our own homeland security, I think the American
people have a reason to be outraged, and justifiably so.
By working in a bipartisan manner, we have been able to get the
Senate to cooperate and craft a solution for this long-standing
problem. And frankly, I think our bill really does set the goal that we
should try to follow, and that is, let's find out how much more we can
cooperate, how many more dollars we can save, and how much more
credibility we can finally start bringing back to this body from the
American people, for the American people. Our bill is endorsed by the
budget watchdog organizations liked the National Taxpayers Union and
the Council on Citizens Against Government Waste.
Mr. Speaker, I have the privilege of serving as the ranking member
for the Subcommittee on Procurement. I not only strongly ask my
colleagues to support this bill, but I would like to leave you with a
question, a question for Republicans and Democrats, but most
importantly a question the American people would like to ask. And that
[[Page H5558]]
is, how much more could we save if this Congress was brave enough to
look deeper into our budget and our expenditures? How much more could
we be saving for the taxpayer or providing to the citizens if we were
brave enough to really audit our own books the way we expect the
private sector and citizens to do every year?
If we only had the bravery to look in and find the truth and take
action on it, I think that when we go back to our districts there would
be a different welcome, a different type of response. And frankly, I
think the response we have received in the past is one that we have
deserved. Hopefully, we will earn the right to deserve a more positive
response from the constituents when we take this action and follow it
up with more concrete action to make sure that we do maintain the
trust.
So again, I ask Congress let's take this as a first step. I
appreciate the support from my colleague from his great State to be
able to say let's work together, let's make the move, but let's stop
being in denial that there isn't more that Congress ought to do to
maintain the integrity of our budget process.
Mr. DAVIS of Illinois. Mr. Speaker, at this time I yield such time as
he may consume to one of the persons who worked extremely hard to bring
this legislation to the floor and to craft a very excellent piece of
legislation, Representative Murphy.
Mr. PATRICK J. MURPHY of Pennsylvania. I thank the gentleman from
Illinois for the time.
Mr. Speaker, I do want to thank my colleague from the other side of
the aisle, Republican Representative Brian Bilbray from California, for
partnering with me on this bipartisan bill for commitment to fiscal
responsibility. I also want to thank the other Chamber over in the
Senate, specifically Senator Tom Carper, for his tireless efforts in
advancing this legislation over in the other body, and his Republican
colleague on this bill, Senator John McCain.
{time} 1050
Mr. Speaker, this legislation is proof that good things can happen
when Democrats and Republicans are willing to work together and put
their differences aside for commonsense measures to get things done for
the American taxpayer.
Now, I am so proud that after 2 years of hard work on this piece of
legislation, Mr. Bilbray and I, after we vote on this today in this
House because it just passed in the Senate, will be sending this bill
to the President of the United States for signature and it will become
law. In this time of tightened belts and strained budgets, it is more
important than ever to get our fiscal house in order and to eliminate
waste from our system and make sure that we earn the trust of the
American taxpayer.
Mr. Speaker, my bill, the Improper Payments Elimination and Recovery
Act, is a bipartisan, commonsense solution to cut waste from the
Federal budget and streamline the payment systems of Federal agencies.
Mr. Speaker, I know the American people would be horrified to learn
that every day the Federal Government either overpays or pays twice the
amount for products and services than they need to. In fiscal year 2009
alone, Federal agencies made nearly $98 billion in improper payments.
These improper payments occur as a result of fraud or from poor
financial management systems that do not detect or prevent mistakes
before Federal dollars are already out the door.
This bill, our bill, will help identify, reduce, and eliminate these
improper payments. It will cut fraud and abuse by requiring agencies to
develop action plans to avoid improper payments.
Mr. Speaker, I think now is the time that we must demand higher
levels of fiscal management and accountability from each Federal
agency. There needs to be repercussions of money misspent and wasted.
That is why this legislation contains strong measures to hold those in
power accountable for failing the American taxpayer. And perhaps most
importantly, this legislation would force the Federal Government to
reclaim more money that was improperly sent out.
My bill ensures that the Federal Government holds itself to the same
standard of fiscal responsibility as any hardworking household or any
business would across America and in my home district in Bucks County,
Pennsylvania. It will save the American taxpayers billions of dollars
that would otherwise be lost.
You know, Mr. Speaker, we already know that this legislation will
work by setting stricter targets for reducing and recovering improper
payments. The Office of Management and Budget was able to reduce errors
in the food stamp program by a little more than half of a percentage
point. But those stamps and a fraction of a percent saved the American
taxpayer $330 million just last year. That's one little program and one
little agency, a half of a percentage point. That's $330 million.
That's $330 million that can go to pay off our national debt, to
provide tax relief to middle class families, or make critical
investments in our future. With this bill, we can replicate that
success in every single Federal agency and every program within the
Federal Government.
Mr. Speaker, quite frankly, after 2 hard years to get this to this
point today, we all know that this legislation is long overdue. The
American people are demanding that this kind of action from our
government today will happen, and it's about time.
So I want to thank Mr. Bilbray. I want to thank Chairman Towns and
Ranking Member Darrell Issa. I urge my colleagues to vote ``yes,'' and
finally, after years of hard work, that we pass this legislation on
behalf of the American taxpayer.
Mr. CHAFFETZ. Mr. Speaker, I yield back the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, my father always taught us that a
penny saved was a penny earned. And, of course, if it's good enough for
our families, it certainly is good enough for our national government.
I compliment the gentleman on the development of an excellent piece
of legislation. I urge its passage.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Illinois (Mr. Davis) that the House suspend the rules
and pass the bill, S. 1508.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. DAVIS of Illinois. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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