[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[House]
[Pages 6517-6522]
[From the U.S. Government Publishing Office, www.gpo.gov]




         IMPROPER PAYMENTS ELIMINATION AND RECOVERY ACT OF 2010

  Mr. TOWNS. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 3393) 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, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3393

       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 
     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--

[[Page 6518]]

       ``(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--
       ``(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 
     financial reporting; and
       (2) criteria for an agency that has demonstrated a 
     stabilized, effective system of internal control over 
     financial reporting, whereby the agency would qualify for a 
     multiyear cycle for obtaining an audit opinion on internal 
     control over financial reporting, 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.--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; and
       (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.
       (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)(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

[[Page 6519]]

     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 subparagraphs (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 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 those under subsection (h), and 
     including the effectiveness of using the services of--
       (A) private contractors;
       (B) agency employees;
       (C) cross-servicing from other agencies; or
       (D) any combination of the provision of services described 
     under subparagraphs (A) through (C); 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

[[Page 6520]]

     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 New 
York (Mr. Towns) and the gentleman from California (Mr. Issa) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New York.


                             General Leave

  Mr. TOWNS. Mr. Speaker, I ask unanimous consent that all Members 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 New York?
  There was no objection.
  Mr. TOWNS. Mr. Speaker, I yield myself such time as I may consume.
  The Office of Management and Budget recently reported 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 this great country would tolerate being charged twice or 
even overbilled for anything and neither should the 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 are now considering, H.R. 3393, the Improper Payments 
Elimination and Recovery Act of 2009, will provide the government with 
the means to fulfill this obligation to the taxpayers.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is an important and bipartisan bill being brought 
to the floor today. It has been well thought out and well crafted, and 
I want to thank Mr. Murphy and Mr. Bilbray for their diligent work on 
this subject, also Mr. Todd Platts, who has worked in this area for a 
number of years and has brought to light this failure of government.
  Mr. Speaker, when there are $2 trillion worth of payments being made 
and $100 billion worth of improper payments being noted, one would say 
we must be doing a good job of finding improper payments that would 
allow us to get to the bottom of this large amount of money. But, Mr. 
Speaker, without this corrective action, it is clear that what we are 
seeing is the tip of a very large iceberg.
  Under the current law, since you must have the greater of both $10 
million and 2.5 percent in order to trigger reporting, this only really 
triggers $10 million events with very small agencies. As we look at the 
Department of Defense and other large agencies, realistically the 2.5 
percent becomes the trigger. If I were able to, with a stroke of a pen, 
change things from day one, I would look and say the American people 
consider not only $10 million a lot of money, but $2 million and $1 
million, $100,000.
  We cannot quickly make those kinds of changes in reporting, I am 
told. However, today we are taking a fairly significant step. By 
automatically having anytime when $100 million is at stake be reported 
and by reducing from 2.5 to 1.5 percent the program outlays, we are 
catching an unknown amount of greater waste, fraud, and abuse in 
government. These improper payments will undoubtedly rise, perhaps 
double, perhaps triple in reporting as a result of this new law, but it 
is not enough. As this reporting becomes more widespread and we're able 
to investigate extremely large but smaller than today programs, I hope 
that we will see that we must find all, all, improper payments in 
government and set them right. The American people expect no less.
  Mr. Speaker, I reserve the balance of my time.
  Mr. TOWNS. Mr. Speaker, I yield 5 minutes to the sponsor of the bill, 
Mr. Patrick Murphy, who is really responsible for our being here today. 
He has worked so hard on this legislation, and, of course, as I have 
said to many staffers along the way, this makes a whole lot of sense, 
and I want to thank him, and, of course, Mr. Platts and people that 
have worked on this and kept it going.
  Mr. PATRICK J. MURPHY of Pennsylvania. I thank the chairman for 
yielding.
  I would like to start off by thanking my colleague from across the 
aisle, Congressman Brian Bilbray from California, for partnering with 
me on this bipartisan bill for the past 2 years. Today is a great day 
for our country, and I want to also highlight his partnership and his 
commitment to fiscal responsibility. It's been an honor to work with 
you, sir.
  I also want to thank Senator Tom Carper for his tireless efforts in 
advancing this legislation in the Senate.
  Mr. Speaker, most of us would be outraged if we realized that our 
phone company charged twice for last month's bill or that we paid for 
car repairs that were never made to our car. We would figure out the 
problem, we would get our money back, and we would make sure that that 
never happened again.
  But every day the Federal Government either overpays or pays twice 
the amount for products or services it was supposed to. But until now, 
there was too little action and even less outrage.

                              {time}  1030

  According to the Office of Management and Budget, in fiscal year 
2009, Federal agencies made nearly $98 billion in improper payments. 
Let me repeat that: In 2009, Federal agencies made nearly $98 billion 
in improper payments in just 1 fiscal year.
  Mr. Speaker, numbers get thrown around in this Chamber all the time. 
So let me put this number in context. This is more than double the 
budget for the Department of Homeland Security and triple the budget of 
the National Institutes of Health. These improper payments occur as a 
result of fraud or from poor fiscal management systems that do not 
detect or prevent mistakes before Federal dollars are already out the 
door. This bill--our bill--the Improper Payments Elimination and 
Recovery Act, will help better identify, reduce, and eliminate these 
improper payments. It will cut down on fraud

[[Page 6521]]

and waste by requiring agencies to develop and implement action plans 
to avoid improper payments.
  Mr. Speaker, no business owner would allow an employee to get away 
with these mistakes. American taxpayers should not have to foot the 
bill when the government mismanages their hard-earned dollars. That is 
why this legislation has strong measures to hold those accountable for 
failing to protect taxpayer dollars. Perhaps most importantly, Mr. 
Speaker, this legislation would force the Federal Government to reclaim 
more money that was improperly sent.
  It's pretty simple. If a family in Bristol, Bucks County, found out 
that they were getting double billed for their car payments or paying 
for groceries they never got, they'd fix the problem, get their money 
back, and would not allow it to happen again. My bill ensures that the 
Federal Government holds itself to the same standard of fiscal 
responsibility that will save taxpayers billions of dollars.
  Mr. Speaker, there is no question that we must do more to tackle our 
national debt. While the debate grows increasingly partisan, the 
solutions seem sometimes out of political reach. But this proposal is 
not. This commonsense measure is something that Democrats and 
Republicans have come together to support. Cutting wasteful spending 
and growing our economy will lead us out of this recession and help put 
us on a path toward fiscal responsibility. I urge all of my colleagues 
to vote ``yes'' and pass this legislation on behalf of the American 
taxpayer.
  Mr. ISSA. At this time I would yield 3 minutes to the coauthor of the 
bill, the gentleman from California (Mr. Bilbray).
  Mr. BILBRAY. I would like to thank the coauthor of the bill, Mr. 
Murphy, and especially Chairman Towns and Ranking Member Issa for 
bringing this item up today. I appreciate the ability to address it.
  Mr. Speaker, all across America, Americans are speaking out loudly. 
In fact, there's a degree of dismay for those of us in Washington when 
we go home to see the outrage that is coming out from the average 
taxpayer in this country. I think we are just now really realizing that 
there is a justification for the outrage and the strong feelings. 
Basically, as we tell the American people that they must give more and 
that we are going to take more, they are saying, No way. You have not 
earned the right to be trusted with our tax money.
  Mr. Murphy and I have been able to identify one of those items that 
the American people have been calling for for a long time. How do we 
explain to our constituents that we are giving away inappropriately 
twice as much money as we spend to defend their neighborhoods from 
terrorism when it comes to homeland security? How do we have the gall 
to ask them to trust us with more money when we have this kind of 
mismanagement of public funds--not just recently, but historically. And 
I think this is one place we can, in a bipartisan effort, admit that 
Washington needs to be more responsible, needs to do more and, frankly, 
demand more from Washington and the bureaucracy and less from the 
American people when it comes to accountability.
  We're talking about the fact that we need now to lower the thresholds 
of reporting so the problem can be more transparent. We need to make 
sure that we hold those who are trusted in the Departments with the 
American taxpayers' money to do more, report more, and be more 
accountable for the mismanagement of those funds. Frankly, we need to 
demand more recovery of the money when we detect these funds are being 
misappropriated.
  Frankly, right now, I think the outrage across this country is 
something that is healthy for all of us--Democrats, Republicans, 
Independents. We should not be asking, Why are the American people so 
outraged? We're saying, Why didn't we realize this earlier and sooner 
so that that outrage did not just show up in screaming town hall 
meetings and protests around this country?
  I want to thank Mr. Murphy for joining with me at showing the 
American people there are some of us that hear it loud and clear. We do 
not blame the American people for being outraged. We blame ourselves 
and the Washington establishment for not addressing this issue before 
and not moving forward.
  So I, again, thank the chairman and the ranking member. I thank my 
coauthor on this. And I think, Mr. Speaker, this is more than just 
money. We're talking about we have taken hard-earned resources from 
hardworking Americans and we have been trusted in the past; and we have 
violated that trust.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. ISSA. Mr. Speaker, I yield the gentleman 30 additional seconds.
  Mr. BILBRAY. This bill will start on a pattern towards earning the 
trust back from the American people. But we do not have a right to ask 
them to trust us with more money until we prove to them that we can 
correct this problem and take care of the money that we have already 
been endowed with. So I ask that this body pass this bill and address 
it. It's a small step in the direction that America has asked us to go 
to for far too long.
  Mr. TOWNS. I yield myself such time as I may consume.
  The Improper Payments Elimination and Recovery Act, H.R. 3393, 
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. That's the reason why I'd like to salute Congressman 
Issa of California, Congressman Bilbray, and of course Congressman 
Platts and Congressman Murphy for the outstanding job that they have 
done on this legislation.
  The bill we are considering today takes the next step and makes 
Federal agencies more accountable for properly managing taxpayers' 
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 to meet their goals. 
Importantly, the bill also gives the agencies the means to go after the 
funds that they have overpaid, which will make the taxpayers, agencies, 
programs, and activities which relied on those appropriations whole.
  We are living in a time, Mr. Speaker, when our government is 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 that we can to 
ensure that Federal agencies who make improper payments fix the problem 
that allows the improper payments to take place. At the end of the day, 
this bill amends current law to require more accountability through 
reports, plans, definitions, clarification of responsibility, 
allocation of funds, and oversight.
  Again, I would like to thank my colleagues, Representatives Murphy, 
Bilbray, Issa, and others, for working together in a truly, truly 
bipartisan manner to get this piece of important legislation to the 
House floor. H.R. 3393 is a commonsense, good government bill, and I 
encourage my colleagues to join me in supporting it.
  I reserve the balance of my time.
  Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in closing, I'd like to share with you something that 
happened this morning. I was on C-SPAN and a woman named Betty called 
in and was very concerned that we were not working on a bipartisan 
basis; that there was no consensus or compromise; that we were 
paralyzed. It's sometimes hard to answer somebody on the other end of a 
telephone line, but I would like to today take note that this is an 
example of the dozens of times every week that we come together, the 
chairman and myself, members of the committee, and we find things we 
can agree

[[Page 6522]]

on that are good for America, the common good, and they will not 
usually be noted.
  So today I would hope that we all note that--and for Betty who called 
in this morning--that in fact this is an example where we can find 
compromise. We can find a win-win for the American people. I would hope 
that we would do more of it. Chairman Towns has been good at looking 
for those examples, and I pledge to be better at looking for 
opportunities like this. I'd like to, lastly, thank Leader Hoyer and 
Leader Boehner for the help they gave us in expediting this to the 
floor.
  With that, Mr. Speaker, I urge support and passage of the bill and 
yield back the balance of my time.
  Mr. TOWNS. Mr. Speaker, let me just make this statement, and I will 
yield back as well.
  Let me again say how glad I am that we are taking the time to fight 
waste, fraud, and abuse of our precious tax dollars. With this measure, 
I want to thank the gentleman from California for his comments and the 
fact that we are working together to get rid of waste, fraud, and abuse 
here. This is a classic example. I want to thank him for working with 
me and the relationship that we have had over the years in terms of 
doing these kinds of things.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Towns) that the House suspend the rules 
and pass the bill, H.R. 3393, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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