[Congressional Record (Bound Edition), Volume 158 (2012), Part 9]
[Senate]
[Pages 13048-13051]
[From the U.S. Government Publishing Office, www.gpo.gov]




   IMPROPER PAYMENTS ELIMINATION AND RECOVERY IMPROVEMENT ACT OF 2012

  Mr. REID. Mr. President, I ask unanimous consent that the Senate 
proceed to the consideration of Calendar No. 449, S. 1409.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 1409) to intensify efforts to identify, prevent, 
     and recover payment error, waste, fraud, and abuse within 
     Federal spending.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Homeland Security and 
Governmental Affairs, with an amendment to strike all after the 
enacting clause and insert in lieu thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Improper Payments 
     Elimination and Recovery Improvement Act of 2012''.

     SEC. 2. DEFINITION.

       In this Act, the term ``agency'' means an executive agency 
     as that term is defined under section 102 of title 31, United 
     States Code.

     SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY 
                   FEDERAL AGENCIES.

       (a) In General.--Section 2 of the Improper Payments 
     Information Act of 2002 (31 U.S.C. 3321 note) is amended--
       (1) by redesignating subsections (b) through (g) as 
     subsections (c) through (h), respectively;
       (2) by inserting after subsection (a) the following:
       ``(b) Improving the Determination of Improper Payments.--
       ``(1) In general.--The Director of the Office of Management 
     and Budget shall on an annual basis--
       ``(A) identify a list of high-priority Federal programs for 
     greater levels of oversight and review--
       ``(i) in which the highest dollar value or highest 
     frequency of improper payments occur; or
       ``(ii) for which there is a higher risk of improper 
     payments; and
       ``(B) in coordination with the agency responsible for 
     administering the high-priority program, establish annual 
     targets and semi-annual or quarterly actions for reducing 
     improper payments associated with each high-priority program.
       ``(2) Report on high-priority improper payments.--
       ``(A) In general.--Subject to Federal privacy policies and 
     to the extent permitted by law, each agency with a program 
     identified under paragraph (1)(A) on an annual basis shall 
     submit to the Inspector General of that agency, and make 
     available to the public (including availability through the 
     Internet), a report on that program.
       ``(B) Contents.--Each report under this paragraph--
       ``(i) shall describe--

       ``(I) any action the agency--

       ``(aa) has taken or plans to take to recover improper 
     payments; and
       ``(bb) intends to take to prevent future improper payments; 
     and
       ``(ii) shall not include any referrals the agency made or 
     anticipates making to the Department of Justice, or any 
     information provided in connection with such referrals.
       ``(C) Public availability on central website.--The Office 
     of Management and Budget shall make each report submitted 
     under this paragraph available on a central website.
       ``(D) Availability of information to inspector general.--
     Subparagraph (B)(ii) shall not prohibit any referral or 
     information being made available to an Inspector General as 
     otherwise provided by law.
       ``(E) Assessment and recommendations.--The Inspector 
     General of each agency that submits a report under this 
     paragraph shall--
       ``(i) review--

       ``(I) the assessment of the level of risk associated with 
     the applicable program, and the quality of the improper 
     payment estimates and methodology of the agency; and
       ``(II) the oversight or financial controls to identify and 
     prevent improper payments; and

       ``(ii) provide recommendations, for modifying any plans of 
     the agency, including improvements for improper payments 
     determination and estimation methodology.'';
       (3) in subsection (d) (as redesignated by paragraph (1) of 
     this subsection), by striking ``subsection (b)'' each place 
     that term appears and inserting ``subsection (c)''; and
       (4) in subsection (e) (as redesignated by paragraph (1) of 
     this subsection), by striking ``subsection (b)'' and 
     inserting ``subsection (c)''.
       (b) Improved Estimates.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget shall provide guidance to agencies for 
     improving the estimates of improper payments under the 
     Improper Payments Information Act of 2002 (31 U.S.C. 3321 
     note).
       (2) Guidance.--Guidance under this subsection shall--
       (A) strengthen the estimation process of agencies by 
     setting standards for agencies to follow in determining the 
     underlying validity of sampled payments to ensure amounts 
     being billed are proper; and
       (B) instruct agencies to give the persons or entities 
     performing improper payments estimates access to all 
     necessary payment data, including access to relevant 
     documentation;
       (C) explicitly bar agencies from relying on self-reporting 
     by the recipients of agency payments as the sole source basis 
     for improper payments estimates;
       (D) require agencies to include all identified improper 
     payments in the reported estimate, regardless of whether the 
     improper payment in question has been or is being recovered;
       (E) include payments to employees, including salary, 
     locality pay, travel pay, purchase card use, and other 
     employee payments, as subject to risk assessment and, where 
     appropriate, improper payment estimation; and
       (F) require agencies to tailor their corrective actions for 
     the high-priority programs identified under section 
     2(b)(1)(A) of the Improper Payments Information Act of 2002 
     (31 U.S.C. 3321 note) to better reflect the unique processes, 
     procedures, and risks involved in each specific program.
       (c) Technical and Conforming Amendments.--The Improper 
     Payments Elimination and Recovery Act of 2010 (Public Law 
     111-204; 124 Stat. 2224) is amended--
       (1) in section 2(h)(1) (31 U.S.C. 3321 note), by striking 
     ``section 2(f)'' and all that follows and inserting ``section 
     2(g) of the Improper Payments Information Act of 2002 (31 
     U.S.C. 3321 note).''; and
       (2) in section 3(a) (31 U.S.C. 3321 note)--
       (A) in paragraph (1), by striking ``section 2(f)'' and all 
     that follows and inserting ``section 2(g) of the Improper 
     Payments Information Act of 2002 (31 U.S.C. 3321 note).''; 
     and
       (B) in paragraph (3)--
       (i) by striking ``section 2(b)'' each place it appears and 
     inserting ``section 2(c)''; and
       (ii) by striking ``section 2(c)'' each place it appears and 
     inserting ``section 2(d)''.

     SEC. 4. IMPROPER PAYMENTS INFORMATION.

       Section 2(a)(3)(A)(ii) of the Improper Payments Information 
     Act of 2002 (31 U.S.C. 3321 note) is amended by striking 
     ``with respect to fiscal years following September 30th of a 
     fiscal year beginning before fiscal year 2013 as determined 
     by the Office of Management and Budget'' and inserting ``with 
     respect to fiscal year 2014 and each fiscal year 
     thereafter''.

     SEC. 5. DO NOT PAY INITIATIVE.

       (a) Prepayment and Preaward Procedures.--
       (1) In general.--Each agency shall review prepayment and 
     preaward procedures and ensure that a thorough review of 
     available databases with relevant information on eligibility 
     occurs to determine program or award eligibility and prevent 
     improper payments before the release of any Federal funds.
       (2) Databases.--At a minimum and before issuing any payment 
     and award, each agency shall review as appropriate the 
     following databases to verify eligibility of the payment and 
     award:
       (A) The Death Master File of the Social Security 
     Administration.
       (B) The General Services Administration's Excluded Parties 
     List System.
       (C) The Debt Check Database of the Department of the 
     Treasury.
       (D) The Credit Alert System or Credit Alert Interactive 
     Voice Response System of the Department of Housing and Urban 
     Development.
       (E) The List of Excluded Individuals/Entities of the Office 
     of Inspector General of the Department of Health and Human 
     Services.
       (b) Do Not Pay Initiative.--
       (1) Establishment.--There is established the Do Not Pay 
     Initiative which shall consist of--
       (A) the databases described under subsection (a)(2); and
       (B) any other database designated by the Director of the 
     Office of Management and Budget in consultation with 
     agencies.
       (2) Other databases.--In making designations of other 
     databases under paragraph (1)(B), the Director of the Office 
     of Management and Budget shall consider any database that 
     assists in preventing improper payments.
       (3) Access and review by agencies.--For purposes of 
     identifying and preventing improper payments, each agency 
     shall have access to, and use of, the Do Not Pay Initiative 
     to determine payment or award eligibility when the Director 
     of the Office of Management and Budget determines the Do Not 
     Pay Initiative is appropriately established for the agency.
       (4) Payment otherwise required.--When using the Do Not Pay 
     Initiative, an agency shall recognize that there may be 
     circumstances under which the law requires a payment or award 
     to be made to a recipient, regardless of whether that 
     recipient is on the Do Not Pay Initiative.

[[Page 13049]]

       (c) Database Integration Plan.--Not later than 60 days 
     after the date of enactment of this Act, the Director of the 
     Office of Management and Budget shall provide to the Congress 
     a plan for--
       (1) inclusion of other databases on the Do Not Pay 
     Initiative;
       (2) to the extent permitted by law, agency access to the Do 
     Not Pay Initiative; and
       (3) the multilateral data use agreements described under 
     subsection (e).
       (d) Initial Working System.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall establish a working system for 
     prepayment and preaward review that includes the Do Not Pay 
     Initiative as described under this section.
       (2) Working system.--The working system established under 
     paragraph (1)--
       (A) may be located within an appropriate agency;
       (B) shall include not less than 3 agencies as users of the 
     system; and
       (C) shall include investigation activities for fraud and 
     systemic improper payments detection through analytic 
     technologies and other techniques, which may include 
     commercial database use or access.
       (3) Application to all agencies.--Not later than January 1, 
     2013, each agency shall review all payments and awards for 
     all programs of that agency through the system established 
     under this subsection.
       (e) Multilateral Data Use Agreements.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget shall develop a plan to establish a 
     multilateral data use agreement authority to carry out this 
     section, including access to databases such as the New Hire 
     Database under section 453(j) of the Social Security Act (42 
     U.S.C. 653(j)).
       (2) Privacy act matching agreements.--Section 552a(o)(1) of 
     title 5, United States Code, is amended in the matter 
     preceding subparagraph (A), by inserting ``or an agreement 
     governing multiple agencies'' before ``specifying''.
       (3) General protocols and security.--
       (A) In general.--In developing the multilateral data use 
     agreements, the Director of the Office of Management and 
     Budget shall establish implementing regulations and 
     guidelines that include streamlined interagency processes to 
     ensure agency access to data, and provide for appropriate 
     transfer and storage of any transferred data, in a manner 
     consistent with relevant privacy, security and disclosure 
     laws.
       (B) Consultation.--The Director of the Office of Management 
     and Budget shall consult with--
       (i) the Council of Inspectors General on Integrity and 
     Efficiency before implementing this paragraph; and
       (ii) the Secretary of Health and Human Services, the Social 
     Security Administrator, and the head of any other agency, as 
     appropriate.
       (f) Development and Access to a Database of Incarcerated 
     Individuals.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall submit to 
     Congress recommendations for increasing the use of, access 
     to, and the technical feasibility of using data on the 
     Federal, State, and local conviction and incarceration status 
     of individuals for purposes of identifying and preventing 
     improper payments by Federal agencies and programs and fraud.
       (g) Plan To Curb Federal Improper Payments to Deceased 
     Individuals by Improving the Quality and Use by Federal 
     Agencies of the Social Security Administration Death Master 
     File.--
       (1) Establishment.--In conjunction with the Commissioner of 
     Social Security and in consultation with relevant 
     stakeholders that have an interest in or responsibility for 
     providing the data, and the States, the Director of the 
     Office of Management and Budget shall establish a plan for 
     improving the quality, accuracy, and timeliness of death data 
     maintained by the Social Security Administration, including 
     death information reported to the Commissioner under section 
     205(r) of the Social Security Act (42 U.S.C. 405(r)).
       (2) Additional actions under plan.--The plan established 
     under this subsection shall include recommended actions by 
     agencies to--
       (A) increase the quality and frequency of access to the 
     Death Master File and other death data;
       (B) achieve a goal of at least daily access as appropriate;
       (C) provide for all States and other data providers to use 
     improved and electronic means for providing data;
       (D) identify improved methods by agencies for determining 
     ineligible payments due to the death of a recipient through 
     proactive verification means; and
       (E) address improper payments made by agencies to deceased 
     individuals as part of Federal retirement programs.
       (3) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget shall submit a report to Congress on 
     the plan established under this subsection, including 
     recommended legislation.

     SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.

       (a) Definition.--In this section, the term ``recovery 
     audit'' means a recovery audit described under section 2(h) 
     of the Improper Payments Elimination and Recovery Act of 
     2010.
       (b) In General.--The Director of the Office of Management 
     and Budget shall determine--
       (1) current and historical rates and amounts of recovery of 
     improper payments (or, in cases in which improper payments 
     are identified solely on the basis of a sample, recovery 
     rates and amounts estimated on the basis of the applicable 
     sample), including specific information of amounts and 
     payments recovered by recovery audit contractors; and
       (2) targets for recovering improper payments, including 
     specific information on amounts and payments recovered by 
     recovery audit contractors.
       (c) Recovery Audit Contractor Programs.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall establish a plan for no less than 
     10 Recovery Audit Contracting programs for the purpose of 
     identifying and recovering overpayments and underpayments in 
     10 agencies.
       (2) Range of recovery audit contracting types.--Programs 
     established under paragraph (1) shall be representative of 
     different types of--
       (A) programs, including programs that differ in size, 
     payment types, and recipient types (such as beneficiaries and 
     vendors or contractors) across the Federal Government; and
       (B) recover audit contracting (including individual 
     payments review and demographic analysis).
       (3) Initial operation of programs.--Not later than 1 year 
     after the plan under paragraph (1) is established, each 
     applicable agency shall establish the programs included in 
     that plan which shall be conducted for not more than a 3-year 
     period.
       (4) Reports.--
       (A) In general.--Not later than 2 years after establishing 
     a program under the plan established under paragraph (1), the 
     head of the agency conducting the program shall submit a 
     report on the program to Congress.
       (B) Contents.--Each report under this paragraph shall 
     include--
       (i) a description of the impact of the program on savings 
     and recoveries; and
       (ii) such recommendations as the head of the agency 
     considers appropriate on extending or expanding the program.

  Mr. REID. Mr. President, I ask unanimous consent that the committee-
reported substitute amendment be considered, the Carper amendment, 
which is at the desk, be agreed to, the committee-reported amendment, 
as amended, be agreed to, and the bill, as amended, be read a third 
time and passed, the motion to reconsider be laid upon the table, with 
no intervening action or debate, and any related statements be printed 
in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2770) was agreed to, as follows:

                (Purpose: In the nature of a substitute)

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Improper Payments 
     Elimination and Recovery Improvement Act of 2012''.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the term ``agency'' means an executive agency as that 
     term is defined under section 102 of title 31, United States 
     Code; and
       (2) the term ``improper payment'' has the meaning given 
     that term in section 2(g) of the Improper Payments 
     Information Act of 2002 (31 U.S.C. 3321 note), as 
     redesignated by section 3(a)(1) of this Act.

     SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY 
                   FEDERAL AGENCIES.

       (a) In General.--Section 2 of the Improper Payments 
     Information Act of 2002 (31 U.S.C. 3321 note) is amended--
       (1) by redesignating subsections (b) through (g) as 
     subsections (c) through (h), respectively;
       (2) by inserting after subsection (a) the following:
       ``(b) Improving the Determination of Improper Payments.--
       ``(1) In general.--The Director of the Office of Management 
     and Budget shall on an annual basis--
       ``(A) identify a list of high-priority Federal programs for 
     greater levels of oversight and review--
       ``(i) in which the highest dollar value or highest rate of 
     improper payments occur; or
       ``(ii) for which there is a higher risk of improper 
     payments; and
       ``(B) in coordination with the agency responsible for 
     administering the high-priority program, establish annual 
     targets and semi-annual or quarterly actions for reducing 
     improper payments associated with each high-priority program.
       ``(2) Report on high-priority improper payments.--
       ``(A) In general.--Subject to Federal privacy policies and 
     to the extent permitted by law, each agency with a program 
     identified under paragraph (1)(A) on an annual basis shall 
     submit to the Inspector General of that agency, and make 
     available to the public (including availability through the 
     Internet), a report on that program.
       ``(B) Contents.--Each report under this paragraph--

[[Page 13050]]

       ``(i) shall describe--

       ``(I) any action the agency--

       ``(aa) has taken or plans to take to recover improper 
     payments; and
       ``(bb) intends to take to prevent future improper payments; 
     and
       ``(ii) shall not include any referrals the agency made or 
     anticipates making to the Department of Justice, or any 
     information provided in connection with such referrals.
       ``(C) Public availability on central website.--The Office 
     of Management and Budget shall make each report submitted 
     under this paragraph available on a central website.
       ``(D) Availability of information to inspector general.--
     Subparagraph (B)(ii) shall not prohibit any referral or 
     information being made available to an Inspector General as 
     otherwise provided by law.
       ``(E) Assessment and recommendations.--The Inspector 
     General of each agency that submits a report under this 
     paragraph shall, for each program of the agency that is 
     identified under paragraph (1)(A)--
       ``(i) review--

       ``(I) the assessment of the level of risk associated with 
     the program, and the quality of the improper payment 
     estimates and methodology of the agency relating to the 
     program; and
       ``(II) the oversight or financial controls to identify and 
     prevent improper payments under the program; and

       ``(ii) submit to Congress recommendations, which may be 
     included in another report submitted by the Inspector General 
     to Congress, for modifying any plans of the agency relating 
     to the program, including improvements for improper payments 
     determination and estimation methodology.'';
       (3) in subsection (d) (as redesignated by paragraph (1) of 
     this subsection), by striking ``subsection (b)'' each place 
     that term appears and inserting ``subsection (c)'';
       (4) in subsection (e) (as redesignated by paragraph (1) of 
     this subsection), by striking ``subsection (b)'' and 
     inserting ``subsection (c)''; and
       (5) in subsection (g)(3) (as redesignated by paragraph (1) 
     of this subsection), by inserting ``or a Federal employee'' 
     after ``non-Federal person or entity''.
       (b) Improved Estimates.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget shall provide guidance to agencies for 
     improving the estimates of improper payments under the 
     Improper Payments Information Act of 2002 (31 U.S.C. 3321 
     note).
       (2) Guidance.--Guidance under this subsection shall--
       (A) strengthen the estimation process of agencies by 
     setting standards for agencies to follow in determining the 
     underlying validity of sampled payments to ensure amounts 
     being billed are proper; and
       (B) instruct agencies to give the persons or entities 
     performing improper payments estimates access to all 
     necessary payment data, including access to relevant 
     documentation;
       (C) explicitly bar agencies from relying on self-reporting 
     by the recipients of agency payments as the sole source basis 
     for improper payments estimates;
       (D) require agencies to include all identified improper 
     payments in the reported estimate, regardless of whether the 
     improper payment in question has been or is being recovered;
       (E) include payments to employees, including salary, 
     locality pay, travel pay, purchase card use, and other 
     employee payments, as subject to risk assessment and, where 
     appropriate, improper payment estimation; and
       (F) require agencies to tailor their corrective actions for 
     the high-priority programs identified under section 
     2(b)(1)(A) of the Improper Payments Information Act of 2002 
     (31 U.S.C. 3321 note) to better reflect the unique processes, 
     procedures, and risks involved in each specific program.
       (c) Technical and Conforming Amendments.--The Improper 
     Payments Elimination and Recovery Act of 2010 (Public Law 
     111-204; 124 Stat. 2224) is amended--
       (1) in section 2(h)(1) (31 U.S.C. 3321 note), by striking 
     ``section 2(f)'' and all that follows and inserting ``section 
     2(g) of the Improper Payments Information Act of 2002 (31 
     U.S.C. 3321 note).''; and
       (2) in section 3(a) (31 U.S.C. 3321 note)--
       (A) in paragraph (1), by striking ``section 2(f)'' and all 
     that follows and inserting ``section 2(g) of the Improper 
     Payments Information Act of 2002 (31 U.S.C. 3321 note).''; 
     and
       (B) in paragraph (3)--
       (i) by striking ``section 2(b)'' each place it appears and 
     inserting ``section 2(c)''; and
       (ii) by striking ``section 2(c)'' each place it appears and 
     inserting ``section 2(d)''.

     SEC. 4. IMPROPER PAYMENTS INFORMATION.

       Section 2(a)(3)(A)(ii) of the Improper Payments Information 
     Act of 2002 (31 U.S.C. 3321 note) is amended by striking 
     ``with respect to fiscal years following September 30th of a 
     fiscal year beginning before fiscal year 2013 as determined 
     by the Office of Management and Budget'' and inserting ``with 
     respect to fiscal year 2014 and each fiscal year 
     thereafter''.

     SEC. 5. DO NOT PAY INITIATIVE.

       (a) Prepayment and Preaward Procedures.--
       (1) In general.--Each agency shall review prepayment and 
     preaward procedures and ensure that a thorough review of 
     available databases with relevant information on eligibility 
     occurs to determine program or award eligibility and prevent 
     improper payments before the release of any Federal funds.
       (2) Databases.--At a minimum and before issuing any payment 
     and award, each agency shall review as appropriate the 
     following databases to verify eligibility of the payment and 
     award:
       (A) The Death Master File of the Social Security 
     Administration.
       (B) The General Services Administration's Excluded Parties 
     List System.
       (C) The Debt Check Database of the Department of the 
     Treasury.
       (D) The Credit Alert System or Credit Alert Interactive 
     Voice Response System of the Department of Housing and Urban 
     Development.
       (E) The List of Excluded Individuals/Entities of the Office 
     of Inspector General of the Department of Health and Human 
     Services.
       (b) Do Not Pay Initiative.--
       (1) Establishment.--There is established the Do Not Pay 
     Initiative which shall include--
       (A) use of the databases described under subsection (a)(2); 
     and
       (B) use of other databases designated by the Director of 
     the Office of Management and Budget in consultation with 
     agencies and in accordance with paragraph (2).
       (2) Other databases.--In making designations of other 
     databases under paragraph (1)(B), the Director of the Office 
     of Management and Budget shall--
       (A) consider any database that substantially assists in 
     preventing improper payments; and
       (B) provide public notice and an opportunity for comment 
     before designating a database under paragraph (1)(B).
       (3) Access and review by agencies.--For purposes of 
     identifying and preventing improper payments, each agency 
     shall have access to, and use of, the Do Not Pay Initiative 
     to verify payment or award eligibility in accordance with 
     subsection (a) when the Director of the Office of Management 
     and Budget determines the Do Not Pay Initiative is 
     appropriately established for the agency.
       (4) Payment otherwise required.--When using the Do Not Pay 
     Initiative, an agency shall recognize that there may be 
     circumstances under which the law requires a payment or award 
     to be made to a recipient, regardless of whether that 
     recipient is identified as potentially ineligible under the 
     Do Not Pay Initiative.
       (5) Annual report.--The Director of the Office of 
     Management and Budget shall submit to Congress an annual 
     report, which may be included as part of another report 
     submitted to Congress by the Director, regarding the 
     operation of the Do Not Pay Initiative, which shall--
       (A) include an evaluation of whether the Do Not Pay 
     Initiative has reduced improper payments or improper awards; 
     and
       (B) provide the frequency of corrections or identification 
     of incorrect information.
       (c) Database Integration Plan.--Not later than 60 days 
     after the date of enactment of this Act, the Director of the 
     Office of Management and Budget shall provide to the Congress 
     a plan for--
       (1) inclusion of other databases on the Do Not Pay 
     Initiative;
       (2) to the extent permitted by law, agency access to the Do 
     Not Pay Initiative; and
       (3) the multilateral data use agreements described under 
     subsection (e).
       (d) Initial Working System.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall establish a working system for 
     prepayment and preaward review that includes the Do Not Pay 
     Initiative as described under this section.
       (2) Working system.--The working system established under 
     paragraph (1)--
       (A) may be located within an appropriate agency;
       (B) shall include not less than 3 agencies as users of the 
     system; and
       (C) shall include investigation activities for fraud and 
     systemic improper payments detection through analytic 
     technologies and other techniques, which may include 
     commercial database use or access.
       (3) Application to all agencies.--Not later than June 1, 
     2013, each agency shall review all payments and awards for 
     all programs of that agency through the system established 
     under this subsection.
       (e) Facilitating Data Access by Federal Agencies and 
     Offices of Inspectors General for Purposes of Program 
     Integrity.--
       (1) Definition.--In this subsection, the term ``Inspector 
     General'' means an Inspector General described in 
     subparagraph (A), (B), or (I) of section 11(b)(1) of the 
     Inspector General Act of 1978 (5 U.S.C. App.).
       (2) Computer matching by federal agencies for purposes of 
     investigation and prevention of improper payments and 
     fraud.--
       (A) In general.--Except as provided in this paragraph, in 
     accordance with section 552a of title 5, United States Code 
     (commonly known as the Privacy Act of 1974), each Inspector 
     General and the head of each agency

[[Page 13051]]

     may enter into computer matching agreements that allow 
     ongoing data matching (which shall include automated data 
     matching) in order to assist in the detection and prevention 
     of improper payments.
       (B) Review.--Not later than 60 days after a proposal for an 
     agreement under subparagraph (A) has been presented to a Data 
     Integrity Board established under section 552a(u) of title 5, 
     United States Code, for consideration, the Data Integrity 
     Board shall respond to the proposal.
       (C) Termination date.--An agreement under subparagraph 
     (A)--
       (i) shall have a termination date of less than 3 years; and
       (ii) during the 3-month period ending on the date on which 
     the agreement is scheduled to terminate, may be renewed by 
     the agencies entering the agreement for not more than 3 
     years.
       (D) Multiple agencies.--For purposes of this paragraph, 
     section 552a(o)(1) of title 5, United States Code, shall be 
     applied by substituting ``between the source agency and the 
     recipient agency or non-Federal agency or an agreement 
     governing multiple agencies'' for ``between the source agency 
     and the recipient agency or non-Federal agency'' in the 
     matter preceding subparagraph (A).
       (E) Cost-benefit analysis.--A justification under section 
     552a(o)(1)(B) of title 5, United States Code, relating to an 
     agreement under subparagraph (A) is not required to contain a 
     specific estimate of any savings under the computer matching 
     agreement.
       (F) Guidance by the office of management and budget.--Not 
     later than 6 months after the date of enactment of this Act, 
     and in consultation with the Council of Inspectors General on 
     Integrity and Efficiency, the Secretary of Health and Human 
     Services, the Commissioner of Social Security, and the head 
     of any other relevant agency, the Director of the Office of 
     Management and Budget shall--
       (i) issue guidance for agencies regarding implementing this 
     paragraph, which shall include standards for--

       (I) reimbursement of costs, when necessary, between 
     agencies;
       (II) retention and timely destruction of records in 
     accordance with section 552a(o)(1)(F) of title 5, United 
     States Code;
       (III) prohibiting duplication and redisclosure of records 
     in accordance with section 552a(o)(1)(H) of title 5, United 
     States Code;

       (ii) review the procedures of the Data Integrity Boards 
     established under section 552a(u) of title 5, United States 
     Code, and develop new guidance for the Data Integrity Boards 
     to--

       (I) improve the effectiveness and responsiveness of the 
     Data Integrity Boards; and
       (II) ensure privacy protections in accordance with section 
     552a of title 5, United States Code (commonly known as the 
     Privacy Act of 1974); and
       (III) establish standard matching agreements for use when 
     appropriate; and

       (iii) establish and clarify rules regarding what 
     constitutes making an agreement entered under subparagraph 
     (A) available upon request to the public for purposes of 
     section 552a(o)(2)(A)(ii) of title 5, United States Code, 
     which shall include requiring publication of the agreement on 
     a public website.
       (G) Corrections.--The Director of the Office of Management 
     and Budget shall establish procedures providing for the 
     correction of data in order to ensure--
       (i) compliance with section 552a(p) of title 5, United 
     States Code; and
       (ii) that corrections are made in any Do Not Pay Initiative 
     database and in any relevant source databases designated by 
     the Director of the Office of Management and Budget under 
     subsection (b)(1).
       (H) Compliance.--The head of each agency, in consultation 
     with the Inspector General of the agency, shall ensure that 
     any information provided to an individual or entity under 
     this subsection is provided in accordance with protocols 
     established under this subsection.
       (I) Rule of construction.--Nothing in this subsection shall 
     be construed to affect the rights of an individual under 
     section 552a(p) of title 5, United States Code.
       (f) Development and Access to a Database of Incarcerated 
     Individuals.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall submit to 
     Congress recommendations for increasing the use of, access 
     to, and the technical feasibility of using data on the 
     Federal, State, and local conviction and incarceration status 
     of individuals for purposes of identifying and preventing 
     improper payments by Federal agencies and programs and fraud.
       (g) Plan To Curb Federal Improper Payments to Deceased 
     Individuals by Improving the Quality and Use by Federal 
     Agencies of the Social Security Administration Death Master 
     File.--
       (1) Establishment.--In conjunction with the Commissioner of 
     Social Security and in consultation with relevant 
     stakeholders that have an interest in or responsibility for 
     providing the data, and the States, the Director of the 
     Office of Management and Budget shall establish a plan for 
     improving the quality, accuracy, and timeliness of death data 
     maintained by the Social Security Administration, including 
     death information reported to the Commissioner under section 
     205(r) of the Social Security Act (42 U.S.C. 405(r)).
       (2) Additional actions under plan.--The plan established 
     under this subsection shall include recommended actions by 
     agencies to--
       (A) increase the quality and frequency of access to the 
     Death Master File and other death data;
       (B) achieve a goal of at least daily access as appropriate;
       (C) provide for all States and other data providers to use 
     improved and electronic means for providing data;
       (D) identify improved methods by agencies for determining 
     ineligible payments due to the death of a recipient through 
     proactive verification means; and
       (E) address improper payments made by agencies to deceased 
     individuals as part of Federal retirement programs.
       (3) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget shall submit a report to Congress on 
     the plan established under this subsection, including 
     recommended legislation.

     SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.

       (a) Definition.--In this section, the term ``recovery 
     audit'' means a recovery audit described under section 2(h) 
     of the Improper Payments Elimination and Recovery Act of 
     2010.
       (b) Review.--The Director of the Office of Management and 
     Budget shall determine--
       (1) current and historical rates and amounts of recovery of 
     improper payments (or, in cases in which improper payments 
     are identified solely on the basis of a sample, recovery 
     rates and amounts estimated on the basis of the applicable 
     sample), including a list of agency recovery audit contract 
     programs and specific information of amounts and payments 
     recovered by recovery audit contractors; and
       (2) targets for recovering improper payments, including 
     specific information on amounts and payments recovered by 
     recovery audit contractors.
  The committee-reported substitute, as amended, was agreed to.
  The bill (S. 1409), as amended, was ordered to be engrossed for a 
third reading, was read the third time, and passed.

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