[House Report 114-824]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-824
======================================================================
BONUSES FOR COST-CUTTERS ACT OF 2016
_______
November 14, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2532]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 2532) to amend title 5, United
States Code, to enhance the authority under which Federal
agencies may pay cash awards to employees for making cost
saving disclosures, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
CONTENTS
Page
Committee Statement and Views.................................... 3
Section-by-Section............................................... 5
Explanation of Amendments........................................ 6
Committee Consideration.......................................... 6
Roll Call Votes.................................................. 6
Application of Law to the Legislative Branch..................... 6
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 7
Statement of General Performance Goals and Objectives............ 7
Duplication of Federal Programs.................................. 7
Disclosure of Directed Rule Makings.............................. 7
Federal Advisory Committee Act................................... 7
Unfunded Mandate Statement....................................... 7
Earmark Identification........................................... 7
Committee Estimate............................................... 8
Budget Authority and Congressional Budget Office Cost Estimate... 8
Changes in Existing Law Made by the Bill, as Reported............ 9
Minority Views................................................... 13
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bonuses for Cost-Cutters Act of
2016''.
SEC. 2. COST SAVINGS ENHANCEMENTS.
(a) In General.--
(1) Definitions.--Section 4511 of title 5, United States
Code, is amended--
(A) in the section heading, by striking
``Definition'' and inserting ``Definitions''; and
(B) in subsection (a)--
(i) by striking the period at the end and
inserting ``; and''; and
(ii) by striking ``this subchapter, the
term'' and inserting the following: ``this
subchapter--
``(1) the term'';
(iii) by adding at the end the following:
``(2) the term `surplus salaries and expenses funds' means
amounts made available for the salaries and expenses account,
or equivalent account, of an agency--
``(A) that are identified by an employee of the
agency under section 4512(a) as unnecessary;
``(B) that the Inspector General of the agency or
other agency employee designated under section 4512(b)
determines are not required for the purpose for which
the amounts were made available;
``(C) that the Chief Financial Officer of the agency
determines are not required for the purpose for which
the amounts were made available; and
``(D) the rescission of which would not be
detrimental to the full execution of the purposes for
which the amounts were made available.''.
(2) Authority.--Section 4512 of title 5, United States Code,
is amended--
(A) in subsection (a)--
(i) in the matter preceding paragraph (1), by
inserting ``or identification of surplus
salaries and expenses funds'' after
``mismanagement'';
(ii) in paragraph (2), by inserting ``or
identification'' after ``disclosure''; and
(iii) in the matter following paragraph (2),
by inserting ``or identification'' after
``disclosure''; and
(B) by adding at the end the following:
``(c)(1) The Inspector General of an agency or other agency employee
designated under subsection (b) shall refer to the Chief Financial
Officer of the agency any potential surplus salaries and expenses funds
identified by an employee that the Inspector General or other agency
employee determines meets the requirements under subparagraphs (B) and
(D) of section 4511(a)(2), along with any recommendations of the
Inspector General or other agency employee.
``(2)(A) If the Chief Financial Officer of the agency determines that
potential surplus salaries and expenses funds referred under paragraph
(1) meet the requirements under section 4511(a)(2), except as provided
in subsection (d), the head of the agency shall transfer the amount of
the surplus funds or unnecessary budget authority from the applicable
appropriations account to the general fund of the Treasury.
``(B) Any amounts transferred under subparagraph (A) shall be
deposited in the Treasury and used for deficit reduction, except that
in the case of a fiscal year for which there is no Federal budget
deficit, such amounts shall be used to reduce the Federal debt (in such
manner as the Secretary of the Treasury considers appropriate).
``(3) The Inspector General or other agency employee designated under
subsection (b) for each agency and the Chief Financial Officer for each
agency shall issues standards and definitions for purposes of making
determinations relating to potential surplus salaries and expenses
funds identified by an employee under this subsection.
``(d)(1) The head of an agency may retain not more than 10 percent of
amounts to be transferred to the general fund of the Treasury under
subsection (c)(2).
``(2) Amounts retained by the head of an agency under paragraph (1)
may be--
``(A) used for the purpose of paying a cash award under
subsection (a) to 1 or more employees who identified the
surplus salaries and expenses funds; and
``(B) to the extent amounts remain after paying cash awards
under subsection (a), transferred or reprogrammed for use by
the agency, in accordance with any limitation on such a
transfer or reprogramming under any other provision of law.
``(e)(1) Not later than October 1 of each fiscal year, the head of
each agency shall submit to the Secretary of the Treasury a report
identifying the total savings achieved during the previous fiscal year
through disclosures of possible fraud, waste, or mismanagement and
identifications of surplus salaries and expenses funds by an employee.
``(2) Not later than September 30 of each fiscal year, the head of
each agency shall submit to the Secretary of the Treasury a report
that, for the previous fiscal year--
``(A) describes each disclosure of possible fraud, waste, or
mismanagement or identification of potentially surplus salaries
and expenses funds by an employee of the agency determined by
the agency to have merit; and
``(B) provides the number and amount of cash awards by the
agency under subsection (a).
``(3) The head of each agency shall include the information described
in paragraphs (1) and (2) in each budget request of the agency
submitted to the Office of Management and Budget as part of the
preparation of the budget of the President submitted to Congress under
section 1105(a) of title 31.
``(4) The Secretary of the Treasury shall submit to the Committee on
Appropriations of the Senate, the Committee on Appropriations of the
House of Representatives, and the Government Accountability Office an
annual report on Federal cost saving and awards based on the reports
submitted under paragraphs (1) and (2).
``(f) The Director of the Office of Personnel Management shall--
``(1) ensure that the cash award program of each agency
complies with this section; and
``(2) submit to Congress an annual certification indicating
whether the cash award program of each agency complies with
this section.
``(g) Not later than 3 years after the date of enactment of the
Bonuses for Cost-Cutters Act of 2016, and every 3 years thereafter, the
Comptroller General of the United States shall submit to Congress a
report on the operation of the cost savings and awards program under
this section, including any recommendations for legislative changes.''.
(3) Technical and conforming amendment.--The table of
sections for subchapter II of chapter 45 of title 5, United
States Code, is amended by striking the item relating to
section 4511 and inserting the following:
``4511. Definitions and general provisions.''.
(b) Officers Eligible for Cash Awards.--
(1) In general.--Section 4509 of title 5, United States Code,
is amended to read as follows:
``Sec. 4509. Prohibition of cash award to certain officers
``(a) Definitions.--In this section, the term `agency'--
``(1) has the meaning given that term under section 551(1);
but
``(2) includes an entity described in subparagraphs (A)
through (G) of section 4501(1).
``(b) Prohibition.--An officer may not receive a cash award under
this subchapter if the officer--
``(1) serves in a position at level I of the Executive
Schedule;
``(2) is the head of an agency; or
``(3) is a commissioner, board member, or other voting member
of an independent establishment.''.
(2) Technical and conforming amendment.--The table of
sections for chapter 45 of title 5, United States Code, is
amended by striking the item relating to section 4509 and
inserting the following:
``4509. Prohibition of cash award to certain officers.''.
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 2532, the Bonuses for Cost-Cutters Act of 2016,
expands the award program for disclosures by federal employees
of fraud, waste, or mismanagement that result in cost savings
to the employee's agency to include identification of surplus
salaries and expenses funds. H.R. 2532 also directs any savings
resulting from the identification of such funds or budget
authority to be deposited in the U.S. Treasury and used to
reduce a budget deficit or the federal debt.
BACKGROUND AND NEED FOR LEGISLATION
``Use it or lose it'' spending is a phenomenon where
government agencies race to spend unused budget authority
before it expires at the end of a federal fiscal year. Recent
academic studies using government contracting data have
confirmed that end of fiscal year spending surges at many
agencies.\1\ One study published by the National Bureau of
Economic Research (NBER) found that as end-of-year spending
ramps up, the quality of purchases goes down.\2\ According to
that report, ``spending in the last week of the year is 4.9
times higher than the rest-of-the-year weekly average . . .
[and] quality scores for year-end projects are 2.2 to 5.6 times
more likely to be below the central value [lower quality].''\3\
The same NBER study found that as the fiscal year expires,
money shifts from government offices in the Eastern Time Zone
to the Pacific Time Zone to gain three extra hours for last
minute spending.\4\
---------------------------------------------------------------------------
\1\For example, see: Curbing the Surge in Year-End Federal
Government Spending: Reforming ``Use It or Lose It'' Rules; Fichtner,
Jason J. and Greene, Robert; Mercatus Center at George Mason
University; September 2014; and Do Expiring Budgets Lead to Wasteful
Year-End Spending? Evidence from Federal Procurement; Liebman, Jeffrey,
& Mahoney, Neale; National Bureau of Economic Research; September 2013.
\2\Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidene
from Federal Procurement; Liebman, Jeffrey, & Mahoney, Neale; National
Bureau of Economic Research; September 2013.
\3\Id.
\4\Id.
---------------------------------------------------------------------------
H.R. 2532 addresses wasteful year-end spending by providing
a financial incentive for federal employees to report instances
of potentially unnecessary salaries and expense account funds.
H.R. 2532 includes safeguards to ensure agency operations are
not compromised when they consider eliminating salaries and
expense account funds identified as unnecessary. Both the
agency inspector general and chief financial officer must
determine that such funds are not required for the purpose for
which the amounts were made available.
H.R. 2532 directs any savings resulting from the
identification of such funds or budget authority to be
deposited in the Treasury and used for deficit reduction or, in
the case of a fiscal year when there is no federal budget
deficit, be used to reduce the federal debt. The bill permits
the head of an agency to retain up to 10 percent of such
savings for the purpose of paying cash awards to employees who
identify surplus salaries and expenses funds. Amounts remaining
after paying cash awards may be transferred or reprogrammed by
the agency. The bill prohibits the payment of awards to: (1)
the head of an agency; (2) federal officers who serve in a
position at level I of the Executive Schedule; or (3) a voting
member of an independent establishment.
LEGISLATIVE HISTORY
H.R. 2532, the Employees of America Streamlining for Your
(EASY) Savings Act of 2015, was introduced by Representative
Charles Fleischmann (R-TN) on May 21, 2015 and referred to the
Committee on Oversight and Government Reform. On September 15,
2016, the Committee held a business meeting to consider the
bill. Chairman Jason Chaffetz (R-UT) offered an amendment in
the nature of a substitute, which was adopted by voice vote.
The bill, as amended, was ordered favorably reported to the
House by voice vote.
Similar legislation, S. 1378, was introduced in the Senate
by Senator Rand Paul (R-KY) and was ordered favorably reported
by the Senate Committee on Homeland Security and Governmental
Affairs on May 25, 2016 by a record vote of 11 to 5.
Section-by-Section
Section 1. Short title
Designates the short title of the bill as the ``Bonuses for
Cost-Cutters Act of 2016''.
Section 2. Cost savings enhancements
Subsection (a)(1) amends Section 4511 of title 5, United
States Code, by adding a definition for the new term ``surplus
salaries and expenses funds'' to mean: amounts made available
for the salaries and expenses account of an agency that: (a)
are identified by an employee as unnecessary; (b) the Inspector
General determines are not required for the purpose for which
the amounts were made available; (c) the Chief Financial
Officer of the agency determines are not required for the
purpose for which the amounts were made available; and (d) the
rescission of which would not be detrimental to the full
execution of the purposes for which the amounts were made
available.
Subsection (a)(2) amends Section 4512 of title 5 to add
``identification of surplus salaries and expenses funds'' as an
action for which an employee can be eligible for a cash award.
The legislation directs the Inspector General (IG) of an agency
to refer to the agency Chief Financial Officer (CFO) any
potential surplus benefits and expenses funds identified by an
employee that the IG determines meets the terms specified under
the bill.
If the CFO determines that potential surplus salaries and
expenses funds meet the requirements, the head of the agency is
to transfer the amount of the surplus funds or unnecessary
budget authority from the applicable appropriations account to
the general fund of the Treasury. Transferred amounts are to be
used for deficit reduction, except in the case of a fiscal year
when there is no federal budget deficit. In that case,
transferred amounts will be used to reduce the federal debt in
such a manner that the Secretary of the Treasury considers
appropriate. The agency IG and CFO are responsible for issuing
standards and definitions for the purposes of making
determinations relating to surplus salaries and expenses
identified by an employee.
The head of an agency can retain up to 10 percent of
amounts to be transferred to the Treasury. The head of the
agency can use these amounts to pay cash to one or more
employees who identified the surplus salaries and expenses
funds. Remaining funds after paying cash awards may be
transferred or reprogrammed for use by the agency.
There are a number of reports associated with ensuring
accountability for this program. The head of the agency is
required to send two reports to the Secretary of the Treasury
regarding identification of possible fraud, waste, or
mismanagement and identification of surplus salaries and
expenses funds by an employee. First, each year by October 1,
they are to submit a report that identifies the total savings
achieved during the previous fiscal year from such
identification of waste, fraud, etc. Second, each year by
September 30, they are to submit a report that describes each
disclosure of waste, fraud, etc. and the number and amount of
cash awards by the agency. The agency is also to include
information from these two reports in each budget request the
agency submits to the Office of Management and Budget as part
of the preparation for the President's budget. The Secretary of
the Treasury will submit an annual report on cost savings and
awards based on the two reports mentioned above in this
paragraph to both House and Senate Committees on Appropriations
and the Government Accountability Office. The Office of
Personnel Management is responsible for ensuring that the cash
award program of each agency complies with the rules above and
submits to Congress an annual certification of its assessment.
Three years after enactment and every three years thereafter,
the Comptroller General will submit a report to Congress on the
operation of this program and any recommendations for
legislative changes.
The bill prohibits the payment of cash awards if the
employee: (1) serves in a position at Level I of the Executive
Schedule; (2) is the head of an agency; or (3) is a
commissioner, board member, or other voting member of an
independent establishment.
Explanation of Amendments
During Full Committee consideration of the bill, Chairman
Jason Chaffetz (R-UT) offered an amendment in the nature of a
substitute to the bill. The amendment: adds ``identification of
surplus salaries and expenses funds'' as an area for which an
employee can be eligible for a cash award under Section 4511 of
title 5; directs any savings resulting from the identification
of such funds or budget authority be deposited in the U.S.
Treasury and used to reduce a budget deficit or the federal
debt, while allowing the agency to retain up to ten percent of
the savings (after cash award amounts to the employee) to be
transferred or reprogrammed for use by the agency; specifies
oversight reporting; designates the short title of the bill as
the ``Bonuses for Cost-Cutters Act of 2016''; eliminates a six-
year sunset clause in the original bill; and updates the
definition of agency. The amendment in the nature of a
substitute was adopted by voice vote.
Committee Consideration
On September 15, 2016, the Committee met in open session
and ordered reported favorably the bill, H.R. 2532, as amended,
by voice vote, a quorum being present.
Roll Call Votes
No roll call votes were requested or conducted during Full
Committee consideration of H.R. 2532.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill enhances the authority under which Federal agencies
may pay cash awards to employees for making cost saving
disclosures. As such this bill does not relate to employment or
access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goal and objective of the bill is to enhance the authority
under which Federal agencies may pay cash awards to employees
for making cost saving disclosures.
Duplication of Federal Programs
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of 5 U.S.C. 551.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
herein.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Committee Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
this bill. However, clause 3(d)(2)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for this bill from the Director of
Congressional Budget Office:
September 23, 2016.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2532, the Bonuses
for Cost-Cutters Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
H.R. 2532--Bonuses for Cost-Cutters Act of 2016
Under current law, Inspectors General (IG) can pay bonuses
to federal employees who identify waste, fraud, or
mismanagement of funds. H.R. 2532 would authorize agencies to
pay bonuses to employees who identify unnecessary expenditures
from amounts provided for agencies' salaries and expenses.
Under the bill, if an agency's IG and its Chief Financial
Officer agree that funds appropriated to the agency are no
longer required then 90 percent of those surplus amounts would
be transferred to the Treasury. The agency would retain 10
percent of the surplus funds and could pay a bonus to the
employee who identified those surplus amounts.
To the extent that the process envisioned under H.R. 2532
results in fewer unnecessary expenditures, implementing the
bill could reduce federal spending; however, CBO has no basis
for estimating any reductions in spending under the bill.
Because salaries and expenses for some agencies are
mandatory appropriations, enacting the bill could affect direct
spending; therefore, pay-as-you-go procedures apply. Enacting
H.R. 2532 would not affect revenues.
CBO estimates that enacting H.R. 2532 would not increase
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
H.R. 2532 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
On July 29, 2016, CBO provided a cost estimate for S. 1378,
Bonuses for Cost-Cutters Act of 2016, as ordered reported by
the Senate Committee on Homeland Security and Governmental
Affairs on May 25, 2016. The two pieces of legislation are
similar and CBO's estimates of their budgetary effects are the
same.
The CBO staff contacts for this estimate are Megan Carroll
and Matthew Pickford. The estimate was approved by H. Samuel
Papenfuss, Deputy Assistant Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
SUBPART C--EMPLOYEE PERFORMANCE
* * * * * * *
CHAPTER 45--INCENTIVE AWARDS
* * * * * * *
SUBCHAPTER I--AWARDS FOR SUPERIOR ACCOMPLISHMENTS
Sec.
4501. Definitions.
* * * * * * *
[4509. Prohibition of cash award to Executive Schedule officers.]
4509. Prohibition of cash award to certain officers.
SUBCHAPTER II--AWARDS FOR COST SAVINGS DISCLOSURES
[4511. Definition and general provisions.]
4511. Definitions and general provisions.
SUBCHAPTER I--AWARDS FOR SUPERIOR ACCOMPLISHMENTS
* * * * * * *
[Sec. 4509. Prohibition of cash award to Executive Schedule officer
[No officer may receive a cash award under the provisions of
this subchapter, if such officer--
[(1) serves in--
[(A) an Executive Schedule position under
subchapter II of chapter 53; or
[(B) a position for which the compensation is
set in statute by reference to a section or
level under subchapter II of chapter 53; and
[(2) was appointed to such position by the President,
by and with the advice and consent of the Senate.]
Sec. 4509. Prohibition of cash award to certain officers
(a) Definitions.--In this section, the term ``agency''--
(1) has the meaning given that term under section
551(1); but
(2) includes an entity described in subparagraphs (A)
through (G) of section 4501(1).
(b) Prohibition.--An officer may not receive a cash award
under this subchapter if the officer--
(1) serves in a position at level I of the Executive
Schedule;
(2) is the head of an agency; or
(3) is a commissioner, board member, or other voting
member of an independent establishment.
SUBCHAPTER II--AWARDS FOR COST SAVINGS DISCLOSURES
Sec. 4511. [Definition] Definitions and general provisions
(a) For purposes of [this subchapter, the term] this
subchapter--
(1) the term ``agency'' means any Executive
agency[.]; and
(2) the term ``surplus salaries and expenses funds''
means amounts made available for the salaries and
expenses account, or equivalent account, of an agency--
(A) that are identified by an employee of the
agency under section 4512(a) as unnecessary;
(B) that the Inspector General of the agency
or other agency employee designated under
section 4512(b) determines are not required for
the purpose for which the amounts were made
available;
(C) that the Chief Financial Officer of the
agency determines are not required for the
purpose for which the amounts were made
available; and
(D) the rescission of which would not be
detrimental to the full execution of the
purposes for which the amounts were made
available.
(b) A cash award under this subchapter is in addition to the
regular pay of the recipient. Acceptance of a cash award under
this subchapter constitutes an agreement that the use by the
Government of an idea, method, or device for which the award is
made does not form the basis of a further claim of any nature
against the Government by the employee, his heirs, or assigns.
Sec. 4512. Agency awards for cost savings disclosures
(a) The Inspector General of an agency, or any other agency
employee designated under subsection (b), may pay a cash award
to any employee of such agency whose disclosure of fraud,
waste, or mismanagement or identification of surplus salaries
and expenses funds to the Inspector General of the agency, or
to such other designated agency employee, has resulted in cost
savings for the agency. The amount of an award under this
section may not exceed the lesser of--
(1) $10,000; or
(2) an amount equal to 1 percent of the agency's cost
savings which the Inspector General, or other employee
designated under subsection (b), determines to be the
total savings attributable to the employee's disclosure
or identification .
For purposes of paragraph (2), the Inspector General or other
designated employee may take into account agency cost savings
projected for subsequent fiscal years which will be
attributable to such disclosure or identification .
(b) In the case of an agency for which there is no Inspector
General, the head of the agency shall designate an agency
employee who shall have the authority to make the
determinations and grant the awards permitted under this
section.
(c)(1) The Inspector General of an agency or other agency
employee designated under subsection (b) shall refer to the
Chief Financial Officer of the agency any potential surplus
salaries and expenses funds identified by an employee that the
Inspector General or other agency employee determines meets the
requirements under subparagraphs (B) and (D) of section
4511(a)(2), along with any recommendations of the Inspector
General or other agency employee.
(2)(A) If the Chief Financial Officer of the agency
determines that potential surplus salaries and expenses funds
referred under paragraph (1) meet the requirements under
section 4511(a)(2), except as provided in subsection (d), the
head of the agency shall transfer the amount of the surplus
funds or unnecessary budget authority from the applicable
appropriations account to the general fund of the Treasury.
(B) Any amounts transferred under subparagraph (A) shall be
deposited in the Treasury and used for deficit reduction,
except that in the case of a fiscal year for which there is no
Federal budget deficit, such amounts shall be used to reduce
the Federal debt (in such manner as the Secretary of the
Treasury considers appropriate).
(3) The Inspector General or other agency employee designated
under subsection (b) for each agency and the Chief Financial
Officer for each agency shall issues standards and definitions
for purposes of making determinations relating to potential
surplus salaries and expenses funds identified by an employee
under this subsection.
(d)(1) The head of an agency may retain not more than 10
percent of amounts to be transferred to the general fund of the
Treasury under subsection (c)(2).
(2) Amounts retained by the head of an agency under paragraph
(1) may be--
(A) used for the purpose of paying a cash award under
subsection (a) to 1 or more employees who identified
the surplus salaries and expenses funds; and
(B) to the extent amounts remain after paying cash
awards under subsection (a), transferred or
reprogrammed for use by the agency, in accordance with
any limitation on such a transfer or reprogramming
under any other provision of law.
(e)(1) Not later than October 1 of each fiscal year, the head
of each agency shall submit to the Secretary of the Treasury a
report identifying the total savings achieved during the
previous fiscal year through disclosures of possible fraud,
waste, or mismanagement and identifications of surplus salaries
and expenses funds by an employee.
(2) Not later than September 30 of each fiscal year, the head
of each agency shall submit to the Secretary of the Treasury a
report that, for the previous fiscal year--
(A) describes each disclosure of possible fraud,
waste, or mismanagement or identification of
potentially surplus salaries and expenses funds by an
employee of the agency determined by the agency to have
merit; and
(B) provides the number and amount of cash awards by
the agency under subsection (a).
(3) The head of each agency shall include the information
described in paragraphs (1) and (2) in each budget request of
the agency submitted to the Office of Management and Budget as
part of the preparation of the budget of the President
submitted to Congress under section 1105(a) of title 31.
(4) The Secretary of the Treasury shall submit to the
Committee on Appropriations of the Senate, the Committee on
Appropriations of the House of Representatives, and the
Government Accountability Office an annual report on Federal
cost saving and awards based on the reports submitted under
paragraphs (1) and (2).
(f) The Director of the Office of Personnel Management
shall--
(1) ensure that the cash award program of each agency
complies with this section; and
(2) submit to Congress an annual certification
indicating whether the cash award program of each
agency complies with this section.
(g) Not later than 3 years after the date of enactment of the
Bonuses for Cost-Cutters Act of 2016, and every 3 years
thereafter, the Comptroller General of the United States shall
submit to Congress a report on the operation of the cost
savings and awards program under this section, including any
recommendations for legislative changes.
* * * * * * *
MINORITY VIEWS
Democratic Members of the Committee strongly support
reducing waste across the federal government, but oppose H.R.
2532 as currently drafted.
The Bonuses for Cost-Cutters Act of 2016 provides for
bonuses for employees who identify ``surplus salaries and
expenses'' that the Inspector General (IG) and agency Chief
Financial Officer (CFO) determine are not required for the
purposes for which they were made available. Under this bill,
90% of savings from identified ``surplus salaries and
expenses'' must be returned to the Treasury and used for
deficit reduction, and up to 10% may be used by the agency to
provide a bonus to the employee who identified the savings. Any
remaining amount of the 10% may be transferred or reprogrammed
by the agency pursuant to current law.
Providing incentives for employees who identify cost
savings makes sense when it is done the right way. When
government dollars are wasted, no one benefits. But this bill
could have unintended consequences that have not been examined
by this Committee. For example, the bill requires Inspectors
General to determine whether funds are being used for the
appropriate purpose. This could put IGs in the position of
making judgments about program operations, potentially
jeopardizing their independence and oversight role.
This bill also raises Constitutional concerns about
Congress's authority to direct spending to authorized programs.
It is unclear whether an agency could use this bill to reduce
funding for a program that it deems wasteful, even though
Congress has appropriated funds for the program.
The bill also could provide misaligned incentives to
employees and agencies. It could create a conflict of interest
for those employees who work on the budget process, who would
stand to benefit from inflating projected salaries and expenses
with the prospect of receiving an individual bonus by later
identifying a surplus.
Current law already permits bonuses to federal employees
who identify waste, fraud, and abuse. 5 U.S.C. section 4512
permits the IG of an agency or other designated agency employee
to pay a cash award to any employee whose disclosure of fraud,
waste, or mismanagement results in cost savings. The Majority
has not identified any gaps in this authority that would
prevent an employee from receiving a bonus for identifying
waste related to an agency's salaries and expenses account.
The Committee has not held a single hearing to explore
concerns raised about the bill or how it would work in
practice. The Committee should examine the impact of this bill
before rushing to enact it.
The American Federation of Government Employees (AFGE),
which represents approximately 670,000 federal and District of
Columbia employees, opposes this bill.
Committee Democrats strongly support reducing wasteful
government spending and are willing to work together towards
developing language this is carefully crafted towards
fulfilling that goal. This bill may be well-intentioned, but we
need to resolve these concerns before enacting a law that could
have negative unintended consequences.
Elijah E. Cummings,
Ranking Member.
[all]