[107th Congress Public Law 300]
[From the U.S. Government Printing Office]

[DOCID: f:publ300.107]

[[Page 116 STAT. 2350]]

Public Law 107-300
107th Congress

                                 An Act

  To provide for estimates and reports of improper payments by Federal 
            agencies. <<NOTE: Nov. 26, 2002 -  [H.R. 4878]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Improper Payments 
Information Act of 2002.>> assembled,

SECTION 1. <<NOTE: 31 USC 3321 note.>> SHORT TITLE.

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


    (a) Identification of Susceptible Programs and Activities.--The head 
of each agency shall, in accordance with guidance prescribed by the 
Director of the Office of Management and Budget, annually review all 
programs and activities that it administers and identify all such 
programs and activities that may be susceptible to significant improper 
    (b) Estimation of Improper Payment.--With respect to each program 
and activity identified under subsection (a), the head of the agency 
concerned shall--
            (1) estimate the annual amount of improper payments; and
            (2) <<NOTE: Deadline.>> submit those estimates to Congress 
        before March 31 of the following applicable year, with all 
        agencies using the same method of reporting, as determined by 
        the Director of the Office of Management and Budget.

    (c) Reports on Actions To Reduce Improper Payments.--With respect to 
any program or activity of an agency with estimated improper payments 
under subsection (b) that exceed $10,000,000, the head of the agency 
shall provide with the estimate under subsection (b) a report on what 
actions the agency is taking to reduce the improper payments, 
            (1) a discussion of the causes of the improper payments 
        identified, actions taken to correct those causes, and results 
        of the actions taken to address those causes;
            (2) a statement of whether the agency has the information 
        systems and other infrastructure it needs in order to reduce 
        improper payments to minimal cost-effective levels;
            (3) if the agency does not have such systems and 
        infrastructure, a description of the resources the agency has 
        requested in its budget submission to obtain the necessary 
        information systems and infrastructure; and
            (4) a description of the steps the agency has taken to 
        ensure that agency managers (including the agency head) are held 
        accountable for reducing improper payments.

[[Page 116 STAT. 2351]]

    (d) Definitions.--For the purposes of this section:
            (1) Agency.--The term ``agency'' means an executive agency, 
        as that term is defined in section 102 of title 31, United 
        States Code.
            (2) Improper payment.--The term ``improper payment''--
                    (A) means any payment that should not have been made 
                or that was made in an incorrect amount (including 
                overpayments and underpayments) under statutory, 
                contractual, administrative, or other legally applicable 
                requirements; and
                    (B) includes any payment to an ineligible recipient, 
                any payment for an ineligible service, any duplicate 
                payment, payments for services not received, and any 
                payment that does not account for credit for applicable 
            (3) Payment.--The term ``payment'' means any payment 
        (including a commitment for future payment, such as a loan 
        guarantee) that is--
                    (A) made by a Federal agency, a Federal contractor, 
                or a governmental or other organization administering a 
                Federal program or activity; and
                    (B) derived from Federal funds or other Federal 
                resources or that will be reimbursed from Federal funds 
                or other Federal resources.

    (e) Application.--This section--
            (1) applies with respect to the administration of programs, 
        and improper payments under programs, in fiscal years after 
        fiscal year 2002; and
            (2) requires the inclusion of estimates under subsection 
        (b)(2) only in annual budget submissions for fiscal years after 
        fiscal year 2003.

    (f) Guidance <<NOTE: Deadline.>> by the Office of Management and 
Budget.--Not later than 6 months after the date of enactment of this 
Act, the Director of the Office of Management and Budget shall prescribe 
guidance to implement the requirements of this section.

    Approved November 26, 2002.


SENATE REPORTS: No. 107-333 (Comm. on Governmental Affairs).
            July 9, considered and passed House.
            Oct. 17, considered and passed Senate, amended.
            Nov. 12, House concurred in Senate amendment.