Senate passes improper payment bill

The Senate on Wednesday approved legislation that requires agencies to identify and recover an estimated $98 billion in taxpayer funds lost annually because of improper payments.

The chamber passed the Improper Payments Elimination and Recovery Act by unanimous consent. The bipartisan bill mandates enhanced oversight of improper payments and will penalize agencies that consistently fail to fix accounting mistakes.

Co-sponsored by Sens. Tom Carper, D-Del.; Tom Coburn, R-Okla.; Susan Collins, R-Maine; John McCain, R-Ariz., and Claire McCaskill, D-Mo., the bill will amend the 2002 Improper Payments Information Act by lowering the threshold for which agencies must report improper payments.

"Agencies will have to be more aggressive in adopting proven strategies to root out waste, fraud and abuse," Carper said. "In addition to requiring agencies to identify and recover improper payments, we're giving agencies the tools to prevent wasteful spending from happening in the first place.

The bill mandates that agencies conduct recovery audits for any program that spends $1 million or more annually. In addition, agency heads would be required to review once every three years all programs that could be susceptible to significant improper payments and produce corrective action plans for preventing future waste. Programs with at least $100 million in improper payments will have to be reported to Congress.

As an incentive to rooting out erroneous payments, agencies will be allowed to retain 25 percent of recovered funds for a federal financial management program; 25 percent for the program's original purpose and 5 percent for the inspector general's office. The remainder will be returned to the general treasury to lower the debt.

If an agency fails to curtail its improper payments for two consecutive years, the Office of Management and Budget can authorize other agency funds be reprogrammed to improve the program's compliance. If a program is not in compliance for three consecutive years, then the agency must submit to a congressional reauthorization process.

The House in April passed a nearly identical version of the bill, sponsored by Patrick Murphy, D-Pa. The Senate bill now goes back to the House, where it is expected to be easily approved.

The bill stems from an April 2009 report by the Government Accountability Office that found an estimated $72 billion in federal improper payments in fiscal 2008 -- or roughly 4 percent of the $1.8 trillion of documented outlays for those related programs. The watchdog discovered that the figure should actually be higher, but some programs were not adequately tracked.

"Each year, the federal government washes billions of taxpayer dollars down the drain through improper payments, McCain said. "This waste is even more unconscionable in the present economy, as American families and businesses are struggling financially."

The White House also has made efforts recently to reduce federal improper payments.

In March, President Obama signed a memorandum directing federal agencies to use more incentive-based audit techniques to identify payments wasted through error or fraud. The administration's fiscal 2012 budget submissions also directs agencies to outline specific actions that will contribute to the governmentwide goal of reducing improper payments by $20 billion. And, last week, Obama established a Do Not Pay list, a single online destination where agencies can check the status of recipients of federal funds before sending payment.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.