Number: 111- 42
Date: April 30, 2010

On April 28, 2010, the House passed H.R. 3393, the Improper Payments Elimination and Recovery Act of 2010, by a voice vote. This bill amends the Improper Payments Information Act of 2002.

The bill includes the following provisions of interest to SSA.

Three-Year Review by Agency Head

•  Beginning with the year after enactment, would require the head of each Federal agency to review agency programs and activities every three fiscal years and identify those that may be susceptible to significant improper payments.

•  Would define "significant" to mean improper payments in program or activity payments in the preceding fiscal year that may have exceeded: (1) $10 million and 2.5 percent of program outlays1 or (2) $100 million.

•  Would set forth risk factors for conducting improper payment reviews, including: (1) whether the program or activity is new to the agency; (2) the volume of payments made; (3) whether payment decisions are made outside of the agency; (4) recent major changes in program funding, authorities, practices, or procedures; (5) the level and quality of personnel training; and (6) significant deficiencies in auditing practices.

Estimates of Improper Payments and Actions to Reduce and Recover Improper Payments

•  Would require agency heads to: (1) produce a statistically valid estimate of the improper payments in their agencies; and (2) include such estimates in their annual financial statements.

•  Would expand agency reporting requirements with respect to improper payments to require reports on actions to both reduce and recover improper payments.

OMB Report Requirement and Authorization for Pilot Projects

•  Would require the Director of the Office of Management and Budget (OMB) to: (1) report to specified congressional committees in each fiscal year on actions agencies have taken to report on and recover improper payments; and (2) provide guidance to agencies for implementing actions to reduce improper payments and strategies for addressing risks and establishing internal controls. Such report would be due no later than 6 months after enactment.

•  Would authorize the Director of OMB to establish one or more pilot programs to test accountability mechanisms to ensure compliance with this Act and eliminate improper payments.

Agency Head to Conduct Recovery Audits

•  Would require agency heads to conduct recovery audits for agency programs that expend $1 million or more annually if such audits would be cost-effective.

•  Would allow agencies to retain up to 25 percent of funds recovered from a recovery audit to be used to address improper payments; up to 25 percent for the program's original purpose, and up to 5 percent for the Office of Inspector General. The remainder would be returned to General Revenues or the appropriate trust fund. This provision applies only to recoveries of overpayments made from discretionary appropriations – e.g., SSA's LAE – for years after enactment.

Inspector General Report

•  Would require each agency's Inspector General to report each fiscal year on agency compliance with this Act.

Effective Date

•  Unless otherwise specified, the provisions of the bill would be effective upon enactment.

 

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11.5 percent prior to FY2013.