June 26, 2002


House Subcommittee Approves H.R. 4878, the "Improper Payments Reduction Act of 2002"

On June 18, 2002, the Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations of the House Committee on Government Reform approved (with an amendment) H.R. 4878, the "Improper Payments Reduction Act of 2002."

The legislation contains the following provisions:

Estimates of Improper Payments and Reports on Actions to Reduce Them

Would require the head of each Federal agency to:

  • Annually review all programs and activities they administer and identify any that may be susceptible to significant improper payments.
  • Estimate the annual amount of improper payments and include that estimate in their annual budget submission. For estimates that exceed one percent of the total program budget or 1 million dollars annually (whichever is less), would require the head of the agency to provide with the estimate a report including:
    • A statement of whether the agency has the information systems and other infrastructure necessary to reduce improper payments to minimal cost-effective levels;
    • A description of the resources it has requested in its budget submission to get the necessary information systems and infrastructure; and
    • A description of the steps that the agency has taken to ensure accountability by responsible agency managers for reducing improper payments.

Guidance by the Office of Management and Budget (OMB)

  • Would require OMB to issue guidance on implementation of this Act.