Bonuses for Cost-Cutters Act of 2016

Summary: Bonuses for Cost-Cutters Act of 2016 (Sec. 2) This bill expands the cash awards 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 that: (1) an agency employee identifies as unnecessary, (2) the inspector general and the chief financial officer of the agency determine are not required for the purpose for which the amounts were made available, and (3) the rescission of which would not be detrimental to the full execution of the purposes for which the amounts were made available.  Any savings resulting from such identifications must be deposited in the Treasury and used to reduce a budget deficit or the federal debt. But agencies may retain up to 10% of such savings for the purpose of paying cash awards to employees who identify surplus salaries and expenses funds. Each fiscal year, agencies must submit reports to the Department of the Treasury regarding: (1) the total savings achieved through disclosures of possible fraud, waste, or mismanagement and identifications of surplus salaries and expenses funds by an employee; and (2) each disclosure that has merit and the number and amount of cash awards by the agency. This information must also be included in agency budget requests submitted to the Office of Management and Budget. Treasury must report annually to Congress on federal cost saving and awards based on agency reports about such employee disclosures. The Office of Personnel Management must certify annually whether each agency's cash award program complies with this bill.  Every three years, the Government Accountability Office must report on the operation of the program and any recommendations for legislative improvements. The bill prohibits the payment of awards to: (1) federal officers who serve in a position at level I of the Executive Schedule; (2) the head of an agency; or (3) a commissioner, board member, or other voting member of an independent establishment. 

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.''.