PUBLIC LAW 111–204—JULY 22, 2010 

IMPROPER PAYMENTS ELIMINATION AND 

RECOVERY ACT OF 2010 


ccoleman on DSK8P6SHH1PROD with PUBLIC LAWS
124 STAT. 2224 PUBLIC LAW 111–204—JULY 22, 2010 

Public Law 111–204 

111th Congress 

An Act 

To amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) 

in order to prevent the loss of billions in taxpayer dollars. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Improper Payments Elimination 

and Recovery Act of 2010’’. 

SEC. 2. IMPROPER PAYMENTS ELIMINATION AND RECOVERY. 

(a) SUSCEPTIBLE PROGRAMS AND ACTIVITIES.—Section 2 of the 

Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) 

is amended by striking subsection (a) and inserting the following: 

‘‘(a) IDENTIFICATION OF SUSCEPTIBLE PROGRAMS AND ACTIVITIES.— 

‘‘(1) IN GENERAL.—The head of each agency shall, in accordance with guidance prescribed by the Director of the Office 

of Management and Budget, periodically review all programs 

and activities that the relevant agency head administers and 

identify all programs and activities that may be susceptible 

to significant improper payments. 

‘‘(2) FREQUENCY.—Reviews under paragraph (1) shall be 

performed for each program and activity that the relevant 

agency head administers during the year after which the 

Improper Payments Elimination and Recovery Act of 2010 is 

enacted and at least once every 3 fiscal years thereafter. For 

those agencies already performing a risk assessment every 

3 years, agencies may apply to the Director of the Office of 

Management and Budget for a waiver from the requirement 

of the preceding sentence and continue their 3-year risk assessment cycle. 

‘‘(3) RISK ASSESSMENTS.— 

‘‘(A) DEFINITION.—In this subsection the term ‘significant’ means— 

‘‘(i) except as provided under clause (ii), that 

improper payments in the program or activity in the 

preceding fiscal year may have exceeded— 

‘‘(I) $10,000,000 of all program or activity payments made during that fiscal year reported and 

2.5 percent of program outlays; or 

‘‘(II) $100,000,000; and 

‘‘(ii) with respect to fiscal years following September 30th of a fiscal year beginning before fiscal 

year 2013 as determined by the Office of Management 

Deadline. 

Guidelines. 

31 USC 3301 

note. 

Improper 

Payments 

Elimination and 

Recovery Act of 

2010. 

July 22, 2010 

[S. 1508] 


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PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2225 

and Budget, that improper payments in the program 

or activity in the preceding fiscal year may have 

exceeded— 

‘‘(I) $10,000,000 of all program or activity payments made during that fiscal year reported and 

1.5 percent of program outlays; or 

‘‘(II) $100,000,000. 

‘‘(B) SCOPE.—In conducting the reviews under paragraph (1), the head of each agency shall take into account 

those risk factors that are likely to contribute to a susceptibility to significant improper payments, such as— 

‘‘(i) whether the program or activity reviewed is 

new to the agency; 

‘‘(ii) the complexity of the program or activity 

reviewed; 

‘‘(iii) the volume of payments made through the 

program or activity reviewed; 

‘‘(iv) whether payments or payment eligibility 

decisions are made outside of the agency, such as by 

a State or local government; 

‘‘(v) recent major changes in program funding, 

authorities, practices, or procedures; 

‘‘(vi) the level, experience, and quality of training 

for personnel responsible for making program eligibility determinations or certifying that payments are 

accurate; and 

‘‘(vii) significant deficiencies in the audit report 

of the agency or other relevant management findings 

that might hinder accurate payment certification.’’. 

(b) ESTIMATION OF IMPROPER PAYMENTS.—Section 2 of the 

Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) 

is amended by striking subsection (b) and inserting the following: 

‘‘(b) ESTIMATION OF IMPROPER PAYMENTS.—With respect to each 

program and activity identified under subsection (a), the head of 

the relevant agency shall— 

‘‘(1) produce a statistically valid estimate, or an estimate 

that is otherwise appropriate using a methodology approved 

by the Director of the Office of Management and Budget, of 

the improper payments made by each program and activity; 

and 

‘‘(2) include those estimates in the accompanying materials 

to the annual financial statement of the agency required under 

section 3515 of title 31, United States Code, or similar provision 

of law and applicable guidance of the Office of Management 

and Budget.’’. 

(c) REPORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.— 

Section 2 of the Improper Payments Information Act of 2002 (31 

U.S.C. 3321 note) is amended by striking subsection (c) and 

inserting the following: 

‘‘(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), the head of the agency 

shall provide with the estimate under subsection (b) a report on 

what actions the agency is taking to reduce improper payments, 

including— 

‘‘(1) a description of the causes of the improper payments, 

actions planned or taken to correct those causes, and the 


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124 STAT. 2226 PUBLIC LAW 111–204—JULY 22, 2010 

planned or actual completion date of the actions taken to 

address those causes; 

‘‘(2) in order to reduce improper payments to a level below 

which further expenditures to reduce improper payments would 

cost more than the amount such expenditures would save in 

prevented or recovered improper payments, a statement of 

whether the agency has what is needed with respect to— 

‘‘(A) internal controls; 

‘‘(B) human capital; and 

‘‘(C) information systems and other infrastructure; 

‘‘(3) if the agency does not have sufficient resources to 

establish and maintain effective internal controls under paragraph (2)(A), a description of the resources the agency has 

requested in its budget submission to establish and maintain 

such internal controls; 

‘‘(4) program-specific and activity-specific improper payments reduction targets that have been approved by the 

Director of the Office of Management and Budget; and 

‘‘(5) a description of the steps the agency has taken to 

ensure that agency managers, programs, and, where appropriate, States and localities are held accountable through 

annual performance appraisal criteria for— 

‘‘(A) meeting applicable improper payments reduction 

targets; and 

‘‘(B) establishing and maintaining sufficient internal 

controls, including an appropriate control environment, 

that effectively— 

‘‘(i) prevent improper payments from being made; 

and 

‘‘(ii) promptly detect and recover improper payments that are made.’’. 

(d) REPORTS ON ACTIONS TO RECOVER IMPROPER PAYMENTS.— 

Section 2 of the Improper Payments Information Act of 2002 (31 

U.S.C. 3321 note) is amended— 

(1) by striking subsection (e); 

(2) by redesignating subsections (d) and (f) as subsections 

(f) and (g), respectively; and 

(3) by inserting after subsection (c) the following: 

‘‘(d) REPORTS ON ACTIONS TO RECOVER IMPROPER PAYMENTS.— 

With respect to any improper payments identified in recovery audits 

conducted under section 2(h) of the Improper Payments Elimination 

and Recovery Act of 2010 (31 U.S.C. 3321 note), the head of the 

agency shall provide with the estimate under subsection (b) a report 

on all actions the agency is taking to recover improper payments, 

including— 

‘‘(1) a discussion of the methods used by the agency to 

recover overpayments; 

‘‘(2) the amounts recovered, outstanding, and determined 

to not be collectable, including the percent such amounts represent of the total overpayments of the agency; 

‘‘(3) if a determination has been made that certain overpayments are not collectable, a justification of that determination; 

‘‘(4) an aging schedule of the amounts outstanding; 

‘‘(5) a summary of how recovered amounts have been disposed of; 

‘‘(6) a discussion of any conditions giving rise to improper 

payments and how those conditions are being resolved; and 


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PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2227 

‘‘(7) if the agency has determined under section 2(h) of 

the Improper Payments Elimination and Recovery Act of 2010 

(31 U.S.C. 3321 note) that performing recovery audits for any 

applicable program or activity is not cost-effective, a justification for that determination. 

‘‘(e) GOVERNMENTWIDE REPORTING OF IMPROPER PAYMENTS AND

ACTIONS TO RECOVER IMPROPER PAYMENTS.— ‘‘(1) REPORT.—Each fiscal year the Director of the Office 

of Management and Budget shall submit a report with respect 

to the preceding fiscal year on actions agencies have taken 

to report information regarding improper payments and actions 

to recover improper overpayments to— 

‘‘(A) the Committee on Homeland Security and Governmental Affairs of the Senate; and 

‘‘(B) the Committee on Oversight and Government 

Reform of the House of Representatives. 

‘‘(2) CONTENTS.—Each report under this subsection shall 

include— 

‘‘(A) a summary of the reports of each agency on 

improper payments and recovery actions submitted under 

this section; 

‘‘(B) an identification of the compliance status of each 

agency to which this Act applies; 

‘‘(C) governmentwide improper payment reduction targets; and 

‘‘(D) a discussion of progress made towards meeting 

governmentwide improper payment reduction targets.’’. 

(e) DEFINITIONS.—Section 2 of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by striking 

subsections (f) (as redesignated by this section) and inserting the 

following: 

‘‘(f) DEFINITIONS.—In 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 good or service, any duplicate 

payment, any payment for a good or service not received 

(except for such payments where authorized by law), and 

any payment that does not account for credit for applicable 

discounts. 

‘‘(3) PAYMENT.—The term ‘payment’ means any transfer 

or commitment for future transfer of Federal funds such as 

cash, securities, loans, loan guarantees, and insurance subsidies 

to any non-Federal person or entity, that is made by a Federal 

agency, a Federal contractor, a Federal grantee, or a governmental or other organization administering a Federal program 

or activity. 

‘‘(4) PAYMENT FOR AN INELIGIBLE GOOD OR SERVICE.—The 

term ‘payment for an ineligible good or service’ shall include 

a payment for any good or service that is rejected under any 


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124 STAT. 2228 PUBLIC LAW 111–204—JULY 22, 2010 

provision of any contract, grant, lease, cooperative agreement, 

or any other funding mechanism.’’. 

(f) GUIDANCE BY THE OFFICE OF MANAGEMENT AND BUDGET.— 

Section 2 of the Improper Payments Information Act of 2002 (31 

U.S.C. 3321 note) is amended by striking subsection (g) (as redesignated by this section) and inserting the following: 

‘‘(g) GUIDANCE BY THE OFFICE OF MANAGEMENT AND BUDGET.— 

‘‘(1) IN GENERAL.—Not later than 6 months after the date 

of enactment of the Improper Payments Elimination and 

Recovery Act of 2010, the Director of the Office of Management 

and Budget shall prescribe guidance for agencies to implement 

the requirements of this section. The guidance shall not include 

any exemptions to such requirements not specifically authorized 

by this section. 

‘‘(2) CONTENTS.—The guidance under paragraph (1) shall 

prescribe— 

‘‘(A) the form of the reports on actions to reduce 

improper payments, recovery actions, and governmentwide 

reporting; and 

‘‘(B) strategies for addressing risks and establishing 

appropriate prepayment and postpayment internal controls.’’. 

(g) DETERMINATIONS OF AGENCY READINESS FOR OPINION ON

INTERNAL CONTROL.—Not later than 1 year after the date of enactment of this Act, the Director of the Office of Management and 

Budget shall develop— 

(1) specific criteria as to when an agency should initially 

be required to obtain an opinion on internal control over 

improper payments; and 

(2) criteria for an agency that has demonstrated a stabilized, effective system of internal control over improper payments, whereby the agency would qualify for a multiyear cycle 

for obtaining an audit opinion on internal control over improper 

payments, rather than an annual cycle. 

(h) RECOVERY AUDITS.— 

(1) DEFINITION.—In this subsection, the term ‘‘agency’’ has 

the meaning given under section 2(f) of the Improper Payments 

Information Act of 2002 (31 U.S.C. 3321 note) as redesignated 

by this Act. 

(2) IN GENERAL.— 

(A) CONDUCT OF AUDITS.—Except as provided under 

paragraph (4) and if not prohibited under any other provision of law, the head of each agency shall conduct recovery 

audits with respect to each program and activity of the 

agency that expends $1,000,000 or more annually if conducting such audits would be cost-effective. 

(B) PROCEDURES.—In conducting recovery audits under 

this subsection, the head of an agency— 

(i) shall give priority to the most recent payments 

and to payments made in any program or programs 

identified as susceptible to significant improper payments under section 2(a) of the Improper Payments 

Information Act of 2002 (31 U.S.C. 3321 note); 

(ii) shall implement this subsection in a manner 

designed to ensure the greatest financial benefit to 

the Government; and 

31 USC 3321 

note. 

Deadline. 

Criteria. 

31 USC 3321 

note. 

Deadline. 


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PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2229 

(iii) may conduct recovery audits directly, by using 

other departments and agencies of the United States, 

or by procuring performance of recovery audits by private sector sources by contract (subject to the availability of appropriations), or by any combination 

thereof. 

(C) RECOVERY AUDIT CONTRACTS.—With respect to 

recovery audits procured by an agency by contract— 

(i) subject to subparagraph (B)(iii), and except to 

the extent such actions are outside the agency’s 

authority, as defined by section 605(a) of the Contract 

Disputes Act of 1978 (41 U.S.C. 605(a)), the head of 

the agency may authorize the contractor to notify entities (including persons) of potential overpayments 

made to such entities, respond to questions concerning 

potential overpayments, and take other administrative 

actions with respect to overpayment claims made or 

to be made by the agency; and 

(ii) such contractor shall have no authority to make 

final determinations relating to whether any overpayment occurred and whether to compromise, settle, or 

terminate overpayment claims. 

(D) CONTRACT TERMS AND CONDITIONS.— 

(i) IN GENERAL.—The agency shall include in each 

contract for procurement of performance of a recovery 

audit a requirement that the contractor shall— 

(I) provide to the agency periodic reports on 

conditions giving rise to overpayments identified 

by the contractor and any recommendations on 

how to mitigate such conditions; 

(II) notify the agency of any overpayments 

identified by the contractor pertaining to the 

agency or to any other agency or agencies that 

are beyond the scope of the contract; and 

(III) report to the agency credible evidence 

of fraud or vulnerabilities to fraud, and conduct 

appropriate training of personnel of the contractor 

on identification of fraud. 

(ii) REPORTS ON ACTIONS TAKEN.—Not later than 

November 1 of each year, each agency shall submit 

a report on actions taken by the agency during the 

preceding fiscal year to address the recommendations 

described under clause (i)(I) to— 

(I) the Office of Management and Budget; and 

(II) Congress. 

(E) AGENCY ACTION FOLLOWING NOTIFICATION.—An 

agency shall take prompt and appropriate action in 

response to a report or notification by a contractor under 

subparagraph (D)(i)(I) or (II), to collect overpayments and 

shall forward to other agencies any information that applies 

to such agencies. 

(3) DISPOSITION OF AMOUNTS RECOVERED.— 

(A) IN GENERAL.—Amounts collected by agencies each 

fiscal year through recovery audits conducted under this 

subsection shall be treated in accordance with this paragraph. The agency head shall determine the distribution 

of collected amounts, less amounts needed to fulfill the 

Determination. 

Notification. 

Reports. 


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124 STAT. 2230 PUBLIC LAW 111–204—JULY 22, 2010 

purposes of section 3562(a) of title 31, United States Code, 

in accordance with subparagraphs (B), (C), and (D). 

(B) USE FOR FINANCIAL MANAGEMENT IMPROVEMENT

PROGRAM.—Not more than 25 percent of the amounts collected by an agency through recovery audits— 

(i) shall be available to the head of the agency 

to carry out the financial management improvement 

program of the agency under paragraph (4); 

(ii) may be credited, if applicable, for that purpose 

by the head of an agency to any agency appropriations 

and funds that are available for obligation at the time 

of collection; and 

(iii) shall be used to supplement and not supplant 

any other amounts available for that purpose and shall 

remain available until expended. 

(C) USE FOR ORIGINAL PURPOSE.—Not more than 25 

percent of the amounts collected by an agency— 

(i) shall be credited to the appropriation or fund, 

if any, available for obligation at the time of collection 

for the same general purposes as the appropriation 

or fund from which the overpayment was made; 

(ii) shall remain available for the same period and 

purposes as the appropriation or fund to which credited; and 

(iii) if the appropriation from which the overpayment was made has expired, shall be newly available 

for the same time period as the funds were originally 

available for obligation, except that any amounts that 

are recovered more than five fiscal years from the 

last fiscal year in which the funds were available for 

obligation shall be deposited in the Treasury as miscellaneous receipts, except that in the case of recoveries 

of overpayments that are made from trust or special 

fund accounts, such amounts shall revert to those 

accounts. 

(D) USE FOR INSPECTOR GENERAL ACTIVITIES.—Not 

more than 5 percent of the amounts collected by an agency 

shall be available to the Inspector General of that agency— 

(i) for— 

(I) the Inspector General to carry out this 

Act; or 

(II) any other activities of the Inspector General relating to investigating improper payments 

or auditing internal controls associated with payments; and 

(ii) shall remain available for the same period and 

purposes as the appropriation or fund to which credited. 

(E) REMAINDER.—Amounts collected that are not 

applied in accordance with subparagraph (A), (B), (C), or 

(D) shall be deposited in the Treasury as miscellaneous 

receipts, except that in the case of recoveries of overpayments that are made from trust or special fund accounts, 

such amounts shall revert to those accounts. 

(F) DISCRETIONARY AMOUNTS.—This paragraph shall 

apply only to recoveries of overpayments that are made 

from discretionary appropriations (as that term is defined 

Applicability. 


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PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2231 

by paragraph 7 of section 250 of the Balanced Budget 

and Emergency Deficit Control Act of 1985) and shall not 

apply to recoveries of overpayments that are made from 

discretionary amounts that were appropriated prior to 

enactment of this Act. 

(G) APPLICATION.—This paragraph shall not apply to 

recoveries of overpayments if the appropriation from which 

the overpayment was made has not expired. 

(4) FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM.— (A) REQUIREMENT.—The head of each agency shall conduct a financial management improvement program, consistent with rules prescribed by the Director of the Office 

of Management and Budget. 

(B) PROGRAM FEATURES.—In conducting the program, 

the head of the agency— 

(i) shall, as the first priority of the program, 

address problems that contribute directly to agency 

improper payments; and 

(ii) may seek to reduce errors and waste in other 

agency programs and operations. 

(5) PRIVACY PROTECTIONS.—Any nongovernmental entity 

that, in the course of recovery auditing or recovery activity 

under this subsection, obtains information that identifies an 

individual or with respect to which there is a reasonable basis 

to believe that the information can be used to identify an 

individual, may not disclose the information for any purpose 

other than such recovery auditing or recovery activity and 

governmental oversight of such activity, unless disclosure for 

that other purpose is authorized by the individual to the executive agency that contracted for the performance of the recovery 

auditing or recovery activity. 

(6) OTHER RECOVERY AUDIT REQUIREMENTS.— 

(A) IN GENERAL.—(i) Except as provided in clause (ii), 

subchapter VI of chapter 35 of title 31, United States 

Code, is repealed. 

(ii) Section 3562(a) of title 31, United States Code, 

shall continue in effect, except that references in such 

section 3562(a) to programs carried out under section 3561 

of such title, shall be interpreted to mean programs carried 

out under section 2(h) of this Act. 

(B) TECHNICAL AND CONFORMING AMENDMENTS.— 

(i) TABLE OF SECTIONS.—The table of sections for 

chapter 35 of title 31, United States Code, is amended 

by striking the matter relating to subchapter VI. 

(ii) DEFINITION.—Section 3501 of title 31, United 

States Code, is amended by striking ‘‘and subchapter 

VI of this title’’. 

(iii) HOMELAND SECURITY GRANTS.—Section 

2022(a)(6) of the Homeland Security Act of 2002 (6 

U.S.C. 612(a)(6)) is amended by striking ‘‘(as that term 

is defined by the Director of the Office of Management 

and Budget under section 3561 of title 31, United 

States Code)’’ and inserting ‘‘under section 2(h) of the 

Improper Payments Elimination and Recovery Act of 

2010 (31 U.S.C. 3321 note)’’. 

(7) RULE OF CONSTRUCTION.—Except as provided under 

paragraph (5), nothing in this section shall be construed as 

31 USC 3561 

et seq. 

Repeal. 

Regulations. 


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124 STAT. 2232 PUBLIC LAW 111–204—JULY 22, 2010 

terminating or in any way limiting authorities that are otherwise available to agencies under existing provisions of law 

to recover improper payments and use recovered amounts. 

(i) REPORT ON RECOVERY AUDITING.—Not later than 2 years 

after the date of the enactment of this Act, the Chief Financial 

Officers Council established under section 302 of the Chief Financial 

Officers Act of 1990 (31 U.S.C. 901 note), in consultation with 

the Council of Inspectors General on Integrity and Efficiency established under section 7 of the Inspector General Reform Act of 

2009 (Public Law 110–409) and recovery audit experts, shall conduct 

a study of— 

(1) the implementation of subsection (h); 

(2) the costs and benefits of agency recovery audit activities, 

including— 

(A) those activities under subsection (h); and 

(B) the effectiveness of using the services of— 

(i) private contractors; 

(ii) agency employees; 

(iii) cross-servicing from other agencies; or 

(iv) any combination of the provision of services 

described under clauses (i) through (iii); and 

(3) submit a report on the results of the study to— 

(A) the Committee on Homeland Security and Governmental Affairs of the Senate; 

(B) the Committee on Oversight and Government 

Reform of the House of Representatives; and 

(C) the Comptroller General. 

SEC. 3. COMPLIANCE. 

(a) DEFINITIONS.—In this section: 

(1) AGENCY.—The term ‘‘agency’’ has the meaning given 

under section 2(f) of the Improper Payments Information Act 

of 2002 (31 U.S.C. 3321 note) as redesignated by this Act. 

(2) ANNUAL FINANCIAL STATEMENT.—The term ‘‘annual 

financial statement’’ means the annual financial statement 

required under section 3515 of title 31, United States Code, 

or similar provision of law. 

(3) COMPLIANCE.—The term ‘‘compliance’’ means that the 

agency— 

(A) has published an annual financial statement for 

the most recent fiscal year and posted that report and 

any accompanying materials required under guidance of 

the Office of Management and Budget on the agency 

website; 

(B) if required, has conducted a program specific risk 

assessment for each program or activity that conforms 

with section 2(a) the Improper Payments Information Act 

of 2002 (31 U.S.C. 3321 note); and 

(C) if required, publishes improper payments estimates 

for all programs and activities identified under section 

2(b) of the Improper Payments Information Act of 2002 

(31 U.S.C. 3321 note) in the accompanying materials to 

the annual financial statement; 

(D) publishes programmatic corrective action plans prepared under section 2(c) of the Improper Payments 

Information Act of 2002 (31 U.S.C. 3321 note) that the 

31 USC 3321 

note. 

Study. 


ccoleman on DSK8P6SHH1PROD with PUBLIC LAWS
PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2233 

agency may have in the accompanying materials to the 

annual financial statement; 

(E) publishes improper payments reduction targets 

established under section 2(c) of the Improper Payments 

Information Act of 2002 (31 U.S.C. 3321 note) that the 

agency may have in the accompanying materials to the 

annual financial statement for each program assessed to 

be at risk, and is meeting such targets; and 

(F) has reported an improper payment rate of less 

than 10 percent for each program and activity for which 

an estimate was published under section 2(b) of the 

Improper Payments Information Act of 2002 (31 U.S.C. 

3321 note). 

(b) ANNUAL COMPLIANCE REPORT BY INSPECTORS GENERAL OF

AGENCIES.—Each fiscal year, the Inspector General of each agency 

shall determine whether the agency is in compliance and submit 

a report on that determination to— 

(1) the head of the agency; 

(2) the Committee on Homeland Security and Governmental Affairs of the Senate; 

(3) the Committee on Oversight and Governmental Reform 

of the House of Representatives; and 

(4) the Comptroller General. 

(c) REMEDIATION.— 

(1) NONCOMPLIANCE.— 

(A) IN GENERAL.—If an agency is determined by the 

Inspector General of that agency not to be in compliance 

under subsection (b) in a fiscal year, the head of the agency 

shall submit a plan to Congress describing the actions 

that the agency will take to come into compliance. 

(B) PLAN.—The plan described under subparagraph 

(A) shall include— 

(i) measurable milestones to be accomplished in 

order to achieve compliance for each program or 

activity; 

(ii) the designation of a senior agency official who 

shall be accountable for the progress of the agency 

in coming into compliance for each program or activity; 

and 

(iii) the establishment of an accountability mechanism, such as a performance agreement, with appropriate incentives and consequences tied to the success 

of the official designated under clause (ii) in leading 

the efforts of the agency to come into compliance for 

each program and activity. 

(2) NONCOMPLIANCE FOR 2 FISCAL YEARS.— 

(A) IN GENERAL.—If an agency is determined by the 

Inspector General of that agency not to be in compliance 

under subsection (b) for 2 consecutive fiscal years for the 

same program or activity, and the Director of the Office 

of Management and Budget determines that additional 

funding would help the agency come into compliance, the 

head of the agency shall obligate additional funding, in 

an amount determined by the Director, to intensified 

compliance efforts. 

(B) FUNDING.—In providing additional funding 

described under subparagraph (A), the head of an agency 

Transfer 

authority. 

Determination. 

Plans. 

Determination. 


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124 STAT. 2234 PUBLIC LAW 111–204—JULY 22, 2010 

shall use any reprogramming or transfer authority available to the agency. If after exercising that reprogramming 

or transfer authority additional funding is necessary to 

obligate the full level of funding determined by the Director 

of the Office of Management and Budget under subparagraph (A), the agency shall submit a request to Congress 

for additional reprogramming or transfer authority. 

(3) REAUTHORIZATION AND STATUTORY PROPOSALS.—If an 

agency is determined by the Inspector General of that agency 

not to be in compliance under subsection (b) for more than 

3 consecutive fiscal years for the same program or activity, 

the head of the agency shall, not later than 30 days after 

such determination, submit to Congress— 

(A) reauthorization proposals for each program or 

activity that has not been in compliance for 3 or more 

consecutive fiscal years; or 

(B) proposed statutory changes necessary to bring the 

program or activity into compliance. 

(d) COMPLIANCE ENFORCEMENT PILOT PROGRAMS.— 

(1) IN GENERAL.—The Director of the Office of Management 

and Budget may establish 1 or more pilot programs which 

shall test potential accountability mechanisms with appropriate 

incentives and consequences tied to success in ensuring compliance with this Act and eliminating improper payments. 

(2) REPORT.—Not later than 5 years after the date of enactment of this Act, the Director of the Office of Management 

and Budget shall submit a report to Congress on the findings 

associated with any pilot programs conducted under paragraph 

(1). The report shall include any legislative or other recommendations that the Director determines necessary. 

(e) REPORT ON CHIEF FINANCIAL OFFICERS ACT OF 1990.— 

Not later than 1 year after the date of the enactment of this 

Act, the Chief Financial Officers Council established under section 

302 of the Chief Financial Officers Act of 1990 (31 U.S.C. 901 

note) and the Council of Inspectors General on Integrity and Efficiency established under section 7 of the Inspector General Reform 

Act of 2009 (Public Law 110–409), in consultation with a broad 

cross-section of experts and stakeholders in Government accounting 

and financial management shall— 

(1) jointly examine the lessons learned during the first 

20 years of implementing the Chief Financial Officers Act of 

1990 (31 U.S.C. 901) and identify reforms or improvements, 

if any, to the legislative and regulatory compliance framework 

for Federal financial management that will optimize Federal 

agency efforts to— 

(A) publish relevant, timely, and reliable reports on 

Government finances; and 

(B) implement internal controls that mitigate the risk 

for fraud, waste, and error in Government programs; and 

(2) jointly submit a report on the results of the examination 

to— 

(A) the Committee on Homeland Security and Governmental Affairs of the Senate; 

(B) the Committee on Oversight and Government 

Reform of the House of Representatives; and 

Publication. 

Deadline. 


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PUBLIC LAW 111–204—JULY 22, 2010 124 STAT. 2235 

LEGISLATIVE HISTORY—S. 1508 (H.R. 3393): 

CONGRESSIONAL RECORD, Vol. 156 (2010): 

June 23, considered and passed Senate. 

July 14, considered and passed House. 

DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010): 

July 22, Presidential remarks. 

Æ 

(C) the Comptroller General. 

Approved July 22, 2010. 


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