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Presidential Documents
 

Executive Order 13520 of November 20, 2009 

Reducing Improper Payments 

By the authority vested in me as President by the Constitution and the 

laws of the United States of America, and in the interest of reducing payment 

errors and eliminating waste, fraud, and abuse in Federal programs, it is 

hereby ordered as follows: 

Section 1. Purpose. When the Federal Government makes payments to individuals and businesses as program beneficiaries, grantees, or contractors, 

or on behalf of program beneficiaries, it must make every effort to confirm 

that the right recipient is receiving the right payment for the right reason 

at the right time. The purpose of this order is to reduce improper payments 

by intensifying efforts to eliminate payment error, waste, fraud, and abuse 

in the major programs administered by the Federal Government, while continuing to ensure that Federal programs serve and provide access to their 

intended beneficiaries. No single step will fully achieve these goals. Therefore, this order adopts a comprehensive set of policies, including transparency 

and public scrutiny of significant payment errors throughout the Federal 

Government; a focus on identifying and eliminating the highest improper 

payments; accountability for reducing improper payments among executive 

branch agencies and officials; and coordinated Federal, State, and local 

government action in identifying and eliminating improper payments. Because this order targets error, waste, fraud, and abuse—not legitimate use 

of Government services—efforts to reduce improper payments under this 

order must protect access to Federal programs by their intended beneficiaries. 

Sec. 2. Transparency and Public Participation. 

(a) Within 90 days of the date of this order, the Director of the Office 

of Management and Budget (OMB) shall: 

(i) identify Federal programs in which the highest dollar value or majority 

of Government-wide improper payments occur (high-priority programs); 

(ii) establish, in coordination with the executive department or agency 

(agency) responsible for administering the high-priority program annual 

or semi-annual targets (or where such targets already exist, supplemental 

targets), as appropriate, for reducing improper payments associated with 

each high-priority program; 

(iii) issue Government-wide guidance on the implementation of this order, 

including procedures for identifying and publicizing the list of entities 

described in subsection (b)(v) of this section and for administrative appeal 

of the decision to publish the identity of those entities, prior to publication; 

and 

(iv) establish a working group consisting of Federal, State, and local officials to make recommendations to the Director of OMB designed to improve 

the Federal Government’s measurement of access to Federal programs 

by the programs’ intended beneficiaries. The working group’s recommendations shall be prepared in consultation with the Council of Inspectors 

General on Integrity and Efficiency (CIGIE) and submitted within 180 

days of the date of this order, and the recommended measurements may 

be incorporated by the Secretary of the Treasury in the information published pursuant to subsection (b) of this section. 

(b) Within 180 days of the date of this order, the Secretary of the Treasury 

in coordination with the Attorney General and the Director of OMB, shall 

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publish on the Internet information about improper payments under highpriority programs. The information shall include, subject to Federal privacy 

policies and to the extent permitted by law: 

(i) the names of the accountable officials designated under section 3 of 

this order; 

(ii) current and historical rates and amounts of improper payments, including, where known and appropriate, causes of the improper payments; 

(iii) current and historical rates and amounts of recovery of improper 

payments, where appropriate (or, where improper payments are identified 

solely on the basis of a sample, recovery rates and amounts estimated 

on the basis of the applicable sample); 

(iv) targets for reducing as well as recovering improper payments, where 

appropriate; and 

(v) the entities that have received the greatest amount of outstanding 

improper payments (or, where improper payments are identified solely 

on the basis of a sample, the entities that have received the greatest 

amount of outstanding improper payments in the applicable sample). 

Information on entities that have received the greatest amount of outstanding 

improper payments shall not include any referrals the agency made or 

anticipates making to the Department of Justice, or any information provided 

in connection with such referrals. 

(c) Within 180 days of the date of this order, the Secretary of the Treasury 

in coordination with the Attorney General and the Director of OMB and 

in consultation with the CIGIE, shall establish a central Internet-based method 

to collect from the public information concerning suspected incidents of 

waste, fraud, and abuse by an entity receiving Federal funds that have 

led or may lead to improper payments by the Federal Government. 

(d) Agencies shall place a prominently displayed link to Internet-based 

resources for addressing improper payments, including the resources established under subsections (b) and (c) of this section, on their Internet home 

pages. 

Sec. 3. Agency Accountability and Coordination. 

(a) Within 120 days of the date of this order, the head of each agency 

responsible for operating a high-priority program shall designate an official 

who holds an existing Senate-confirmed position to be accountable for meeting the targets established under section 2 of this order without unduly 

burdening program access and participation by eligible beneficiaries. In those 

agencies where the majority of payments are isolated to a single component, 

the head of the agency shall name a second accountable official for that 

component whose sole responsibility would be for program integrity activities 

and, as appropriate, shall consolidate and coordinate all program integrity 

activities within the component. 

(b) Within 180 days of the date of this order, each agency official designated 

under subsection (a) of this section, or otherwise designated by the Director 

of OMB, shall provide the agency’s Inspector General a report containing: 

(i) the agency’s methodology for identifying and measuring improper payments by the agency’s high-priority programs; 

(ii) the agency’s plans, together with supporting analysis, for meeting 

the reduction targets for improper payments in the agency’s high-priority 

programs; and 

(iii) the agency’s plan, together with supporting analysis, for ensuring 

that initiatives undertaken pursuant to this order do not unduly burden 

program access and participation by eligible beneficiaries. 

Following the receipt and review of this information, the agency Inspector 

General shall assess the level of risk associated with the applicable programs, 

determine the extent of oversight warranted, and provide the agency head 

with recommendations, if any, for modifying the agency’s methodology, 

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improper payment reduction plans, or program access and participation 

plans. 

(c) If an agency fails to meet the targets established under section 2 of 

this order or implement the plan described in subsection (b)(iii) of this 

section for 2 consecutive years, that agency’s accountable official designated 

under subsection (a) of this section shall submit to the agency head, Inspector 

General, and Chief Financial Officer a report describing the likely causes 

of the agency’s failure and proposing a remedial plan. The agency head 

shall review this plan and, in consultation with the Inspector General and 

Chief Financial Officer, forward the plan with any additional comments 

and analysis to the Director of OMB. 

(d) Within 180 days of the date of this order, the Chief Financial Officers 

Council (CFOC) in consultation with the CIGIE, the Department of Justice, 

and program experts, shall make recommendations to the Director of OMB 

and the Secretary of the Treasury on actions (including actions related 

to forensic accounting and audits) agencies should take to more effectively 

tailor their methodologies for identifying and measuring improper payments 

to those programs, or components of programs, where improper payments 

are most likely to occur. Recommendations shall address the manner in 

which the recommended actions would affect program access and participation by eligible beneficiaries. 

(e) Within 180 days of the date of this order, the Secretary of the Treasury 

and the Director of OMB in consultation with the CIGIE, the Department 

of Justice, and program experts, shall recommend to the President actions 

designed to reduce improper payments by improving information sharing 

among agencies and programs, and where applicable, State and local governments and other stakeholders. The recommendations shall address the ways 

in which information sharing may improve eligibility verification and prepayment scrutiny, shall identify legal or regulatory impediments to effective 

information sharing, and shall address the manner in which the recommended actions would affect program access and participation by eligible 

beneficiaries. 

(f) Within 180 days of the date of this order, and at least once every 

quarter thereafter, the head of each agency shall submit to the agency’s 

Inspector General and the CIGIE, and make available to the public, a report 

on any high-dollar improper payments identified by the agency, subject 

to Federal privacy policies and to the extent permitted by law. The report 

shall describe any actions the agency has taken or plans to take to recover 

improper payments, as well as any actions the agency intends to take to 

prevent improper payments from occurring in the future. The report shall 

not include any referrals the agency made or anticipates making to the 

Department of Justice, or any information provided in connection with such 

referrals. Following the review of each report, the agency Inspector General 

and the CIGIE shall assess the level of risk associated with the applicable 

program, determine the extent of oversight warranted, and provide the agency 

head with recommendations, if any, for modifying the agency’s plans. 

Sec. 4. Enhanced Focus on Contractors and Working with State and Local 

Stakeholders. 

(a) Within 180 days of the date of this order, the Federal Acquisition Regulatory Council, in coordination with the Director of OMB, and in consultation 

with the National Procurement Fraud Task Force (or its successor group), 

the CIGIE, and appropriate agency officials, shall recommend to the President 

actions designed to enhance contractor accountability for improper payments. 

The recommendations may include, but are not limited to, subjecting contractors to debarment, suspension, financial penalties, and identification through 

a public Internet website, subject to Federal privacy policies and to the 

extent permitted by law and where the identification would not interfere 

with or compromise an ongoing criminal or civil investigation, for knowingly 

failing timely to disclose credible evidence of significant overpayments received on Government contracts. 

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(b) Within 30 days of the date of this order, the Director of OMB shall 

establish a working group consisting of Federal and elected State and local 

officials to make recommendations to the Director of OMB designed to 

improve the effectiveness of single audits of State and local governments 

and non-profit organizations that are expending Federal funds. The Director 

of OMB may designate an appropriate official to serve as Chair of the 

working group to convene its meetings and direct its work. The working 

group’s recommendations shall be prepared in consultation with the CIGIE 

and submitted within 180 days of the date of this order. The recommendations shall address, among other things, the effectiveness of single audits 

in identifying improper payments and opportunities to streamline or eliminate single audit requirements where their value is minimal. 

(c) Within 30 days of the date of this order, the Director of OMB shall 

establish a working group (which may be separate from the group established 

under subsection (b) of this section) consisting of Federal and elected State 

and local officials to make recommendations to the Director of OMB for 

administrative actions designed to improve the incentives and accountability 

of State and local governments, as well as other entities receiving Federal 

funds, for reducing improper payments. The Director of OMB may designate 

an appropriate official to serve as Chair of the working group to convene 

its meetings and direct its work. The working group’s recommendations 

shall be prepared in consultation with the CIGIE and submitted within 

180 days of the date of this order. 

Sec. 5. Policy Proposals. The Director of OMB, in consultation with the 

appropriate agencies and the CIGIE, shall develop policy recommendations, 

including potential legislative proposals, designed to reduce improper payments, including those caused by error, waste, fraud, and abuse, across 

Federal programs without compromising program access, to be included, 

as appropriate, in the Budget of the United States Government for Fiscal 

Year 2011 and future years, or other Administration proposals. 

Sec. 6. General Provisions. 

(a) Nothing in this order shall be construed to impair or otherwise affect: 

(i) authority granted by law to a department, agency, the head thereof, 

or any agency Inspector General; or 

(ii) functions of the Director of OMB relating to budgetary, administrative, 

or legislative proposals. 

(b) Nothing in this order shall be construed to require the disclosure of 

classified information, law enforcement sensitive information, or other information that must be protected in the interests of national security. 

(c) This order shall be implemented consistent with applicable law and 

subject to the availability of appropriations. 

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(d) This order is not intended to, and does not, create any right or benefit, 

substantive or procedural, enforceable at law or in equity, by any party 

against the United States, its departments, agencies, or entities, its officers, 

employees, or agents, or any other person. 

THE WHITE HOUSE, 

November 20, 2009. 

[FR Doc. E9–28493 

Filed 11–24–09; 11:15 am] 

Billing code 3195–W0–P