II 

Calendar No. 449 

112TH CONGRESS 

2D SESSION S. 1409 

[Report No. 112–181] 

To intensify efforts to identify, prevent, and recover payment error, waste, 

fraud, and abuse within Federal spending. 

IN THE SENATE OF THE UNITED STATES 

JULY 22, 2011 

Mr. CARPER (for himself, Ms. COLLINS, Mr. LIEBERMAN, Mr. BROWN of Massachusetts, and Mr. CASEY) introduced the following bill; which was read 

twice and referred to the Committee on Homeland Security and Governmental Affairs 

JULY 12, 2012 

Reported by Mr. LIEBERMAN, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To intensify efforts to identify, prevent, and recover payment 

error, waste, fraud, and abuse within Federal spending. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

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

5 Elimination and Recovery Improvement Act of 2011’’. 

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1 SEC. 2. DEFINITION. 

2 In this Act, the term ‘‘agency’’ means an executive 

3 agency defined under section 105 of title 5, United States 

4 Code. 

5 SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER 

6 PAYMENTS BY FEDERAL AGENCIES. 

7 (a) IN GENERAL.—The Director of the Office of 

8 Management and Budget shall on an annual basis— 

9 (1) identify a list of high-priority Federal pro10 grams for greater levels of oversight and review— 

11 (A) in which the highest dollar value or 

12 majority of governmentwide improper payments 

13 occur; or 

14 (B) for which there is a higher risk of im15 proper payments; 

16 (2) in coordination with the agency responsible 

17 for administering the high-priority program— 

18 (A) establish semi-annual or quarterly tar19 gets and actions for reducing improper pay20 ments associated with each high-priority pro21 gram; or 

22 (B) if such targets are in effect on the 

23 date of enactment of this Act, establish supple24 mental targets; and 

25 (3) determine the entities that have received the 

26 greatest amount of improper payments (or, if immstockstill on DSK4VPTVN1PROD with BILLS

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1 proper payments are identified solely on the basis of 

2 a sample, the entities that have received the greatest 

3 amount of improper payments in the applicable sam4 ple). 

5 (b) REPORT ON HIGH-DOLLAR IMPROPER PAY6 MENTS.— 

7 (1) IN GENERAL.—Subject to Federal privacy 

8 policies and to the extent permitted by law, each 

9 agency on a quarterly basis shall submit to the In10 spector General of that agency, and make available 

11 to the public (including availability through the 

12 Internet), a report on any high-dollar improper pay13 ments identified by the agency. 

14 (2) CONTENTS.—Each report under this sub15 section— 

16 (A) shall describe— 

17 (i) any action the agency— 

18 (I) has taken or plans to take to 

19 recover improper payments; and 

20 (II) intends to take to prevent 

21 future improper payments; and 

22 (B) shall not include any referrals the 

23 agency made or anticipates making to the De24 partment of Justice, or any information pro25 vided in connection with such referrals. 

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1 (3) AVAILABILITY OF INFORMATION TO INSPEC2 TOR GENERAL.—Paragraph (2)(B) shall not prohibit 

3 any referral or information being made available to 

4 an Inspector General as otherwise provided by law. 

5 (4) ASSESSMENT.—After the review of each re6 port under this subsection, the Inspector General 

7 shall— 

8 (A) assess the level of risk associated with 

9 the applicable program and the quality of the 

10 improper payment estimates and methodology 

11 of the agency; 

12 (B) determine the extent of additional 

13 oversight or financial controls warranted to 

14 identify and prevent improper payments; and 

15 (C) provide the head of the agency with 

16 any recommendations, for modifying any plans 

17 of the agency, including improvements for im18 proper payments determination and estimation 

19 methodology. 

20 (c) IMPROVED ESTIMATES.— 

21 (1) IN GENERAL.—Not later than 180 days 

22 after the date of enactment of this Act, the Director 

23 of the Office of Management and Budget shall pro24 vide guidance to agencies for improving the esti25 mates of improper payments under the Improper 

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1 Payments Information Act of 2002 (31 U.S.C. 3321 

2 note). 

3 (2) GUIDANCE.—Guidance under this sub4 section shall— 

5 (A) strengthen the estimation process of 

6 agencies by reviewing the underlying validity of 

7 payments to ensure amounts being billed are 

8 proper; and 

9 (B) include— 

10 (i) access to more complete data as 

11 part of reviews; 

12 (ii) ending reliance on self-reporting 

13 of improper payments as a replacement for 

14 estimates, and relying on the development 

15 of a robust process to estimate and iden16 tify improper payments across the agency; 

17 (iii) all overpayments in the improper 

18 payments estimate, regardless of whether 

19 improperly paid funds have been or are 

20 being recovered; 

21 (iv) ensuring that— 

22 (I) the review of payments to em23 ployees shall include analysis of em24 ployee data, including pay grade data, 

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1 locality pay, and other factors that af2 fect pay; and 

3 (II) reviews address high-risk or 

4 high-dollar personnel payments, in5 cluding travel, pay, and purchase 

6 cards; 

7 (v) reassessing high-risk programs to 

8 better reflect the unique processes, proce9 dures, and risks of improper payments, in10 cluding assessments for each program to 

11 reflect different risk components and bet12 ter direct corrective actions; and 

13 (vi) confirming that inter-agency 

14 transfers are proper using a methodology 

15 comparable to that used to assess program 

16 level improper payments. 

17 SEC. 4. IMPROPER PAYMENTS INFORMATION. 

18 Section 2(a)(3)(A)(ii) of the Improper Payments In19 formation Act of 2002 (31 U.S.C. 3321 note) is amended 

20 by striking ‘‘with respect to fiscal years following Sep21 tember 30th of a fiscal year beginning before fiscal year 

22 2013 as determined by the Office of Management and 

23 Budget’’ and inserting ‘‘with respect to fiscal year 2014 

24 and each fiscal year thereafter’’. 

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1 SEC. 5. DO NOT PAY INITIATIVE. 

2 (a) PREPAYMENT AND PREAWARD PROCEDURES.— 

3 (1) IN GENERAL.—Each agency shall review 

4 prepayment and preaward procedures and ensure 

5 that a thorough review of available databases with 

6 relevant information on eligibility occurs to deter7 mine program or award eligibility and prevent im8 proper payments before the release of any Federal 

9 funds, to the extent permitted by law. 

10 (2) DATABASES.—At a minimum, each agency 

11 shall, before payment and award, check the following 

12 databases (if applicable and permitted by law) to 

13 verify eligibility: 

14 (A) The Death Master File of the Social 

15 Security Administration. 

16 (B) The General Services Administration’s 

17 Excluded Parties List System. 

18 (C) The Debt Check Database of the De19 partment of the Treasury. 

20 (D) The Credit Alert System or Credit 

21 Alert Interactive Voice Response System of the 

22 Department of Housing and Urban Develop23 ment. 

24 (E) The List of Excluded Individuals/Enti25 ties of the Office of Inspector General of the 

26 Department of Health and Human Services. 

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1 (b) DO NOT PAY LIST.— 

2 (1) ESTABLISHMENT.—There is established the 

3 Do Not Pay List which shall consist of— 

4 (A) the databases described under sub5 section (a)(2); and 

6 (B) any other database designated by the 

7 Director of the Office of Management and 

8 Budget in consultation with agencies. 

9 (2) OTHER DATABASES.—In making designa10 tions of other databases under paragraph (1)(B), the 

11 Director of the Office of Management and Budget 

12 shall consider— 

13 (A) any database that assists in preventing 

14 improper payments; and 

15 (B) the database of incarcerated individ16 uals established under subsection (f). 

17 (3) ACCESS AND REVIEW BY AGENCIES.—For 

18 purposes of identifying and preventing improper 

19 payment, each agency shall have access to, and use 

20 of, the Do Not Pay List to determine payment or 

21 award eligibility when the Director of the Office of 

22 Management and Budget determines the Do Not 

23 Pay List is appropriately established for the agency. 

24 (4) PAYMENT OTHERWISE REQUIRED.—When 

25 using the Do Not Pay List, an agency shall recogmstockstill on DSK4VPTVN1PROD with BILLS

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1 nize that there may be circumstances under which 

2 the law requires a payment or award to be made to 

3 a recipient, regardless of whether that recipient is on 

4 the Do Not Pay List. 

5 (c) DATABASE INTEGRATION PLAN.—Not later than 

6 60 days after the date of enactment of this Act, the Direc7 tor of the Office of Management and Budget shall provide 

8 to the Congress a plan for— 

9 (1) inclusion of other databases on the Do Not 

10 Pay List; 

11 (2) to the extent permitted by law, agency ac12 cess to the Do Not Pay List; and 

13 (3) the multilateral data use agreements de14 scribed under subsection (e). 

15 (d) INITIAL WORKING SYSTEM.— 

16 (1) ESTABLISHMENT.—Not later than 90 days 

17 after the date of enactment of this Act, the Director 

18 of the Office of Management and Budget shall es19 tablish a working system for prepayment and 

20 preaward review that includes the Do Not Pay List 

21 as described under this section. 

22 (2) INITIAL SYSTEM.—The working system es23 tablished under paragraph (1)— 

24 (A) may be located within an appropriate 

25 agency; 

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1 (B) shall include not less than 3 agencies; 

2 (C) shall include fraud and improper pay3 ments detection through predictive modeling 

4 and other analytic technologies and other tech5 niques; and 

6 (D) may provide for the use of commercial 

7 database sources, commercial analysis, and 

8 other functionality for payment or award re9 views, as determined appropriate by the Direc10 tor of the Office of Management and Budget 

11 for verifying Federal data. 

12 (3) APPLICATION TO ALL AGENCIES.—Not later 

13 than January 1, 2013, each agency shall review all 

14 payments and awards for all programs of that agen15 cy through the system established under this sub16 section. 

17 (e) MULTILATERAL DATA USE AGREEMENTS.— 

18 (1) IN GENERAL.—Not later than 60 days after 

19 the date of enactment of this Act, the Director of 

20 the Office of Management and Budget shall develop 

21 a plan to establish a multilateral data use agreement 

22 authority to carry out this section, including access 

23 to databases such as the New Hire Database under 

24 section 453(j) of the Social Security Act (42 U.S.C. 

25 653(j)). 

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1 (2) GENERAL PROTOCOLS AND SECURITY.— 

2 (A) IN GENERAL.—The multilateral data 

3 use agreements shall be consistent with proto4 cols to ensure the secure transfer and storage 

5 of any data provided to another entity or indi6 vidual— 

7 (i) under the provisions of, or amend8 ments made by, this section; and 

9 (ii) consistent with applicable informa10 tion, privacy, security, and disclosure laws, 

11 including— 

12 (I) the regulations promulgated 

13 under the Health Insurance Port14 ability and Accountability Act of 1996 

15 and section 552a of title 5, United 

16 States Code; and 

17 (II) subject to any information 

18 systems security requirements under 

19 such laws or otherwise required by the 

20 Director of the Office of Management 

21 and Budget. 

22 (B) CONSULTATION.—The Director of the 

23 Office of Management and Budget shall consult 

24 with— 

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1 (i) the Council of Inspectors General 

2 on Integrity and Efficiency before imple3 menting this paragraph; and 

4 (ii) the Secretary of Health and 

5 Human Services, the Social Security Ad6 ministrator, and the head of any other 

7 agency, as appropriate. 

8 (f) DEVELOPMENT AND ACCESS TO A DATABASE OF

9 INCARCERATED INDIVIDUALS.— 

10 (1) IN GENERAL.—The Attorney General shall 

11 develop and maintain a database of individuals in12 carcerated at Federal and State facilities. 

13 (2) AVAILABILITY AND UPDATE.—The database 

14 developed under this subsection shall be— 

15 (A) available to agencies to carry out this 

16 section and prevent waste, fraud, and abuse; 

17 and 

18 (B) updated no less frequently than on a 

19 weekly basis. 

20 (g) PLAN TO IMPROVE THE SOCIAL SECURITY AD21 MINISTRATION DEATH MASTER FILE.— 

22 (1) ESTABLISHMENT.—In conjunction with the 

23 Commissioner of Social Security and in consultation 

24 with stakeholders and the States, the Director of the 

25 Office of Management and Budget, shall establish a 

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1 plan for improving the quality and timeliness of 

2 death data maintained by the Social Security Ad3 ministration, including death information reported to 

4 the Commissioner under section 205(r) of the Social 

5 Security Act (42 U.5.C. 405(r)). 

6 (2) ACTIONS UNDER PLAN.—The plan estab7 lished under this subsection shall include actions 

8 agencies are required to take to— 

9 (A) increase the quality and frequency of 

10 access; 

11 (B) achieve a goal of at least daily access 

12 as appropriate; and 

13 (C) provide for all States to use modern, 

14 electronic means for providing data. 

15 (3) REPORT.—Not later than 120 days after 

16 the date of enactment of this Act, the Director of 

17 the Office of Management and Budget shall submit 

18 a report to Congress on the plan established under 

19 this subsection, including recommended legislation. 

20 SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS. 

21 (a) IN GENERAL.—The Director of the Office of 

22 Management and Budget shall determine— 

23 (1) current and historical rates and amounts of 

24 recovery of improper payments (or, in cases in which 

25 improper payments are identified solely on the basis 

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1 of a sample, recovery rates and amounts estimated 

2 on the basis of the applicable sample), including spe3 cific information of amounts and payments recovered 

4 by recovery audit contractors; and 

5 (2) targets for recovering improper payments, 

6 including specific information on amounts and pay7 ments recovered by recovery audit contractors. 

8 (b) RECOVERY AUDIT CONTRACTOR PROGRAMS.— 

9 (1) ESTABLISHMENT.—Not later than 90 days 

10 after the date of enactment of this Act, the Director 

11 of the Office of Management and Budget shall es12 tablish a plan for no less than 10 Recovery Audit 

13 Contracting programs for the purpose of identifying 

14 and recovering overpayments and underpayments in 

15 10 agencies. 

16 (2) REVIEW OF COMMERCIAL PAYMENTS.—Of 

17 the programs established under this subsection, 5 

18 programs shall review commercial payments by an 

19 agency. 

20 (3) DURATION.—Any program established 

21 under this subsection shall terminate not more than 

22 3 years after the date on which the program is es23 tablished. 

24 (4) REPORTS.— 

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1 (A) IN GENERAL.—Not later than 3 

2 months after the completion of a program, the 

3 head of the agency conducting the program 

4 shall submit a report on the program to Con5 gress. 

6 (B) CONTENTS.—Each report under this 

7 paragraph shall include— 

8 (i) a description of the impact of the 

9 program on savings and recoveries; and 

10 (ii) such recommendations as the head 

11 of the agency considers appropriate on ex12 tending or expanding the program. 

13 SECTION 1. SHORT TITLE. 

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

15 Elimination and Recovery Improvement Act of 2012’’. 

16 SEC. 2. DEFINITION. 

17 In this Act, the term ‘‘agency’’ means an executive 

18 agency as that term is defined under section 102 of title 

19 31, United States Code. 

20 SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER 

21 PAYMENTS BY FEDERAL AGENCIES. 

22 (a) IN GENERAL.—Section 2 of the Improper Pay23 ments Information Act of 2002 (31 U.S.C. 3321 note) is 

24 amended— 

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1 (1) by redesignating subsections (b) through (g) 

2 as subsections (c) through (h), respectively; 

3 (2) by inserting after subsection (a) the fol4 lowing: 

5 ‘‘(b) IMPROVING THE DETERMINATION OF IMPROPER

6 PAYMENTS.— 

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

8 Management and Budget shall on an annual basis— 

9 ‘‘(A) identify a list of high-priority Federal 

10 programs for greater levels of oversight and re11 view— 

12 ‘‘(i) in which the highest dollar value 

13 or highest frequency of improper payments 

14 occur; or 

15 ‘‘(ii) for which there is a higher risk of 

16 improper payments; and 

17 ‘‘(B) in coordination with the agency re18 sponsible for administering the high-priority 

19 program, establish annual targets and semi-an20 nual or quarterly actions for reducing improper 

21 payments associated with each high-priority pro22 gram. 

23 ‘‘(2) REPORT ON HIGH-PRIORITY IMPROPER PAY24 MENTS.— 

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1 ‘‘(A) IN GENERAL.—Subject to Federal pri2 vacy policies and to the extent permitted by law, 

3 each agency with a program identified under 

4 paragraph (1)(A) on an annual basis shall sub5 mit to the Inspector General of that agency, and 

6 make available to the public (including avail7 ability through the Internet), a report on that 

8 program. 

9 ‘‘(B) CONTENTS.—Each report under this 

10 paragraph— 

11 ‘‘(i) shall describe— 

12 ‘‘(I) any action the agency— 

13 ‘‘(aa) has taken or plans to 

14 take to recover improper pay15 ments; and 

16 ‘‘(bb) intends to take to pre17 vent future improper payments; 

18 and 

19 ‘‘(ii) shall not include any referrals the 

20 agency made or anticipates making to the 

21 Department of Justice, or any information 

22 provided in connection with such referrals. 

23 ‘‘(C) PUBLIC AVAILABILITY ON CENTRAL

24 WEBSITE.—The Office of Management and Budgmstockstill on DSK4VPTVN1PROD with BILLS

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1 et shall make each report submitted under this 

2 paragraph available on a central website. 

3 ‘‘(D) AVAILABILITY OF INFORMATION TO IN4 SPECTOR GENERAL.—Subparagraph (B)(ii) shall 

5 not prohibit any referral or information being 

6 made available to an Inspector General as other7 wise provided by law. 

8 ‘‘(E) ASSESSMENT AND RECOMMENDA9 TIONS.—The Inspector General of each agency 

10 that submits a report under this paragraph 

11 shall— 

12 ‘‘(i) review— 

13 ‘‘(I) the assessment of the level of 

14 risk associated with the applicable pro15 gram, and the quality of the improper 

16 payment estimates and methodology of 

17 the agency; and 

18 ‘‘(II) the oversight or financial 

19 controls to identify and prevent im20 proper payments; and 

21 ‘‘(ii) provide recommendations, for 

22 modifying any plans of the agency, includ23 ing improvements for improper payments 

24 determination and estimation method25 ology.’’; 

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1 (3) in subsection (d) (as redesignated by para2 graph (1) of this subsection), by striking ‘‘subsection 

3 (b)’’ each place that term appears and inserting ‘‘sub4 section (c)’’; and 

5 (4) in subsection (e) (as redesignated by para6 graph (1) of this subsection), by striking ‘‘subsection 

7 (b)’’ and inserting ‘‘subsection (c)’’. 

8 (b) IMPROVED ESTIMATES.— 

9 (1) IN GENERAL.—Not later than 180 days after 

10 the date of enactment of this Act, the Director of the 

11 Office of Management and Budget shall provide guid12 ance to agencies for improving the estimates of im13 proper payments under the Improper Payments In14 formation Act of 2002 (31 U.S.C. 3321 note). 

15 (2) GUIDANCE.—Guidance under this subsection 

16 shall— 

17 (A) strengthen the estimation process of 

18 agencies by setting standards for agencies to fol19 low in determining the underlying validity of 

20 sampled payments to ensure amounts being 

21 billed are proper; and 

22 (B) instruct agencies to give the persons or 

23 entities performing improper payments estimates 

24 access to all necessary payment data, including 

25 access to relevant documentation; 

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1 (C) explicitly bar agencies from relying on 

2 self-reporting by the recipients of agency pay3 ments as the sole source basis for improper pay4 ments estimates; 

5 (D) require agencies to include all identified 

6 improper payments in the reported estimate, re7 gardless of whether the improper payment in 

8 question has been or is being recovered; 

9 (E) include payments to employees, includ10 ing salary, locality pay, travel pay, purchase 

11 card use, and other employee payments, as sub12 ject to risk assessment and, where appropriate, 

13 improper payment estimation; and 

14 (F) require agencies to tailor their correc15 tive actions for the high-priority programs iden16 tified under section 2(b)(1)(A) of the Improper 

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

18 3321 note) to better reflect the unique processes, 

19 procedures, and risks involved in each specific 

20 program. 

21 (c) TECHNICAL AND CONFORMING AMENDMENTS.—The 

22 Improper Payments Elimination and Recovery Act of 2010 

23 (Public Law 111–204; 124 Stat. 2224) is amended— 

24 (1) in section 2(h)(1) (31 U.S.C. 3321 note), by 

25 striking ‘‘section 2(f)’’ and all that follows and insertmstockstill on DSK4VPTVN1PROD with BILLS

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1 ing ‘‘section 2(g) of the Improper Payments Informa2 tion Act of 2002 (31 U.S.C. 3321 note).’’; and 

3 (2) in section 3(a) (31 U.S.C. 3321 note)— 

4 (A) in paragraph (1), by striking ‘‘section 

5 2(f)’’ and all that follows and inserting ‘‘section 

6 2(g) of the Improper Payments Information Act 

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

8 (B) in paragraph (3)— 

9 (i) by striking ‘‘section 2(b)’’ each 

10 place it appears and inserting ‘‘section 

11 2(c)’’; and 

12 (ii) by striking ‘‘section 2(c)’’ each 

13 place it appears and inserting ‘‘section 

14 2(d)’’. 

15 SEC. 4. IMPROPER PAYMENTS INFORMATION. 

16 Section 2(a)(3)(A)(ii) of the Improper Payments In17 formation Act of 2002 (31 U.S.C. 3321 note) is amended 

18 by striking ‘‘with respect to fiscal years following September 

19 30th of a fiscal year beginning before fiscal year 2013 as 

20 determined by the Office of Management and Budget’’ and 

21 inserting ‘‘with respect to fiscal year 2014 and each fiscal 

22 year thereafter’’. 

23 SEC. 5. DO NOT PAY INITIATIVE. 

24 (a) PREPAYMENT AND PREAWARD PROCEDURES.— 

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1 (1) IN GENERAL.—Each agency shall review pre2 payment and preaward procedures and ensure that a 

3 thorough review of available databases with relevant 

4 information on eligibility occurs to determine pro5 gram or award eligibility and prevent improper pay6 ments before the release of any Federal funds. 

7 (2) DATABASES.—At a minimum and before 

8 issuing any payment and award, each agency shall 

9 review as appropriate the following databases to 

10 verify eligibility of the payment and award: 

11 (A) The Death Master File of the Social Se12 curity Administration. 

13 (B) The General Services Administration’s 

14 Excluded Parties List System. 

15 (C) The Debt Check Database of the Depart16 ment of the Treasury. 

17 (D) The Credit Alert System or Credit Alert 

18 Interactive Voice Response System of the Depart19 ment of Housing and Urban Development. 

20 (E) The List of Excluded Individuals/Enti21 ties of the Office of Inspector General of the De22 partment of Health and Human Services. 

23 (b) DO NOT PAY INITIATIVE.— 

24 (1) ESTABLISHMENT.—There is established the 

25 Do Not Pay Initiative which shall consist of— 

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1 (A) the databases described under subsection 

2 (a)(2); and 

3 (B) any other database designated by the 

4 Director of the Office of Management and Budget 

5 in consultation with agencies. 

6 (2) OTHER DATABASES.—In making designa7 tions of other databases under paragraph (1)(B), the 

8 Director of the Office of Management and Budget 

9 shall consider any database that assists in preventing 

10 improper payments. 

11 (3) ACCESS AND REVIEW BY AGENCIES.—For 

12 purposes of identifying and preventing improper pay13 ments, each agency shall have access to, and use of, 

14 the Do Not Pay Initiative to determine payment or 

15 award eligibility when the Director of the Office of 

16 Management and Budget determines the Do Not Pay 

17 Initiative is appropriately established for the agency. 

18 (4) PAYMENT OTHERWISE REQUIRED.—When 

19 using the Do Not Pay Initiative, an agency shall rec20 ognize that there may be circumstances under which 

21 the law requires a payment or award to be made to 

22 a recipient, regardless of whether that recipient is on 

23 the Do Not Pay Initiative. 

24 (c) DATABASE INTEGRATION PLAN.—Not later than 60 

25 days after the date of enactment of this Act, the Director 

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1 of the Office of Management and Budget shall provide to 

2 the Congress a plan for— 

3 (1) inclusion of other databases on the Do Not 

4 Pay Initiative; 

5 (2) to the extent permitted by law, agency access 

6 to the Do Not Pay Initiative; and 

7 (3) the multilateral data use agreements de8 scribed under subsection (e). 

9 (d) INITIAL WORKING SYSTEM.— 

10 (1) ESTABLISHMENT.—Not later than 90 days 

11 after the date of enactment of this Act, the Director 

12 of the Office of Management and Budget shall estab13 lish a working system for prepayment and preaward 

14 review that includes the Do Not Pay Initiative as de15 scribed under this section. 

16 (2) WORKING SYSTEM.—The working system es17 tablished under paragraph (1)— 

18 (A) may be located within an appropriate 

19 agency; 

20 (B) shall include not less than 3 agencies as 

21 users of the system; and 

22 (C) shall include investigation activities for 

23 fraud and systemic improper payments detection 

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1 niques, which may include commercial database 

2 use or access. 

3 (3) APPLICATION TO ALL AGENCIES.—Not later 

4 than January 1, 2013, each agency shall review all 

5 payments and awards for all programs of that agency 

6 through the system established under this subsection. 

7 (e) MULTILATERAL DATA USE AGREEMENTS.— 

8 (1) IN GENERAL.—Not later than 60 days after 

9 the date of enactment of this Act, the Director of the 

10 Office of Management and Budget shall develop a 

11 plan to establish a multilateral data use agreement 

12 authority to carry out this section, including access 

13 to databases such as the New Hire Database under 

14 section 453(j) of the Social Security Act (42 U.S.C. 

15 653(j)). 

16 (2) PRIVACY ACT MATCHING AGREEMENTS.—Sec17 tion 552a(o)(1) of title 5, United States Code, is 

18 amended in the matter preceding subparagraph (A), 

19 by inserting ‘‘or an agreement governing multiple 

20 agencies’’ before ‘‘specifying’’. 

21 (3) GENERAL PROTOCOLS AND SECURITY.— 

22 (A) IN GENERAL.—In developing the multi23 lateral data use agreements, the Director of the 

24 Office of Management and Budget shall establish 

25 implementing regulations and guidelines that inmstockstill on DSK4VPTVN1PROD with BILLS

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1 clude streamlined interagency processes to ensure 

2 agency access to data, and provide for appro3 priate transfer and storage of any transferred 

4 data, in a manner consistent with relevant pri5 vacy, security and disclosure laws. 

6 (B) CONSULTATION.—The Director of the 

7 Office of Management and Budget shall consult 

8 with— 

9 (i) the Council of Inspectors General 

10 on Integrity and Efficiency before imple11 menting this paragraph; and 

12 (ii) the Secretary of Health and 

13 Human Services, the Social Security Ad14 ministrator, and the head of any other 

15 agency, as appropriate. 

16 (f) DEVELOPMENT AND ACCESS TO A DATABASE OF IN17 CARCERATED INDIVIDUALS.—Not later than 1 year after the 

18 date of enactment of this Act, the Attorney General shall 

19 submit to Congress recommendations for increasing the use 

20 of, access to, and the technical feasibility of using data on 

21 the Federal, State, and local conviction and incarceration 

22 status of individuals for purposes of identifying and pre23 venting improper payments by Federal agencies and pro24 grams and fraud. 

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1 (g) PLAN TO CURB FEDERAL IMPROPER PAYMENTS TO

2 DECEASED INDIVIDUALS BY IMPROVING THE QUALITY AND

3 USE BY FEDERAL AGENCIES OF THE SOCIAL SECURITY AD4 MINISTRATION DEATH MASTER FILE.— 

5 (1) ESTABLISHMENT.—In conjunction with the 

6 Commissioner of Social Security and in consultation 

7 with relevant stakeholders that have an interest in or 

8 responsibility for providing the data, and the States, 

9 the Director of the Office of Management and Budget 

10 shall establish a plan for improving the quality, accu11 racy, and timeliness of death data maintained by the 

12 Social Security Administration, including death in13 formation reported to the Commissioner under section 

14 205(r) of the Social Security Act (42 U.S.C. 405(r)). 

15 (2) ADDITIONAL ACTIONS UNDER PLAN.—The 

16 plan established under this subsection shall include 

17 recommended actions by agencies to— 

18 (A) increase the quality and frequency of 

19 access to the Death Master File and other death 

20 data; 

21 (B) achieve a goal of at least daily access 

22 as appropriate; 

23 (C) provide for all States and other data 

24 providers to use improved and electronic means 

25 for providing data; 

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1 (D) identify improved methods by agencies 

2 for determining ineligible payments due to the 

3 death of a recipient through proactive 

4 verification means; and 

5 (E) address improper payments made by 

6 agencies to deceased individuals as part of Fed7 eral retirement programs. 

8 (3) REPORT.—Not later than 120 days after the 

9 date of enactment of this Act, the Director of the Of10 fice of Management and Budget shall submit a report 

11 to Congress on the plan established under this sub12 section, including recommended legislation. 

13 SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS. 

14 (a) DEFINITION.—In this section, the term ‘‘recovery 

15 audit’’ means a recovery audit described under section 2(h) 

16 of the Improper Payments Elimination and Recovery Act 

17 of 2010. 

18 (b) IN GENERAL.—The Director of the Office of Man19 agement and Budget shall determine— 

20 (1) current and historical rates and amounts of 

21 recovery of improper payments (or, in cases in which 

22 improper payments are identified solely on the basis 

23 of a sample, recovery rates and amounts estimated on 

24 the basis of the applicable sample), including specific 

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1 information of amounts and payments recovered by 

2 recovery audit contractors; and 

3 (2) targets for recovering improper payments, 

4 including specific information on amounts and pay5 ments recovered by recovery audit contractors. 

6 (c) RECOVERY AUDIT CONTRACTOR PROGRAMS.— 

7 (1) ESTABLISHMENT.—Not later than 90 days 

8 after the date of enactment of this Act, the Director 

9 of the Office of Management and Budget shall estab10 lish a plan for no less than 10 Recovery Audit Con11 tracting programs for the purpose of identifying and 

12 recovering overpayments and underpayments in 10 

13 agencies. 

14 (2) RANGE OF RECOVERY AUDIT CONTRACTING

15 TYPES.—Programs established under paragraph (1) 

16 shall be representative of different types of— 

17 (A) programs, including programs that dif18 fer in size, payment types, and recipient types 

19 (such as beneficiaries and vendors or contractors) 

20 across the Federal Government; and 

21 (B) recover audit contracting (including in22 dividual payments review and demographic 

23 analysis). 

24 (3) INITIAL OPERATION OF PROGRAMS.—Not 

25 later than 1 year after the plan under paragraph (1) 

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1 is established, each applicable agency shall establish 

2 the programs included in that plan which shall be 

3 conducted for not more than a 3-year period. 

4 (4) REPORTS.— 

5 (A) IN GENERAL.—Not later than 2 years 

6 after establishing a program under the plan es7 tablished under paragraph (1), the head of the 

8 agency conducting the program shall submit a 

9 report on the program to Congress. 

10 (B) CONTENTS.—Each report under this 

11 paragraph shall include— 

12 (i) a description of the impact of the 

13 program on savings and recoveries; and 

14 (ii) such recommendations as the head 

15 of the agency considers appropriate on ex16 tending or expanding the program. 

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Calendar No. 449 

112TH CONGRESS 

2D SESSION S. 1409 

[Report No. 112–181] 

A BILL 

To intensify efforts to identify, prevent, and recover 

Federal spending. payment error, waste, fraud, and abuse within 

JULY 12, 2012 

Reported with an amendment 

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