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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1409 Reported in Senate (RS)]

                                                       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.

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

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Improper Payments 
Elimination and Recovery Improvement Act of 2011''.</DELETED>

<DELETED>SEC. 2. DEFINITION.</DELETED>

<DELETED>    In this Act, the term ``agency'' means an executive agency 
defined under section 105 of title 5, United States Code.</DELETED>

<DELETED>SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY 
              FEDERAL AGENCIES.</DELETED>

<DELETED>    (a) In General.--The Director of the Office of Management 
and Budget shall on an annual basis--</DELETED>
        <DELETED>    (1) identify a list of high-priority Federal 
        programs for greater levels of oversight and review--</DELETED>
                <DELETED>    (A) in which the highest dollar value or 
                majority of governmentwide improper payments occur; 
                or</DELETED>
                <DELETED>    (B) for which there is a higher risk of 
                improper payments;</DELETED>
        <DELETED>    (2) in coordination with the agency responsible 
        for administering the high-priority program--</DELETED>
                <DELETED>    (A) establish semi-annual or quarterly 
                targets and actions for reducing improper payments 
                associated with each high-priority program; 
                or</DELETED>
                <DELETED>    (B) if such targets are in effect on the 
                date of enactment of this Act, establish supplemental 
                targets; and</DELETED>
        <DELETED>    (3) determine the entities that have received the 
        greatest amount of improper payments (or, if improper payments 
        are identified solely on the basis of a sample, the entities 
        that have received the greatest amount of improper payments in 
        the applicable sample).</DELETED>
<DELETED>    (b) Report on High-Dollar Improper Payments.--</DELETED>
        <DELETED>    (1) In general.--Subject to Federal privacy 
        policies and to the extent permitted by law, each agency on a 
        quarterly basis shall submit to the Inspector General of that 
        agency, and make available to the public (including 
        availability through the Internet), a report on any high-dollar 
        improper payments identified by the agency.</DELETED>
        <DELETED>    (2) Contents.--Each report under this subsection--
        </DELETED>
                <DELETED>    (A) shall describe--</DELETED>
                        <DELETED>    (i) any action the agency--
                        </DELETED>
                                <DELETED>    (I) has taken or plans to 
                                take to recover improper payments; 
                                and</DELETED>
                                <DELETED>    (II) intends to take to 
                                prevent future improper payments; 
                                and</DELETED>
                <DELETED>    (B) 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.</DELETED>
        <DELETED>    (3) Availability of information to inspector 
        general.--Paragraph (2)(B) shall not prohibit any referral or 
        information being made available to an Inspector General as 
        otherwise provided by law.</DELETED>
        <DELETED>    (4) Assessment.--After the review of each report 
        under this subsection, the Inspector General shall--</DELETED>
                <DELETED>    (A) assess the level of risk associated 
                with the applicable program and the quality of the 
                improper payment estimates and methodology of the 
                agency;</DELETED>
                <DELETED>    (B) determine the extent of additional 
                oversight or financial controls warranted to identify 
                and prevent improper payments; and</DELETED>
                <DELETED>    (C) provide the head of the agency with 
                any recommendations, for modifying any plans of the 
                agency, including improvements for improper payments 
                determination and estimation methodology.</DELETED>
<DELETED>    (c) Improved Estimates.--</DELETED>
        <DELETED>    (1) In general.--Not later than 180 days after the 
        date of enactment of this Act, the Director of the Office of 
        Management and Budget shall provide guidance to agencies for 
        improving the estimates of improper payments under the Improper 
        Payments Information Act of 2002 (31 U.S.C. 3321 
        note).</DELETED>
        <DELETED>    (2) Guidance.--Guidance under this subsection 
        shall--</DELETED>
                <DELETED>    (A) strengthen the estimation process of 
                agencies by reviewing the underlying validity of 
                payments to ensure amounts being billed are proper; 
                and</DELETED>
                <DELETED>    (B) include--</DELETED>
                        <DELETED>    (i) access to more complete data 
                        as part of reviews;</DELETED>
                        <DELETED>    (ii) ending reliance on self-
                        reporting of improper payments as a replacement 
                        for estimates, and relying on the development 
                        of a robust process to estimate and identify 
                        improper payments across the agency;</DELETED>
                        <DELETED>    (iii) all overpayments in the 
                        improper payments estimate, regardless of 
                        whether improperly paid funds have been or are 
                        being recovered;</DELETED>
                        <DELETED>    (iv) ensuring that--</DELETED>
                                <DELETED>    (I) the review of payments 
                                to employees shall include analysis of 
                                employee data, including pay grade 
                                data, locality pay, and other factors 
                                that affect pay; and</DELETED>
                                <DELETED>    (II) reviews address high-
                                risk or high-dollar personnel payments, 
                                including travel, pay, and purchase 
                                cards;</DELETED>
                        <DELETED>    (v) reassessing high-risk programs 
                        to better reflect the unique processes, 
                        procedures, and risks of improper payments, 
                        including assessments for each program to 
                        reflect different risk components and better 
                        direct corrective actions; and</DELETED>
                        <DELETED>    (vi) confirming that inter-agency 
                        transfers are proper using a methodology 
                        comparable to that used to assess program level 
                        improper payments.</DELETED>

<DELETED>SEC. 4. IMPROPER PAYMENTS INFORMATION.</DELETED>

<DELETED>    Section 2(a)(3)(A)(ii) of the Improper Payments 
Information Act of 2002 (31 U.S.C. 3321 note) is amended by striking 
``with respect to fiscal years following September 30th of a fiscal 
year beginning before fiscal year 2013 as determined by the Office of 
Management and Budget'' and inserting ``with respect to fiscal year 
2014 and each fiscal year thereafter''.</DELETED>

<DELETED>SEC. 5. DO NOT PAY INITIATIVE.</DELETED>

<DELETED>    (a) Prepayment and Preaward Procedures.--</DELETED>
        <DELETED>    (1) In general.--Each agency shall review 
        prepayment and preaward procedures and ensure that a thorough 
        review of available databases with relevant information on 
        eligibility occurs to determine program or award eligibility 
        and prevent improper payments before the release of any Federal 
        funds, to the extent permitted by law.</DELETED>
        <DELETED>    (2) Databases.--At a minimum, each agency shall, 
        before payment and award, check the following databases (if 
        applicable and permitted by law) to verify 
        eligibility:</DELETED>
                <DELETED>    (A) The Death Master File of the Social 
                Security Administration.</DELETED>
                <DELETED>    (B) The General Services Administration's 
                Excluded Parties List System.</DELETED>
                <DELETED>    (C) The Debt Check Database of the 
                Department of the Treasury.</DELETED>
                <DELETED>    (D) The Credit Alert System or Credit 
                Alert Interactive Voice Response System of the 
                Department of Housing and Urban Development.</DELETED>
                <DELETED>    (E) The List of Excluded Individuals/
                Entities of the Office of Inspector General of the 
                Department of Health and Human Services.</DELETED>
<DELETED>    (b) Do Not Pay List.--</DELETED>
        <DELETED>    (1) Establishment.--There is established the Do 
        Not Pay List which shall consist of--</DELETED>
                <DELETED>    (A) the databases described under 
                subsection (a)(2); and</DELETED>
                <DELETED>    (B) any other database designated by the 
                Director of the Office of Management and Budget in 
                consultation with agencies.</DELETED>
        <DELETED>    (2) Other databases.--In making designations of 
        other databases under paragraph (1)(B), the Director of the 
        Office of Management and Budget shall consider--</DELETED>
                <DELETED>    (A) any database that assists in 
                preventing improper payments; and</DELETED>
                <DELETED>    (B) the database of incarcerated 
                individuals established under subsection (f).</DELETED>
        <DELETED>    (3) Access and review by agencies.--For purposes 
        of identifying and preventing improper payment, each agency 
        shall have access to, and use of, the Do Not Pay List to 
        determine payment or award eligibility when the Director of the 
        Office of Management and Budget determines the Do Not Pay List 
        is appropriately established for the agency.</DELETED>
        <DELETED>    (4) Payment otherwise required.--When using the Do 
        Not Pay List, an agency shall recognize that there may be 
        circumstances under which the law requires a payment or award 
        to be made to a recipient, regardless of whether that recipient 
        is on the Do Not Pay List.</DELETED>
<DELETED>    (c) Database Integration Plan.--Not later than 60 days 
after the date of enactment of this Act, the Director of the Office of 
Management and Budget shall provide to the Congress a plan for--
</DELETED>
        <DELETED>    (1) inclusion of other databases on the Do Not Pay 
        List;</DELETED>
        <DELETED>    (2) to the extent permitted by law, agency access 
        to the Do Not Pay List; and</DELETED>
        <DELETED>    (3) the multilateral data use agreements described 
        under subsection (e).</DELETED>
<DELETED>    (d) Initial Working System.--</DELETED>
        <DELETED>    (1) Establishment.--Not later than 90 days after 
        the date of enactment of this Act, the Director of the Office 
        of Management and Budget shall establish a working system for 
        prepayment and preaward review that includes the Do Not Pay 
        List as described under this section.</DELETED>
        <DELETED>    (2) Initial system.--The working system 
        established under paragraph (1)--</DELETED>
                <DELETED>    (A) may be located within an appropriate 
                agency;</DELETED>
                <DELETED>    (B) shall include not less than 3 
                agencies;</DELETED>
                <DELETED>    (C) shall include fraud and improper 
                payments detection through predictive modeling and 
                other analytic technologies and other techniques; 
                and</DELETED>
                <DELETED>    (D) may provide for the use of commercial 
                database sources, commercial analysis, and other 
                functionality for payment or award reviews, as 
                determined appropriate by the Director of the Office of 
                Management and Budget for verifying Federal 
                data.</DELETED>
        <DELETED>    (3) Application to all agencies.--Not later than 
        January 1, 2013, each agency shall review all payments and 
        awards for all programs of that agency through the system 
        established under this subsection.</DELETED>
<DELETED>    (e) Multilateral Data Use Agreements.--</DELETED>
        <DELETED>    (1) In general.--Not later than 60 days after the 
        date of enactment of this Act, the Director of the Office of 
        Management and Budget shall develop a plan to establish a 
        multilateral data use agreement authority to carry out this 
        section, including access to databases such as the New Hire 
        Database under section 453(j) of the Social Security Act (42 
        U.S.C. 653(j)).</DELETED>
        <DELETED>    (2) General protocols and security.--</DELETED>
                <DELETED>    (A) In general.--The multilateral data use 
                agreements shall be consistent with protocols to ensure 
                the secure transfer and storage of any data provided to 
                another entity or individual--</DELETED>
                        <DELETED>    (i) under the provisions of, or 
                        amendments made by, this section; and</DELETED>
                        <DELETED>    (ii) consistent with applicable 
                        information, privacy, security, and disclosure 
                        laws, including--</DELETED>
                                <DELETED>    (I) the regulations 
                                promulgated under the Health Insurance 
                                Portability and Accountability Act of 
                                1996 and section 552a of title 5, 
                                United States Code; and</DELETED>
                                <DELETED>    (II) subject to any 
                                information systems security 
                                requirements under such laws or 
                                otherwise required by the Director of 
                                the Office of Management and 
                                Budget.</DELETED>
                <DELETED>    (B) Consultation.--The Director of the 
                Office of Management and Budget shall consult with--
                </DELETED>
                        <DELETED>    (i) the Council of Inspectors 
                        General on Integrity and Efficiency before 
                        implementing this paragraph; and</DELETED>
                        <DELETED>    (ii) the Secretary of Health and 
                        Human Services, the Social Security 
                        Administrator, and the head of any other 
                        agency, as appropriate.</DELETED>
<DELETED>    (f) Development and Access to a Database of Incarcerated 
Individuals.--</DELETED>
        <DELETED>    (1) In general.--The Attorney General shall 
        develop and maintain a database of individuals incarcerated at 
        Federal and State facilities.</DELETED>
        <DELETED>    (2) Availability and update.--The database 
        developed under this subsection shall be--</DELETED>
                <DELETED>    (A) available to agencies to carry out 
                this section and prevent waste, fraud, and abuse; 
                and</DELETED>
                <DELETED>    (B) updated no less frequently than on a 
                weekly basis.</DELETED>
<DELETED>    (g) Plan To Improve the Social Security Administration 
Death Master File.--</DELETED>
        <DELETED>    (1) Establishment.--In conjunction with the 
        Commissioner of Social Security and in consultation with 
        stakeholders and the States, the Director of the Office of 
        Management and Budget, shall establish a plan for improving the 
        quality and timeliness of death data maintained by the Social 
        Security Administration, including death information reported 
        to the Commissioner under section 205(r) of the Social Security 
        Act (42 U.5.C. 405(r)).</DELETED>
        <DELETED>    (2) Actions under plan.--The plan established 
        under this subsection shall include actions agencies are 
        required to take to--</DELETED>
                <DELETED>    (A) increase the quality and frequency of 
                access;</DELETED>
                <DELETED>    (B) achieve a goal of at least daily 
                access as appropriate; and</DELETED>
                <DELETED>    (C) provide for all States to use modern, 
                electronic means for providing data.</DELETED>
        <DELETED>    (3) Report.--Not later than 120 days 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 
        plan established under this subsection, including recommended 
        legislation.</DELETED>

<DELETED>SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.</DELETED>

<DELETED>    (a) In General.--The Director of the Office of Management 
and Budget shall determine--</DELETED>
        <DELETED>    (1) current and historical rates and amounts of 
        recovery of improper payments (or, in cases in which improper 
        payments are identified solely on the basis of a sample, 
        recovery rates and amounts estimated on the basis of the 
        applicable sample), including specific information of amounts 
        and payments recovered by recovery audit contractors; 
        and</DELETED>
        <DELETED>    (2) targets for recovering improper payments, 
        including specific information on amounts and payments 
        recovered by recovery audit contractors.</DELETED>
<DELETED>    (b) Recovery Audit Contractor Programs.--</DELETED>
        <DELETED>    (1) Establishment.--Not later than 90 days after 
        the date of enactment of this Act, the Director of the Office 
        of Management and Budget shall establish a plan for no less 
        than 10 Recovery Audit Contracting programs for the purpose of 
        identifying and recovering overpayments and underpayments in 10 
        agencies.</DELETED>
        <DELETED>    (2) Review of commercial payments.--Of the 
        programs established under this subsection, 5 programs shall 
        review commercial payments by an agency.</DELETED>
        <DELETED>    (3) Duration.--Any program established under this 
        subsection shall terminate not more than 3 years after the date 
        on which the program is established.</DELETED>
        <DELETED>    (4) Reports.--</DELETED>
                <DELETED>    (A) In general.--Not later than 3 months 
                after the completion of a program, the head of the 
                agency conducting the program shall submit a report on 
                the program to Congress.</DELETED>
                <DELETED>    (B) Contents.--Each report under this 
                paragraph shall include--</DELETED>
                        <DELETED>    (i) a description of the impact of 
                        the program on savings and recoveries; 
                        and</DELETED>
                        <DELETED>    (ii) such recommendations as the 
                        head of the agency considers appropriate on 
                        extending or expanding the program.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improper Payments Elimination and 
Recovery Improvement Act of 2012''.

SEC. 2. DEFINITION.

    In this Act, the term ``agency'' means an executive agency as that 
term is defined under section 102 of title 31, United States Code.

SEC. 3. IMPROVING THE DETERMINATION OF IMPROPER PAYMENTS BY FEDERAL 
              AGENCIES.

    (a) In General.--Section 2 of the Improper Payments Information Act 
of 2002 (31 U.S.C. 3321 note) is amended--
            (1) by redesignating subsections (b) through (g) as 
        subsections (c) through (h), respectively;
            (2) by inserting after subsection (a) the following:
    ``(b) Improving the Determination of Improper Payments.--
            ``(1) In general.--The Director of the Office of Management 
        and Budget shall on an annual basis--
                    ``(A) identify a list of high-priority Federal 
                programs for greater levels of oversight and review--
                            ``(i) in which the highest dollar value or 
                        highest frequency of improper payments occur; 
                        or
                            ``(ii) for which there is a higher risk of 
                        improper payments; and
                    ``(B) in coordination with the agency responsible 
                for administering the high-priority program, establish 
                annual targets and semi-annual or quarterly actions for 
                reducing improper payments associated with each high-
                priority program.
            ``(2) Report on high-priority improper payments.--
                    ``(A) In general.--Subject to Federal privacy 
                policies and to the extent permitted by law, each 
                agency with a program identified under paragraph (1)(A) 
                on an annual basis shall submit to the Inspector 
                General of that agency, and make available to the 
                public (including availability through the Internet), a 
                report on that program.
                    ``(B) Contents.--Each report under this paragraph--
                            ``(i) shall describe--
                                    ``(I) any action the agency--
                                            ``(aa) has taken or plans 
                                        to take to recover improper 
                                        payments; and
                                            ``(bb) intends to take to 
                                        prevent future improper 
                                        payments; and
                            ``(ii) 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) Public availability on central website.--The 
                Office of Management and Budget shall make each report 
                submitted under this paragraph available on a central 
                website.
                    ``(D) Availability of information to inspector 
                general.--Subparagraph (B)(ii) shall not prohibit any 
                referral or information being made available to an 
                Inspector General as otherwise provided by law.
                    ``(E) Assessment and recommendations.--The 
                Inspector General of each agency that submits a report 
                under this paragraph shall--
                            ``(i) review--
                                    ``(I) the assessment of the level 
                                of risk associated with the applicable 
                                program, and the quality of the 
                                improper payment estimates and 
                                methodology of the agency; and
                                    ``(II) the oversight or financial 
                                controls to identify and prevent 
                                improper payments; and
                            ``(ii) provide recommendations, for 
                        modifying any plans of the agency, including 
                        improvements for improper payments 
                        determination and estimation methodology.'';
            (3) in subsection (d) (as redesignated by paragraph (1) of 
        this subsection), by striking ``subsection (b)'' each place 
        that term appears and inserting ``subsection (c)''; and
            (4) in subsection (e) (as redesignated by paragraph (1) of 
        this subsection), by striking ``subsection (b)'' and inserting 
        ``subsection (c)''.
    (b) Improved Estimates.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Director of the Office of Management 
        and Budget shall provide guidance to agencies for improving the 
        estimates of improper payments under the Improper Payments 
        Information Act of 2002 (31 U.S.C. 3321 note).
            (2) Guidance.--Guidance under this subsection shall--
                    (A) strengthen the estimation process of agencies 
                by setting standards for agencies to follow in 
                determining the underlying validity of sampled payments 
                to ensure amounts being billed are proper; and
                    (B) instruct agencies to give the persons or 
                entities performing improper payments estimates access 
                to all necessary payment data, including access to 
                relevant documentation;
                    (C) explicitly bar agencies from relying on self-
                reporting by the recipients of agency payments as the 
                sole source basis for improper payments estimates;
                    (D) require agencies to include all identified 
                improper payments in the reported estimate, regardless 
                of whether the improper payment in question has been or 
                is being recovered;
                    (E) include payments to employees, including 
                salary, locality pay, travel pay, purchase card use, 
                and other employee payments, as subject to risk 
                assessment and, where appropriate, improper payment 
                estimation; and
                    (F) require agencies to tailor their corrective 
                actions for the high-priority programs identified under 
                section 2(b)(1)(A) of the Improper Payments Information 
                Act of 2002 (31 U.S.C. 3321 note) to better reflect the 
                unique processes, procedures, and risks involved in 
                each specific program.
    (c) Technical and Conforming Amendments.--The Improper Payments 
Elimination and Recovery Act of 2010 (Public Law 111-204; 124 Stat. 
2224) is amended--
            (1) in section 2(h)(1) (31 U.S.C. 3321 note), by striking 
        ``section 2(f)'' and all that follows and inserting ``section 
        2(g) of the Improper Payments Information Act of 2002 (31 
        U.S.C. 3321 note).''; and
            (2) in section 3(a) (31 U.S.C. 3321 note)--
                    (A) in paragraph (1), by striking ``section 2(f)'' 
                and all that follows and inserting ``section 2(g) of 
                the Improper Payments Information Act of 2002 (31 
                U.S.C. 3321 note).''; and
                    (B) in paragraph (3)--
                            (i) by striking ``section 2(b)'' each place 
                        it appears and inserting ``section 2(c)''; and
                            (ii) by striking ``section 2(c)'' each 
                        place it appears and inserting ``section 
                        2(d)''.

SEC. 4. IMPROPER PAYMENTS INFORMATION.

    Section 2(a)(3)(A)(ii) of the Improper Payments Information Act of 
2002 (31 U.S.C. 3321 note) is amended by striking ``with respect to 
fiscal years following September 30th of a fiscal year beginning before 
fiscal year 2013 as determined by the Office of Management and Budget'' 
and inserting ``with respect to fiscal year 2014 and each fiscal year 
thereafter''.

SEC. 5. DO NOT PAY INITIATIVE.

    (a) Prepayment and Preaward Procedures.--
            (1) In general.--Each agency shall review prepayment and 
        preaward procedures and ensure that a thorough review of 
        available databases with relevant information on eligibility 
        occurs to determine program or award eligibility and prevent 
        improper payments before the release of any Federal funds.
            (2) Databases.--At a minimum and before issuing any payment 
        and award, each agency shall review as appropriate the 
        following databases to verify eligibility of the payment and 
        award:
                    (A) The Death Master File of the Social Security 
                Administration.
                    (B) The General Services Administration's Excluded 
                Parties List System.
                    (C) The Debt Check Database of the Department of 
                the Treasury.
                    (D) The Credit Alert System or Credit Alert 
                Interactive Voice Response System of the Department of 
                Housing and Urban Development.
                    (E) The List of Excluded Individuals/Entities of 
                the Office of Inspector General of the Department of 
                Health and Human Services.
    (b) Do Not Pay Initiative.--
            (1) Establishment.--There is established the Do Not Pay 
        Initiative which shall consist of--
                    (A) the databases described under subsection 
                (a)(2); and
                    (B) any other database designated by the Director 
                of the Office of Management and Budget in consultation 
                with agencies.
            (2) Other databases.--In making designations of other 
        databases under paragraph (1)(B), the Director of the Office of 
        Management and Budget shall consider any database that assists 
        in preventing improper payments.
            (3) Access and review by agencies.--For purposes of 
        identifying and preventing improper payments, each agency shall 
        have access to, and use of, the Do Not Pay Initiative to 
        determine payment or award eligibility when the Director of the 
        Office of Management and Budget determines the Do Not Pay 
        Initiative is appropriately established for the agency.
            (4) Payment otherwise required.--When using the Do Not Pay 
        Initiative, an agency shall recognize that there may be 
        circumstances under which the law requires a payment or award 
        to be made to a recipient, regardless of whether that recipient 
        is on the Do Not Pay Initiative.
    (c) Database Integration Plan.--Not later than 60 days after the 
date of enactment of this Act, the Director of the Office of Management 
and Budget shall provide to the Congress a plan for--
            (1) inclusion of other databases on the Do Not Pay 
        Initiative;
            (2) to the extent permitted by law, agency access to the Do 
        Not Pay Initiative; and
            (3) the multilateral data use agreements described under 
        subsection (e).
    (d) Initial Working System.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Director of the Office of 
        Management and Budget shall establish a working system for 
        prepayment and preaward review that includes the Do Not Pay 
        Initiative as described under this section.
            (2) Working system.--The working system established under 
        paragraph (1)--
                    (A) may be located within an appropriate agency;
                    (B) shall include not less than 3 agencies as users 
                of the system; and
                    (C) shall include investigation activities for 
                fraud and systemic improper payments detection through 
                analytic technologies and other techniques, which may 
                include commercial database use or access.
            (3) Application to all agencies.--Not later than January 1, 
        2013, each agency shall review all payments and awards for all 
        programs of that agency through the system established under 
        this subsection.
    (e) Multilateral Data Use Agreements.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Director of the Office of Management 
        and Budget shall develop a plan to establish a multilateral 
        data use agreement authority to carry out this section, 
        including access to databases such as the New Hire Database 
        under section 453(j) of the Social Security Act (42 U.S.C. 
        653(j)).
            (2) Privacy act matching agreements.--Section 552a(o)(1) of 
        title 5, United States Code, is amended in the matter preceding 
        subparagraph (A), by inserting ``or an agreement governing 
        multiple agencies'' before ``specifying''.
            (3) General protocols and security.--
                    (A) In general.--In developing the multilateral 
                data use agreements, the Director of the Office of 
                Management and Budget shall establish implementing 
                regulations and guidelines that include streamlined 
                interagency processes to ensure agency access to data, 
                and provide for appropriate transfer and storage of any 
                transferred data, in a manner consistent with relevant 
                privacy, security and disclosure laws.
                    (B) Consultation.--The Director of the Office of 
                Management and Budget shall consult with--
                            (i) the Council of Inspectors General on 
                        Integrity and Efficiency before implementing 
                        this paragraph; and
                            (ii) the Secretary of Health and Human 
                        Services, the Social Security Administrator, 
                        and the head of any other agency, as 
                        appropriate.
    (f) Development and Access to a Database of Incarcerated 
Individuals.--Not later than 1 year after the date of enactment of this 
Act, the Attorney General shall submit to Congress recommendations for 
increasing the use of, access to, and the technical feasibility of 
using data on the Federal, State, and local conviction and 
incarceration status of individuals for purposes of identifying and 
preventing improper payments by Federal agencies and programs and 
fraud.
    (g) Plan To Curb Federal Improper Payments to Deceased Individuals 
by Improving the Quality and Use by Federal Agencies of the Social 
Security Administration Death Master File.--
            (1) Establishment.--In conjunction with the Commissioner of 
        Social Security and in consultation with relevant stakeholders 
        that have an interest in or responsibility for providing the 
        data, and the States, the Director of the Office of Management 
        and Budget shall establish a plan for improving the quality, 
        accuracy, and timeliness of death data maintained by the Social 
        Security Administration, including death information reported 
        to the Commissioner under section 205(r) of the Social Security 
        Act (42 U.S.C. 405(r)).
            (2) Additional actions under plan.--The plan established 
        under this subsection shall include recommended actions by 
        agencies to--
                    (A) increase the quality and frequency of access to 
                the Death Master File and other death data;
                    (B) achieve a goal of at least daily access as 
                appropriate;
                    (C) provide for all States and other data providers 
                to use improved and electronic means for providing 
                data;
                    (D) identify improved methods by agencies for 
                determining ineligible payments due to the death of a 
                recipient through proactive verification means; and
                    (E) address improper payments made by agencies to 
                deceased individuals as part of Federal retirement 
                programs.
            (3) Report.--Not later than 120 days 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 plan 
        established under this subsection, including recommended 
        legislation.

SEC. 6. IMPROVING RECOVERY OF IMPROPER PAYMENTS.

    (a) Definition.--In this section, the term ``recovery audit'' means 
a recovery audit described under section 2(h) of the Improper Payments 
Elimination and Recovery Act of 2010.
    (b) In General.--The Director of the Office of Management and 
Budget shall determine--
            (1) current and historical rates and amounts of recovery of 
        improper payments (or, in cases in which improper payments are 
        identified solely on the basis of a sample, recovery rates and 
        amounts estimated on the basis of the applicable sample), 
        including specific information of amounts and payments 
        recovered by recovery audit contractors; and
            (2) targets for recovering improper payments, including 
        specific information on amounts and payments recovered by 
        recovery audit contractors.
    (c) Recovery Audit Contractor Programs.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Director of the Office of 
        Management and Budget shall establish a plan for no less than 
        10 Recovery Audit Contracting programs for the purpose of 
        identifying and recovering overpayments and underpayments in 10 
        agencies.
            (2) Range of recovery audit contracting types.--Programs 
        established under paragraph (1) shall be representative of 
        different types of--
                    (A) programs, including programs that differ in 
                size, payment types, and recipient types (such as 
                beneficiaries and vendors or contractors) across the 
                Federal Government; and
                    (B) recover audit contracting (including individual 
                payments review and demographic analysis).
            (3) Initial operation of programs.--Not later than 1 year 
        after the plan under paragraph (1) is established, each 
        applicable agency shall establish the programs included in that 
        plan which shall be conducted for not more than a 3-year 
        period.
            (4) Reports.--
                    (A) In general.--Not later than 2 years after 
                establishing a program under the plan established under 
                paragraph (1), the head of the agency conducting the 
                program shall submit a report on the program to 
                Congress.
                    (B) Contents.--Each report under this paragraph 
                shall include--
                            (i) a description of the impact of the 
                        program on savings and recoveries; and
                            (ii) such recommendations as the head of 
                        the agency considers appropriate on extending 
                        or expanding the program.
                                                       Calendar No. 449

112th CONGRESS

  2d Session

                                S. 1409

                          [Report No. 112-181]

_______________________________________________________________________

                                 A BILL

 To intensify efforts to identify, prevent, and recover payment error, 
            waste, fraud, and abuse within Federal spending.

_______________________________________________________________________

                             July 12, 2012

                       Reported with an amendment
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