II 

Calendar No. 694 

118TH CONGRESS 

2D SESSION S. 2924 

[Report No. 118–288] 

To amend title 31, United States Code, to improve the management of 

improper payments, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 26 (legislative day, SEPTEMBER 22), 2023 

Mr. CARPER (for himself, Mr. BRAUN, and Mr. LANKFORD) introduced the 

following bill; which was read twice and referred to the Committee on 

Homeland Security and Governmental Affairs 

DECEMBER 12, 2024 

Reported by Mr. PETERS, with an amendment and an amendment to the title 

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

A BILL 

To amend title 31, United States Code, to improve the 

management of improper payments, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Safeguarding the 

3 Transparency and Efficiency of Payments Act’’ or the 

4 ‘‘STEP Act’’. 

5 SEC. 2. IMPROPER PAYMENTS. 

6 (a) DEFINITIONS.— 

7 (1) IN GENERAL.—Section 3351 of title 31, 

8 United States Code, is amended— 

9 (A) by redesignating paragraphs (2) 

10 through (8) as paragraphs (3) through (9), re11 spectively; 

12 (B) by inserting after paragraph (1) the 

13 following: 

14 ‘‘(2) CHIEF FINANCIAL OFFICER.—The term 

15 ‘chief financial officer’ means— 

16 ‘‘(A) with respect to an executive agency 

17 described in section 901(b), the Chief Financial 

18 Officer of the executive agency appointed under 

19 such section; and 

20 ‘‘(B) with respect to an executive agency 

21 that is not described in section 901(b), the offi22 cial serving as the senior executive responsible 

23 for managing the financial activities of the exec24 utive agency.’’; and 

25 (C) in paragraph (3), as so redesignated— 

26 (i) in subparagraph (A)— 


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1 (I) in clause (i)— 

2 (aa) by striking ‘‘published’’ 

3 and inserting ‘‘included’’; and 

4 (bb) by striking ‘‘with’’ and 

5 inserting ‘‘in the document con6 taining’’; and 

7 (II) in clause (ii), by striking 

8 ‘‘statement’’ and inserting ‘‘docu9 ment’’; 

10 (ii) in subparagraph (C), by striking 

11 ‘‘accompanying materials to’’ and inserting 

12 ‘‘document containing;’’ 

13 (iii) in subparagraph (D), by striking 

14 ‘‘accompanying materials to’’ and inserting 

15 ‘‘document containing’’; and 

16 (iv) in subparagraph (E), by striking 

17 ‘‘accompanying materials to’’ and inserting 

18 ‘‘document containing’’. 

19 (2) CONFORMING AMENDMENTS.—Section 

20 3353(a)(4)(B) of title 31, United States Code, is 

21 amended— 

22 (A) in clause (i), by striking ‘‘section 

23 3351(2)(B)’’ and inserting ‘‘section 

24 3351(3)(B)’’; 


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1 (B) in clause (ii), by striking ‘‘section 

2 3351(2)(C)’’ and inserting ‘‘section 

3 3351(3)(C)’’; 

4 (C) in clause (iii), by striking ‘‘section 

5 3351(2)(D)’’ and inserting ‘‘section 

6 3351(3)(D)’’; and 

7 (D) in clause (vi), by striking ‘‘section 

8 3351(2)(A)’’ and inserting ‘‘section 

9 3351(3)(A)’’. 

10 (b) ESTIMATES OF IMPROPER PAYMENTS AND RE11 PORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.— 

12 Section 3352 of title 31, United States Code, is amend13 ed— 

14 (1) in subsection (a)— 

15 (A) in paragraph (3)— 

16 (i) in subparagraph (B), in the matter 

17 preceding clause (i), by striking ‘‘para18 graph (1)’’ and inserting ‘‘paragraph 

19 (1)(B)’’; and 

20 (ii) in subparagraph (C), by striking 

21 ‘‘paragraph (1)’’ and inserting ‘‘para22 graphs (1) and (4)’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(4) NEW PROGRAMS AND ACTIVITIES.—In ad25 dition to the programs and activities identified under 


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1 paragraph (1)(B), the head of an executive agency 

2 shall annually identify as susceptible to significant 

3 improper payments any program or activity that— 

4 ‘‘(A) has or is expected to have outlays ex5 ceeding $100,000,000 in any one of the first 3 

6 fiscal years of operation; and 

7 ‘‘(B) is in the first 4 years of operation.’’; 

8 (2) in subsection (c)(1)— 

9 (A) in the matter preceding subparagraph 

10 (A), by striking ‘‘subsection (a)(1)’’ and insert11 ing ‘‘paragraph (1) or (4) of subsection (a)’’; 

12 and 

13 (B) by striking subparagraphs (A) and (B) 

14 and inserting the following: 

15 ‘‘(A) produce a statistically valid estimate 

16 of the improper payments made under the pro17 gram or activity, or an estimate of such im18 proper payments that is otherwise appropriate 

19 using a methodology approved by— 

20 ‘‘(i) the Director of the Office of Man21 agement and Budget; and 

22 ‘‘(ii) the chief financial officer of the 

23 executive agency; and 


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1 ‘‘(B) report the estimates described in sub2 paragraph (A) in accordance with subsection 

3 (j).’’; and 

4 (3) by adding at the end the following: 

5 ‘‘(j) ANNUAL REPORTS.—Any annual report required 

6 to be made by the head of an executive agency under this 

7 section shall— 

8 ‘‘(1) be included in full in the document con9 taining the annual financial statement of the execu10 tive agency; and 

11 ‘‘(2) include a statement by the chief financial 

12 officer of the executive agency— 

13 ‘‘(A) certifying— 

14 ‘‘(i) the reliability of the executive 

15 agency’s identification of programs and ac16 tivities that may be susceptible to signifi17 cant improper payments under subsection 

18 (a); and 

19 ‘‘(ii) the validity of each estimate of 

20 improper payments under subsection (c); 

21 and 

22 ‘‘(B) describing the actions of the chief fi23 nancial officer of the executive agency to mon24 itor the development and implementation of any 


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1 corrective action plans reported under sub2 section (d).’’. 

3 (c) FINANCIAL AND ADMINISTRATIVE CONTROLS RE4 LATING TO FRAUD AND IMPROPER PAYMENTS.—Section 

5 3357 of title 31, United States Code, is amended by strik6 ing subsection (d) and inserting the following: 

7 ‘‘(d) REPORTS.—For each fiscal year beginning in 

8 the first fiscal year after the date of enactment of the 

9 Safeguarding the Transparency and Efficiency of Pay10 ments Act, and in each of the following 9 fiscal years, the 

11 head of each agency shall submit to Congress, in the re12 port containing the annual financial statement of the 

13 agency, a report— 

14 ‘‘(1) on the progress of the agency in— 

15 ‘‘(A) implementing— 

16 ‘‘(i) the financial and administrative 

17 controls required to be established under 

18 subsection (c)(1); 

19 ‘‘(ii) the fraud risk principles in the 

20 Standards for Internal Control in the Fed21 eral Government of the Government Ac22 countability Office; and 

23 ‘‘(iii) Circular A–123 of the Office of 

24 Management and Budget with respect to 


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1 the leading practices for managing fraud 

2 risk; 

3 ‘‘(B) identifying fraud risks and 

4 vulnerabilities, including with respect to payroll, 

5 beneficiary payments, grants, large contracts, 

6 and purchase and travel cards; and 

7 ‘‘(C) establishing strategies, procedures, 

8 and other steps to curb fraud; and 

9 ‘‘(2) that includes, as defined by the leading 

10 practices identified in the report published by the 

11 Government Accountability Office on July 28, 2015, 

12 entitled ‘Framework for Managing Fraud Risks in 

13 Federal Programs’— 

14 ‘‘(A) an identification of— 

15 ‘‘(i) each dedicated entity that leads 

16 the fraud risk management activities of the 

17 agency and the roles of each such entity; 

18 ‘‘(ii) the responsibilities of each entity 

19 described in clause (i); 

20 ‘‘(iii) each program and operation of 

21 the agency for which each entity described 

22 in clause (i) is responsible; 

23 ‘‘(iv) the capacity of the entity de24 scribed in clause (i), including any limitaVerDate Sep 11 2014 02:26 Dec 13, 2024 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6401 E:\BILLS\S2924.RS S2924

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1 tions, to strategically manage the fraud 

2 risks of the agency; 

3 ‘‘(v) any program or operation of the 

4 agency for which there is not a dedicated 

5 entity that leads fraud risk management 

6 activities; and 

7 ‘‘(vi) if applicable, a detailed justifica8 tion for not having a dedicated entity, as 

9 described in clause (v); 

10 ‘‘(B) the status of the fraud risk profiles 

11 for each program and operation of the agency, 

12 including the date of the last update and date 

13 of the next planned update of those fraud risk 

14 profiles; 

15 ‘‘(C) with respect to each program or oper16 ation of the agency for which there is not a 

17 fraud risk profile, an identification of that pro18 gram or operation and a detailed justification 

19 for not having a fraud risk profile for the pro20 gram or operation; 

21 ‘‘(D) the status of the antifraud strategies 

22 for each program and operation of the agency, 

23 including the date of the last update and the 

24 date of the next planned update of those anti25 fraud strategies; and 


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1 ‘‘(E) with respect to each program or oper2 ation of the agency for which there is not an 

3 antifraud strategy, an identification of that pro4 gram or operation and a detailed justification 

5 for not having an antifraud strategy for the 

6 program or operation.’’. 

7 SECTION 1. SHORT TITLE. 

8 This Act may be cited as the ‘‘Safeguarding the Trans9 parency and Efficiency of Payments Act’’ or the ‘‘STEP 

10 Act’’. 

11 SEC. 2. IMPROPER PAYMENTS. 

12 (a) DEFINITIONS.— 

13 (1) IN GENERAL.—Section 3351 of title 31, 

14 United States Code, is amended— 

15 (A) by redesignating paragraphs (2) 

16 through (8) as paragraphs (3) through (9), re17 spectively; and 

18 (B) by inserting after paragraph (1) the fol19 lowing: 

20 ‘‘(2) CHIEF FINANCIAL OFFICER.—The term 

21 ‘chief financial officer’ means— 

22 ‘‘(A) with respect to an executive agency de23 scribed in section 901(b), the Chief Financial Of24 ficer of the executive agency appointed under 

25 such section; and 


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1 ‘‘(B) with respect to an executive agency 

2 that is not described in section 901(b), the offi3 cial serving as the senior executive responsible 

4 for managing the financial activities of the exec5 utive agency.’’. 

6 (2) CONFORMING AMENDMENTS.—Section 

7 3353(a)(4)(B) of title 31, United States Code, is 

8 amended— 

9 (A) in clause (i), by striking ‘‘section 

10 3351(2)(B)’’ and inserting ‘‘section 3351(3)(B)’’; 

11 (B) in clause (ii), by striking ‘‘section 

12 3351(2)(C)’’ and inserting ‘‘section 3351(3)(C)’’; 

13 (C) in clause (iii), by striking ‘‘section 

14 3351(2)(D)’’ and inserting ‘‘section 3351(3)(D)’’; 

15 and 

16 (D) in clause (vi), by striking ‘‘section 

17 3351(2)(A)’’ and inserting ‘‘section 3351(3)(A)’’. 

18 (b) ESTIMATES OF IMPROPER PAYMENTS AND RE19 PORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.— 

20 Section 3352 of title 31, United States Code, is amended— 

21 (1) in subsection (a)— 

22 (A) in paragraph (3)— 

23 (i) in subparagraph (B), in the matter 

24 preceding clause (i), by striking ‘‘paragraph 

25 (1)’’ and inserting ‘‘paragraph (1)(B)’’; and 


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1 (ii) in subparagraph (C), by striking 

2 ‘‘paragraph (1)’’ each place it appears and 

3 inserting ‘‘paragraphs (1) and (4)’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(4) NEW PROGRAMS AND ACTIVITIES.—In addi6 tion to the programs and activities identified under 

7 paragraph (1)(B) and subject to paragraph (5), the 

8 head of an executive agency shall annually identify as 

9 susceptible to significant improper payments any 

10 program or activity that— 

11 ‘‘(A) has or is expected to have outlays ex12 ceeding $100,000,000 in any one of the first 3 

13 fiscal years of operation; and 

14 ‘‘(B) is in the first 4 years of operation. 

15 ‘‘(5) EXCEPTION.—Paragraph (4) shall not 

16 apply with respect to any program or activity that 

17 the head of the relevant executive agency concludes, 

18 based on the results of a review conducted under 

19 paragraph (1), is not susceptible to significant im20 proper payments.’’; 

21 (2) in subsection (c)(1)— 

22 (A) in the matter preceding subparagraph 

23 (A), by striking ‘‘subsection (a)(1)’’ and insert24 ing ‘‘paragraph (1) or (4) of subsection (a)’’; and 


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1 (B) by striking subparagraphs (A) and (B) 

2 and inserting the following: 

3 ‘‘(A) produce a statistically valid estimate 

4 of the improper payments made under the pro5 gram or activity, or an estimate of such im6 proper payments that is otherwise appropriate 

7 using a methodology approved by— 

8 ‘‘(i) the Director of the Office of Man9 agement and Budget; and 

10 ‘‘(ii) the chief financial officer of the 

11 executive agency; and 

12 ‘‘(B) report the estimates described in sub13 paragraph (A) in accordance with subsection 

14 (j).’’; and 

15 (3) by adding at the end the following: 

16 ‘‘(j) ANNUAL REPORTS.—Any annual report required 

17 to be made by the head of an executive agency under this 

18 section shall— 

19 ‘‘(1) be included in the materials accompanying 

20 the annual financial statement of the executive agency 

21 and, as required, in applicable guidance of the Office 

22 of Management and Budget; and 

23 ‘‘(2) include a statement by the chief financial 

24 officer of the executive agency— 


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1 ‘‘(A) certifying the reliability of the execu2 tive agency’s identification of programs and ac3 tivities that may be susceptible to significant im4 proper payments under subsection (a); and 

5 ‘‘(B) describing the actions of the chief fi6 nancial officer of the executive agency to monitor 

7 the development and implementation of any cor8 rective action plans reported under subsection 

9 (d).’’. 

10 (c) FINANCIAL AND ADMINISTRATIVE CONTROLS RE11 LATING TO FRAUD AND IMPROPER PAYMENTS.—Section 

12 3357 of title 31, United States Code, is amended by striking 

13 subsection (d) and inserting the following: 

14 ‘‘(d) REPORTS.— 

15 ‘‘(1) IN GENERAL.—For each fiscal year begin16 ning in the first fiscal year after the date of enact17 ment of the Safeguarding the Transparency and Effi18 ciency of Payments Act, and in each of the following 

19 9 fiscal years, the head of each agency shall submit 

20 to Congress, in the report containing the annual fi21 nancial statement of the agency, a report— 

22 ‘‘(A) on the progress of the agency in— 

23 ‘‘(i) implementing— 


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1 ‘‘(I) the financial and adminis2 trative controls required to be estab3 lished under subsection (c)(1); 

4 ‘‘(II) the fraud risk principles in 

5 the Standards for Internal Control in 

6 the Federal Government of the Govern7 ment Accountability Office; and 

8 ‘‘(III) Circular A–123 of the Of9 fice of Management and Budget with 

10 respect to the leading practices for 

11 managing fraud risk; 

12 ‘‘(ii) identifying fraud risks and 

13 vulnerabilities, including with respect to 

14 payroll, beneficiary payments, grants, large 

15 contracts, and purchase and travel cards; 

16 and 

17 ‘‘(iii) establishing strategies, proce18 dures, and other steps to curb fraud; and 

19 ‘‘(B) that includes information on the status 

20 of implementing each of the 11 leading practices 

21 identified in the report published by the Govern22 ment Accountability Office on July 28, 2015, en23 titled ‘Framework for Managing Fraud Risks in 

24 Federal Programs’. 


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1 ‘‘(2) INFORMATION IN REPORT.—If the annual 

2 financial statement of an agency, or an alternative 

3 report of the agency included in the annual financial 

4 statement, includes information that fulfills the re5 quirements of this subsection, the head of the agency 

6 may include a brief statement to that effect in the fi7 nancial statement or alternative report without dupli8 cating the information required under this subsection 

9 in a separate or standalone report.’’. 

10 SEC. 3. NO ADDITIONAL FUNDS. 

11 No additional funds are authorized to be appropriated 

12 for the purpose of carrying out this Act or the amendments 

13 made by this Act. 

Amend the title so as to read: ‘‘A bill to amend title 

31, United States Code, to improve the prevention of improper payments, and for other purposes.’’. 


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Calendar No. 694 

118TH CONGRESS 

2D SESSION S. 2924 

[Report No. 118–288] 

A BILL 

To amend title 31, United States Code, to improve 

other purposes. the management of improper payments, and for 

DECEMBER 12, 2024 

Reported with an amendment and an amendment to the 

title 


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