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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2924 Reported in Senate (RS)]

<DOC>

                                                       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.

    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 ``Safeguarding the 
Transparency and Efficiency of Payments Act'' or the ``STEP 
Act''.</DELETED>

<DELETED>SEC. 2. IMPROPER PAYMENTS.</DELETED>

<DELETED>    (a) Definitions.--</DELETED>
        <DELETED>    (1) In general.--Section 3351 of title 31, United 
        States Code, is amended--</DELETED>
                <DELETED>    (A) by redesignating paragraphs (2) 
                through (8) as paragraphs (3) through (9), 
                respectively;</DELETED>
                <DELETED>    (B) by inserting after paragraph (1) the 
                following:</DELETED>
        <DELETED>    ``(2) Chief financial officer.--The term `chief 
        financial officer' means--</DELETED>
                <DELETED>    ``(A) with respect to an executive agency 
                described in section 901(b), the Chief Financial 
                Officer of the executive agency appointed under such 
                section; and</DELETED>
                <DELETED>    ``(B) with respect to an executive agency 
                that is not described in section 901(b), the official 
                serving as the senior executive responsible for 
                managing the financial activities of the executive 
                agency.''; and</DELETED>
                <DELETED>    (C) in paragraph (3), as so redesignated--
                </DELETED>
                        <DELETED>    (i) in subparagraph (A)--
                        </DELETED>
                                <DELETED>    (I) in clause (i)--
                                </DELETED>
                                        <DELETED>    (aa) by striking 
                                        ``published'' and inserting 
                                        ``included''; and</DELETED>
                                        <DELETED>    (bb) by striking 
                                        ``with'' and inserting ``in the 
                                        document containing''; 
                                        and</DELETED>
                                <DELETED>    (II) in clause (ii), by 
                                striking ``statement'' and inserting 
                                ``document'';</DELETED>
                        <DELETED>    (ii) in subparagraph (C), by 
                        striking ``accompanying materials to'' and 
                        inserting ``document containing;''</DELETED>
                        <DELETED>    (iii) in subparagraph (D), by 
                        striking ``accompanying materials to'' and 
                        inserting ``document containing''; 
                        and</DELETED>
                        <DELETED>    (iv) in subparagraph (E), by 
                        striking ``accompanying materials to'' and 
                        inserting ``document containing''.</DELETED>
        <DELETED>    (2) Conforming amendments.--Section 3353(a)(4)(B) 
        of title 31, United States Code, is amended--</DELETED>
                <DELETED>    (A) in clause (i), by striking ``section 
                3351(2)(B)'' and inserting ``section 
                3351(3)(B)'';</DELETED>
                <DELETED>    (B) in clause (ii), by striking ``section 
                3351(2)(C)'' and inserting ``section 
                3351(3)(C)'';</DELETED>
                <DELETED>    (C) in clause (iii), by striking ``section 
                3351(2)(D)'' and inserting ``section 3351(3)(D)''; 
                and</DELETED>
                <DELETED>    (D) in clause (vi), by striking ``section 
                3351(2)(A)'' and inserting ``section 
                3351(3)(A)''.</DELETED>
<DELETED>    (b) Estimates of Improper Payments and Reports on Actions 
To Reduce Improper Payments.--Section 3352 of title 31, United States 
Code, is amended--</DELETED>
        <DELETED>    (1) in subsection (a)--</DELETED>
                <DELETED>    (A) in paragraph (3)--</DELETED>
                        <DELETED>    (i) in subparagraph (B), in the 
                        matter preceding clause (i), by striking 
                        ``paragraph (1)'' and inserting ``paragraph 
                        (1)(B)''; and</DELETED>
                        <DELETED>    (ii) in subparagraph (C), by 
                        striking ``paragraph (1)'' and inserting 
                        ``paragraphs (1) and (4)''; and</DELETED>
                <DELETED>    (B) by adding at the end the 
                following:</DELETED>
        <DELETED>    ``(4) New programs and activities.--In addition to 
        the programs and activities identified under paragraph (1)(B), 
        the head of an executive agency shall annually identify as 
        susceptible to significant improper payments any program or 
        activity that--</DELETED>
                <DELETED>    ``(A) has or is expected to have outlays 
                exceeding $100,000,000 in any one of the first 3 fiscal 
                years of operation; and</DELETED>
                <DELETED>    ``(B) is in the first 4 years of 
                operation.'';</DELETED>
        <DELETED>    (2) in subsection (c)(1)--</DELETED>
                <DELETED>    (A) in the matter preceding subparagraph 
                (A), by striking ``subsection (a)(1)'' and inserting 
                ``paragraph (1) or (4) of subsection (a)''; 
                and</DELETED>
                <DELETED>    (B) by striking subparagraphs (A) and (B) 
                and inserting the following:</DELETED>
                <DELETED>    ``(A) produce a statistically valid 
                estimate of the improper payments made under the 
                program or activity, or an estimate of such improper 
                payments that is otherwise appropriate using a 
                methodology approved by--</DELETED>
                        <DELETED>    ``(i) the Director of the Office 
                        of Management and Budget; and</DELETED>
                        <DELETED>    ``(ii) the chief financial officer 
                        of the executive agency; and</DELETED>
                <DELETED>    ``(B) report the estimates described in 
                subparagraph (A) in accordance with subsection (j).''; 
                and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
<DELETED>    ``(j) Annual Reports.--Any annual report required to be 
made by the head of an executive agency under this section shall--
</DELETED>
        <DELETED>    ``(1) be included in full in the document 
        containing the annual financial statement of the executive 
        agency; and</DELETED>
        <DELETED>    ``(2) include a statement by the chief financial 
        officer of the executive agency--</DELETED>
                <DELETED>    ``(A) certifying--</DELETED>
                        <DELETED>    ``(i) the reliability of the 
                        executive agency's identification of programs 
                        and activities that may be susceptible to 
                        significant improper payments under subsection 
                        (a); and</DELETED>
                        <DELETED>    ``(ii) the validity of each 
                        estimate of improper payments under subsection 
                        (c); and</DELETED>
                <DELETED>    ``(B) describing the actions of the chief 
                financial officer of the executive agency to monitor 
                the development and implementation of any corrective 
                action plans reported under subsection 
                (d).''.</DELETED>
<DELETED>    (c) Financial and Administrative Controls Relating to 
Fraud and Improper Payments.--Section 3357 of title 31, United States 
Code, is amended by striking subsection (d) and inserting the 
following:</DELETED>
<DELETED>    ``(d) Reports.--For each fiscal year beginning in the 
first fiscal year after the date of enactment of the Safeguarding the 
Transparency and Efficiency of Payments Act, and in each of the 
following 9 fiscal years, the head of each agency shall submit to 
Congress, in the report containing the annual financial statement of 
the agency, a report--</DELETED>
        <DELETED>    ``(1) on the progress of the agency in--</DELETED>
                <DELETED>    ``(A) implementing--</DELETED>
                        <DELETED>    ``(i) the financial and 
                        administrative controls required to be 
                        established under subsection (c)(1);</DELETED>
                        <DELETED>    ``(ii) the fraud risk principles 
                        in the Standards for Internal Control in the 
                        Federal Government of the Government 
                        Accountability Office; and</DELETED>
                        <DELETED>    ``(iii) Circular A-123 of the 
                        Office of Management and Budget with respect to 
                        the leading practices for managing fraud 
                        risk;</DELETED>
                <DELETED>    ``(B) identifying fraud risks and 
                vulnerabilities, including with respect to payroll, 
                beneficiary payments, grants, large contracts, and 
                purchase and travel cards; and</DELETED>
                <DELETED>    ``(C) establishing strategies, procedures, 
                and other steps to curb fraud; and</DELETED>
        <DELETED>    ``(2) that includes, as defined by the leading 
        practices identified in the report published by the Government 
        Accountability Office on July 28, 2015, entitled `Framework for 
        Managing Fraud Risks in Federal Programs'--</DELETED>
                <DELETED>    ``(A) an identification of--</DELETED>
                        <DELETED>    ``(i) each dedicated entity that 
                        leads the fraud risk management activities of 
                        the agency and the roles of each such 
                        entity;</DELETED>
                        <DELETED>    ``(ii) the responsibilities of 
                        each entity described in clause (i);</DELETED>
                        <DELETED>    ``(iii) each program and operation 
                        of the agency for which each entity described 
                        in clause (i) is responsible;</DELETED>
                        <DELETED>    ``(iv) the capacity of the entity 
                        described in clause (i), including any 
                        limitations, to strategically manage the fraud 
                        risks of the agency;</DELETED>
                        <DELETED>    ``(v) any program or operation of 
                        the agency for which there is not a dedicated 
                        entity that leads fraud risk management 
                        activities; and</DELETED>
                        <DELETED>    ``(vi) if applicable, a detailed 
                        justification for not having a dedicated 
                        entity, as described in clause (v);</DELETED>
                <DELETED>    ``(B) the status of the fraud risk 
                profiles for each program and operation of the agency, 
                including the date of the last update and date of the 
                next planned update of those fraud risk 
                profiles;</DELETED>
                <DELETED>    ``(C) with respect to each program or 
                operation of the agency for which there is not a fraud 
                risk profile, an identification of that program or 
                operation and a detailed justification for not having a 
                fraud risk profile for the program or 
                operation;</DELETED>
                <DELETED>    ``(D) the status of the antifraud 
                strategies for each program and operation of the 
                agency, including the date of the last update and the 
                date of the next planned update of those antifraud 
                strategies; and</DELETED>
                <DELETED>    ``(E) with respect to each program or 
                operation of the agency for which there is not an 
                antifraud strategy, an identification of that program 
                or operation and a detailed justification for not 
                having an antifraud strategy for the program or 
                operation.''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Safeguarding the Transparency and 
Efficiency of Payments Act'' or the ``STEP Act''.

SEC. 2. IMPROPER PAYMENTS.

    (a) Definitions.--
            (1) In general.--Section 3351 of title 31, United States 
        Code, is amended--
                    (A) by redesignating paragraphs (2) through (8) as 
                paragraphs (3) through (9), respectively; and
                    (B) by inserting after paragraph (1) the following:
            ``(2) Chief financial officer.--The term `chief financial 
        officer' means--
                    ``(A) with respect to an executive agency described 
                in section 901(b), the Chief Financial Officer of the 
                executive agency appointed under such section; and
                    ``(B) with respect to an executive agency that is 
                not described in section 901(b), the official serving 
                as the senior executive responsible for managing the 
                financial activities of the executive agency.''.
            (2) Conforming amendments.--Section 3353(a)(4)(B) of title 
        31, United States Code, is amended--
                    (A) in clause (i), by striking ``section 
                3351(2)(B)'' and inserting ``section 3351(3)(B)'';
                    (B) in clause (ii), by striking ``section 
                3351(2)(C)'' and inserting ``section 3351(3)(C)'';
                    (C) in clause (iii), by striking ``section 
                3351(2)(D)'' and inserting ``section 3351(3)(D)''; and
                    (D) in clause (vi), by striking ``section 
                3351(2)(A)'' and inserting ``section 3351(3)(A)''.
    (b) Estimates of Improper Payments and Reports on Actions to Reduce 
Improper Payments.--Section 3352 of title 31, United States Code, is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (3)--
                            (i) in subparagraph (B), in the matter 
                        preceding clause (i), by striking ``paragraph 
                        (1)'' and inserting ``paragraph (1)(B)''; and
                            (ii) in subparagraph (C), by striking 
                        ``paragraph (1)'' each place it appears and 
                        inserting ``paragraphs (1) and (4)''; and
                    (B) by adding at the end the following:
            ``(4) New programs and activities.--In addition to the 
        programs and activities identified under paragraph (1)(B) and 
        subject to paragraph (5), the head of an executive agency shall 
        annually identify as susceptible to significant improper 
        payments any program or activity that--
                    ``(A) has or is expected to have outlays exceeding 
                $100,000,000 in any one of the first 3 fiscal years of 
                operation; and
                    ``(B) is in the first 4 years of operation.
            ``(5) Exception.--Paragraph (4) shall not apply with 
        respect to any program or activity that the head of the 
        relevant executive agency concludes, based on the results of a 
        review conducted under paragraph (1), is not susceptible to 
        significant improper payments.'';
            (2) in subsection (c)(1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``subsection (a)(1)'' and inserting 
                ``paragraph (1) or (4) of subsection (a)''; and
                    (B) by striking subparagraphs (A) and (B) and 
                inserting the following:
                    ``(A) produce a statistically valid estimate of the 
                improper payments made under the program or activity, 
                or an estimate of such improper payments that is 
                otherwise appropriate using a methodology approved by--
                            ``(i) the Director of the Office of 
                        Management and Budget; and
                            ``(ii) the chief financial officer of the 
                        executive agency; and
                    ``(B) report the estimates described in 
                subparagraph (A) in accordance with subsection (j).''; 
                and
            (3) by adding at the end the following:
    ``(j) Annual Reports.--Any annual report required to be made by the 
head of an executive agency under this section shall--
            ``(1) be included in the materials accompanying the annual 
        financial statement of the executive agency and, as required, 
        in applicable guidance of the Office of Management and Budget; 
        and
            ``(2) include a statement by the chief financial officer of 
        the executive agency--
                    ``(A) certifying the reliability of the executive 
                agency's identification of programs and activities that 
                may be susceptible to significant improper payments 
                under subsection (a); and
                    ``(B) describing the actions of the chief financial 
                officer of the executive agency to monitor the 
                development and implementation of any corrective action 
                plans reported under subsection (d).''.
    (c) Financial and Administrative Controls Relating to Fraud and 
Improper Payments.--Section 3357 of title 31, United States Code, is 
amended by striking subsection (d) and inserting the following:
    ``(d) Reports.--
            ``(1) In general.--For each fiscal year beginning in the 
        first fiscal year after the date of enactment of the 
        Safeguarding the Transparency and Efficiency of Payments Act, 
        and in each of the following 9 fiscal years, the head of each 
        agency shall submit to Congress, in the report containing the 
        annual financial statement of the agency, a report--
                    ``(A) on the progress of the agency in--
                            ``(i) implementing--
                                    ``(I) the financial and 
                                administrative controls required to be 
                                established under subsection (c)(1);
                                    ``(II) the fraud risk principles in 
                                the Standards for Internal Control in 
                                the Federal Government of the 
                                Government Accountability Office; and
                                    ``(III) Circular A-123 of the 
                                Office of Management and Budget with 
                                respect to the leading practices for 
                                managing fraud risk;
                            ``(ii) identifying fraud risks and 
                        vulnerabilities, including with respect to 
                        payroll, beneficiary payments, grants, large 
                        contracts, and purchase and travel cards; and
                            ``(iii) establishing strategies, 
                        procedures, and other steps to curb fraud; and
                    ``(B) that includes information on the status of 
                implementing each of the 11 leading practices 
                identified in the report published by the Government 
                Accountability Office on July 28, 2015, entitled 
                `Framework for Managing Fraud Risks in Federal 
                Programs'.
            ``(2) Information in report.--If the annual financial 
        statement of an agency, or an alternative report of the agency 
        included in the annual financial statement, includes 
        information that fulfills the requirements of this subsection, 
        the head of the agency may include a brief statement to that 
        effect in the financial statement or alternative report without 
        duplicating the information required under this subsection in a 
        separate or standalone report.''.

SEC. 3. NO ADDITIONAL FUNDS.

    No additional funds are authorized to be appropriated for the 
purpose of carrying out this Act or the amendments 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.''.
                                                       Calendar No. 694

118th CONGRESS

  2d Session

                                S. 2924

                          [Report No. 118-288]

_______________________________________________________________________

                                 A BILL

  To amend title 31, United States Code, to improve the management of 
               improper payments, and for other purposes.

_______________________________________________________________________

                           December 12, 2024

        Reported with an amendment and an amendment to the title
```