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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1508 Enrolled Bill (ENR)]

        S.1508

                      One Hundred Eleventh Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the fifth day of January, two thousand and ten

                                 An Act

 
 To amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321 
   note) in order to prevent the loss of billions in taxpayer dollars.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
    This Act may be cited as the ``Improper Payments Elimination and 
Recovery Act of 2010''.
SEC. 2. IMPROPER PAYMENTS ELIMINATION AND RECOVERY.
    (a) Susceptible Programs and Activities.--Section 2 of the Improper 
Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by 
striking subsection (a) and inserting the following:
    ``(a) Identification of Susceptible Programs and Activities.--
        ``(1) In general.--The head of each agency shall, in accordance 
    with guidance prescribed by the Director of the Office of 
    Management and Budget, periodically review all programs and 
    activities that the relevant agency head administers and identify 
    all programs and activities that may be susceptible to significant 
    improper payments.
        ``(2) Frequency.--Reviews under paragraph (1) shall be 
    performed for each program and activity that the relevant agency 
    head administers during the year after which the Improper Payments 
    Elimination and Recovery Act of 2010 is enacted and at least once 
    every 3 fiscal years thereafter. For those agencies already 
    performing a risk assessment every 3 years, agencies may apply to 
    the Director of the Office of Management and Budget for a waiver 
    from the requirement of the preceding sentence and continue their 
    3-year risk assessment cycle.
        ``(3) Risk assessments.--
            ``(A) Definition.--In this subsection the term 
        `significant' means--
                ``(i) except as provided under clause (ii), that 
            improper payments in the program or activity in the 
            preceding fiscal year may have exceeded--

                    ``(I) $10,000,000 of all program or activity 
                payments made during that fiscal year reported and 2.5 
                percent of program outlays; or
                    ``(II) $100,000,000; and

                ``(ii) 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, that 
            improper payments in the program or activity in the 
            preceding fiscal year may have exceeded--

                    ``(I) $10,000,000 of all program or activity 
                payments made during that fiscal year reported and 1.5 
                percent of program outlays; or
                    ``(II) $100,000,000.

            ``(B) Scope.--In conducting the reviews under paragraph 
        (1), the head of each agency shall take into account those risk 
        factors that are likely to contribute to a susceptibility to 
        significant improper payments, such as--
                ``(i) whether the program or activity reviewed is new 
            to the agency;
                ``(ii) the complexity of the program or activity 
            reviewed;
                ``(iii) the volume of payments made through the program 
            or activity reviewed;
                ``(iv) whether payments or payment eligibility 
            decisions are made outside of the agency, such as by a 
            State or local government;
                ``(v) recent major changes in program funding, 
            authorities, practices, or procedures;
                ``(vi) the level, experience, and quality of training 
            for personnel responsible for making program eligibility 
            determinations or certifying that payments are accurate; 
            and
                ``(vii) significant deficiencies in the audit report of 
            the agency or other relevant management findings that might 
            hinder accurate payment certification.''.
    (b) Estimation of Improper Payments.--Section 2 of the Improper 
Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by 
striking subsection (b) and inserting the following:
    ``(b) Estimation of Improper Payments.--With respect to each 
program and activity identified under subsection (a), the head of the 
relevant agency shall--
        ``(1) produce a statistically valid estimate, or an estimate 
    that is otherwise appropriate using a methodology approved by the 
    Director of the Office of Management and Budget, of the improper 
    payments made by each program and activity; and
        ``(2) include those estimates in the accompanying materials to 
    the annual financial statement of the agency required under section 
    3515 of title 31, United States Code, or similar provision of law 
    and applicable guidance of the Office of Management and Budget.''.
    (c) Reports on Actions To Reduce Improper Payments.--Section 2 of 
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is 
amended by striking subsection (c) and inserting the following:
    ``(c) Reports on Actions To Reduce Improper Payments.--With respect 
to any program or activity of an agency with estimated improper 
payments under subsection (b), the head of the agency shall provide 
with the estimate under subsection (b) a report on what actions the 
agency is taking to reduce improper payments, including--
        ``(1) a description of the causes of the improper payments, 
    actions planned or taken to correct those causes, and the planned 
    or actual completion date of the actions taken to address those 
    causes;
        ``(2) in order to reduce improper payments to a level below 
    which further expenditures to reduce improper payments would cost 
    more than the amount such expenditures would save in prevented or 
    recovered improper payments, a statement of whether the agency has 
    what is needed with respect to--
            ``(A) internal controls;
            ``(B) human capital; and
            ``(C) information systems and other infrastructure;
        ``(3) if the agency does not have sufficient resources to 
    establish and maintain effective internal controls under paragraph 
    (2)(A), a description of the resources the agency has requested in 
    its budget submission to establish and maintain such internal 
    controls;
        ``(4) program-specific and activity-specific improper payments 
    reduction targets that have been approved by the Director of the 
    Office of Management and Budget; and
        ``(5) a description of the steps the agency has taken to ensure 
    that agency managers, programs, and, where appropriate, States and 
    localities are held accountable through annual performance 
    appraisal criteria for--
            ``(A) meeting applicable improper payments reduction 
        targets; and
            ``(B) establishing and maintaining sufficient internal 
        controls, including an appropriate control environment, that 
        effectively--
                ``(i) prevent improper payments from being made; and
                ``(ii) promptly detect and recover improper payments 
            that are made.''.
    (d) Reports on Actions To Recover Improper Payments.--Section 2 of 
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is 
amended--
        (1) by striking subsection (e);
        (2) by redesignating subsections (d) and (f) as subsections (f) 
    and (g), respectively; and
        (3) by inserting after subsection (c) the following:
    ``(d) Reports on Actions To Recover Improper Payments.--With 
respect to any improper payments identified in recovery audits 
conducted under section 2(h) of the Improper Payments Elimination and 
Recovery Act of 2010 (31 U.S.C. 3321 note), the head of the agency 
shall provide with the estimate under subsection (b) a report on all 
actions the agency is taking to recover improper payments, including--
        ``(1) a discussion of the methods used by the agency to recover 
    overpayments;
        ``(2) the amounts recovered, outstanding, and determined to not 
    be collectable, including the percent such amounts represent of the 
    total overpayments of the agency;
        ``(3) if a determination has been made that certain 
    overpayments are not collectable, a justification of that 
    determination;
        ``(4) an aging schedule of the amounts outstanding;
        ``(5) a summary of how recovered amounts have been disposed of;
        ``(6) a discussion of any conditions giving rise to improper 
    payments and how those conditions are being resolved; and
        ``(7) if the agency has determined under section 2(h) of the 
    Improper Payments Elimination and Recovery Act of 2010 (31 U.S.C. 
    3321 note) that performing recovery audits for any applicable 
    program or activity is not cost-effective, a justification for that 
    determination.
    ``(e) Governmentwide Reporting of Improper Payments and Actions To 
Recover Improper Payments.--
        ``(1) Report.--Each fiscal year the Director of the Office of 
    Management and Budget shall submit a report with respect to the 
    preceding fiscal year on actions agencies have taken to report 
    information regarding improper payments and actions to recover 
    improper overpayments to--
            ``(A) the Committee on Homeland Security and Governmental 
        Affairs of the Senate; and
            ``(B) the Committee on Oversight and Government Reform of 
        the House of Representatives.
        ``(2) Contents.--Each report under this subsection shall 
    include--
            ``(A) a summary of the reports of each agency on improper 
        payments and recovery actions submitted under this section;
            ``(B) an identification of the compliance status of each 
        agency to which this Act applies;
            ``(C) governmentwide improper payment reduction targets; 
        and
            ``(D) a discussion of progress made towards meeting 
        governmentwide improper payment reduction targets.''.
    (e) Definitions.--Section 2 of the Improper Payments Information 
Act of 2002 (31 U.S.C. 3321 note) is amended by striking subsections 
(f) (as redesignated by this section) and inserting the following:
    ``(f) Definitions.--In this section:
        ``(1) Agency.--The term `agency' means an executive agency, as 
    that term is defined in section 102 of title 31, United States 
    Code.
        ``(2) Improper payment.--The term `improper payment'--
            ``(A) means any payment that should not have been made or 
        that was made in an incorrect amount (including overpayments 
        and underpayments) under statutory, contractual, 
        administrative, or other legally applicable requirements; and
            ``(B) includes any payment to an ineligible recipient, any 
        payment for an ineligible good or service, any duplicate 
        payment, any payment for a good or service not received (except 
        for such payments where authorized by law), and any payment 
        that does not account for credit for applicable discounts.
        ``(3) Payment.--The term `payment' means any transfer or 
    commitment for future transfer of Federal funds such as cash, 
    securities, loans, loan guarantees, and insurance subsidies to any 
    non-Federal person or entity, that is made by a Federal agency, a 
    Federal contractor, a Federal grantee, or a governmental or other 
    organization administering a Federal program or activity.
        ``(4) Payment for an ineligible good or service.--The term 
    `payment for an ineligible good or service' shall include a payment 
    for any good or service that is rejected under any provision of any 
    contract, grant, lease, cooperative agreement, or any other funding 
    mechanism.''.
    (f) Guidance by the Office of Management and Budget.--Section 2 of 
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is 
amended by striking subsection (g) (as redesignated by this section) 
and inserting the following:
    ``(g) Guidance by the Office of Management and Budget.--
        ``(1) In general.--Not later than 6 months after the date of 
    enactment of the Improper Payments Elimination and Recovery Act of 
    2010, the Director of the Office of Management and Budget shall 
    prescribe guidance for agencies to implement the requirements of 
    this section. The guidance shall not include any exemptions to such 
    requirements not specifically authorized by this section.
        ``(2) Contents.--The guidance under paragraph (1) shall 
    prescribe--
            ``(A) the form of the reports on actions to reduce improper 
        payments, recovery actions, and governmentwide reporting; and
            ``(B) strategies for addressing risks and establishing 
        appropriate prepayment and postpayment internal controls.''.
    (g) Determinations of Agency Readiness for Opinion on Internal 
Control.--Not later than 1 year after the date of enactment of this 
Act, the Director of the Office of Management and Budget shall 
develop--
        (1) specific criteria as to when an agency should initially be 
    required to obtain an opinion on internal control over improper 
    payments; and
        (2) criteria for an agency that has demonstrated a stabilized, 
    effective system of internal control over improper payments, 
    whereby the agency would qualify for a multiyear cycle for 
    obtaining an audit opinion on internal control over improper 
    payments, rather than an annual cycle.
    (h) Recovery Audits.--
        (1) Definition.--In this subsection, the term ``agency'' has 
    the meaning given under section 2(f) of the Improper Payments 
    Information Act of 2002 (31 U.S.C. 3321 note) as redesignated by 
    this Act.
        (2) In general.--
            (A) Conduct of audits.--Except as provided under paragraph 
        (4) and if not prohibited under any other provision of law, the 
        head of each agency shall conduct recovery audits with respect 
        to each program and activity of the agency that expends 
        $1,000,000 or more annually if conducting such audits would be 
        cost-effective.
            (B) Procedures.--In conducting recovery audits under this 
        subsection, the head of an agency--
                (i) shall give priority to the most recent payments and 
            to payments made in any program or programs identified as 
            susceptible to significant improper payments under section 
            2(a) of the Improper Payments Information Act of 2002 (31 
            U.S.C. 3321 note);
                (ii) shall implement this subsection in a manner 
            designed to ensure the greatest financial benefit to the 
            Government; and
                (iii) may conduct recovery audits directly, by using 
            other departments and agencies of the United States, or by 
            procuring performance of recovery audits by private sector 
            sources by contract (subject to the availability of 
            appropriations), or by any combination thereof.
            (C) Recovery audit contracts.--With respect to recovery 
        audits procured by an agency by contract--
                (i) subject to subparagraph (B)(iii), and except to the 
            extent such actions are outside the agency's authority, as 
            defined by section 605(a) of the Contract Disputes Act of 
            1978 (41 U.S.C. 605(a)), the head of the agency may 
            authorize the contractor to notify entities (including 
            persons) of potential overpayments made to such entities, 
            respond to questions concerning potential overpayments, and 
            take other administrative actions with respect to 
            overpayment claims made or to be made by the agency; and
                (ii) such contractor shall have no authority to make 
            final determinations relating to whether any overpayment 
            occurred and whether to compromise, settle, or terminate 
            overpayment claims.
            (D) Contract terms and conditions.--
                (i) In general.--The agency shall include in each 
            contract for procurement of performance of a recovery audit 
            a requirement that the contractor shall--

                    (I) provide to the agency periodic reports on 
                conditions giving rise to overpayments identified by 
                the contractor and any recommendations on how to 
                mitigate such conditions;
                    (II) notify the agency of any overpayments 
                identified by the contractor pertaining to the agency 
                or to any other agency or agencies that are beyond the 
                scope of the contract; and
                    (III) report to the agency credible evidence of 
                fraud or vulnerabilities to fraud, and conduct 
                appropriate training of personnel of the contractor on 
                identification of fraud.

                (ii) Reports on actions taken.--Not later than November 
            1 of each year, each agency shall submit a report on 
            actions taken by the agency during the preceding fiscal 
            year to address the recommendations described under clause 
            (i)(I) to--

                    (I) the Office of Management and Budget; and
                    (II) Congress.

            (E) Agency action following notification.--An agency shall 
        take prompt and appropriate action in response to a report or 
        notification by a contractor under subparagraph (D)(i)(I) or 
        (II), to collect overpayments and shall forward to other 
        agencies any information that applies to such agencies.
        (3) Disposition of amounts recovered.--
            (A) In general.--Amounts collected by agencies each fiscal 
        year through recovery audits conducted under this subsection 
        shall be treated in accordance with this paragraph. The agency 
        head shall determine the distribution of collected amounts, 
        less amounts needed to fulfill the purposes of section 3562(a) 
        of title 31, United States Code, in accordance with 
        subparagraphs (B), (C), and (D).
            (B) Use for financial management improvement program.--Not 
        more than 25 percent of the amounts collected by an agency 
        through recovery audits--
                (i) shall be available to the head of the agency to 
            carry out the financial management improvement program of 
            the agency under paragraph (4);
                (ii) may be credited, if applicable, for that purpose 
            by the head of an agency to any agency appropriations and 
            funds that are available for obligation at the time of 
            collection; and
                (iii) shall be used to supplement and not supplant any 
            other amounts available for that purpose and shall remain 
            available until expended.
            (C) Use for original purpose.--Not more than 25 percent of 
        the amounts collected by an agency--
                (i) shall be credited to the appropriation or fund, if 
            any, available for obligation at the time of collection for 
            the same general purposes as the appropriation or fund from 
            which the overpayment was made;
                (ii) shall remain available for the same period and 
            purposes as the appropriation or fund to which credited; 
            and
                (iii) if the appropriation from which the overpayment 
            was made has expired, shall be newly available for the same 
            time period as the funds were originally available for 
            obligation, except that any amounts that are recovered more 
            than five fiscal years from the last fiscal year in which 
            the funds were available for obligation shall be deposited 
            in the Treasury as miscellaneous receipts, except that in 
            the case of recoveries of overpayments that are made from 
            trust or special fund accounts, such amounts shall revert 
            to those accounts.
            (D) Use for inspector general activities.--Not more than 5 
        percent of the amounts collected by an agency shall be 
        available to the Inspector General of that agency--
                (i) for--

                    (I) the Inspector General to carry out this Act; or
                    (II) any other activities of the Inspector General 
                relating to investigating improper payments or auditing 
                internal controls associated with payments; and

                (ii) shall remain available for the same period and 
            purposes as the appropriation or fund to which credited.
            (E) Remainder.--Amounts collected that are not applied in 
        accordance with subparagraph (A), (B), (C), or (D) shall be 
        deposited in the Treasury as miscellaneous receipts, except 
        that in the case of recoveries of overpayments that are made 
        from trust or special fund accounts, such amounts shall revert 
        to those accounts.
            (F) Discretionary amounts.--This paragraph shall apply only 
        to recoveries of overpayments that are made from discretionary 
        appropriations (as that term is defined by paragraph 7 of 
        section 250 of the Balanced Budget and Emergency Deficit 
        Control Act of 1985) and shall not apply to recoveries of 
        overpayments that are made from discretionary amounts that were 
        appropriated prior to enactment of this Act.
            (G) Application.--This paragraph shall not apply to 
        recoveries of overpayments if the appropriation from which the 
        overpayment was made has not expired.
        (4) Financial management improvement program.--
            (A) Requirement.--The head of each agency shall conduct a 
        financial management improvement program, consistent with rules 
        prescribed by the Director of the Office of Management and 
        Budget.
            (B) Program features.--In conducting the program, the head 
        of the agency--
                (i) shall, as the first priority of the program, 
            address problems that contribute directly to agency 
            improper payments; and
                (ii) may seek to reduce errors and waste in other 
            agency programs and operations.
        (5) Privacy protections.--Any nongovernmental entity that, in 
    the course of recovery auditing or recovery activity under this 
    subsection, obtains information that identifies an individual or 
    with respect to which there is a reasonable basis to believe that 
    the information can be used to identify an individual, may not 
    disclose the information for any purpose other than such recovery 
    auditing or recovery activity and governmental oversight of such 
    activity, unless disclosure for that other purpose is authorized by 
    the individual to the executive agency that contracted for the 
    performance of the recovery auditing or recovery activity.
        (6) Other recovery audit requirements.--
            (A) In general.--(i) Except as provided in clause (ii), 
        subchapter VI of chapter 35 of title 31, United States Code, is 
        repealed.
            (ii) Section 3562(a) of title 31, United States Code, shall 
        continue in effect, except that references in such section 
        3562(a) to programs carried out under section 3561 of such 
        title, shall be interpreted to mean programs carried out under 
        section 2(h) of this Act.
            (B) Technical and conforming amendments.--
                (i) Table of sections.--The table of sections for 
            chapter 35 of title 31, United States Code, is amended by 
            striking the matter relating to subchapter VI.
                (ii) Definition.--Section 3501 of title 31, United 
            States Code, is amended by striking ``and subchapter VI of 
            this title''.
                (iii) Homeland security grants.--Section 2022(a)(6) of 
            the Homeland Security Act of 2002 (6 U.S.C. 612(a)(6)) is 
            amended by striking ``(as that term is defined by the 
            Director of the Office of Management and Budget under 
            section 3561 of title 31, United States Code)'' and 
            inserting ``under section 2(h) of the Improper Payments 
            Elimination and Recovery Act of 2010 (31 U.S.C. 3321 
            note)''.
        (7) Rule of construction.--Except as provided under paragraph 
    (5), nothing in this section shall be construed as terminating or 
    in any way limiting authorities that are otherwise available to 
    agencies under existing provisions of law to recover improper 
    payments and use recovered amounts.
    (i) Report on Recovery Auditing.--Not later than 2 years after the 
date of the enactment of this Act, the Chief Financial Officers Council 
established under section 302 of the Chief Financial Officers Act of 
1990 (31 U.S.C. 901 note), in consultation with the Council of 
Inspectors General on Integrity and Efficiency established under 
section 7 of the Inspector General Reform Act of 2009 (Public Law 110-
409) and recovery audit experts, shall conduct a study of--
        (1) the implementation of subsection (h);
        (2) the costs and benefits of agency recovery audit activities, 
    including--
            (A) those activities under subsection (h); and
            (B) the effectiveness of using the services of--
                (i) private contractors;
                (ii) agency employees;
                (iii) cross-servicing from other agencies; or
                (iv) any combination of the provision of services 
            described under clauses (i) through (iii); and
        (3) submit a report on the results of the study to--
            (A) the Committee on Homeland Security and Governmental 
        Affairs of the Senate;
            (B) the Committee on Oversight and Government Reform of the 
        House of Representatives; and
            (C) the Comptroller General.
SEC. 3. COMPLIANCE.
    (a) Definitions.--In this section:
        (1) Agency.--The term ``agency'' has the meaning given under 
    section 2(f) of the Improper Payments Information Act of 2002 (31 
    U.S.C. 3321 note) as redesignated by this Act.
        (2) Annual financial statement.--The term ``annual financial 
    statement'' means the annual financial statement required under 
    section 3515 of title 31, United States Code, or similar provision 
    of law.
        (3) Compliance.--The term ``compliance'' means that the 
    agency--
            (A) has published an annual financial statement for the 
        most recent fiscal year and posted that report and any 
        accompanying materials required under guidance of the Office of 
        Management and Budget on the agency website;
            (B) if required, has conducted a program specific risk 
        assessment for each program or activity that conforms with 
        section 2(a) the Improper Payments Information Act of 2002 (31 
        U.S.C. 3321 note); and
            (C) if required, publishes improper payments estimates for 
        all programs and activities identified under section 2(b) of 
        the Improper Payments Information Act of 2002 (31 U.S.C. 3321 
        note) in the accompanying materials to the annual financial 
        statement;
            (D) publishes programmatic corrective action plans prepared 
        under section 2(c) of the Improper Payments Information Act of 
        2002 (31 U.S.C. 3321 note) that the agency may have in the 
        accompanying materials to the annual financial statement;
            (E) publishes improper payments reduction targets 
        established under section 2(c) of the Improper Payments 
        Information Act of 2002 (31 U.S.C. 3321 note) that the agency 
        may have in the accompanying materials to the annual financial 
        statement for each program assessed to be at risk, and is 
        meeting such targets; and
            (F) has reported an improper payment rate of less than 10 
        percent for each program and activity for which an estimate was 
        published under section 2(b) of the Improper Payments 
        Information Act of 2002 (31 U.S.C. 3321 note).
    (b) Annual Compliance Report by Inspectors General of Agencies.--
Each fiscal year, the Inspector General of each agency shall determine 
whether the agency is in compliance and submit a report on that 
determination to--
        (1) the head of the agency;
        (2) the Committee on Homeland Security and Governmental Affairs 
    of the Senate;
        (3) the Committee on Oversight and Governmental Reform of the 
    House of Representatives; and
        (4) the Comptroller General.
    (c) Remediation.--
        (1) Noncompliance.--
            (A) In general.--If an agency is determined by the 
        Inspector General of that agency not to be in compliance under 
        subsection (b) in a fiscal year, the head of the agency shall 
        submit a plan to Congress describing the actions that the 
        agency will take to come into compliance.
            (B) Plan.--The plan described under subparagraph (A) shall 
        include--
                (i) measurable milestones to be accomplished in order 
            to achieve compliance for each program or activity;
                (ii) the designation of a senior agency official who 
            shall be accountable for the progress of the agency in 
            coming into compliance for each program or activity; and
                (iii) the establishment of an accountability mechanism, 
            such as a performance agreement, with appropriate 
            incentives and consequences tied to the success of the 
            official designated under clause (ii) in leading the 
            efforts of the agency to come into compliance for each 
            program and activity.
        (2) Noncompliance for 2 fiscal years.--
            (A) In general.--If an agency is determined by the 
        Inspector General of that agency not to be in compliance under 
        subsection (b) for 2 consecutive fiscal years for the same 
        program or activity, and the Director of the Office of 
        Management and Budget determines that additional funding would 
        help the agency come into compliance, the head of the agency 
        shall obligate additional funding, in an amount determined by 
        the Director, to intensified compliance efforts.
            (B) Funding.--In providing additional funding described 
        under subparagraph (A), the head of an agency shall use any 
        reprogramming or transfer authority available to the agency. If 
        after exercising that reprogramming or transfer authority 
        additional funding is necessary to obligate the full level of 
        funding determined by the Director of the Office of Management 
        and Budget under subparagraph (A), the agency shall submit a 
        request to Congress for additional reprogramming or transfer 
        authority.
        (3) Reauthorization and statutory proposals.--If an agency is 
    determined by the Inspector General of that agency not to be in 
    compliance under subsection (b) for more than 3 consecutive fiscal 
    years for the same program or activity, the head of the agency 
    shall, not later than 30 days after such determination, submit to 
    Congress--
            (A) reauthorization proposals for each program or activity 
        that has not been in compliance for 3 or more consecutive 
        fiscal years; or
            (B) proposed statutory changes necessary to bring the 
        program or activity into compliance.
    (d) Compliance Enforcement Pilot Programs.--
        (1) In general.--The Director of the Office of Management and 
    Budget may establish 1 or more pilot programs which shall test 
    potential accountability mechanisms with appropriate incentives and 
    consequences tied to success in ensuring compliance with this Act 
    and eliminating improper payments.
        (2) Report.--Not later than 5 years 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 findings associated with 
    any pilot programs conducted under paragraph (1). The report shall 
    include any legislative or other recommendations that the Director 
    determines necessary.
    (e) Report on Chief Financial Officers Act of 1990.--Not later than 
1 year after the date of the enactment of this Act, the Chief Financial 
Officers Council established under section 302 of the Chief Financial 
Officers Act of 1990 (31 U.S.C. 901 note) and the Council of Inspectors 
General on Integrity and Efficiency established under section 7 of the 
Inspector General Reform Act of 2009 (Public Law 110-409), in 
consultation with a broad cross-section of experts and stakeholders in 
Government accounting and financial management shall--
        (1) jointly examine the lessons learned during the first 20 
    years of implementing the Chief Financial Officers Act of 1990 (31 
    U.S.C. 901) and identify reforms or improvements, if any, to the 
    legislative and regulatory compliance framework for Federal 
    financial management that will optimize Federal agency efforts to--
            (A) publish relevant, timely, and reliable reports on 
        Government finances; and
            (B) implement internal controls that mitigate the risk for 
        fraud, waste, and error in Government programs; and
        (2) jointly submit a report on the results of the examination 
    to--
            (A) the Committee on Homeland Security and Governmental 
        Affairs of the Senate;
            (B) the Committee on Oversight and Government Reform of the 
        House of Representatives; and
            (C) the Comptroller General.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```