H. R. 4878
One Hundred Seventh Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the twenty-third day of January, two thousand and two
An Act
To provide for estimates and reports of improper payments by Federal agencies.
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 Information
Act of 2002’’.
SEC. 2. ESTIMATES OF IMPROPER PAYMENTS AND REPORTS ON
ACTIONS TO REDUCE THEM.
(a) IDENTIFICATION
OF SUSCEPTIBLE PROGRAMS
AND ACTIVI-
TIES.—The head of each agency shall, in accordance with guidance
prescribed by the Director of the Office of Management and Budget,
annually review all programs and activities that it administers
and identify all such programs and activities that may be suscep-
tible to significant improper payments.
(b) ESTIMATION OF IMPROPER PAYMENT.—With respect to each
program and activity identified under subsection (a), the head of
the agency concerned shall—
(1) estimate the annual amount of improper payments;
and
(2) submit those estimates to Congress before March 31
of the following applicable year, with all agencies using the
same method of reporting, as determined by the Director of
the Office of Management and Budget.
(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) that exceed $10,000,000,
the head of the agency shall provide with the estimate under
subsection (b) a report on what actions the agency is taking to
reduce the improper payments, including—
(1) a discussion of the causes of the improper payments
identified, actions taken to correct those causes, and results
of the actions taken to address those causes;
(2) a statement of whether the agency has the information
systems and other infrastructure it needs in order to reduce
improper payments to minimal cost-effective levels;
(3) if the agency does not have such systems and infrastruc-
ture, a description of the resources the agency has requested
in its budget submission to obtain the necessary information
systems and infrastructure; and
(4) a description of the steps the agency has taken to
ensure that agency managers (including the agency head) are
held accountable for reducing improper payments.
H. R. 4878—2
(d) DEFINITIONS.—For the purposes of 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 service, any duplicate pay-
ment, payments for services not received, and any payment
that does not account for credit for applicable discounts.
(3) PAYMENT.—The term ‘‘payment’’ means any payment
(including a commitment for future payment, such as a loan
guarantee) that is—
(A) made by a Federal agency, a Federal contractor,
or a governmental or other organization administering a
Federal program or activity; and
(B) derived from Federal funds or other Federal
resources or that will be reimbursed from Federal funds
or other Federal resources.
(e) APPLICATION.—This section—
(1) applies with respect to the administration of programs,
and improper payments under programs, in fiscal years after
fiscal year 2002; and
(2) requires the inclusion of estimates under subsection
(b)(2) only in annual budget submissions for fiscal years after
fiscal year 2003.
(f) GUIDANCE BY THE OFFICE OF MANAGEMENT AND BUDGET.—
Not later than 6 months after the date of enactment of this Act,
the Director of the Office of Management and Budget shall prescribe
guidance to implement the requirements of this section.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.