I 
112TH CONGRESS 
2D SESSION 
H. R. 4053 
To intensify efforts to identify, prevent, and recover payment error, waste, 
fraud, and abuse within Federal spending. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 16, 2012 
Mr. TOWNS (for himself, Mr. PLATTS, Mr. SCHRADER, Mr. CONNOLLY of Vir-
ginia, Mr. ALTMIRE, Mr. BARROW, Mr. BISHOP of Georgia, Mr. BOREN, 
Mr. BOSWELL, Mr. CARDOZA, Mr. COOPER, Mr. DONNELLY of Indiana, 
Mr. HOLDEN, Mr. MATHESON, Mr. MCINTYRE, Mr. MICHAUD, Mr. 
PETERSON, Mr. ROSS of Arkansas, Mr. DAVID SCOTT of Georgia, Mr. 
SHULER, and Mr. THOMPSON of California) introduced the following bill; 
which was referred to the Committee on Oversight and Government Re-
form 
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 Representa-
tives 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 Improvement Act of 2012’’. 
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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 Pay-
ments 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 fol-
lowing: 
‘‘(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 re-
view— 
‘‘(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 
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‘‘(B) in coordination with the agency re-
sponsible for administering the high-priority 
program, establish annual targets and semi-an-
nual 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 (in-
cluding availability through the Internet), a re-
port 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 pay-
ments; and 
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‘‘(bb) intends to take to pre-
vent future improper payments; 
and 
‘‘(ii) shall not include any referrals 
the agency made or anticipates making to 
the Department of Justice, or any informa-
tion provided in connection with such re-
ferrals. 
‘‘(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
RECOMMENDA-
TIONS.—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 im-
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proper payment estimates and meth-
odology of the agency; and 
‘‘(II) the oversight or financial 
controls to identify and prevent im-
proper payments; and 
‘‘(ii) provide recommendations, for 
modifying any plans of the agency, includ-
ing improvements for improper payments 
determination 
and 
estimation 
method-
ology.’’; 
(3) in subsection (d) (as redesignated by para-
graph (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 para-
graph (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 pro-
vide guidance to agencies for improving the esti-
mates of improper payments under the Improper 
Payments Information Act of 2002 (31 U.S.C. 3321 
note). 
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(2) GUIDANCE.—Guidance under this sub-
section 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 esti-
mates access to all necessary payment data, in-
cluding access to relevant documentation; 
(C) explicitly bar agencies from relying on 
self-reporting by the recipients of agency pay-
ments as the sole source basis for improper 
payments estimates; 
(D) require agencies to include all identi-
fied improper payments in the reported esti-
mate, regardless of whether the improper pay-
ment in question has been or is being recovered; 
(E) include payments to employees, includ-
ing salary, locality pay, travel pay, purchase 
card use, and other employee payments, as sub-
ject to risk assessment and, where appropriate, 
improper payment estimation; and 
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(F) require agencies to tailor their correc-
tive actions for the high-priority programs iden-
tified 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 proc-
esses, procedures, and risks involved in each 
specific program. 
SEC. 4. IMPROPER PAYMENTS INFORMATION. 
Section 2(a)(3)(A)(ii) of the Improper Payments In-
formation Act of 2002 (31 U.S.C. 3321 note) is amended 
by striking ‘‘with respect to fiscal years following Sep-
tember 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 deter-
mine program or award eligibility and prevent im-
proper payments before the release of any Federal 
funds. 
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(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 De-
partment of the Treasury. 
(D) The Credit Alert System or Credit 
Alert Interactive Voice Response System of the 
Department of Housing and Urban Develop-
ment. 
(E) The List of Excluded Individuals/Enti-
ties 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 sub-
section (a)(2); and 
(B) any other database designated by the 
Director of the Office of Management and 
Budget in consultation with agencies. 
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(2) OTHER DATABASES.—In making designa-
tions of other databases under paragraph (1)(B), the 
Director of the Office of Management and Budget 
shall consider any database that assists in pre-
venting 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 rec-
ognize 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 Direc-
tor 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; 
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(2) to the extent permitted by law, agency ac-
cess to the Do Not Pay Initiative; and 
(3) the multilateral data use agreements de-
scribed 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 es-
tablish a working system for prepayment and 
preaward review that includes the Do Not Pay Ini-
tiative 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 detec-
tion through analytic technologies and other 
techniques, which may include commercial data-
base 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 agen-
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cy through the system established under this sub-
section. 
(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(i) of the Social Security Act (42 U.S.C. 
653(i)). 
(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 mul-
tilateral data use agreements, the Director of 
the Office of Management and Budget shall es-
tablish implementing regulations and guidelines 
that include streamlined interagency processes 
to ensure agency access to data, and provide for 
appropriate transfer and storage of any trans-
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ferred data, in a manner consistent with rel-
evant 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 imple-
menting this paragraph; and 
(ii) the Secretary of Health and 
Human Services, the Social Security Ad-
ministrator, 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 Gen-
eral shall submit to Congress recommendations for in-
creasing 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 SECU-
RITY ADMINISTRATION DEATH MASTER FILE.— 
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(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 main-
tained by the Social Security Administration, includ-
ing 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 
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