I
107TH CONGRESS
2D SESSION
H. R. 4878
To provide for reduction of improper payments by Federal agencies.
IN THE HOUSE OF REPRESENTATIVES
JUNE 6, 2002
Mr. HORN (for himself and Mr. BURTON of Indiana) introduced the following
bill; which was referred to the Committee on Government Reform
A BILL
To provide for reduction of improper payments by Federal
agencies.
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
Reduction Act of 2002’’.
SEC. 2. DEFINITIONS.
For the purposes of this Act:
(1) 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 organi-
zation administering a Federal program or ac-
tivity; and
(B) derived from Federal funds or other
Federal resources or that will be reimbursed
from Federal funds or other Federal resources.
(2) IMPROPER PAYMENT.—The term ‘‘improper
payment’’—
(A) means any payment that should not
have been made or that was made in an incor-
rect amount (including overpayments and un-
derpayments) under statutory, contractual, ad-
ministrative, or other legally applicable require-
ments; and
(B) includes any payment to an ineligible
recipient, any payment for an ineligible service,
any duplicate payment, payments for services
not received, and any payment that does not ac-
count for credit for applicable discounts.
(3) AGENCY.—The term ‘‘agency’’ means an
executive agency, as that term is defined in section
102 of title 31, United States Code.
SEC. 3. ESTIMATES OF IMPROPER PAYMENTS AND REDUC-
TION TARGETS.
(a) IDENTIFICATION
OF SUSCEPTIBLE PROGRAMS
AND ACTIVITIES.—The head of each agency shall, in ac-
cordance with guidance prescribed under section 4, annu-
ally review all programs and activities that it administers
and identify all such programs and activities that may be
susceptible to significant improper payments.
(b) ESTIMATION OF IMPROPER PAYMENT.—With re-
spect to each program and activity identified under sub-
section (a), the head of the agency concerned shall—
(1) estimate the annual amount of improper
payments; and
(2) include that estimate in its annual budget
submission and its annual program performance re-
port under section 1116 of title 31, United States
Code.
(c) REDUCTION OF IMPROPER PAYMENTS.—With re-
spect to any program or activity of an agency with esti-
mated improper payments under subsection (b) that ex-
ceed one percent of the total program or activity budget
or $1,000,000 annually (whichever is less), the head of
the agency shall—
(1) estimate the minimal level to which im-
proper payments can be reduced on a cost-effective
basis;
(2) establish annual performance targets to re-
duce such improper payments by specific amounts
each year, that will result in reducing improper pay-
ments to the minimal level as soon as practical;
(3) ensure that responsible agency managers
(including the agency head) are held accountable for
meeting the performance targets established under
paragraph (2); and
(4) describe in the agency’s annual budget sub-
missions and program performance reports—
(A) the agency’s performance in meeting
the targets established under paragraph (2);
and
(B) how managers have been held account-
able for that performance.
SEC. 4. GUIDANCE BY THE OFFICE OF MANAGEMENT AND
BUDGET.
The Director of the Office of Management and Budg-
et shall prescribe guidance to implement the requirements
of this Act not later than 30 days after the date of the
enactment of this Act.
Æ