II 119th CONGRESS 1st Session S. 80 IN THE SENATE OF THE UNITED STATES January 13, 2025 Mr. Lankford introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To amend title 31, United States Code, to improve the prevention of improper payments, and for other purposes.

1. Short title This Act may be cited as the Safeguarding the Transparency and Efficiency of Payments Act or the STEP Act . 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. . 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.