Payment Integrity Information Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5389 To improve efforts to identify and reduce Governmentwide improper payments, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 11, 2019 Ms. CRAIG (for herself, Mr. MEADOWS, Mrs. BUSTOS, and Mr. GIANFORTE) introduced the following bill; which was referred to the Committee on Oversight and Reform A BILL To improve efforts to identify and reduce Governmentwide improper payments, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Payment Integrity In- 4 formation Act of 2019’’. 5 SEC. 2. IMPROPER PAYMENTS. 6 (a) IN GENERAL.—Chapter 33 of title 31, United 7 States Code, is amended by adding at the end the fol- 8 lowing: 9 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 5389 IH ‘‘Subchapter IV—Improper Payments 1 ‘‘§ 3351. Definitions 2 ‘‘In this subchapter: 3 ‘‘(1) ANNUAL FINANCIAL STATEMENT.—The 4 term ‘annual financial statement’ means the annual 5 financial statement required under section 3515 of 6 this title or similar provision of law. 7 ‘‘(2) COMPLIANCE.—The term ‘compliance’ 8 means that an executive agency— 9 ‘‘(A) has— 10 ‘‘(i) published improper payments in- 11 formation with the annual financial state- 12 ment of the executive agency for the most 13 recent fiscal year; and 14 ‘‘(ii) posted on the website of the ex- 15 ecutive agency that statement and any ac- 16 companying materials required under guid- 17 ance of the Office of Management and 18 Budget; 19 ‘‘(B) if required, has conducted a program 20 specific risk assessment for each program or ac- 21 tivity that conforms with the requirements 22 under section 3352(a); 23 ‘‘(C) if required, publishes improper pay- 24 ments estimates for all programs and activities 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 5389 IH identified under section 3352(a) in the accom- 1 panying materials to the annual financial state- 2 ment; 3 ‘‘(D) publishes programmatic corrective ac- 4 tion plans prepared under section 3352(d) that 5 the executive agency may have in the accom- 6 panying materials to the annual financial state- 7 ment; 8 ‘‘(E) publishes improper payments reduc- 9 tion targets established under section 3352(d) 10 that the executive agency may have in the ac- 11 companying materials to the annual financial 12 statement for each program or activity assessed 13 to be at risk, and has demonstrated improve- 14 ments and developed a plan to meet the reduc- 15 tion targets; and 16 ‘‘(F) has reported an improper payment 17 rate of less than 10 percent for each program 18 and activity for which an estimate was pub- 19 lished under section 3352(c). 20 ‘‘(3) DO NOT PAY INITIATIVE.—The term ‘Do 21 Not Pay Initiative’ means the initiative described in 22 section 3354(b). 23 ‘‘(4) IMPROPER PAYMENT.—The term ‘im- 24 proper payment’— 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 5389 IH ‘‘(A) means any payment that should not 1 have been made or that was made in an incor- 2 rect amount, including an overpayment or un- 3 derpayment, under a statutory, contractual, ad- 4 ministrative, or other legally applicable require- 5 ment; and 6 ‘‘(B) includes— 7 ‘‘(i) any payment to an ineligible re- 8 cipient; 9 ‘‘(ii) any payment for an ineligible 10 good or service; 11 ‘‘(iii) any duplicate payment; 12 ‘‘(iv) any payment for a good or serv- 13 ice not received, except for those payments 14 where authorized by law; and 15 ‘‘(v) any payment that does not ac- 16 count for credit for applicable discounts. 17 ‘‘(5) PAYMENT.—The term ‘payment’ means 18 any transfer or commitment for future transfer of 19 Federal funds such as cash, securities, loans, loan 20 guarantees, and insurance subsidies to any non-Fed- 21 eral person or entity or a Federal employee, that is 22 made by a Federal agency, a Federal contractor, a 23 Federal grantee, or a governmental or other organi- 24 zation administering a Federal program or activity. 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 5389 IH ‘‘(6) PAYMENT FOR AN INELIGIBLE GOOD OR 1 SERVICE.—The term ‘payment for an ineligible good 2 or service’ includes a payment for any good or serv- 3 ice that is rejected under any provision of any con- 4 tract, grant, lease, cooperative agreement, or other 5 funding mechanism. 6 ‘‘(7) RECOVERY AUDIT.—The term ‘recovery 7 audit’ means a recovery audit described in section 8 3352(i). 9 ‘‘(8) STATE.—The term ‘State’ means each 10 State of the United States, the District of Columbia, 11 each territory or possession of the United States, 12 and each Federally recognized Indian tribe. 13 ‘‘§ 3352. Estimates of improper payments and reports 14 on actions to reduce improper payments 15 ‘‘(a) IDENTIFICATION OF SUSCEPTIBLE PROGRAMS 16 AND ACTIVITIES.— 17 ‘‘(1) IN GENERAL.—The head of each executive 18 agency shall, in accordance with guidance prescribed 19 by the Director of the Office of Management and 20 Budget— 21 ‘‘(A) periodically review all programs and 22 activities that the head of the executive agency 23 administers; and 24 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 5389 IH ‘‘(B) identify all programs and activities 1 with outlays exceeding the statutory threshold 2 dollar amount described in paragraph (3)(A)(i) 3 that may be susceptible to significant improper 4 payments. 5 ‘‘(2) FREQUENCY.—A review under paragraph 6 (1) shall be performed for each program and activity 7 that the head of an executive agency administers not 8 less frequently than once every 3 fiscal years. 9 ‘‘(3) RISK ASSESSMENTS.— 10 ‘‘(A) DEFINITION OF SIGNIFICANT.—In 11 this paragraph, the term ‘significant’ means 12 that, in the preceding fiscal year, the sum of a 13 program or activity’s improper payments and 14 payments whose propriety cannot be determined 15 by the executive agency due to lacking or insuf- 16 ficient documentation may have exceeded— 17 ‘‘(i) $10,000,000 of all reported pro- 18 gram or activity payments of the executive 19 agency made during that fiscal year and 20 1.5 percent of program outlays; or 21 ‘‘(ii) $100,000,000. 22 ‘‘(B) SCOPE.—In conducting a review 23 under paragraph (1), the head of each executive 24 agency shall take into account those risk factors 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 5389 IH that are likely to contribute to a susceptibility 1 to significant improper payments, such as— 2 ‘‘(i) whether the program or activity 3 reviewed is new to the executive agency; 4 ‘‘(ii) the complexity of the program or 5 activity reviewed; 6 ‘‘(iii) the volume of payments made 7 through the program or activity reviewed; 8 ‘‘(iv) whether payments or payment 9 eligibility decisions are made outside of the 10 executive agency, such as by a State or 11 local government; 12 ‘‘(v) recent major changes in program 13 funding, authorities, practices, or proce- 14 dures; 15 ‘‘(vi) the level, experience, and quality 16 of training for personnel responsible for 17 making program eligibility determinations 18 or certifying that payments are accurate; 19 ‘‘(vii) significant deficiencies in the 20 audit report of the executive agency or 21 other relevant management findings that 22 might hinder accurate payment certifi- 23 cation; 24 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 5389 IH ‘‘(viii) similarities to other programs 1 or activities that have reported improper 2 payment estimates or been deemed suscep- 3 tible to significant improper payments; 4 ‘‘(ix) the accuracy and reliability of 5 improper payment estimates previously re- 6 ported for the program or activity, or other 7 indicator of potential susceptibility to im- 8 proper payments identified by the Inspec- 9 tor General of the executive agency, the 10 Government Accountability Office, other 11 audits performed by or on behalf of the 12 Federal, State, or local government, disclo- 13 sures by the executive agency, or any other 14 means; 15 ‘‘(x) whether the program or activity 16 lacks information or data systems to con- 17 firm eligibility or provide for other pay- 18 ment integrity needs; and 19 ‘‘(xi) the risk of fraud as assessed by 20 the executive agency under the Standards 21 for Internal Control in the Federal Govern- 22 ment published by the Government Ac- 23 countability Office (commonly known as 24 the ‘Green Book’). 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 5389 IH ‘‘(C) ANNUAL REPORT.—Each executive 1 agency shall publish an annual report that in- 2 cludes— 3 ‘‘(i) a listing of each program or activ- 4 ity identified under paragraph (1), includ- 5 ing the date on which the program or ac- 6 tivity was most recently assessed for risk 7 under paragraph (1); and 8 ‘‘(ii) a listing of any program or activ- 9 ity for which the executive agency makes 10 any substantial changes to the methodolo- 11 gies of the reviews conducted under para- 12 graph (1). 13 ‘‘(b) IMPROVING THE DETERMINATION OF IMPROPER 14 PAYMENTS.— 15 ‘‘(1) IN GENERAL.—The Director of the Office 16 of Management and Budget shall on an annual 17 basis— 18 ‘‘(A) identify a list of high-priority Federal 19 programs for greater levels of oversight and re- 20 view— 21 ‘‘(i) in which the highest dollar value 22 or highest rate of improper payments 23 occur; or 24 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 5389 IH ‘‘(ii) for which there is a higher risk 1 of improper payments; and 2 ‘‘(B) in coordination with the executive 3 agency responsible for administering a high-pri- 4 ority program identified under subparagraph 5 (A), establish annual targets and semi-annual 6 or quarterly actions for reducing improper pay- 7 ments associated with the high-priority pro- 8 gram. 9 ‘‘(2) REPORT ON HIGH-PRIORITY IMPROPER 10 PAYMENTS.— 11 ‘‘(A) IN GENERAL.—Subject to Federal 12 privacy policies and to the extent permitted by 13 law, each executive agency with a program iden- 14 tified under paragraph (1)(A) shall on an an- 15 nual basis submit to the Inspector General of 16 the executive agency and the Office of Manage- 17 ment and Budget, and make available to the 18 public, including through a website, a report on 19 that program. 20 ‘‘(B) CONTENTS.—Each report submitted 21 under subparagraph (A)— 22 ‘‘(i) shall describe any action the exec- 23 utive agency— 24 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 5389 IH ‘‘(I) has taken or plans to take to 1 recover improper payments; and 2 ‘‘(II) intends to take to prevent 3 future improper payments; and 4 ‘‘(ii) shall not include— 5 ‘‘(I) any referrals the executive 6 agency made or anticipates making to 7 the Department of Justice; or 8 ‘‘(II) any information provided in 9 connection with a referral described in 10 subclause (I). 11 ‘‘(C) PUBLIC AVAILABILITY ON CENTRAL 12 WEBSITE.—The Office of Management and 13 Budget shall make each report submitted under 14 subparagraph (A) available on a central 15 website. 16 ‘‘(D) AVAILABILITY OF INFORMATION TO 17 INSPECTOR GENERAL.—Subparagraph (B)(ii) 18 shall not prohibit any referral or information 19 being made available to an Inspector General as 20 otherwise provided by law. 21 ‘‘(E) ASSESSMENT AND RECOMMENDA- 22 TIONS.—The Inspector General of each execu- 23 tive agency that submits a report under sub- 24 paragraph (A) shall, for each program of the 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 5389 IH executive agency that is identified under para- 1 graph (1)(A)— 2 ‘‘(i) review— 3 ‘‘(I) the assessment of the level 4 of risk associated with the program 5 and the quality of the improper pay- 6 ment estimates and methodology of 7 the executive agency relating to the 8 program; and 9 ‘‘(II) the oversight or financial 10 controls to identify and prevent im- 11 proper payments under the program; 12 and 13 ‘‘(ii) submit to the appropriate au- 14 thorizing and appropriations committees of 15 Congress recommendations, which may be 16 included in another report submitted by 17 the Inspector General to Congress, for 18 modifying any plans of the executive agen- 19 cy relating to the program, including im- 20 provements for improper payments deter- 21 mination and estimation methodology. 22 ‘‘(F) ANNUAL MEETING.—Not less fre- 23 quently than once every year, the head of each 24 executive agency with a program identified 25 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5389.IH H5389 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 5389 IH under paragraph (1)(A), or a designee of the 1 head of the executive agency, shall meet with 2 the Director of the Office of Management and 3 Budget, or a designee of the Director, to report 4 on actions taken during the preceding year and 5 planned actions to prevent improper payments. 6 ‘‘(c) ESTIMATION OF IMPROPER PAYMENTS.— 7 ‘‘(1) ESTIMATION.—With respect to each pro- 8 gram and activity identified under subsection (a)(1), 9 the head of the relevant executive agency shall— 10 ‘‘(A) produce a statistically valid estimate, 11 or an estimate that is otherwise appropriate 12 using a methodology approved by the Director 13 of the Office of Management and Budget, of 14 the improper payments made under the pro- 15 gram or activity; and 16 ‘‘(B) include the estimates described in 17 subparagraph (A) in the accompanying mate- 18 rials to the annual financial statement of the 19 executive agency and as required in applicable 20 guidance of the Office of Management and 21 Budget. 22 ‘‘(2) LACKING OR INSUFFICIENT DOCUMENTA- 23 TION.— 24 VerDate Sep 11 2014 16:55 Dec 15, 2019 Jkt [Text truncated for display. 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