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This bill would strengthen how federal agencies find and stop improper payments and fraud. It updates federal payment rules so agencies must more closely check programs that may be at risk, including newer programs with large spending. It also adds stronger reporting duties, requires more involvement from agency chief financial officers, and asks agencies to show progress in using fraud controls and best practices. The goal is to make government payments more accurate, more transparent, and less wasteful, without giving agencies any new funding to do it.
- Agencies would have to review new programs and activities that are in their first four years and are expected to spend more than $100 million in one of the first three years, unless a review shows they are not likely to have major improper payments.
- For programs at risk, agencies would have to produce statistically valid estimates of improper payments, or another approved estimate method, and report those results as part of their annual financial reporting.
- Each agency’s chief financial officer would need to certify that the agency’s list of risky programs is reliable and describe how they are monitoring corrective action plans.
- Agencies would also have to report each year on their progress in fighting fraud, including controls for payroll, benefits, grants, large contracts, and purchase and travel cards, plus the status of key fraud-risk practices identified by the Government Accountability Office.
The bill also says agencies can include this information in their regular financial statement reports if it already covers the required details, so they do not have to file separate duplicate reports. No extra money would be authorized to carry out these changes.
Official Summaries
Safeguarding the Transparency and Efficiency of Payments Act or the STEP Act
This bill requires federal agencies to take certain actions to prevent improper payments (i.e., payments that should not have been made or were made in an incorrect amount).
The bill requires agencies to annually identify as susceptible to significant improper payments any new program or activity that is in its first four years of operation and has, or is expected to have, outlays exceeding $100 million in any of its first three fiscal years of operation, with exceptions for activities that are not susceptible to significant improper payments. (Agencies must report estimates of improper payments for activities identified as susceptible.)
The bill allows agencies, when estimating improper payments, to use an estimation methodology approved by the agency's chief financial officer (CFO). (Currently, only methodologies approved by the Office of Management and Budget may be used.)
An agency’s annual financial statement must include certain reports related to the agency’s improper payments. Such reports must also include a certification by the agency CFO that the identification of programs and activities susceptible to significant improper payments is reliable as well as a description of the CFO's actions to monitor required corrective action plans.
Each agency must report to Congress for each of the 10 fiscal years after enactment on certain matters, including progress in managing fraud risks and implementing financial controls.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 80 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 80
To amend title 31, United States Code, to improve the prevention of
improper payments, and for other purposes.
_______________________________________________________________________
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.
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 ``Safeguarding the Transparency and
Efficiency of Payments Act'' or the ``STEP Act''.
SEC. 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.''.
SEC. 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.
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