Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
                                                     Calendar No. 156
114th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {      114-86
_______________________________________________________________________


                     FEDERAL IMPROPER PAYMENTS ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 614

         TO PROVIDE ACCESS TO AND USE OF INFORMATION BY FEDERAL
 AGENCIES IN ORDER TO REDUCE IMPROPER PAYMENTS, AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                 July 21, 2015.--Ordered to be printed
                 
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

49-010                         WASHINGTON : 2015                  
                 
                 
                 
                 
                 
                 
                 
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                    Keith B. Ashdown, Staff Director
                  Christopher R. Hixon, Chief Counsel
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
Gabrielle D'Adamo Singer, Deputy Chief Counsel for Governmental Affairs
                       Courtney J. Allen, Counsel
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
               Mary Beth Schultz, Minority Chief Counsel
       Peter P. Tyler, Minority Senior Professional Staff Member
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     
                     
                     
                                                      Calendar No. 156
114th Congress     }                                     {      Report
                                 SENATE
 1st Session       }                                     {      114-86

======================================================================



 
                     FEDERAL IMPROPER PAYMENTS ACT

                                _______
                                

                 July 21, 2015.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 614]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 614) to provide 
access to and use of information by Federal agencies in order 
to reduce improper payments, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................6
 IV. Section-by-Section Analysis......................................6
  V. Evaluation of Regulatory Impact..................................7
 VI. Congressional Budget Office Cost Estimate........................7
VII. Changes in Existing Law Made by the Bill, as Reported............8

                         I. Purpose and Summary

    S. 614 seeks to reduce improper payments made by federal 
agencies, which are payments that the government makes in 
erroneous amounts, or payments that should not be made at all. 
The bill would improve the sharing and use of key data to 
combat improper payments, and would encourage the use of data 
analytics by federal agencies for government-wide waste and 
fraud reviews.

              II. Background and the Need for Legislation

    This Committee has long been concerned with the federal 
government's persistent improper payment problem--that is, 
executive branch agencies' too common mistake of sending money 
to people or companies, whether for benefits or under 
contracts, either in an incorrect amount or when no money 
should be paid to the recipient at all. Improper payments 
include remittances to ineligible recipients, duplicate 
payments, payments for a good or service not received, payments 
that do not reflect credits for applicable discounts, and in 
some cases payments to the deceased.\1\ Improper payments by 
federal agencies impose a significant cost on taxpayers, with 
the United States Treasury losing tens of billions of dollars 
annually to overpayments, including, at times, fraudulent 
payments to government contractors, program beneficiaries, and 
others. For fiscal year (FY) 2014, for example, federal 
agencies reported an estimated total of $124.7 billion in 
improper payments, an increase of $19 billion from the prior 
fiscal year.\2\
---------------------------------------------------------------------------
    \1\Congressional Research Service (CRS), Improper Payments and 
Recovery Audits: Legislation, Implementation, and Analysis, R42878, 1 
(Jan. 2, 2013).
    \2\Pursuant to an executive order, the Secretary of the Treasury in 
consultation with the Attorney General and the Office of Management and 
Budget (OMB) maintains a website on improper payments reporting at 
http://www.paymentaccuracy.gov/.
---------------------------------------------------------------------------
    Errors in carrying out federal health care entitlements are 
the largest contributor to improper payments.\3\ Medicare, 
Medicaid, and the Children's Health Insurance Program account 
for approximately $78 billion in improper payments in 2014.\4\ 
The expansion of Medicaid under the Affordable Care Act and the 
increased utilization of the Medicare programs due to an aging 
population will result in increased spending on these programs 
in future years.\5\ Indeed, Medicaid spending is expected to 
increase from $270 billion in 2014 to $529 billion in 2025.\6\ 
During that same period, Medicare spending is expected to grow 
from $600 billion to nearly $1.2 trillion.\7\
---------------------------------------------------------------------------
    \3\Id.
    \4\Id.
    \5\Centers for Medicare and Medicaid Services, National Health 
Expenditure Projections 2013-2023, http://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-Reports/
NationalHealthExpendData/Downloads/Proj2013.pdf.
    \6\Congressional Budget Office (CBO), Medicaid Baseline 
Projections. (Mar. 09, 2015), 
https://www.cbo.gov/sites/default/files/cbofiles/attachments/44204-
2015-03-Medicaid.pdf.
    \7\Congressional Budget Office, Medicare Baseline Projections, 
(Mar. 09, 2015).
---------------------------------------------------------------------------
    As spending on Medicare and Medicaid continues to grow--
nearly doubling over ten years--it is imperative that the rate 
of improper payments is brought under control and dramatically 
reduced. If the improper payment rates for these two programs 
remain the same, by 2025 just these two programs could account 
for $150 billion in improper payments based on the projected 
outlays.
    For over a decade, a series of laws have attempted to 
identify, prevent, and recover improper payments.\8\
---------------------------------------------------------------------------
    \8\CRS, Improper Payments and Recovery Audits: Legislation, 
Implementation, and Analysis, R42878, 1 (Jan. 2, 2013).
---------------------------------------------------------------------------
    Improper Payments Information Act of 2002 (IPIA).\9\ 
Agencies began to deal comprehensively with improper payments 
following the enactment of IPIA, which required each agency 
subject to the requirements of the Chief Financial Officers Act 
of 1990\10\ to annually review all programs and activities that 
it administers, identify those that may be susceptible to 
significant improper payments, develop improper payments 
estimates for those programs deemed susceptible, and report the 
estimates annually.
---------------------------------------------------------------------------
    \9\Pub. L. No. 107-300, 116 Stat. 2350, 31 U.S.C. Sec. 3321 note 
(2002).
    \10\The list of the 24 agencies covered by this mandate is found at 
31 U.S.C. Sec. 901(b)(1)(2004).
---------------------------------------------------------------------------
    Improper Payments Elimination and Recovery Act of 2010 
(IPERA).\11\ In July 2010, Congress passed, and the President 
signed, IPERA to enhance the reporting and reduction of 
improper payments. IPERA amended IPIA by expanding on the 
previous requirements for identifying, estimating, and 
reporting on programs and activities susceptible to significant 
improper payments and expanding requirements for recovering 
overpayments across a broad range of federal programs. IPERA:
---------------------------------------------------------------------------
    \11\Pub. L. No. 111-204, 124 Stat. 2224 (2010).
---------------------------------------------------------------------------
           Added a requirement that any program with 
        estimated improper payments exceeding specific dollar 
        amounts and error rate thresholds set out in the law 
        must report on the actions the agency is taking to 
        reduce improper payments;
           Imposed a new requirement for agencies to 
        conduct audits to recover improper payments, where cost 
        effective, for each program and activity with at least 
        one million dollars in annual program outlays;
           Established incentives and budgetary 
        penalties for programs that fail to comply with the 
        requirements of the law over a reasonable number of 
        years; and
           Required each federal agency's inspector 
        general to determine annually whether his or her agency 
        is in compliance with certain IPERA requirements and to 
        report on that determination.
    IPERA Improvement Act of 2012 (the ``Improvement 
Act'').\12\ Building on the previously enacted legislation, the 
Improvement Act required agencies to take additional steps to 
curb improper payments. Specifically, the Improvement Act:
---------------------------------------------------------------------------
    \12\Pub. L. No. 112-248, 126 Stat. 2390, 31 U.S.C. Sec. 3321 note 
(2013).
---------------------------------------------------------------------------
           Expanded requirements for agencies to 
        estimate improper payments, forcing agencies to improve 
        previously weak efforts at estimating such payments. 
        For example, the Act prevents agencies from relying 
        only on voluntary disclosure of improper payments by 
        contractors and requires agencies to produce 
        documentation to prove a payment was correct.
           Codified the government-wide Do Not Pay 
        program (previously established through a 2010 White 
        House memorandum) that requires agencies to check 
        against a central, comprehensive database of entities 
        ineligible to receive federal funds before making 
        payments, including the Social Security 
        Administration's (SSA) Death Master File (DMF) and the 
        other databases specified in the White House 
        memorandum.\13\ The law also addressed some of the 
        challenges encountered by the Administration as it 
        attempted to implement its Do Not Pay program, such as 
        the need for multilateral data sharing agreements among 
        agencies.
---------------------------------------------------------------------------
    \13\Memorandum on Enhancing Payment Accuracy Through a ``Do Not Pay 
List,'' (June 18, 2010), http://www.whitehouse.gov/the-press-office/
presidential-memorandum-enhancing-payment-accuracy-through-a-do-not-
pay-list. The Do Not Pay list was established to allow screening 
against the following databases: the SSA DMF, which lists all deaths 
reported to the agency since 1936; the General Services 
Administration's Excluded Parties List System, which lists entities 
debarred from receiving federal contracts; the Department of the 
Treasury's Debt Check Database, which contains information on 
individuals who owe delinquent child support or non-tax debt that might 
exclude them from certain federal loans, loan insurance, or loan 
guarantees; the Department of Housing and Urban Development's (HUD) 
Credit Alert Verification Reporting System, which provides information 
on individuals who are in default or have had claims paid on direct or 
guaranteed federal loans, or are delinquent on other debts owed to 
federal agencies; and the Department of Health and Human Services' 
Office of Inspector General's (HHS-OIG) List of Excluded Individuals/
Entities, which identifies those barred from federally-funded health 
care programs.
---------------------------------------------------------------------------
           Required that the Office of Management and 
        Budget (OMB), within 120 days of enactment, issue a 
        plan for curbing improper payments to deceased 
        individuals.
    The creation of the Do Not Pay list and these legislative 
efforts have resulted in an increased focus across the 
government in preventing, identifying, and reducing improper 
payments. Total improper payments made by the federal 
government dropped from $120.6 billion in FY 2010 to $106 
billion in FY 2013.\14\
---------------------------------------------------------------------------
    \14\Payment Accuracy, Government-wide Improper Payments Targets, 
http://www.paymentaccuracy.gov/.
---------------------------------------------------------------------------
    However, as noted above, improper payments in FY 2014 rose 
to nearly $125 billion. That increase is attributed to 
increased error rates in three major programs: Medicare Fee-
for-Service, Medicaid programs, and the Earned Income Tax 
Credit. These three programs accounted for approximately 65 
percent of total government-wide improper payments for FY 
2014.\15\ As outlays continue to increase, the growth in 
improper payments will also increase unless action is taken. 
Clearly, additional efforts are needed to return to a downward 
trajectory in improper payments.
---------------------------------------------------------------------------
    \15\Testimony of Beryl Davis, Government Accountability Office 
before the Committee on Homeland Security and Governmental Affairs, 
``Examining Federal Improper Payments and Errors in the Death Master 
File,'' Mar. 16, 2015.
---------------------------------------------------------------------------
    During the 113th Congress, the Committee held a hearing to 
examine the implementation of IPERA and the IPERA Improvement 
Act, and to explore potential next steps for similar 
initiatives, such as improving the sharing and accuracy of data 
to prevent improper payments to dead people. At the hearing, 
Daniel I. Werfel, Controller, OMB's Office of Federal Financial 
Management, highlighted federal efforts to prevent improper 
payments. Both his testimony and that of Richard L. Gregg, 
Fiscal Assistant Secretary at the Department of the Treasury, 
provided an update on the progress made in implementing the Do 
Not Pay initiative, acknowledging that there was much to be 
done to ensure that the initiative provided a comprehensive 
solution to payment integrity.\16\ Patrick P. O'Carroll, Jr., 
SSA Inspector General and Daniel Bertoni, a Government 
Accountability Office Director for Education, Welfare, and 
Income Security, and Marianna LaCanfora, the SSA Acting Deputy 
Commissioner for Retirement and Disability Policy, also gave 
testimony.
---------------------------------------------------------------------------
    \16\``Curbing Federal Agency Waste and Fraud: New Steps to 
Strengthen the Integrity of Federal Payments;'' Hearing Before the 
Committee on Homeland Security and Governmental Affairs, 113th Cong. 
(2013), http://www.hsgac.senate.gov/hearings/curbing-federal-agency-
waste-and-fraud-new-steps-to-strengthen-the-integrity-of-federal-
payments.
---------------------------------------------------------------------------
    On February 11, 2015, GAO Comptroller General Gene Dodaro 
testified before the Committee regarding the release of GAO's 
bi-annual ``High Risk'' list of government programs most at 
risk of waste, fraud, or abuse. The testimony and deliberations 
of this hearing included discussions of the level of federal 
improper payments, as well as causes and potential 
solutions.\17\
---------------------------------------------------------------------------
    \17\``Risky Business: Examining GAO's 2015 List of High Risk 
Government Programs;'' Hearing Before the Committee on Homeland 
Security and Governmental Affairs, 114th Cong. (2015). http://
www.hsgac.senate.gov/hearings/risky-business-examining-gaos-2015-list-
of-high-risk-government-programs.
---------------------------------------------------------------------------
    The Committee has continued to examine this issue following 
consideration of S. 614. On March 16, 2015, the Committee held 
a hearing titled ``Examining Federal Improper Payments and 
Errors in the Death Master File'' which examined the $19 
billion increase in improper payments in 2015.\18\ The hearing 
also uncovered problems with the DMF, the key database used by 
agencies to screen payments in an effort to prevent improper 
payments to the deceased.
---------------------------------------------------------------------------
    \18\``Examining Federal Improper Payments and Errors in the Death 
Master File;'' Hearing Before the Committee on Homeland Security and 
Governmental Affairs, 113th Cong. (2013).
http://www.hsgac.senate.gov/hearings/examining-federal-improper-
payments-and-errors-in-the-death-master-file.
---------------------------------------------------------------------------
    On March 17, 2015, Committee Chairman Ron Johnson wrote to 
the Department of Health and Human Services, requesting 
information regarding, as stated by the letter, improper 
payments of advanced premium assistance tax credits and cost-
sharing subsidies under the Affordable Care Act to 200,000 
individuals who were not eligible to receive them because they 
did not verify legal residency in the United States.\19\ On May 
21, 2015, the Chairman also sent a letter to the Internal 
Revenue Service, the agency responsible for recovering those 
improper payments.\20\ The Chairman estimates that the loss to 
taxpayers could be as high as $400 million and neither agency 
has responded that they have a plan to recoup these payments. 
IPERA, as noted above, requires agencies to establish a plan 
for the identification, prevention, and recoupment of improper 
payments when doing so would result in a recovery of 
overpayments greater than the administrative cost of pursuing 
such recovery.
---------------------------------------------------------------------------
    \19\Letter from Chairman Ron Johnson, S. Comm. On Homeland Security 
& Governmental Affairs, to Sylvia Burwell, Secretary of the Department 
of Health and Human Services (Mar. 17, 2015).
    \20\Letter from Chairman Ron Johnson, S. Comm. On Homeland Security 
& Governmental Affairs, to John Koskinen, Commissioner of the Internal 
Revenue Service (May 21, 2015).
---------------------------------------------------------------------------
    S. 614, the Improper Payments Coordination Act, reflects 
lessons learned through the Committee's hearings, as well as 
the Committee's other ongoing oversight of federal agency 
improper payments, which includes reviews of annual agency 
reports on improper payments as well as extensive discussions 
with agency inspectors general regarding their body of work 
related to improper payments.
    S. 614 takes additional key steps to address improper 
payments made by government agencies. The legislation extends 
access to the Do Not Pay initiative to the judicial and 
legislative branches of the federal government, as well as the 
state government agencies that manage federal funds, to expand 
use of this tool to prevent improper payments. The legislation 
also requires the Department of State and Department of Defense 
to report death data to other agencies to prevent improper 
payments to deceased individuals. Additionally, the bill 
improves the Do Not Pay initiative by requiring OMB to issue 
guidance clarifying rules and procedures for agencies to share 
information.
    Finally, the legislation seeks to expand and improve the 
use of data analytics by federal agencies for federal-wide 
waste and fraud reviews. As part of the Do Not Pay initiative, 
the Department of Treasury established a center within the 
Department to identify payments that are improper or 
potentially fraudulent. This analysis involves payments across 
a wide range of federal agencies and programs. However, the 
roles and responsibilities of the analysis center are not well-
defined. For example, the center's interaction with similar 
efforts by federal agency inspectors general is not yet 
defined, and there is no timetable for the continuing 
development of the center. Therefore, the bill requires the 
Secretary of the Treasury to prepare a report describing data 
analytics performed, the metrics used in determining whether 
these analytics help reduce improper payments, and target dates 
for implementing the data analytics operations performed as 
part of the Do Not Pay initiative.

                        III. Legislative History

    Ranking Member Carper and Chairman Johnson introduced S. 
614 on February 7, 2015 and the bill was referred to the 
Committee.
    The Committee considered S. 614 at a business meeting on 
March 4, 2015. The Committee ordered the bill reported 
favorably by voice vote en bloc. Members present for the vote 
on the bill were Senators Johnson, Portman, Lankford, Ayotte, 
Ernst, Carper, McCaskill, Baldwin, Heitkamp, and Peters.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1--Short title

    This section establishes the bill's title as the ``Improper 
Payments Coordination Act of 2015.''

Section 2--Availability of the Do Not Pay Initiative to the Judicial 
        and Legislative Branches and States

    This section amends Section 5 of the Improper Payments 
Elimination and Recovery Improvement Act of 2012 to expand the 
Do Not Pay initiative from use by just Executive branch 
agencies, to also allow use of the Do Not Pay Program by the 
Judicial and Legislative Branches, as well as state government 
agencies that manage federal programs.

Section 3--Improving the sharing and use of data by Government agencies 
        to curb improper payments

    This section amends Section 5 of the Improper Payments 
Elimination and Recovery Improvement Act of 2012 to:
    (1) Replace the use of the words ``Death Master File'' with 
``death records.'' This is a technical correction.
    (2) Improve the sharing of information regarding overseas 
deaths. Currently, there are no clear procedures for agencies 
such as the Department of Defense and Department of State to 
share their notices of overseas deaths of United States 
citizens (as opposed to deaths that occur within the United 
States) to update federal agency lists of deceased individuals. 
These lists are used to ensure that beneficiaries, retirees, 
and others do not receive improper payments when deceased. The 
section requires OMB to provide guidance that the two agencies 
should share notices of overseas deaths.
    (3) Provide guidance for agencies to share data with the Do 
Not Pay program. Currently, six key databases are required by 
law to be included in the Do Not Pay program. However, some 
agencies have been slow to share key data, often due to a lack 
of clarity on rules and procedures. This section requires OMB 
to provide guidance addressing this problem.

Section 4--Data analytics

    The Department of Treasury has an analysis center to help 
federal agencies identify and prevent improper payments. This 
section amends Section 5 of the IPERA Improvement Act of 2012 
(31 U.S.C. Sec. 3321 note) by adding subparagraph (h). 
Subparagraph (h) requires the Secretary of the Treasury to 
submit a report to Congress describing how the Do Not Pay 
Initiative data analytics center incorporates: (1) comparisons 
of payment and beneficiary enrollment lists for state programs 
that use federal funds to identify improper payments; (2) 
reviews of payments across federal programs to identify payment 
duplication; and (3) reviews of other information determined to 
be effective. The report, due within 180 days after enactment, 
must also describe the metrics used to determine if the 
analytic and investigatory efforts have helped reduce improper 
payments.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                     June 18, 2015.
Hon. Ron Johnson, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 614, the Federal 
Improper Payments Coordination Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 614--Federal Improper Payments Coordination Act of 2015

    S. 614 would amend federal law with an aim to reduce 
improper payments made by the federal government. Improper 
payments occur when funds are paid to the wrong recipient, the 
recipient receives the incorrect amount of funds, documentation 
is not available to support a payment, or the recipient uses 
funds in an improper manner.\1\ Specifically, the legislation 
would authorize the judicial and legislative branches, as well 
as state government agencies that manage federal programs, to 
use the Treasury Department's Do Not Pay (DNP) Program. 
(Agencies use that program to check various databases before 
making payments or contract awards in order to identify 
ineligible recipients and to prevent other payment errors.) S. 
614 also would direct the Secretaries of State and Defense to 
improve the accuracy of their payment systems by sharing 
information relating to the deaths of individuals. Finally, the 
Secretary of the Treasury would be required to submit a report 
to the Congress on efforts to reduce improper payments.
---------------------------------------------------------------------------
    \1\A fraudulent payment (the intentional misuse of funds) may be 
related to an improper payment, but they are not necessarily the same. 
Efforts to curtail improper payments do not exclusively target fraud 
prevention. For additional information see: Congressional Budget 
Office: How Initiatives to Reduce Fraud in Federal Health Care Programs 
Affect the Budget (October 2014).
---------------------------------------------------------------------------
    The Office of Management and Budget (OMB) reports that 
about $125 billion in improper payments were made by the 
federal government in 2014, which represented about 4 percent 
of the $3 trillion in government-wide spending that year. 
Although implementing the bill would probably result in fewer 
improper payments, any subsequent budgetary savings would not 
be significant for several reasons:
           Most improper payments result from 
        incomplete documentation related to the payment and 
        correcting that documentation usually does not alter 
        the amount of the payment;
           Over 80 percent of improper payments stem 
        from the larger federal entitlement programs such as 
        Medicare, Medicaid, Unemployment Insurance, and 
        Supplemental Security Income. The bill would not 
        provide any new authorities to help those programs 
        reduce improper payments;
           The judicial and legislative branches of the 
        government can already access the DNP program under 
        current law, according to Treasury Department 
        officials;
           Spending by those branches represents less 
        than 1 percent of total federal spending and most of it 
        is for salaries and expenses. Such spending generally 
        does not result in large numbers of improper payments;
           State and local governments already use 
        databases similar to the DNP to detect improper 
        payments.
    In fact, no measures used by OMB or evidence from the 
Government Accountability Office (GAO) indicate that focusing 
on correcting improper payments would lead to a significant 
reduction in federal spending.
    Because enacting the bill could affect direct spending for 
federal entitlement programs, pay-as-you-go procedures apply. 
However, CBO estimates that any change in direct spending would 
not be significant for the reasons stated above. We also 
estimate that implementing S. 614 would not result in 
significant additional administrative costs for the Departments 
of Defense, State, and the Treasury.
    S. 614 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, Assistant 
Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 614 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

TITLE 31--MONEY AND FINANCE

           *       *       *       *       *       *       *


Section. 3321. Disbursing authority in the executive branch

           *       *       *       *       *       *       *



Improper Payments Elimination and Recovery Improvement

           *       *       *       *       *       *       *



SEC. 5. DO NOT PAY INITIATIVE

    (a)
          (1) * * *
          (2)
                  [(A) The Death Master File of the Social 
                Security Administration.] (A) The death records 
                maintained by the Commissioner of Social 
                Security.
    (b)
          (1) * * *
          (2) * * *
          (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 verify payment or award eligibility in 
        accordance with subsection (a) when the Director of the 
        Office of Management and Budget determines the Do Not 
        Pay Initiative is appropriately established for the 
        agency. States and any contractor, subcontractor, or 
        agent of a State, and the judicial and legislative 
        branches of the United States (as defined in paragraphs 
        (2) and (3), respectively, of section 202(e) of title 
        18, United States Code), shall have access to, and use 
        of, the Do Not Pay Initiative to verify payment or 
        award eligibility for payments (as defined in section 
        (2)(g)(3) of the Improper Payments Information Act of 
        2002, 31 U.S.C. 3321 note) when, with respect to a 
        State, the Director of the Office of Management and 
        Budget determines that the Do Not Pay Initiative is 
        appropriately established for that State and any 
        contractor, subcontractor, or agent of the State, and, 
        with respect to the judicial and legislative branches 
        of the United States, when the Director of the Office 
        of Management and Budget determines that the Do Not Pay 
        Initiative is appropriately established for the 
        judicial branch or the legislative branch, as 
        applicable.
    (c) * * *
    (d)
          (1) * * *
          (2)
                  (A) * * *
                  (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 
                detection through analytic technologies and 
                other techniques, which may include commercial 
                database use or access[.]; and
                  (D) may include States and their quasi-
                government entities, and the judicial and 
                legislative branches of the United States (as 
                defined in paragraphs (2) and (3), 
                respectively, of section 202(e) of title 18, 
                United States Code) as users of the system in 
                accordance with subsection (b)(3).

           *       *       *       *       *       *       *

    (h) Report on Improper Payments Data Analysis.--Not later 
than 180 days after the date of enactment of the Federal 
Improper Payments Coordination Act of 2015, the Secretary of 
the Treasury shall submit to Congress a report which shall 
include a description of--
          (1) data analytics performed as part of the Do Not 
        Pay Initiative for the purpose of detecting, 
        preventing, and recovering improper payments through 
        pre-award, post-award pre-payment, and post-payment 
        analysis, which shall include a description of any 
        analysis or investigations incorporating--
                  (A) review and data matching of payments and 
                beneficiary enrollment lists of State programs 
                carried out using Federal funds for the 
                purposes of identifying eligibility 
                duplication, residency ineligibility, duplicate 
                payments, or other potential improper payment 
                issues;
                  (B) review of multiple Federal agencies and 
                programs for which comparison of data could 
                show payment duplication; and
                  (C) review of other information the Secretary 
                of the Treasury determines could prove 
                effective for identifying, preventing, or 
                recovering improper payments, which may include 
                investigation or review of information from 
                multiple Federal agencies or programs;
          (2) the metrics used in determining whether the 
        analytic and investigatory efforts have reduced, or 
        contributed to the reduction of, improper payments or 
        improper awards; and
          (3) the target dates for implementing the data 
        analytics operations performed as part of the Do Not 
        Pay Initiative.

SEC. 6. * * *

SEC. 7. IMPROVING THE USE OF DATA BY GOVERNMENT AGENCIES FOR CURBING 
                    IMPROPER PAYMENTS.

    (a) Prompt Reporting of Death Information by the Department 
of State and the Department of Defense.--Not later than 1 year 
after the date of enactment of this section, the Secretary of 
State and the Secretary of Defense shall establish a procedure 
under which each Secretary shall, promptly and on a regular 
basis, submit information relating to the deaths of individuals 
to each agency for which the Director of the Office of 
Management and Budget determines receiving and using such 
information would be relevant and necessary.
    (b) Guidance to Agencies Regarding Data Access and Use for 
Improper Payments Purposes.--
          (1) In general.--Not later than 6 months after the 
        date of enactment of this section, and in consultation 
        with the Council of Inspectors General on Integrity and 
        Efficiency, the heads of other relevant Federal, State, 
        and local agencies, and Indian tribes and tribal 
        organizations, the Director of the Office of Management 
        and Budget shall issue guidance regarding 
        implementation of the Do Not Pay Initiative under 
        section 5 to--
                  (A) the Department of the Treasury; and
                  (B) each agency or component of an agency--
                          (i) that operates or maintains a 
                        database of information described in 
                        section 5(a)(2); or
                          (ii) for which the Director 
                        determines improved data matching would 
                        be relevant, necessary, or beneficial.
          (2) Requirements.--The guidance issued under 
        paragraph (1) shall--
                  (A) address the implementation of subsection 
                (a); and
                  (B) include the establishment of deadlines 
                for access to and use of the databases 
                described in section 5(a)(2) under the Do Not 
                Pay Initiative.

                                  [all]