House-passed bill would make federal agencies focus on wrong payments that cost taxpayers money

The law would add a definition of financial loss to the Government and focus its improper payment reports and estimates on payments that cause such a loss. Financial loss means any payment, or part of one, made above the correct amount allowed by law. It leaves out payments made to the right person for the right amount that simply missed certain agency administrative steps. Steps needed to prove eligibility or verify the correct amount are not excluded.

The Treasury Secretary must write risk assessment guidance, and each agency must assess the risk for each of its listed programs, before money is paid out. Each agency submits a yearly list of its programs and activities from the federal Program Inventory. Risk assessments are repeated at least every 3 years. Assessments are due within 6 months after the guidance is issued, before the next payment for existing programs and before any payment for new ones. The guidance is due within 1 year after the bill becomes law.

Agencies must report at least every 3 years instead of every year, and include estimates of payments that do and do not cause financial loss, the part due to fraud, and a ranked list of risks and controls. Agencies must also put their estimate in their budget justification and report on fraud-risk work, including how they follow a Government Accountability Office fraud framework and Office of Management and Budget guidance. An agency must redo its estimate after a major change in funding or authorization, for a new program, or if its inspector general recommends it.

Each year, agencies with high-priority programs must name a senior liaison who meets with the budget office, Treasury, the inspector general, and the Pandemic Response Accountability Committee. The budget office and Treasury must also meet state officials. Meetings review actions to prevent improper payments and fraud, and the state meetings cover programs run by states for the federal government. Meetings are required at least once every fiscal year.