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Updates federal improper payment rules by clarifying who counts as an agency chief financial officer, requiring agencies to identify and estimate improper payments for newly started programs that are likely to have large outlays, and strengthening annual reporting and fraud-control certifications. Agencies must flag new programs in their first four years that expect more than $100,000,000 in outlays in any one of the first three years, use approved estimation methods, and include specific CFO attestations and 10-year reporting on fraud-risk controls. The bill does not authorize any new appropriations to implement these changes, so agencies must carry out the new requirements within existing budgets and resources.
Adds a definition of “chief financial officer” to 31 U.S.C. 3351: (A) for executive agencies described in 901(b), the CFO appointed under section 901(b); (B) for other executive agencies, the senior official responsible for managing the agency’s financial activities.
Makes conforming references in 31 U.S.C. 3353(a)(4)(B) to reflect the redesignation of paragraphs in section 3351 (updates cross‑references from former paragraph numbers to new ones).
In 31 U.S.C. 3352(a)(3)(B), changes a cross-reference by replacing “paragraph (1)” with “paragraph (1)(B).”
In 31 U.S.C. 3352(a)(3)(C), replaces each occurrence of the previous reference with “paragraphs (1) and (4).”
Adds 31 U.S.C. 3352(a)(4) requiring the head of an executive agency to 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.
Who is affected and how:
Federal executive branch agencies: Directly affected. Agencies must identify, estimate, and report improper payments for qualifying new programs, adopt stronger fraud controls, and produce enhanced annual CFO certifications and decade-long reports to Congress. This increases administrative and compliance work and may require reallocating existing resources.
Agency chief financial officers and financial management staff: Directly affected. CFOs will need to provide required attestations, ensure approved estimation methods are used, and oversee implementation of fraud-risk controls and reporting. This raises workload and accountability for agency financial leadership.
Oversight bodies and auditors (Congress, OMB, GAO): Beneficiaries of more structured, longer-term reporting and certifications that improve transparency on improper payment risks and anti-fraud practices.
Program managers of new large programs: Affected by earlier and potentially more frequent reviews for improper-payment risk, which could affect program start-up timelines or require additional internal controls.
Taxpayers and the public: Indirect beneficiaries. Strengthened detection, estimation, and reporting of improper payments and fraud controls aim to reduce waste and improve stewardship of federal funds over time.
Budgetary impact: The statute forbids new appropriations for implementing these requirements, so agencies must absorb any additional compliance costs within current budgets or reprogram resources. That constraint could limit the pace or scope of implementation, especially for agencies with constrained financial management capacity.
Overall effect: The bill tightens federal financial management around improper payments for newly created, high-dollar programs and increases long-term reporting and CFO accountability, while not providing new funding for implementation. That combination increases compliance demands on agencies but aims to improve detection and prevention of improper payments and fraud.
Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Introduced January 13, 2025 by James Lankford · Last progress January 13, 2025
Redesignates paragraphs (2) through (8) as paragraphs (3) through (9), and inserts a new paragraph (2) defining the term 'chief financial officer' for executive agencies.
Updates internal cross-references to the redesignated paragraphs of section 3351 (changes references from section 3351(2)(...) to section 3351(3)(...)).
Adds requirements to identify certain new programs and activities susceptible to significant improper payments, modifies sampling/estimation and reporting provisions, and adds a new annual reporting subsection (j) requiring inclusion with annual financial statements and a chief financial officer statement.
Replaces subsection (d) with new reporting requirements obligating each agency to submit annual reports to Congress (via the agency's annual financial statement) for a 10-fiscal-year period beginning the first fiscal year after enactment, detailing progress implementing financial and administrative controls, fraud risk principles, OMB Circular A-123 practices, identification of fraud risks, and status of implementing 11 GAO leading practices.
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Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Introduced in Senate