CHAPTER 33 - DEPOSITING, KEEPING, AND PAYING MONEY

Title 31 > CHAPTER 33

Sections (38)

§ 3301 General duties of the Secretary of the Treasury

(a) The Secretary of the Treasury shall— receive and keep public money; take receipts for money paid out by the Secretary; give receipts for money deposited in the Treasury; endorse warrants for receipts for money deposited in the Treasury; submit the accounts of the Secretary to the Comptroller General every 3 months, or more often if required by the Comptroller General; and submit to inspection at any time by the Comptroller General of money in the possession of the Secretary.

(b) Except as provided in section 3326 of this title , an acknowledgment for money deposited in the Treasury is not valid if the Secretary does not endorse a warrant as required by subsection (a)(4) of this section.

§ 3302 Custodians of money

(a) Except as provided by another law, an official or agent of the United States Government having custody or possession of public money shall keep the money safe without— lending the money; using the money; depositing the money in a bank; and exchanging the money for other amounts.

(b) Except as provided in section 3718(b) 1 of this title, an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.

(c) A person having custody or possession of public money, including a disbursing official having public money not for current expenditure, shall deposit the money without delay in the Treasury or with a depositary designated by the Secretary of the Treasury under law. Except as provided in paragraph (2), money required to be deposited pursuant to this subsection shall be deposited not later than the third day after the custodian receives the money. The Secretary or a depositary receiving a deposit shall issue duplicate receipts for the money deposited. The original receipt is for the Secretary and the duplicate is for the custodian. The Secretary of the Treasury may by regulation prescribe that a person having custody or possession of money required by this subsection to be deposited shall deposit such money during a period of time that is greater or lesser than the period of time specified by the second sentence of paragraph (1).

(d) An official or agent not complying with subsection (b) of this section may be removed from office. The official or agent may be required to forfeit to the Government any part of the money held by the official or agent and to which the official or agent may be entitled.

(e) An official or agent of the Government having custody or possession of public money shall keep an accurate entry of each amount of public money received, transferred, and paid.

(f) When authorized by the Secretary, an official or agent of the Government having custody or possession of public money, or performing other fiscal agent services, may be allowed necessary expenses to collect, keep, transfer, and pay out public money and to perform those services. However, money appropriated for those expenses may not be used to employ or pay officers and employees of the Government.

§ 3303 Designation of depositaries

(a) The Secretary of the Treasury designates depositaries of money as provided in this section and under other law.

(b) When necessary to carry out the business of the United States Government and under conditions the Secretary decides are necessary, the Secretary may designate depositaries in foreign countries and in territories and possessions of the United States to receive deposits of public money. The Secretary shall give preference to United States financial institutions the Secretary decides are safe and able to give the service required.

§ 3304 Transfers of public money from depositaries

The Secretary of the Treasury may transfer public money in the possession of a depositary— to the Treasury; and if the Secretary believes the safety of the public money and convenience require it, to another depositary. ( Pub. L. 97–258 , Sept. 13, 1982 , 96 Stat. 949 .)

§ 3305 Audits of depositaries

The Secretary of the Treasury, or an officer, employee, or agent designated by the Secretary, may audit a depositary of public money. For uniformity and accuracy in accounts and safety of public money, an individual conducting an audit shall audit a depositary’s— books; accounts; returns; and public money on hand and the way the money is kept. ( Pub. L. 97–258 , Sept. 13, 1982 , 96 Stat. 949 .)

§ 3321 Disbursing authority in the executive branch

(a) Except as provided in this section or another law, only officers and employees of the Department of the Treasury designated by the Secretary of the Treasury as disbursing officials may disburse public money available for expenditure by an executive agency.

(b) For economy and efficiency, the Secretary may delegate the authority to disburse public money to officers and employees of other executive agencies.

(c) The head of each of the following executive agencies shall designate personnel of the agency as disbursing officials to disburse public money available for expenditure by the agency: United States Marshal’s Office. The Department of Defense. The Department of Homeland Security. 1 (with respect to public money available for expenditure by the Coast Guard when it is not operating as a service in the Navy).

(d) On request of the Secretary and with the approval of the head of an executive agency referred to in subsection (c) of this section, facilities of the agency may be used to assist in disbursing public money available for expenditure by another executive agency.

“SEC. 1801 SHORT TITLE.

“This title may be cited as the ‘Saving Federal Dollars Through Better Use of Government Purchase and Travel Cards Act of 2017’.

“SEC. 1802 DEFINITIONS.

“In this title: The term ‘improper payment’ has the meaning given the term in [former] section 2 of the Improper Payments Information Act of 2002 [ Pub. L. 107–300 ] ([former] 31 U.S.C. 3321 note [see 33 U.S.C. 3351 ]). The term ‘questionable transaction’ means a charge card transaction that from initial card data appears to be high risk and may therefore be improper due to non-compliance with applicable law, regulation or policy. The term ‘strategic sourcing’ means analyzing and modifying a Federal agency’s spending patterns to better leverage its purchasing power, reduce costs, and improve overall performance.

“SEC. 1803 EXPANDED USE OF DATA ANALYTICS.

(“(a) Strategy.— Not later than 180 days after the date of the enactment of this Act [ Dec. 12, 2017 ], the Director of the Office of Management and Budget, in consultation with the Administrator for General Services, shall develop a strategy to expand the use of data analytics in managing government purchase and travel charge card programs. These analytics may employ existing General Services Administration capabilities, and may be in conjunction with agencies’ capabilities, for the purpose of— identifying examples or patterns of questionable transactions and developing enhanced tools and methods for agency use in— identifying questionable purchase and travel card transactions; and recovering improper payments made with purchase and travel cards; identifying potential opportunities for agencies to further leverage administrative process streamlining and cost reduction from purchase and travel card use, including additional agency opportunities for card-based strategic sourcing; developing a set of purchase and travel card metrics and benchmarks for high-risk activities, which shall assist agencies in identifying potential emphasis areas for their purchase and travel card management and oversight activities, including those required by the Government Charge Card Abuse Prevention Act of 2012 ( Public Law 112–194 ) [see Short Title of 2012 Amendment note set out under section 101 of Title 41 , Public Contracts]; and developing a plan, which may be based on existing capabilities, to create a library of analytics tools and data sources for use by Federal agencies (including inspectors general of those agencies).

“SEC. 1804 GUIDANCE ON IMPROVING INFORMATION SHARING TO CURB IMPROPER PAYMENTS.

(“(a) In General.— Not later than 180 days after the date of the enactment of this Act [ Dec. 12, 2017 ], the Director of the Office of Management and Budget, in consultation with the Administrator of General Services and the interagency charge card data management group established under section 1805, shall issue guidance on improving information sharing by government agencies for the purposes of section 1803(a)(1).

(“(b) Elements.— The guidance issued under subsection (a) shall— require relevant officials at Federal agencies to identify high-risk activities and communicate that information to the appropriate management levels within the agencies; require that appropriate officials at Federal agencies review the reports issued by charge card-issuing banks on questionable transaction activity (such as purchase and travel card pre-suspension and suspension reports, delinquency reports, and exception reports), including transactions that occur with high-risk activities, and suspicious timing or amounts of cash withdrawals or advances; provide for the appropriate sharing of information related to potential questionable transactions, fraud schemes, and high-risk activities with the General Services Administration and the appropriate officials in Federal agencies; consider the recommendations made by Inspectors General or the best practices Inspectors General have identified; and include other requirements determined appropriate by the Director for the purposes of carrying out this title.

“SEC. 1805 INTERAGENCY CHARGE CARD DATA MANAGEMENT GROUP.

(“(a) Establishment.— The Administrator of General Services and the Director of the Office of Management and Budget shall establish a purchase and travel charge card data management group to develop and share best practices for the purposes described in section 1803(a).

(“(b) Elements.— The best practices developed under subsection (a) shall— cover rules, edits, and task order or contract modifications related to charge card-issuing banks; include the review of accounts payable information and purchase and travel card transaction data of agencies for the purpose of identifying potential strategic sourcing and other additional opportunities (such as recurring payments, utility payments, and grant payments) for which the charge cards or related payment products could be used as a payment method; and include other best practices as determined by the Administrator and Director.

(“(c) Membership.— The purchase and travel charge card data management group shall meet regularly as determined by the co-chairs, for a duration of three years, and include those agencies as described in section 2 of the Government Charge Card Abuse Prevention Act of 2012 ( Public Law 112–194 ) [enacting section 1909 of Title 41 , Public Contracts and provisions set out as a note under section 1909 of Title 41 and amending section 2784 of Title 10 , Armed Forces] and others identified by the Administrator and Director.

“SEC. 1806 REPORTING REQUIREMENTS.

(“(a) General Services Administration Report.— Not later than one year after the date of the enactment of this Act [ Dec. 12, 2017 ], the Administrator for General Services shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives a report on the implementation of this title, including the metrics used in determining whether the analytic and benchmarking efforts have reduced, or contributed to the reduction of, questionable transactions or improper payments as well as improved utilization of card-based payment products.

(“(b) Agency Reports and Consolidated Report to Congress.— Not later than one year after the date of the enactment of this Act, the head of each Federal agency described in section 2 of the Government Charge Card Abuse Prevention Act of 2012 ( Public Law 112–194 ) shall submit a report to the Director of the Office of Management and Budget on that agency’s activities to implement this title.

(“(c) Office of Management and Budget Report to Congress.— The Director of the Office of Management and Budget shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives a consolidated report of agency activities to implement this title, which may be included as part of another report submitted by the Director to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives.

(“(d) Report on Additional Savings Opportunities.— Not later than one year after the date of the enactment of this Act, the Administrator of General Services shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives a report identifying and exploring further potential savings opportunities for government agencies under the Federal charge card programs. This report may be combined with the report required under subsection (a).”

§ 3322 Disbursing officials

(a) The Secretary of the Treasury shall transfer public money to a disbursing official only by draft or warrant written on the Treasury. Except as provided in section 3716 and section 3720A of this title and subsection (b) of this section, a disbursing official shall— deposit public money as required by section 3302 of this title ; and draw public money from the Treasury or a depositary only— as necessary to make payments; and payable to persons to whom payment is to be made.

(b) In a place without a depositary, the Secretary, on deciding it is essential to the public interest, may authorize specially in writing that public money be— deposited in any other public depositary; or kept in another manner under regulations the Secretary decides are the safest and most effective in making a payment to a public creditor easier.

(c) A disbursing official is not liable for an overpayment provided under a United States Government bill of lading or transportation request when the overpayment is caused by the— use of improper transportation rates or classifications if the Administrator of General Services has determined that verification by a prepayment audit conducted pursuant to section 3726(a) of this title for a particular mode or modes of transportation, or for an agency or subagency, will not adequately protect the interests of the Government; or failure to deduct the proper amount under— a land grant law; or an equalization or other agreement.

§ 3323 Warrants

(a) Except as provided in section 3326 of this title , the Secretary of the Treasury may pay out money only against a warrant. A warrant shall be— authorized by law; signed by the Secretary; and countersigned by the Comptroller General.

(b) A disbursing official shall send to the Secretary with a warrant a certificate under section 3526 of this title , or a requisition for an advance. The certificate or requisition shall state the appropriation to which the payment is to be charged. The Secretary shall return the certificate or requisition to the Comptroller General with the date and amount endorsed on the certificate or requisition.

(c) A requisition for the payment of money on an audited account or for depositing money in the Treasury is not required.

(d) The Secretary and the Comptroller General shall charge to the appropriate appropriation in their books any money paid by a warrant.

§ 3324 Advances

(a) Except as provided in this section, a payment under a contract to provide a service or deliver an article for the United States Government may not be more than the value of the service already provided or the article already delivered.

(b) An advance of public money may be made only if it is authorized by— a specific appropriation or other law; or the President to be made to— a disbursing official if the President decides the advance is necessary to carry out— the duties of the official promptly and faithfully; and an obligation of the Government; or an individual serving in the armed forces at a distant station if the President decides the advance is necessary to disburse regularly pay and allowances.

(c) Before the Secretary of the Treasury acts on a requisition for an advance, the Comptroller General shall act on the requisition under section 3522 of this title . The Comptroller General does not countersign a requisition for an advance.

(d) The head of an agency may pay in advance from appropriations available for the purpose— to the Secretary of the Army, charges for messages sent by the Secretary of the Army for the head of the agency, including charges for— payment of tolls of commercial carriers; leasing facilities for sending messages; and installing and maintaining facilities for sending messages; and charges for a publication printed or recorded in any way for the auditory or visual use of the agency.

§ 3325 Vouchers

(a) A disbursing official in the executive branch of the United States Government shall— disburse money only as provided by a voucher certified by— the head of the executive agency concerned; or an officer or employee of the executive agency having written authorization from the head of the agency to certify vouchers; examine a voucher if necessary to decide if it is— in proper form; certified and approved; and computed correctly on the facts certified; and except for the correctness of computations on a voucher or pursuant to payment intercepts or offsets pursuant to section 3716 or 3720A of this title,, 1 be held accountable for carrying out clauses (1) and (2) of this subsection.

(b) In addition to officers and employees referred to in subsection (a)(1)(B) of this section as having authorization to certify vouchers, members of the armed forces may certify vouchers when authorized, in writing, by the Secretary of Defense or, in the case of the Coast Guard when it is not operating as a service in the Navy, by the Secretary of Homeland Security.

(c) On request, the Secretary of the Treasury may provide to the appropriate officer or employee of the United States Government a list of persons receiving periodic payments from the Government. When certified and in proper form, the list may be used as a voucher on which the Secretary may disburse money.

(d) The head of an executive agency or an officer or employee of an executive agency referred to in subsection (a)(1)(B), as applicable, shall include with each certified voucher submitted to a disbursing official pursuant to this section the taxpayer identifying number of each person to whom payment may be made under the voucher.

§ 3326 Waiver of requirements for warrants and advances

(a) When the Secretary of the Treasury and the Comptroller General decide that, with sufficient safeguards, existing procedures may be changed to simplify, improve, and economize the control and accounting of public money, they may prescribe joint regulations for waiving any part of the requirements in effect on September 12, 1950 , that— warrants be issued and countersigned for the receipt, retention, and disbursement of public money and trust funds; and amounts be requisitioned and advanced to accountable officials.

(b) Regulations of the Secretary and the Comptroller General may provide for the payment of vouchers by authorized disbursing officials by checks drawn on the general fund of the Treasury. However, the regulations shall provide for appropriate action (including suspension or withdrawal of authority to make payments) against a delinquent disbursing official for any reason related to the official’s accounts.

§ 3327 General authority to issue checks and other drafts

(a) The Secretary of the Treasury may issue a check or other draft on public money in the Treasury to pay an obligation of the United States Government. When the Secretary decides it is convenient to a public creditor and in the public interest, the Secretary may designate a depositary to issue a check or other draft on public money held by the depositary to pay an obligation of the Government. As directed by the Secretary, each depositary shall report to the Secretary on public money paid and received by the depositary.

(b) The Secretary of the Treasury shall take such actions as are necessary to ensure that Social Security account numbers (including derivatives of such numbers) are not visible on or through unopened mailings of checks or other drafts described in subsection (a) of this section.

§ 3328 Paying checks and drafts

(a) Time Limit on Treasury Checks.— Except as provided in sections 3329 and 3330 of this title— the Secretary shall not be required to pay a Treasury check issued on or after the effective date of this section unless it is negotiated to a financial institution within 12 months after the date on which the check was issued; and the Secretary shall not be required to pay a Treasury check issued before the effective date of this section unless it is negotiated to a financial institution within 12 months after such effective date. Notwithstanding the time limitations imposed by paragraph (1), if the Secretary is on notice of a question of law or fact about whether a Treasury check is properly payable when the check is presented for payment, the Secretary may defer payment on such check until the question is settled. Nothing in this subsection shall be construed to affect the underlying obligation of the United States, or any agency thereof, for which a Treasury check was issued.

(b) If a check issued by a disbursing official and drawn on a designated depositary is not paid by the last day of the fiscal year after the fiscal year in which the check was issued, the amount of the check is— withdrawn from the account with the depositary; and deposited in the Treasury for credit to a consolidated account of the Treasury. A claim for the proceeds of an unpaid check under this subsection may be paid from a consolidated account by a check drawn on the Treasury.

(c) A limitation imposed on a claim against the United States Government under section 3702 of this title does not apply to an unpaid check drawn on the Treasury or a designated depositary.

(d) The Secretary may prescribe regulations the Secretary decides are necessary to carry out subsections (a)–(c) of this section.

(e) The Secretary shall prescribe regulations on— enforcing the speedy presentation of Government drafts; paying drafts, including the place of payment; and paying drafts if presentment is not made as required. Regulations prescribed under paragraph (1) of this subsection shall prevent, as far as may be practicable, Government drafts from being used or placed in circulation as paper currency or a medium of exchange.

(f) Authority To Decline Payment.— Nothing in this section limits the authority of the Secretary to decline payment of a Treasury check after first examination thereof at the Treasury.

§ 3329 Withholding checks to be sent to foreign countries

(a) The Secretary of the Treasury shall prohibit a check or warrant drawn on public money from being sent to a foreign country from the United States or from a territory or possession of the United States when the Secretary decides that postal, transportation, or banking facilities generally, or local conditions in the foreign country, do not reasonably ensure that the payee— will receive the check or warrant; and will be able to negotiate it for full value.

(b) If a check or warrant is prohibited from being sent to a foreign country under subsection (a) of this section, the drawer shall hold the check or warrant until the end of the calendar quarter after the date of the check or warrant. The Secretary may release the check or warrant for delivery during the calendar quarter after the date of the check or warrant if the Secretary decides that conditions have changed to ensure reasonably that the payee— will receive the check or warrant; and will be able to negotiate it for full value. Unless the Secretary otherwise directs, the drawer shall send at the end of the calendar quarter after the date of the check or warrant the— withheld check or warrant to the drawee; and report to the Secretary on— the name and address of the payee; the date, number, and amount of the check or warrant; and the account on which the check or warrant was drawn. The drawee shall transfer the amount of a withheld check or warrant from the account of the drawer to the special deposit account “Secretary of the Treasury, Proceeds of Withheld Foreign Checks”. The check or warrant shall be marked “Paid into Withheld Foreign Check Account”. The Secretary shall credit the accounts of the drawer and drawee.

(c) The Secretary may pay an amount deposited in the special account under subsection (b)(4) of this section with a check drawn on the account when— a person claiming payment satisfies the Secretary of the right to the amount of the check or warrant (or satisfies the Secretary of Veterans Affairs if the claim represents a payment under laws administered by the Secretary of Veterans Affairs); and the Secretary is reasonably ensured that the person— will receive the check or warrant; and will be able to negotiate it for full value.

(d) This section and section 3330 of this title — apply to a check or warrant whose delivery may be withheld under Executive Order 8389; do not affect a requirement for a license for delivering and paying a check in payment of a claim under subsection (c) of this section when a license is required by law to authorize delivery and payment; and do not affect a check or warrant issued for the payment of pay or goods bought by the United States Government in a foreign country.

§ 3330 Payment of Department of Veterans Affairs checks for the benefit of individuals in foreign countries

(a) A check is deemed to be issued for sending to a foreign country and subject to this section and section 3329 of this title if the check is— drawn on public money; for benefits under laws carried out by the Secretary of Veterans Affairs; and to be sent to a person in the United States or a territory or possession of the United States, and the person is legally responsible for the care of an individual in a foreign country. The Secretary of Veterans Affairs shall notify the Secretary of the Treasury of each check described under paragraph (1) of this subsection. The Secretary of Veterans Affairs may exempt a check from paragraph (1) of this subsection if the application of paragraph (1) would reduce, discontinue, or deny benefits for the care of a dependent of an individual in a foreign country.

(b) When the amount of checks (representing payments to an individual under laws administered by the Secretary of Veterans Affairs) transferred under section 3329(b)(4) of this title equals $1,000, the amounts of additional checks (except checks under contracts of insurance) payable to the individual under those laws shall be deposited in the Treasury as miscellaneous receipts. An amount transferred under section 3329(b)(4) or deposited as miscellaneous receipts is deemed to be payment for all purposes to the individual entitled to payment.

(c) If the payee of a check for pension, compensation, or emergency officers’ retirement pay under laws administered by the Secretary of Veterans Affairs dies while the amount of the check is in the special deposit account, the amount is payable (subject to section 3329 of this title and this section) as follows: after the death of the veteran, to the surviving spouse, or, if there is no surviving spouse, to children of the veteran under 18 years of age at the time of the veteran’s death. after the death of the surviving spouse, to children of the spouse under 18 years of age at the time of the spouse’s death. after the death of an apportionee of a part of the veteran’s pension, compensation, or emergency officers’ retirement pay but before all of the apportioned amount is paid to the veteran, the apportioned amount not paid. in any other case, only to the extent necessary to reimburse a person for burial expenses.

(d) A payment may be made under subsection (c) of this section only if a claim for payment is— filed with the Secretary of Veterans Affairs by the end of the first year after the date of the death of the individual entitled to payment; and completed by submitting the necessary evidence by the 6th month after the date the Secretary of Veterans Affairs requests the evidence. Payment shall include only amounts due at the time of death under ratings or decisions existing at the time of the death.

§ 3331 Substitute checks

(a) In this section, “original check”— means an order for the payment of money— payable on demand; that does not bear interest; drawn by an authorized disbursing official or agent of the United States Government; and the amount of which is deposited with the Treasury or another account available for payment; and does not include coins and currency of the Government.

(b) When the Secretary of the Treasury is satisfied that an original check is lost, stolen, destroyed in any part, or is so defaced that the value to the owner or holder is impaired, the Secretary may issue a substitute check to the owner or holder of the original check. Except as provided in subsection (c) or (f) of this section, the substitute check is payable from the amount available to pay the original check.

(c) When the Secretary is satisfied that an original check drawn on a depositary in a foreign country or a territory or possession of the United States is lost, stolen, destroyed in part, or is so defaced that its value to the owner or holder is impaired, the drawer of the original check (or another official designated by the Secretary with the approval of the head of the agency on whose behalf the original check was issued) may issue to the owner or holder of the check a substitute check. The drawer or official shall issue the substitute check by the last day of the fiscal year after the fiscal year in which the original check was issued— using the current date; and drawn on the account of the drawer of the original check or another account available for payment of the substitute.

(d) A substitute check issued under this section— may be paid only if the original check has not been paid; shall include information necessary to identify the original check; that is drawn on the Treasury— is deemed to be an original check; and is paid under the same conditions as the original check; and does not relieve a disbursing or certifying official from liability to the Government for payment resulting from erroneously issuing the original check.

(e) Before issuing a substitute check under this section, the Secretary may require the owner or holder of the original check to agree to indemnify the Government with security in the form and amount the Secretary decides is necessary.

(f) The Secretary may waive any provision of this section as may be necessary to ensure that claimants receive timely payments.

(g) Under conditions the Secretary may prescribe, the Secretary may delegate duties and powers of the Secretary under this section to the head of an agency. Consistent with a delegation from the Secretary under this subsection, the head of an agency may delegate those duties and powers to an officer or employee of the agency.

§ 3332 Required direct deposit

(a) Notwithstanding any other provision of law, all Federal wage, salary, and retirement payments shall be paid to recipients of such payments by electronic funds transfer, unless another method has been determined by the Secretary of the Treasury to be appropriate. Each recipient of Federal wage, salary, or retirement payments shall designate one or more financial institutions or other authorized payment agents and provide the payment certifying or authorizing agency information necessary for the recipient to receive electronic funds transfer payments through each institution so designated.

(b) The head of each agency shall waive the requirements of subsection (a) of this section for a recipient of Federal wage, salary, or retirement payments authorized or certified by the agency upon written request by such recipient. Federal wage, salary, or retirement payments shall be paid to any recipient granted a waiver under paragraph (1) of this subsection by any method determined appropriate by the Secretary of the Treasury.

(c) The Secretary of the Treasury may waive the requirements of subsection (a) of this section for any group of recipients upon request by the head of an agency under standards prescribed by the Secretary of the Treasury. Federal wage, salary, or retirement payments shall be paid to any member of a group granted a waiver under paragraph (1) of this subsection by any method determined appropriate by the Secretary of the Treasury.

(d) This section shall apply only to recipients of Federal wage or salary payments who begin to receive such payments on or after January 1, 1995 , and recipients of Federal retirement payments who begin to receive such payments on or after January 1, 1995 .

(e) Notwithstanding subsections (a) through (d) of this section, sections 5120(a) and (d) of title 38, and any other provision of law, all Federal payments to a recipient who becomes eligible for that type of payment after 90 days after the date of the enactment of the Debt Collection Improvement Act of 1996 shall be made by electronic funds transfer. The head of a Federal agency shall, with respect to Federal payments made or authorized by the agency, waive the application of paragraph (1) to a recipient of those payments upon receipt of written certification from the recipient that the recipient does not have an account with a financial institution or an authorized payment agent.

(f) Notwithstanding any other provision of law (including subsections (a) through (e) of this section and sections 5120(a) and (d) of title 38), except as provided in paragraph (2) all Federal payments made after January 1, 1999 , shall be made by electronic funds transfer. The Secretary of the Treasury may waive application of this subsection to payments— for individuals or classes of individuals for whom compliance imposes a hardship; for classifications or types of checks; or in other circumstances as may be necessary. The Secretary of the Treasury shall make determinations under subparagraph (A) based on standards developed by the Secretary.

(g) Each recipient of Federal payments required to be made by electronic funds transfer shall— designate 1 or more financial institutions or other authorized agents to which such payments shall be made; and provide to the Federal agency that makes or authorizes the payments information necessary for the recipient to receive electronic funds transfer payments through each institution or agent designated under paragraph (1).

(h) The crediting of the amount of a payment to the appropriate account on the books of a financial institution or other authorized payment agent designated by a payment recipient under this section shall constitute a full acquittance to the United States for the amount of the payment.

(i) The Secretary of the Treasury may prescribe regulations that the Secretary considers necessary to carry out this section. Regulations under this subsection shall ensure that individuals required under subsection (g) to have an account at a financial institution because of the application of subsection (f)(1)— will have access to such an account at a reasonable cost; and are given the same consumer protections with respect to the account as other account holders at the same financial institution.

(j) For purposes of this section— The term “electronic funds transfer” means any transfer of funds, other than a transaction originated by cash, check, or similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes Automated Clearing House transfers, Fed Wire transfers, transfers made at automatic teller machines, and point-of-sale terminals. The term “Federal agency” means— an agency (as defined in section 101 of this title ); and a Government corporation (as defined in section 103 of title 5 ). The term “Federal payments” includes— Federal wage, salary, and retirement payments; vendor and expense reimbursement payments; and benefit payments. Such term shall not include any payment under the Internal Revenue Code of 1986.

§ 3333 Relief for payments made without negligence

(a) The Secretary of the Treasury is not liable for a payment made by the Secretary or depositary in due course and without negligence, of— a check, draft, or warrant drawn on the Treasury or the depositary; an electronic payment issued by the Treasury or the depositary; and a debt obligation guaranteed or assumed by the United States Government. The Comptroller General shall credit the accounts of the Treasury or the depositary for the payment. The amount of the relief and the amount of any relief granted to an official or agent of the Department of the Treasury under 31 U.S.C. 3527 , shall be charged to the Check Forgery Insurance Fund ( 31 U.S.C. 3343 ). A recovery or repayment of a loss for which replacement is made out of the fund shall be credited to the fund and is available for the purposes for which the fund was established.

(b) This section does not relieve another individual from civil or criminal liability for a check, draft, warrant, or debt obligation of the Government.

§ 3334 Cancellation and proceeds distribution of Treasury checks

(a) In General.— The Secretary shall provide monthly to each agency that authorizes the issuance of Treasury checks a list of those checks issued for such agency on or after such effective date that have not been paid and have become more than 12 months old during the preceding month, beginning with the fourteenth month following the effective date of this section. Such checks shall be canceled by the Secretary and the proceeds thereof shall be returned to the agency concerned and credited to the appropriation or fund account initially charged for the payment.

(b) Checks Issued Before Effective Date.— Not later than 18 months after the effective date of this section, the Secretary shall identify and cancel all Treasury checks issued before such effective date that have not been paid in accordance with section 3328 of this title . The proceeds from checks canceled pursuant to paragraph (1) shall be applied to eliminate the balances in accounts that represent uncollectible accounts receivable and other costs associated with the payment of checks and check claims by the Department of the Treasury on behalf of all payment certifying agencies. Any remaining proceeds shall be deposited to the miscellaneous receipts of the Treasury.

(c) No Effect on Underlying Obligation.— Nothing in this section shall be construed to affect the underlying obligation of the United States, or any agency thereof, for which a Treasury check was issued.

§ 3335 Timely disbursement of Federal funds

(a) Each head of an executive agency (other than the Tennessee Valley Authority) shall, under such regulations as the Secretary of the Treasury shall prescribe, provide for the timely disbursement of Federal funds through cash, checks, electronic funds transfer, or any other means identified by the Secretary.

(b) The Secretary may collect from any executive agency which does not comply with subsection (a) a charge in an amount the Secretary determines to be the cost to the general fund of the Treasury caused by such noncompliance.

(c) The amounts of charges collected from an executive agency under this section shall be deposited in the Treasury and credited as miscellaneous receipts.

(d) Any charge assessed by the Secretary under this section, to the maximum extent practicable— shall be paid out of appropriations available for executive agency operations; and shall not be paid from amounts available for funding programs of an executive agency.

§ 3336 Electronic benefit transfer pilot

(a) The Congress finds that: Electronic benefit transfer (EBT) is a safe, reliable, and economical way to provide benefit payments to individuals who do not have an account at a financial institution. The designation of financial institutions as financial agents of the Federal Government for EBT is an appropriate and reasonable use of the Secretary’s authority to designate financial agents. A joint federal-state 1 EBT system offers convenience and economies of scale for those states 1 (and their citizens) that wish to deliver 1 state-administered benefits on a single card by entering into a partnership with the federal 1 government. 1 The Secretary’s designation of a financial agent to deliver EBT is a specialized service not available through ordinary business channels and may be offered to the states 1 pursuant to section 6501 et seq . of this title.

(b) The Secretary shall continue to carry out the existing EBT pilot to disburse benefit payments electronically to recipients who do not have an account at a financial institution, which shall include the designation of one or more financial institution 2 as a financial agent of the Government, and the offering to the participating states 1 of the opportunity to contract with the financial agent selected by the Secretary, as described in the Invitation for Expressions of Interest to Acquire EBT Services for the Southern Alliance of States dated March 9, 1995 , as amended as of June 30, 1995 , July 7, 1995 , and August 1, 1995 .

(c) The selection and designation of financial agents, the design of the pilot program, and any other matter associated with or related to the EBT pilot described in subsection (b) shall not be subject to judicial review.

§ 3341 Sale of Government warrants, checks, drafts, and obligations

(a) A disbursing official of the United States Government may sell a Government warrant, check, draft, or obligation not the property of the official at a premium, or dispose of the proceeds of the warrant, check, draft, or obligation, only if the official deposits the premium and the proceeds in the Treasury or with a depositary for the credit of the Government.

(b) A disbursing official violating subsection (a) of this section shall be dismissed immediately.

§ 3342 Check cashing and exchange transactions

(a) A disbursing official of the United States Government may— cash and negotiate negotiable instruments payable in United States currency or currency of a foreign country; exchange United States currency, coins, and negotiable instruments and currency, coins, and negotiable instruments of foreign countries; and cash checks drawn on the Treasury to accommodate United States citizens in a foreign country, but only if— satisfactory banking facilities are not available in the foreign country; and a check is presented by the payee who is a United States citizen.

(b) A disbursing official may act under subsection (a)(1) and (2) of this section only for the following: An official purpose. Personnel of the Government. A dependent of personnel of the Government, but only— at a United States installation at which adequate banking facilities are not available; and in the case of negotiation of negotiable instruments, if the dependent’s sponsor authorizes, in writing, the presentation of negotiable instruments to the disbursing official for negotiation. A veteran hospitalized or living in an institution operated by an agency. A contractor, or personnel of a contractor, carrying out a Government project. Personnel of an authorized agency not part of the Government that operates with an agency of the Government. A Federal credit union (as defined in section 101(1) of the Federal Credit Union Act ( 12 U.S.C. 1752(1) )) that at the request of the Secretary of Defense is operating on a United States military installation in a foreign country, but only if that country does not permit contractor-operated military banking facilities to operate on such installations. A member of the military forces of an allied or coalition nation who is participating in a combined operation, combined exercise, or combined humanitarian or peacekeeping mission with the Armed Forces of the United States, but— only if— such disbursing official action for members of the military forces of that nation is approved by the senior United States military commander assigned to that operation, exercise, or mission; and that nation has guaranteed payment for any deficiency resulting from such disbursing official action; and in the case of negotiable instruments, only for a negotiable instrument drawn on a financial institution located in the United States or on a foreign branch of such an institution.

(c) An amount held by the disbursing official that is available for expenditure may be used to carry out subsection (a) of this section with the approval of the head of the agency having jurisdiction over the amount. The head of an agency having jurisdiction over a disbursing official may offset, within the same fiscal year, a deficiency resulting from a transaction under subsection (a) of this section with a gain from a transaction under subsection (a). A gain in the account of a disbursing official not used to offset deficiencies under subsection (a) shall be deposited in the Treasury as miscellaneous receipts. The amount of any deficiency resulting from cashing a check for a dependent under subsection (b)(3), including any charges assessed against the disbursing official by a financial institution for insufficient funds to pay the check, may be offset from the pay of the dependent’s sponsor. Amounts necessary to adjust for deficiencies in the account of a disbursing official because of transactions under subsection (a) of this section are authorized to be appropriated.

(d) The Secretary of the Treasury and, with the approval of the Secretary, the head of an agency having jurisdiction over a disbursing official, may issue regulations to carry out this section. However, under conditions the Secretary decides are necessary, the Secretary may delegate to the head of an agency the authority to issue regulations applying to a disbursing official that is an officer or employee of the agency.

(e) Regulations prescribed under subsection (d) shall include regulations that define the terms “dependent” and “sponsor” for the purposes of this section. In the regulations, the term “dependent”, with respect to a member of a uniformed service, shall have the meaning given that term in section 401 of title 37 .

(f) With respect to automated teller machines on naval vessels, the authority of a disbursing official of the United States Government under subsection (a) also includes the following: The authority to provide operating funds to the automated teller machines. The authority to accept, for safekeeping, deposits and transfers of funds made through the automated teller machines.

§ 3343 Check forgery insurance fund

(a) The Department of the Treasury has a special deposit revolving fund, the “Check Forgery Insurance Fund”. Necessary amounts are hereafter appropriated to the Fund out of any moneys in the Treasury not otherwise appropriated, and shall remain available until expended to make the payments required or authorized under this section. The Fund consists of amounts— appropriated to the Fund; and received under subsection (d) of this section.

(b) The Secretary of the Treasury shall pay from the Fund to a payee or special endorsee of a check drawn on the Treasury or a depositary designated by the Secretary the amount of the check without interest if in the determination of the Secretary the payee or special endorse 1 establishes that— the check was lost or stolen without the fault of the payee or a holder that is a special endorsee and whose endorsement is necessary for further negotiation; the check was negotiated later and paid by the Secretary or a depositary on a forged endorsement of the payee’s or special endorsee’s name; and the payee or special endorsee has not participated in any part of the proceeds of the negotiation or payment.

(c) Notwithstanding section 1306 of this title , a check drawn on a designated depositary may be paid in the currency of a foreign country when the appropriate accountable official authorizes payment in that currency.

(d) The Secretary shall deposit immediately to the credit of the Fund an amount recovered from a forger or a transferee or party on the check. The Secretary may use amounts in the Fund to reimburse payment certifying or authorizing agencies for any payment that the Secretary determines would otherwise have been payable from the Fund, and may reimburse certifying or authorizing agencies with amounts recovered because of payee nonentitlement. However, currency of a foreign country recovered because of a forged check drawn on a designated depositary shall be credited to the Fund or to the foreign currency fund that was charged when payment was made under subsection (b) of this section to the payee or special endorsee.

(e) The Secretary may waive any provision of this section as may be necessary to ensure that claimants receive timely payments.

(f) Under such conditions as the Secretary may prescribe, the Secretary may delegate duties and powers of the Secretary under this section to the head of an agency. Consistent with a delegation from the Secretary under this subsection, the head of an agency may redelegate those duties and powers to officers or employees of the agency.

(g) This section does not relieve— a forger from civil or criminal liability; or a transferee or party on a check after the forgery from liability— on the express or implied warranty of prior endorsements of the transferee or party; or to refund amounts to the Secretary.

§ 3351 Definitions

In this subchapter: The term “annual financial statement” means the annual financial statement required under section 3515 of this title or similar provision of law. The term “compliance” means that an executive agency— has— published improper payments information with the annual financial statement of the executive agency for the most recent fiscal year; and posted on the website of the executive agency that statement and any accompanying materials required under guidance of the Office of Management and Budget; if required, has conducted a program specific risk assessment for each program or activity that conforms with the requirements under section 3352(a); if required, publishes improper payments estimates for all programs and activities identified under section 3352(a) in the accompanying materials to the annual financial statement; publishes programmatic corrective action plans prepared under section 3352(d) that the executive agency may have in the accompanying materials to the annual financial statement; publishes improper payments reduction targets established under section 3352(d) that the executive agency may have in the accompanying materials to the annual financial statement for each program or activity assessed to be at risk, and has demonstrated improvements and developed a plan to meet the reduction targets; and has reported an improper payment rate of less than 10 percent for each program and activity for which an estimate was published under section 3352(c). The term “Do Not Pay Initiative” means the initiative described in section 3354(b). The term “improper payment”— means any payment that should not have been made or that was made in an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement; and includes— any payment to an ineligible recipient; any payment for an ineligible good or service; any duplicate payment; any payment for a good or service not received, except for those payments where authorized by law; and any payment that does not account for credit for applicable discounts. The term “payment” means any transfer or commitment for future transfer of Federal funds such as cash, securities, loans, loan guarantees, and insurance subsidies to any non-Federal person or entity or a Federal employee, that is made by a Federal agency, a Federal contractor, a Federal grantee, or a governmental or other organization administering a Federal program or activity. The term “payment for an ineligible good or service” includes a payment for any good or service that is rejected under any provision of any contract, grant, lease, cooperative agreement, or other funding mechanism. The term “recovery audit” means a recovery audit described in section 3352(i). The term “State” means each State of the United States, the District of Columbia, each territory or possession of the United States, and each Federally recognized Indian tribe. (Added Pub. L. 116–117, § 2(a) , Mar. 2, 2020 , 134 Stat. 113 .)

§ 3352 Estimates of improper payments and reports on actions to reduce improper payments

(a) Identification of Susceptible Programs and Activities.— The head of each executive agency shall, in accordance with guidance prescribed by the Director of the Office of Management and Budget— periodically review all programs and activities that the head of the executive agency administers; and identify all programs and activities with outlays exceeding the statutory threshold dollar amount described in paragraph (3)(A)(i) that may be susceptible to significant improper payments. A review under paragraph (1) shall be performed for each program and activity that the head of an executive agency administers not less frequently than once every 3 fiscal years. In this paragraph, the term “significant” means that, in the preceding fiscal year, the sum of a program or activity’s improper payments and payments whose propriety cannot be determined by the executive agency due to lacking or insufficient documentation may have exceeded— $10,000,000ofallreportedprogramoractivitypaymentsoftheexecutiveagencymadeduringthatfiscalyearand1.5percentofprogramoutlays;or$100,000,000. In conducting a review under paragraph (1), the head of each executive agency shall take into account those risk factors that are likely to contribute to a susceptibility to significant improper payments, such as— whether the program or activity reviewed is new to the executive agency; the complexity of the program or activity reviewed; the volume of payments made through the program or activity reviewed; whether payments or payment eligibility decisions are made outside of the executive agency, such as by a State or local government; recent major changes in program funding, authorities, practices, or procedures; the level, experience, and quality of training for personnel responsible for making program eligibility determinations or certifying that payments are accurate; significant deficiencies in the audit report of the executive agency or other relevant management findings that might hinder accurate payment certification; similarities to other programs or activities that have reported improper payment estimates or been deemed susceptible to significant improper payments; the accuracy and reliability of improper payment estimates previously reported for the program or activity, or other indicator of potential susceptibility to improper payments identified by the Inspector General of the executive agency, the Government Accountability Office, other audits performed by or on behalf of the Federal, State, or local government, disclosures by the executive agency, or any other means; whether the program or activity lacks information or data systems to confirm eligibility or provide for other payment integrity needs; and the risk of fraud as assessed by the executive agency under the Standards for Internal Control in the Federal Government published by the Government Accountability Office (commonly known as the “Green Book”). Each executive agency shall publish an annual report that includes— a listing of each program or activity identified under paragraph (1), including the date on which the program or activity was most recently assessed for risk under paragraph (1); and a listing of any program or activity for which the executive agency makes any substantial changes to the methodologies of the reviews conducted under paragraph (1).

(b) Improving the Determination of Improper Payments.— The Director of the Office of Management and Budget shall on an annual basis— identify a list of high-priority Federal programs for greater levels of oversight and review— in which the highest dollar value or highest rate of improper payments occur; or for which there is a higher risk of improper payments; and in coordination with the executive agency responsible for administering a high-priority program identified under subparagraph (A), establish annual targets and semi-annual or quarterly actions for reducing improper payments associated with the high-priority program. Subject to Federal privacy policies and to the extent permitted by law, each executive agency with a program identified under paragraph (1)(A) shall on an annual basis submit to the Inspector General of the executive agency and the Office of Management and Budget, and make available to the public, including through a website, a report on that program. Each report submitted under subparagraph (A)— shall describe any action the executive agency— has taken or plans to take to recover improper payments; and intends to take to prevent future improper payments; and shall not include— any referrals the executive agency made or anticipates making to the Department of Justice; or any information provided in connection with a referral described in subclause (I). The Office of Management and Budget shall make each report submitted under subparagraph (A) available on a central website. Subparagraph (B)(ii) shall not prohibit any referral or information being made available to an Inspector General as otherwise provided by law. The Inspector General of each executive agency that submits a report under subparagraph (A) shall, for each program of the executive agency that is identified under paragraph (1)(A)— review— the assessment of the level of risk associated with the program and the quality of the improper payment estimates and methodology of the executive agency relating to the program; and the oversight or financial controls to identify and prevent improper payments under the program; and submit to the appropriate authorizing and appropriations committees of Congress recommendations, which may be included in another report submitted by the Inspector General to Congress, for modifying any plans of the executive agency relating to the program, including improvements for improper payments determination and estimation methodology. Not less frequently than once every year, the head of each executive agency with a program identified under paragraph (1)(A), or a designee of the head of the executive agency, shall meet with the Director of the Office of Management and Budget, or a designee of the Director, to report on actions taken during the preceding year and planned actions to prevent improper payments.

(c) Estimation of Improper Payments.— With respect to each program and activity identified under subsection (a)(1), the head of the relevant executive agency shall— produce a statistically valid estimate, or an estimate that is otherwise appropriate using a methodology approved by the Director of the Office of Management and Budget, of the improper payments made under the program or activity; and include the estimates described in subparagraph (A) in the accompanying materials to the annual financial statement of the executive agency and as required in applicable guidance of the Office of Management and Budget. For the purpose of producing an estimate under paragraph (1), when the executive agency cannot determine, due to lacking or insufficient documentation, whether a payment is proper or not, the payment shall be treated as an improper payment. The head of an executive agency may report separately on what portion of the improper payments estimate for a program or activity of the executive agency under paragraph (1) is attributable to lacking or insufficient documentation.

(d) Reports on Actions To Reduce Improper Payments.— With respect to any program or activity of an executive agency with estimated improper payments under subsection (c), the head of the executive agency shall provide with the estimate required under subsection (c) a report on what actions the executive agency is taking to reduce improper payments, including— a description of the causes of the improper payments, actions planned or taken to correct those causes, and the planned or actual completion date of the actions taken to address those causes; in order to reduce improper payments to a level below which further expenditures to reduce improper payments would cost more than the amount those expenditures would save in prevented or recovered improper payments, a statement of whether the executive agency has what is needed with respect to— internal controls; human capital; and information systems and other infrastructure; if the executive agency does not have sufficient resources to establish and maintain effective internal controls as described in paragraph (2)(A), a description of the resources the executive agency has requested in the budget submission of the executive agency to establish and maintain those internal controls; program-specific and activity-specific improper payments reduction targets that have been approved by the Director of the Office of Management and Budget; a description of the steps the executive agency has taken to ensure that executive agency managers, programs, and, where appropriate, States and local governments are held accountable through annual performance appraisal criteria for— meeting applicable improper payments reduction targets; and establishing and maintaining sufficient internal controls, including an appropriate control environment, that effectively— prevent improper payments from being made; and promptly detect and recover improper payments that are made; and a description of how the level of planned or completed actions by the executive agency to address the causes of the improper payments matches the level of improper payments, including a breakdown by category of improper payment and specific timelines for completion of those actions.

(e) Reports on Actions To Recover Improper Payments.— With respect to improper payments identified in a recovery audit, the head of the executive agency shall provide with the estimate required under subsection (c) a report on all actions the executive agency is taking to recover the improper payments, including— a discussion of the methods used by the executive agency to recover improper payments; the amounts recovered, outstanding, and determined to not be collectable, including the percent those amounts represent of the total improper payments of the executive agency; if a determination has been made that certain improper payments are not collectable, a justification of that determination; an aging schedule of the amounts outstanding; a summary of how recovered amounts have been disposed of; a discussion of any conditions giving rise to improper payments and how those conditions are being resolved; and if the executive agency has determined under subsection (i) that performing recovery audits for any applicable program or activity is not cost-effective, a justification for that determination.

(f) Governmentwide Reporting of Improper Payments and Actions To Recover Improper Payments.— Each fiscal year, the Director of the Office of Management and Budget shall submit a report with respect to the preceding fiscal year on actions that executive agencies have taken to report information regarding improper payments and actions to recover improper payments to— the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Reform of the House of Representatives; and the Comptroller General of the United States. Each report required under paragraph (1) shall include— a summary of the reports of each executive agency on improper payments and recovery actions submitted under this section; an identification of the compliance status of each executive agency, as determined by the Inspector General of the executive agency under section 3353, to which this section applies; Governmentwide improper payment reduction targets; a Governmentwide estimate of improper payments; and a discussion of progress made towards meeting Governmentwide improper payment reduction targets.

(g) Guidance by the Office of Management and Budget.— Not later than 1 year after the date of enactment of this section, the Director of the Office of Management and Budget shall prescribe guidance for executive agencies to implement the requirements of this section, which shall not include any exemptions to those requirements that are not specifically authorized by this section. The guidance under paragraph (1) shall prescribe— the form of the reports on actions to reduce improper payments, recovery actions, and Governmentwide reporting; and strategies for addressing risks and establishing appropriate prepayment and postpayment internal controls.

(h) Determinations of Agency Readiness for Opinion on Internal Control.— The criteria required to be developed under section 2(g) of the Improper Payments Elimination and Recovery Act of 2010, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be modified as determined appropriate by the Director of the Office of Management and Budget.

(i) Recovery Audits.— Except as provided under paragraph (3) and if not prohibited under any other provision of law, the head of each executive agency shall conduct recovery audits with respect to each program and activity of the executive agency that expends $1,000,000 or more annually if conducting the audits would be cost effective. In conducting a recovery audit under this subsection, the head of an executive agency— shall give priority to the most recent payments and to payments made in any program identified as susceptible to significant improper payments under subsection (a); shall implement this subsection in a manner designed to ensure the greatest financial benefit to the Federal Government; and may conduct the recovery audit directly, by using other departments and agencies of the United States, or by procuring performance of recovery audits by private sector sources by contract, subject to the availability of appropriations, or by any combination thereof. With respect to a recovery audit procured by an executive agency by contract— subject to subparagraph (B)(iii), and except to the extent such actions are outside the authority of the executive agency under section 7103 of title 41 , the head of the executive agency may authorize the contractor to— notify entities, including individuals, of potential overpayments made to those entities; respond to questions concerning potential overpayments; and take other administrative actions with respect to an overpayment claim made or to be made by the executive agency; and the contractor shall not have the authority to make a final determination relating to whether any overpayment occurred or whether to compromise, settle, or terminate an overpayment claim. The executive agency shall include in each contract for procurement of performance of a recovery audit a requirement that the contractor shall— provide to the executive agency periodic reports on conditions giving rise to overpayments identified by the contractor and any recommendations on how to mitigate those conditions; notify the executive agency of any overpayments identified by the contractor pertaining to the executive agency or to any other executive agency that are beyond the scope of the contract; and report to the executive agency credible evidence of fraud or vulnerabilities to fraud and conduct appropriate training of personnel of the contractor on identification of fraud. Each executive agency shall, on an annual basis, include in annual financial statement of the executive agency a report on actions taken by the executive agency during the preceding fiscal year to address the recommendations described in clause (i)(I). Each executive agency shall— take prompt and appropriate action in response to a report or notification by a contractor under subclause (I) or (II) of subparagraph (D)(i) to collect an overpayment; and forward to other executive agencies any information that applies to that executive agency. Amounts collected by executive agencies each fiscal year through recovery audits shall be treated in accordance with this paragraph. The head of an executive agency shall determine the distribution of collected amounts described in subparagraph (A), less amounts needed to fulfill the purposes of section 3562(a) of this title , in accordance with subparagraphs (C), (D), and (E). Not more than 25 percent of the amounts collected by an executive agency through recovery audits— shall be available to the head of the executive agency to carry out the financial management improvement program of the executive agency under paragraph (3); may be credited, if applicable, for the purpose described in clause (i) by the head of an executive agency to any executive agency appropriations and funds that are available for obligation at the time of collection; and shall be used to supplement and not supplant any other amounts available for the purpose described in clause (i) and shall remain available until expended. Not more than 25 percent of the amounts collected by an executive agency through recovery audits— shall be credited to the appropriation or fund, if any, available for obligation at the time of collection for the same general purposes as the appropriation or fund from which the overpayment was made; shall remain available for the same period and purposes as the appropriation or fund to which credited; and if the appropriation from which an overpayment was made has expired— in the case of recoveries of overpayments that are made from a trust or special fund account, shall revert to that account; and in the case of other recoveries of overpayments— for amounts that are recovered more than 5 fiscal years from the last fiscal year in which the funds were available for obligation, shall be deposited in the Treasury as miscellaneous receipts; and for other amounts, shall be newly available for the same time period as the funds were originally available for obligation. Not more than 5 percent of the amounts collected by an executive agency through recovery audits— shall be available to the Inspector General of that executive agency for— the Inspector General to carry out this Act; or any other activities of the Inspector General relating to investigating improper payments or auditing internal controls associated with payments; and shall remain available for the same period and purposes as the appropriation or fund to which credited. Amounts collected that are not applied in accordance with subparagraph (B), (C), (D), or (E) shall be deposited in the Treasury as miscellaneous receipts, except that in the case of recoveries of overpayments that are made from trust or special fund accounts, those amounts shall revert to those accounts. This paragraph shall apply only to recoveries of overpayments that are made from discretionary appropriations, as defined in section 250(c)(7) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 900(c)(7) ), and shall not apply to recoveries of overpayments that are made from discretionary amounts that were appropriated before the date of enactment of the Improper Payments Elimination and Recovery Act of 2010, as in effect on the day before the date of enactment of this section. This paragraph shall not apply to the recovery of an overpayment if the appropriation from which the overpayment was made has not expired. The head of each executive agency shall conduct a financial management improvement program consistent with rules prescribed by the Director of the Office of Management and Budget. In conducting a program described in subparagraph (A), the head of an executive agency— shall, as the first priority of the program, address problems that contribute directly to executive agency improper payments; and may seek to reduce errors and waste in other executive agency programs and operations. Any nongovernmental entity that, in the course of recovery auditing or recovery activity under this subsection, obtains information that identifies an individual or with respect to which there is a reasonable basis to believe that the information can be used to identify an individual, may not disclose the information for any purpose other than the recovery auditing or recovery activity and governmental oversight of the activity, unless disclosure for that other purpose is authorized by the individual to the executive agency that contracted for the performance of the recovery auditing or recovery activity. Except as provided under paragraph (4), nothing in this subsection shall be construed as terminating or in any way limiting authorities that are otherwise available to executive agencies under existing provisions of law to recover improper payments and use recovered amounts.

§ 3353 Compliance

(a) Annual Compliance Report by Inspectors General of Executive Agencies.— Each fiscal year, the Inspector General of each executive agency shall— determine whether the executive agency is in compliance; and submit a report on the determination made under subparagraph (A) to— the head of the executive agency; the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Reform of the House of Representatives; and the Comptroller General of the United States. The Council of the Inspectors General on Integrity and Efficiency (in this subsection referred to as the “Council”) shall develop a public central website, or make use of a public central website in existence on the date of enactment of this section, to contain individual compliance determination reports issued by Inspectors General under paragraph (1)(B) and such additional information as determined by the Council. Not later than 180 days after the date of enactment of this section, the Director of the Office of Management and Budget, in consultation with the Council and with consideration given to the available resources and independence of individual Offices of Inspectors General, shall develop and promulgate guidance for the compliance determination reports issued by the Inspectors General under paragraph (1)(B), which shall require that— the reporting format used by the Inspectors General is consistent; Inspectors General evaluate and take into account the adequacy of executive agency risk assessments, improper payment estimates methodology, and executive agency action plans to address the causes of improper payments; Inspectors General take into account whether the executive agency has correctly identified the causes of improper payments and whether the actions of the executive agency to address those causes are adequate and effective; Inspectors General evaluate the adequacy of executive agency action plans on how the executive agency addresses the causes of improper payments; and as part of the report, Inspectors General include an evaluation of executive agency efforts to prevent and reduce improper payments and any recommendations for actions to further improve that prevention and reduction. Not later than 180 days after the date of enactment of this section, the Council shall, with consideration given to the available resources and independence of individual Offices of Inspectors General, develop and promulgate guidance that specifies procedures for compliance determinations made by the Inspectors General under paragraph (1)(A), which shall describe procedures for Inspectors General— to make the determinations consistent regarding compliance; and to evaluate— for compliance with the requirement described in section 3351(2)(B), the risk assessment methodology of the executive agency, including whether the audits, examinations, and legal actions of the Inspector General indicate a higher risk of improper payments or actual improper payments that were not included in the risk assessments of the executive agency conducted under section 3352(a); for compliance with the requirement described in section 3351(2)(C), the accuracy of the rate estimates and whether the sampling and estimation plan used is appropriate given program characteristics; for compliance with the requirement described in section 3351(2)(D), the corrective action plans and whether the plans are adequate and focused on the true causes of improper payments, including whether the corrective action plans are— reducing improper payments; effectively implemented; and prioritized within the executive agency; the adequacy of executive agency action plans to address the causes of improper payments; executive agency efforts to prevent and reduce improper payments, and any recommendations for actions to further improve; and whether an executive agency has published an annual financial statement in accordance with the requirement described in section 3351(2)(A).

(b) Remediation.— If an executive agency is determined by the Inspector General of that executive agency not to be in compliance under subsection (a) in a fiscal year with respect to a program or activity, the head of the executive agency shall submit to the appropriate authorizing and appropriations committees of Congress a plan describing the actions that the executive agency will take to come into compliance. The plan described in subparagraph (A) shall include— measurable milestones to be accomplished in order to achieve compliance for each program or activity; the designation of a senior executive agency official who shall be accountable for the progress of the executive agency in coming into compliance for each program or activity; and the establishment of an accountability mechanism, such as a performance agreement, with appropriate incentives and consequences tied to the success of the official designated under clause (ii) in leading the efforts of the executive agency to come into compliance for each program or activity. If an executive agency is determined by the Inspector General of that executive agency not to be in compliance under subsection (a) for 2 consecutive fiscal years for the same program or activity, the executive agency shall propose to the Director of the Office of Management and Budget additional program integrity proposals that would help the executive agency come into compliance. If the Director of the Office of Management and Budget determines that additional funding would help an executive agency described in subparagraph (A) come into compliance, the head of the executive agency shall obligate additional funding, in an amount determined by the Director, to intensified compliance efforts. In providing additional funding under clause (i)— the head of an executive agency shall use any reprogramming or transfer authority available to the executive agency; and if after exercising the reprogramming or transfer authority described in subclause (I), additional funding is necessary to obligate the full level of funding determined by the Director of the Office of Management and Budget under clause (i), the executive agency shall submit a request to Congress for additional reprogramming or transfer authority. If an executive agency is determined by the Inspector General of that executive agency not to be in compliance under subsection (a) for 3 consecutive fiscal years for the same program or activity, the head of the executive agency shall, not later than 30 days after the date of that determination, submit to the appropriate authorizing and appropriations committees of Congress and the Comptroller General of the United States— reauthorization proposals for each program or activity that has not been in compliance for 3 or more consecutive fiscal years; and proposed statutory changes necessary to bring the program or activity into compliance; or if the head of the executive agency determines that clauses (i) and (ii) of subparagraph (A) will not bring the program or activity into compliance, a description of the actions that the executive agency is undertaking to bring the program or activity into compliance and a timeline of when the compliance will be achieved. If an executive agency is determined by the Inspector General of that executive agency not to be in compliance under subsection (a) for 4 or more consecutive fiscal years for the same program or activity, the head of the executive agency shall, not later than 30 days after such determination, submit to the appropriate authorizing and appropriations committees of Congress a report that includes— the activities taken to comply with the requirements for 1, 2, 3, 4, or more years of noncompliance; a description of any requirements that were fulfilled for 1, 2, or 3 consecutive years of noncompliance that are still relevant and being pursued as a means to bring the program or activity into compliance and prevent and reduce improper payments; a description of any new corrective actions; and a timeline for when the program or activity will achieve compliance based on the actions described within the report. Each executive agency shall submit to the appropriate authorizing and appropriations committees of Congress and the Comptroller General of the United States— a list of each program or activity that was determined to not be in compliance under paragraph (1), (2), (3), or (4); and actions that are planned to bring the program or activity into compliance.

(c) Compliance Enforcement Pilot Programs.— The Director of the Office of Management and Budget may establish 1 or more pilot programs that shall test potential accountability mechanisms with appropriate incentives and consequences tied to success in ensuring compliance with this section and eliminating improper payments.

(d) Improved Estimates Guidance.— The guidance required to be provided under section 3(b) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be modified as determined appropriate by the Director of the Office of Management and Budget.

§ 3354 Do Not Pay Initiative

(a) Prepayment and Preaward Procedures.— Each executive agency shall review prepayment and preaward procedures and ensure that a thorough review of available databases with relevant information on eligibility occurs to determine program or award eligibility and prevent improper payments before the release of any Federal funds. At a minimum and before issuing any payment or award, each executive agency shall review as appropriate the following databases to verify eligibility of the payment and award: The death records maintained by the Commissioner of Social Security. The System for Award Management Exclusion Records, formerly known as the Excluded Parties List System, of the General Services Administration. The Debt Check Database of the Department of the Treasury. The Credit Alert System or Credit Alert Interactive Voice Response System of the Department of Housing and Urban Development. The List of Excluded Individuals/Entities of the Office of Inspector General of the Department of Health and Human Services. Information regarding incarcerated individuals maintained by the Commissioner of Social Security under sections 202(x) and 1611(e) of the Social Security Act ( 42 U.S.C. 402(x) , 1382(e)).

(b) Do Not Pay Initiative.— There is the Do Not Pay Initiative, which shall include— use of the databases described in subsection (a)(2); and use of other databases designated by the Director of the Office of Management and Budget, or the designee of the Director, in consultation with executive agencies and in accordance with paragraph (2). In making designations of other databases under paragraph (1)(B), the Director of the Office of Management and Budget, or the head of any executive agency designated by the Director, shall— consider any database that substantially assists in preventing improper payments; and provide public notice and an opportunity for comment before designating a database under paragraph (1)(B). For purposes of identifying and preventing improper payments, each executive agency shall have access to, and use of, the Do Not Pay Initiative to verify payment or award eligibility in accordance with subsection (a). The head of the agency operating the Working System may, in consultation with the Office of Management and Budget, waive the requirements of section 552a( o ) of title 5 in any case or class of cases for computer matching activities conducted under this section. The Director of the Office of Management and Budget may issue guidance that establishes requirements governing waivers under clause (i). Each State and any contractor, subcontractor, or agent of a State, including a State auditor or State program responsible for reducing improper payments of a federally funded State-administered program, 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 , shall have access to, and use of, the Do Not Pay Initiative for the purpose of verifying payment or award eligibility for payments. To ensure consistency with the principles of section 552a of title 5 (commonly known as the “Privacy Act of 1974”), the Director of the Office of Management and Budget may issue guidance that establishes privacy and other requirements that shall be incorporated into Do Not Pay Initiative access agreements with States, including 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 . When using the Do Not Pay Initiative, an executive agency shall recognize that there may be circumstances under which the law requires a payment or award to be made to a recipient, regardless of whether that recipient is identified as potentially ineligible under the Do Not Pay Initiative. The Director of the Office of Management and Budget shall submit to Congress an annual report, which may be included as part of another report submitted to Congress by the Director, regarding the operation of the Do Not Pay Initiative, which shall— include an evaluation of whether the Do Not Pay Initiative has reduced improper payments or improper awards; and provide the frequency of corrections or identification of incorrect information.

(c) Initial Working System.— The working system required to be established under section 5(d) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and shall require each executive agency to review all payments and awards for all programs and activities of that executive agency through the working system.

(d) Facilitating Data Access by Federal Agencies and Offices of Inspectors General for Purposes of Program Integrity.— Except as provided in this paragraph, in accordance with section 552a of title 5 (commonly known as the “Privacy Act of 1974”), the head of each executive agency may enter into computer matching agreements with other heads of executive agencies that allow ongoing data matching, which shall include automated data matching, in order to assist in the detection and prevention of improper payments. Not later than 60 days after the date on which a proposal for an agreement under subparagraph (A) has been presented to a Data Integrity Board established under section 552a(u) of title 5 for consideration, the Data Integrity Board shall respond to the proposal. An agreement described in subparagraph (A)— shall have a termination date of less than 3 years; and during the 3-month period ending on the date on which the agreement is scheduled to terminate, may be renewed by the executive agencies entering the agreement for not more than 3 years. For purposes of this paragraph, section 552a( o )(1) of title 5 shall be applied by substituting “between the source agency and the recipient agency or non-Federal agency or an agreement governing multiple agencies” for “between the source agency and the recipient agency or non-Federal agency” in the matter preceding subparagraph (A). A justification under section 552a( o )(1)(B) of title 5 relating to an agreement under subparagraph (A) is not required to contain a specific estimate of any savings under the computer matching agreement. The guidance, rules, and procedures required to be issued, clarified, and established under paragraphs (3) and (4) of section 5(e) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be modified as determined appropriate by the Director of the Office of Management and Budget. The head of each executive agency, in consultation with the Inspector General of the executive agency, shall ensure that any information provided to an individual or entity under this subsection is provided in accordance with protocols established under this subsection. Nothing in this subsection shall be construed— to affect the rights of an individual under section 552a(p) of title 5 ; or to impede the exercise of an exemption provided to Inspectors General or by an executive agency in coordination with an Inspector General under section 6(j) of the Inspector General Act of 1978 (5 U.S.C. App.). 1

(e) Plan To Curb Federal Improper Payments to Deceased Individuals by Improving the Quality and Use by Federal Agencies of the Social Security Administration Death Master File and Other Death Data.— In conjunction with the Commissioner of Social Security and in consultation with relevant stakeholders that have an interest in or responsibility for providing the data, and each State, the Director of the Office of Management and Budget shall conduct a study and update the plan required to be established under section 5(g) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section, for improving the quality, accuracy, and timeliness of death data maintained by the Social Security Administration, including death information reported to the Commissioner under section 205(r) of the Social Security Act ( 42 U.S.C. 405(r) ). The plan described in this subsection shall include recommended actions by executive agencies to— increase the quality and frequency of access to the Death Master File and other death data; achieve a goal of at least daily access as appropriate; provide for all States and other data providers to use improved and electronic means for providing data; identify improved methods by executive agencies for determining ineligible payments due to the death of a recipient through proactive verification means; and address improper payments made by executive agencies to deceased individuals as part of Federal retirement programs. Not later than 120 days after the date of enactment of this section, the Director of the Office of Management and Budget shall submit a report to Congress on the plan described in this subsection, including recommended legislation.

§ 3355 Improving recovery of improper payments

The Director of the Office of Management and Budget shall determine— current and historical rates and amounts of recovery of improper payments, or, in cases in which improper payments are identified solely on the basis of a sample, recovery rates and amounts estimated on the basis of the applicable sample, including a list of executive agency recovery audit contract programs and specific information of amounts and payments recovered by recovery audit contractors; and targets for recovering improper payments, including specific information on amounts and payments recovered by recovery audit contractors. (Added Pub. L. 116–117, § 2(a) , Mar. 2, 2020 , 134 Stat. 130 .)

§ 3356 Improving the use of data by executive agencies for curbing improper payments

(a) Prompt Reporting of Death Information by the Department of State and the Department of Defense.— The procedure required to be established under section 7(a) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be modified as determined appropriate by the Director of the Office of Management and Budget.

(b) Prompt Reporting of Death Information by the Department of Veterans Affairs and the Office of Personnel Management.— Not later than 1 year after the date of enactment of this section, the Secretary of Veterans Affairs and the Director of the Office of Personnel Management shall establish a procedure under which the Secretary and the Director— shall promptly and on a regular basis submit information relating to the deaths of individuals, including stopped payments data as applicable, to each executive agency for which the Director of the Office of Management and Budget determines receiving and using such information would be relevant and necessary; and to facilitate the centralized access of death data for the use of reducing improper payments, may identify additional Federal sources of death data and direct the data owner to provide that data to 1 or more executive agencies for that purpose.

(c) Guidance to Executive Agencies Regarding Data Access and Use for Improper Payments Purposes.— The guidance required to be issued under section 7(b) of the Improper Payments Elimination and Recovery Improvement Act of 2012, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be modified as determined appropriate by the Director of the Office of Management and Budget.

§ 3357 Financial and administrative controls relating to fraud and improper payments

(a) Definition.— In this section, the term “agency” has the meaning given the term in section 551 of title 5 .

(b) Guidelines.— The guidelines required to be established under section 3(a) of the Fraud Reduction and Data Analytics Act of 2015, as in effect on the day before the date of enactment of this section— shall continue to be in effect on and after the date of enactment of this section; and may be periodically modified by the Director of the Office of Management and Budget, in consultation with the Comptroller General of the United States, as the Director and Comptroller General may determine necessary.

(c) Requirements for Controls.— The guidelines described in subsection (b) shall include— conducting an evaluation of fraud risks and using a risk-based approach to design and implement financial and administrative control activities to mitigate identified fraud risks; collecting and analyzing data from reporting mechanisms on detected fraud to monitor fraud trends and using that data and information to continuously improve fraud prevention controls; and using the results of monitoring, evaluation, audits, and investigations to improve fraud prevention, detection, and response.

(d) Report.— For each of fiscal years 2019 and 2020, each agency shall submit to Congress, as part of the annual financial report of the agency, a report of the agency on— implementing— the financial and administrative controls described in subsection (b); the fraud risk principle in the Standards for Internal Control in the Federal Government published by the Government Accountability Office (commonly known as the “Green Book”); and Office of Management and Budget Circular A–123, or any successor thereto, with respect to the leading practices for managing fraud risk; identifying risks and vulnerabilities to fraud, including with respect to payroll, beneficiary payments, grants, large contracts, and purchase and travel cards; and establishing strategies, procedures, and other steps to curb fraud.

§ 3358 Interagency working group for Governmentwide payment integrity improvement

(a) Working Group.— Not later than 90 days after the date of enactment of this section, there is established an interagency working group on payment integrity— to improve— State-administered Federal programs to determine eligibility processes and data sharing practices; the guidelines described in section 3357(b) and other best practices and techniques for detecting, preventing, and responding to improper payments, including improper payments that are the result of fraud; and the sharing and development of data analytics techniques to help prevent and identify potential improper payments, including those that are the result of fraud; and to identify any additional activities that will improve payment integrity of Federal programs. The interagency working group established under paragraph (1) shall be composed of— the Director of the Office of Management and Budget; 1 representative from each of the agencies described in paragraphs (1) and (2) of section 901(b) of this title ; and any other representatives of other executive agencies determined appropriate by the Director of the Office of Management and Budget, which may include the Chief Information Officer, the Chief Procurement Officer, the Chief Risk Officer, or the Chief Operating Officer of an executive agency.

(b) Consultation.— The working group established under subsection (a)(1) may consult with Offices of Inspectors General and Federal and non-Federal experts on fraud risk assessments, administrative controls over payment integrity, financial controls, and other relevant matters.

(c) Meetings.— The working group established under subsection (a)(1) shall hold not fewer than 4 meetings per year.

(d) Report.— Not later than 240 days after the date of enactment of this section, the working group established under subsection (a)(1) shall submit to Congress a report that includes— a plan containing tangible solutions to prevent and reduce improper payments; and a plan for State agencies to work with Federal agencies to regularly review lists of beneficiaries of State-managed Federal programs for duplicate enrollment between States, including how the Do Not Pay Business Center and the data analytics initiative of the Department of the Treasury could aid in the detection of duplicate enrollment.