The PIIA Reform Act would create a centralized leadership role, the Overpayment Czar, within the Office of Federal Financial Management to lead federal efforts to identify, prevent, and reduce improper payments across government programs. The bill expands the scope of programs considered at risk, requires agencies to identify and report on vulnerabilities, and authorizes policy recommendations to improve payment integrity. It also imposes stronger accountability mechanisms for noncompliance (including potential sequestration-based budget reductions) and adds new reporting requirements for agencies. Additionally, the measure pushes states that receive major federal funding (like TANF, Medicaid, SNAP, unemployment, and WIC) to adopt specified payment integrity tools and report on their effectiveness, with penalties for noncompliance. The Do Not Pay system would be broadened for more data-sharing use. Overall, the bill aims to centralize leadership, broaden the reach of improper-payment controls, increase transparency, and tighten consequences for lagging performance.
Key Points
- 1Establishment of the Overpayment Czar: A new Director of Improper Payment Mitigation within the Office of Federal Financial Management, reporting to the Controller, with duties to assist agencies, develop mitigation strategies, and annually propose corrective actions to improve payment integrity.
- 2Expanded scope and identification of improper payments: Adds new programs and thresholds (e.g., programs with large first-year payments or outlays over $100 million, or with outstanding Inspector General recommendations) to the improper payments framework; requires agencies to identify programs susceptible to significant improper payments and to include a plan to decrease improper payments in their financial management planning.
- 3Stronger penalties for persistent noncompliance: Creates a special adjustment mechanism under sequestration rules that could reduce an agency’s highest-level administrative budget authority by 5% (one year) or 10% (if noncompliance persists across two or more years).
- 4Enhanced agency reporting and accountability: Requires annual agency-level reporting on progress implementing internal controls, fraud risk management practices, and identified fraud risks (including payroll, beneficiary payments, grants, large contracts, and procurement cards) and progress on adopting leading GAO fraud-risk practices and OMB Circular A-123.
- 5State participation and Do Not Pay data sharing: Establishes a new 3359 section to require certain states receiving major federal funds (TANF, Medicaid, SNAP, unemployment, WIC) to use payment integrity tools, report on their use and effectiveness, and face penalties (remediation of overpayments to the Treasury) for noncompliance; also broadens data-sharing in the Do Not Pay system.