Appendix 4 Improper Payment Elimination and Recovery Act (IPERA) of 2010 (PL 111-204)

Supporting Statement for OMB Clearance for the Study of Non-Response to the
School Meals Application Verification Process
Appendix 4
Improper Payment Elimination and Recovery Act (IPERIA) of 2010 (PL 111-204)

PUBLIC LAW 111–204—JULY 22, 2010

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IMPROPER PAYMENTS ELIMINATION AND
RECOVERY ACT OF 2010

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124 STAT. 2224

PUBLIC LAW 111–204—JULY 22, 2010

Public Law 111–204
111th Congress
An Act
July 22, 2010
[S. 1508]
Improper
Payments
Elimination and
Recovery Act of
2010.
31 USC 3301
note.

Guidelines.

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To amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note)
in order to prevent the loss of billions in taxpayer dollars.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Improper Payments Elimination
and Recovery Act of 2010’’.
SEC. 2. IMPROPER PAYMENTS ELIMINATION AND RECOVERY.

(a) SUSCEPTIBLE PROGRAMS AND ACTIVITIES.—Section 2 of the
Improper Payments Information Act of 2002 (31 U.S.C. 3321 note)
is amended by striking subsection (a) and inserting the following:
‘‘(a) IDENTIFICATION OF SUSCEPTIBLE PROGRAMS AND ACTIVITIES.—
‘‘(1) IN GENERAL.—The head of each 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 relevant agency head administers and
identify all programs and activities that may be susceptible
to significant improper payments.
‘‘(2) FREQUENCY.—Reviews under paragraph (1) shall be
performed for each program and activity that the relevant
agency head administers during the year after which the
Improper Payments Elimination and Recovery Act of 2010 is
enacted and at least once every 3 fiscal years thereafter. For
those agencies already performing a risk assessment every
3 years, agencies may apply to the Director of the Office of
Management and Budget for a waiver from the requirement
of the preceding sentence and continue their 3-year risk assessment cycle.
‘‘(3) RISK ASSESSMENTS.—
‘‘(A) DEFINITION.—In this subsection the term ‘significant’ means—
‘‘(i) except as provided under clause (ii), that
improper payments in the program or activity in the
preceding fiscal year may have exceeded—
‘‘(I) $10,000,000 of all program or activity payments made during that fiscal year reported and
2.5 percent of program outlays; or
‘‘(II) $100,000,000; and
‘‘(ii) with respect to fiscal years following September 30th of a fiscal year beginning before fiscal
year 2013 as determined by the Office of Management

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PUBLIC LAW 111–204—JULY 22, 2010

124 STAT. 2225

and Budget, that improper payments in the program
or activity in the preceding fiscal year may have
exceeded—
‘‘(I) $10,000,000 of all program or activity payments made during that fiscal year reported and
1.5 percent of program outlays; or
‘‘(II) $100,000,000.
‘‘(B) SCOPE.—In conducting the reviews under paragraph (1), the head of each agency shall take into account
those risk factors that are likely to contribute to a susceptibility to significant improper payments, such as—
‘‘(i) whether the program or activity reviewed is
new to the agency;
‘‘(ii) the complexity of the program or activity
reviewed;
‘‘(iii) the volume of payments made through the
program or activity reviewed;
‘‘(iv) whether payments or payment eligibility
decisions are made outside of the agency, such as by
a State or local government;
‘‘(v) recent major changes in program funding,
authorities, practices, or procedures;
‘‘(vi) the level, experience, and quality of training
for personnel responsible for making program eligibility determinations or certifying that payments are
accurate; and
‘‘(vii) significant deficiencies in the audit report
of the agency or other relevant management findings
that might hinder accurate payment certification.’’.
(b) ESTIMATION OF IMPROPER PAYMENTS.—Section 2 of the
Improper Payments Information Act of 2002 (31 U.S.C. 3321 note)
is amended by striking subsection (b) and inserting the following:
‘‘(b) ESTIMATION OF IMPROPER PAYMENTS.—With respect to each
program and activity identified under subsection (a), the head of
the relevant agency shall—
‘‘(1) 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 by each program and activity;
and
‘‘(2) include those estimates in the accompanying materials
to the annual financial statement of the agency required under
section 3515 of title 31, United States Code, or similar provision
of law and applicable guidance of the Office of Management
and Budget.’’.
(c) REPORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.—
Section 2 of the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note) is amended by striking subsection (c) and
inserting the following:
‘‘(c) REPORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.—
With respect to any program or activity of an agency with estimated
improper payments under subsection (b), the head of the agency
shall provide with the estimate under subsection (b) a report on
what actions the agency is taking to reduce improper payments,
including—
‘‘(1) a description of the causes of the improper payments,
actions planned or taken to correct those causes, and the

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124 STAT. 2226

PUBLIC LAW 111–204—JULY 22, 2010

planned or actual completion date of the actions taken to
address those causes;
‘‘(2) in order to reduce improper payments to a level below
which further expenditures to reduce improper payments would
cost more than the amount such expenditures would save in
prevented or recovered improper payments, a statement of
whether the agency has what is needed with respect to—
‘‘(A) internal controls;
‘‘(B) human capital; and
‘‘(C) information systems and other infrastructure;
‘‘(3) if the agency does not have sufficient resources to
establish and maintain effective internal controls under paragraph (2)(A), a description of the resources the agency has
requested in its budget submission to establish and maintain
such internal controls;
‘‘(4) program-specific and activity-specific improper payments reduction targets that have been approved by the
Director of the Office of Management and Budget; and
‘‘(5) a description of the steps the agency has taken to
ensure that agency managers, programs, and, where appropriate, States and localities are held accountable through
annual performance appraisal criteria for—
‘‘(A) meeting applicable improper payments reduction
targets; and
‘‘(B) establishing and maintaining sufficient internal
controls, including an appropriate control environment,
that effectively—
‘‘(i) prevent improper payments from being made;
and
‘‘(ii) promptly detect and recover improper payments that are made.’’.
(d) REPORTS ON ACTIONS TO RECOVER IMPROPER PAYMENTS.—
Section 2 of the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note) is amended—
(1) by striking subsection (e);
(2) by redesignating subsections (d) and (f) as subsections
(f) and (g), respectively; and
(3) by inserting after subsection (c) the following:
‘‘(d) REPORTS ON ACTIONS TO RECOVER IMPROPER PAYMENTS.—
With respect to any improper payments identified in recovery audits
conducted under section 2(h) of the Improper Payments Elimination
and Recovery Act of 2010 (31 U.S.C. 3321 note), the head of the
agency shall provide with the estimate under subsection (b) a report
on all actions the agency is taking to recover improper payments,
including—
‘‘(1) a discussion of the methods used by the agency to
recover overpayments;
‘‘(2) the amounts recovered, outstanding, and determined
to not be collectable, including the percent such amounts represent of the total overpayments of the agency;
‘‘(3) if a determination has been made that certain overpayments are not collectable, a justification of that determination;
‘‘(4) an aging schedule of the amounts outstanding;
‘‘(5) a summary of how recovered amounts have been disposed of;
‘‘(6) a discussion of any conditions giving rise to improper
payments and how those conditions are being resolved; and

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124 STAT. 2227

‘‘(7) if the agency has determined under section 2(h) of
the Improper Payments Elimination and Recovery Act of 2010
(31 U.S.C. 3321 note) that performing recovery audits for any
applicable program or activity is not cost-effective, a justification for that determination.
‘‘(e) GOVERNMENTWIDE REPORTING OF IMPROPER PAYMENTS AND
ACTIONS TO RECOVER IMPROPER PAYMENTS.—
‘‘(1) REPORT.—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 agencies have taken
to report information regarding improper payments and actions
to recover improper overpayments to—
‘‘(A) the Committee on Homeland Security and Governmental Affairs of the Senate; and
‘‘(B) the Committee on Oversight and Government
Reform of the House of Representatives.
‘‘(2) CONTENTS.—Each report under this subsection shall
include—
‘‘(A) a summary of the reports of each agency on
improper payments and recovery actions submitted under
this section;
‘‘(B) an identification of the compliance status of each
agency to which this Act applies;
‘‘(C) governmentwide improper payment reduction targets; and
‘‘(D) a discussion of progress made towards meeting
governmentwide improper payment reduction targets.’’.
(e) DEFINITIONS.—Section 2 of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by striking
subsections (f) (as redesignated by this section) and inserting the
following:
‘‘(f) DEFINITIONS.—In this section:
‘‘(1) AGENCY.—The term ‘agency’ means an executive
agency, as that term is defined in section 102 of title 31,
United States Code.
‘‘(2) IMPROPER PAYMENT.—The term ‘improper payment’—
‘‘(A) means any payment that should not have been
made or that was made in an incorrect amount (including
overpayments and underpayments) under statutory,
contractual, administrative, or other legally applicable
requirements; and
‘‘(B) 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 such payments where authorized by law), and
any payment that does not account for credit for applicable
discounts.
‘‘(3) PAYMENT.—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, 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.
‘‘(4) PAYMENT FOR AN INELIGIBLE GOOD OR SERVICE.—The
term ‘payment for an ineligible good or service’ shall include
a payment for any good or service that is rejected under any

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124 STAT. 2228

Deadline.

31 USC 3321
note.
Deadline.
Criteria.

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31 USC 3321
note.

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PUBLIC LAW 111–204—JULY 22, 2010

provision of any contract, grant, lease, cooperative agreement,
or any other funding mechanism.’’.
(f) GUIDANCE BY THE OFFICE OF MANAGEMENT AND BUDGET.—
Section 2 of the Improper Payments Information Act of 2002 (31
U.S.C. 3321 note) is amended by striking subsection (g) (as redesignated by this section) and inserting the following:
‘‘(g) GUIDANCE BY THE OFFICE OF MANAGEMENT AND BUDGET.—
‘‘(1) IN GENERAL.—Not later than 6 months after the date
of enactment of the Improper Payments Elimination and
Recovery Act of 2010, the Director of the Office of Management
and Budget shall prescribe guidance for agencies to implement
the requirements of this section. The guidance shall not include
any exemptions to such requirements not specifically authorized
by this section.
‘‘(2) CONTENTS.—The guidance under paragraph (1) shall
prescribe—
‘‘(A) the form of the reports on actions to reduce
improper payments, recovery actions, and governmentwide
reporting; and
‘‘(B) strategies for addressing risks and establishing
appropriate prepayment and postpayment internal controls.’’.
(g) DETERMINATIONS OF AGENCY READINESS FOR OPINION ON
INTERNAL CONTROL.—Not later than 1 year after the date of enactment of this Act, the Director of the Office of Management and
Budget shall develop—
(1) specific criteria as to when an agency should initially
be required to obtain an opinion on internal control over
improper payments; and
(2) criteria for an agency that has demonstrated a stabilized, effective system of internal control over improper payments, whereby the agency would qualify for a multiyear cycle
for obtaining an audit opinion on internal control over improper
payments, rather than an annual cycle.
(h) RECOVERY AUDITS.—
(1) DEFINITION.—In this subsection, the term ‘‘agency’’ has
the meaning given under section 2(f) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) as redesignated
by this Act.
(2) IN GENERAL.—
(A) CONDUCT OF AUDITS.—Except as provided under
paragraph (4) and if not prohibited under any other provision of law, the head of each agency shall conduct recovery
audits with respect to each program and activity of the
agency that expends $1,000,000 or more annually if conducting such audits would be cost-effective.
(B) PROCEDURES.—In conducting recovery audits under
this subsection, the head of an agency—
(i) shall give priority to the most recent payments
and to payments made in any program or programs
identified as susceptible to significant improper payments under section 2(a) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note);
(ii) shall implement this subsection in a manner
designed to ensure the greatest financial benefit to
the Government; and

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PUBLIC LAW 111–204—JULY 22, 2010

124 STAT. 2229

(iii) may conduct recovery audits 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.
(C) RECOVERY AUDIT CONTRACTS.—With respect to
recovery audits procured by an agency by contract—
(i) subject to subparagraph (B)(iii), and except to
the extent such actions are outside the agency’s
authority, as defined by section 605(a) of the Contract
Disputes Act of 1978 (41 U.S.C. 605(a)), the head of
the agency may authorize the contractor to notify entities (including persons) of potential overpayments
made to such entities, respond to questions concerning
potential overpayments, and take other administrative
actions with respect to overpayment claims made or
to be made by the agency; and
(ii) such contractor shall have no authority to make
final determinations relating to whether any overpayment occurred and whether to compromise, settle, or
terminate overpayment claims.
(D) CONTRACT TERMS AND CONDITIONS.—
(i) IN GENERAL.—The agency shall include in each
contract for procurement of performance of a recovery
audit a requirement that the contractor shall—
(I) provide to the agency periodic reports on
conditions giving rise to overpayments identified
by the contractor and any recommendations on
how to mitigate such conditions;
(II) notify the agency of any overpayments
identified by the contractor pertaining to the
agency or to any other agency or agencies that
are beyond the scope of the contract; and
(III) report to the agency credible evidence
of fraud or vulnerabilities to fraud, and conduct
appropriate training of personnel of the contractor
on identification of fraud.
(ii) REPORTS ON ACTIONS TAKEN.—Not later than
November 1 of each year, each agency shall submit
a report on actions taken by the agency during the
preceding fiscal year to address the recommendations
described under clause (i)(I) to—
(I) the Office of Management and Budget; and
(II) Congress.
(E) AGENCY ACTION FOLLOWING NOTIFICATION.—An
agency shall take prompt and appropriate action in
response to a report or notification by a contractor under
subparagraph (D)(i)(I) or (II), to collect overpayments and
shall forward to other agencies any information that applies
to such agencies.
(3) DISPOSITION OF AMOUNTS RECOVERED.—
(A) IN GENERAL.—Amounts collected by agencies each
fiscal year through recovery audits conducted under this
subsection shall be treated in accordance with this paragraph. The agency head shall determine the distribution
of collected amounts, less amounts needed to fulfill the

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Reports.

Notification.

Determination.

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124 STAT. 2230

Applicability.

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PUBLIC LAW 111–204—JULY 22, 2010
purposes of section 3562(a) of title 31, United States Code,
in accordance with subparagraphs (B), (C), and (D).
(B) USE FOR FINANCIAL MANAGEMENT IMPROVEMENT
PROGRAM.—Not more than 25 percent of the amounts collected by an agency through recovery audits—
(i) shall be available to the head of the agency
to carry out the financial management improvement
program of the agency under paragraph (4);
(ii) may be credited, if applicable, for that purpose
by the head of an agency to any agency appropriations
and funds that are available for obligation at the time
of collection; and
(iii) shall be used to supplement and not supplant
any other amounts available for that purpose and shall
remain available until expended.
(C) USE FOR ORIGINAL PURPOSE.—Not more than 25
percent of the amounts collected by an agency—
(i) 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;
(ii) shall remain available for the same period and
purposes as the appropriation or fund to which credited; and
(iii) if the appropriation from which the overpayment was made has expired, shall be newly available
for the same time period as the funds were originally
available for obligation, except that any amounts that
are recovered more than five fiscal years from the
last fiscal year in which the funds were available for
obligation 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, such amounts shall revert to those
accounts.
(D) USE FOR INSPECTOR GENERAL ACTIVITIES.—Not
more than 5 percent of the amounts collected by an agency
shall be available to the Inspector General of that agency—
(i) for—
(I) the Inspector General to carry out this
Act; or
(II) any other activities of the Inspector General relating to investigating improper payments
or auditing internal controls associated with payments; and
(ii) shall remain available for the same period and
purposes as the appropriation or fund to which credited.
(E) REMAINDER.—Amounts collected that are not
applied in accordance with subparagraph (A), (B), (C), or
(D) 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,
such amounts shall revert to those accounts.
(F) DISCRETIONARY AMOUNTS.—This paragraph shall
apply only to recoveries of overpayments that are made
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PUBLIC LAW 111–204—JULY 22, 2010

124 STAT. 2231

by paragraph 7 of section 250 of the Balanced Budget
and Emergency Deficit Control Act of 1985) and shall not
apply to recoveries of overpayments that are made from
discretionary amounts that were appropriated prior to
enactment of this Act.
(G) APPLICATION.—This paragraph shall not apply to
recoveries of overpayments if the appropriation from which
the overpayment was made has not expired.
(4) FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM.—
(A) REQUIREMENT.—The head of each agency shall conduct a financial management improvement program, consistent with rules prescribed by the Director of the Office
of Management and Budget.
(B) PROGRAM FEATURES.—In conducting the program,
the head of the agency—
(i) shall, as the first priority of the program,
address problems that contribute directly to agency
improper payments; and
(ii) may seek to reduce errors and waste in other
agency programs and operations.
(5) PRIVACY PROTECTIONS.—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 such recovery auditing or recovery activity and
governmental oversight of such 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.
(6) OTHER RECOVERY AUDIT REQUIREMENTS.—
(A) IN GENERAL.—(i) Except as provided in clause (ii),
subchapter VI of chapter 35 of title 31, United States
Code, is repealed.
(ii) Section 3562(a) of title 31, United States Code,
shall continue in effect, except that references in such
section 3562(a) to programs carried out under section 3561
of such title, shall be interpreted to mean programs carried
out under section 2(h) of this Act.
(B) TECHNICAL AND CONFORMING AMENDMENTS.—
(i) TABLE OF SECTIONS.—The table of sections for
chapter 35 of title 31, United States Code, is amended
by striking the matter relating to subchapter VI.
(ii) DEFINITION.—Section 3501 of title 31, United
States Code, is amended by striking ‘‘and subchapter
VI of this title’’.
(iii)
HOMELAND
SECURITY
GRANTS.—Section
2022(a)(6) of the Homeland Security Act of 2002 (6
U.S.C. 612(a)(6)) is amended by striking ‘‘(as that term
is defined by the Director of the Office of Management
and Budget under section 3561 of title 31, United
States Code)’’ and inserting ‘‘under section 2(h) of the
Improper Payments Elimination and Recovery Act of
2010 (31 U.S.C. 3321 note)’’.
(7) RULE OF CONSTRUCTION.—Except as provided under
paragraph (5), nothing in this section shall be construed as

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Regulations.

Repeal.
31 USC 3561
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124 STAT. 2232

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PUBLIC LAW 111–204—JULY 22, 2010

terminating or in any way limiting authorities that are otherwise available to agencies under existing provisions of law
to recover improper payments and use recovered amounts.
(i) REPORT ON RECOVERY AUDITING.—Not later than 2 years
after the date of the enactment of this Act, the Chief Financial
Officers Council established under section 302 of the Chief Financial
Officers Act of 1990 (31 U.S.C. 901 note), in consultation with
the Council of Inspectors General on Integrity and Efficiency established under section 7 of the Inspector General Reform Act of
2009 (Public Law 110–409) and recovery audit experts, shall conduct
a study of—
(1) the implementation of subsection (h);
(2) the costs and benefits of agency recovery audit activities,
including—
(A) those activities under subsection (h); and
(B) the effectiveness of using the services of—
(i) private contractors;
(ii) agency employees;
(iii) cross-servicing from other agencies; or
(iv) any combination of the provision of services
described under clauses (i) through (iii); and
(3) submit a report on the results of the study to—
(A) the Committee on Homeland Security and Governmental Affairs of the Senate;
(B) the Committee on Oversight and Government
Reform of the House of Representatives; and
(C) the Comptroller General.
SEC. 3. COMPLIANCE.

(a) DEFINITIONS.—In this section:
(1) AGENCY.—The term ‘‘agency’’ has the meaning given
under section 2(f) of the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note) as redesignated by this Act.
(2) ANNUAL FINANCIAL STATEMENT.—The term ‘‘annual
financial statement’’ means the annual financial statement
required under section 3515 of title 31, United States Code,
or similar provision of law.
(3) COMPLIANCE.—The term ‘‘compliance’’ means that the
agency—
(A) has published an annual financial statement for
the most recent fiscal year and posted that report and
any accompanying materials required under guidance of
the Office of Management and Budget on the agency
website;
(B) if required, has conducted a program specific risk
assessment for each program or activity that conforms
with section 2(a) the Improper Payments Information Act
of 2002 (31 U.S.C. 3321 note); and
(C) if required, publishes improper payments estimates
for all programs and activities identified under section
2(b) of the Improper Payments Information Act of 2002
(31 U.S.C. 3321 note) in the accompanying materials to
the annual financial statement;
(D) publishes programmatic corrective action plans prepared under section 2(c) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) that the

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PUBLIC LAW 111–204—JULY 22, 2010

124 STAT. 2233

agency may have in the accompanying materials to the
annual financial statement;
(E) publishes improper payments reduction targets
established under section 2(c) of the Improper Payments
Information Act of 2002 (31 U.S.C. 3321 note) that the
agency may have in the accompanying materials to the
annual financial statement for each program assessed to
be at risk, and is meeting such targets; and
(F) has reported an improper payment rate of less
than 10 percent for each program and activity for which
an estimate was published under section 2(b) of the
Improper Payments Information Act of 2002 (31 U.S.C.
3321 note).
(b) ANNUAL COMPLIANCE REPORT BY INSPECTORS GENERAL OF
AGENCIES.—Each fiscal year, the Inspector General of each agency
shall determine whether the agency is in compliance and submit
a report on that determination to—
(1) the head of the agency;
(2) the Committee on Homeland Security and Governmental Affairs of the Senate;
(3) the Committee on Oversight and Governmental Reform
of the House of Representatives; and
(4) the Comptroller General.
(c) REMEDIATION.—
(1) NONCOMPLIANCE.—
(A) IN GENERAL.—If an agency is determined by the
Inspector General of that agency not to be in compliance
under subsection (b) in a fiscal year, the head of the agency
shall submit a plan to Congress describing the actions
that the agency will take to come into compliance.
(B) PLAN.—The plan described under subparagraph
(A) shall include—
(i) measurable milestones to be accomplished in
order to achieve compliance for each program or
activity;
(ii) the designation of a senior agency official who
shall be accountable for the progress of the agency
in coming into compliance for each program or activity;
and
(iii) 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 agency to come into compliance for
each program and activity.
(2) NONCOMPLIANCE FOR 2 FISCAL YEARS.—
(A) IN GENERAL.—If an agency is determined by the
Inspector General of that agency not to be in compliance
under subsection (b) for 2 consecutive fiscal years for the
same program or activity, and the Director of the Office
of Management and Budget determines that additional
funding would help the agency come into compliance, the
head of the agency shall obligate additional funding, in
an amount determined by the Director, to intensified
compliance efforts.
(B) FUNDING.—In providing additional funding
described under subparagraph (A), the head of an agency

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124 STAT. 2234

Deadline.

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PUBLIC LAW 111–204—JULY 22, 2010

shall use any reprogramming or transfer authority available to the agency. If after exercising that reprogramming
or transfer authority additional funding is necessary to
obligate the full level of funding determined by the Director
of the Office of Management and Budget under subparagraph (A), the agency shall submit a request to Congress
for additional reprogramming or transfer authority.
(3) REAUTHORIZATION AND STATUTORY PROPOSALS.—If an
agency is determined by the Inspector General of that agency
not to be in compliance under subsection (b) for more than
3 consecutive fiscal years for the same program or activity,
the head of the agency shall, not later than 30 days after
such determination, submit to Congress—
(A) reauthorization proposals for each program or
activity that has not been in compliance for 3 or more
consecutive fiscal years; or
(B) proposed statutory changes necessary to bring the
program or activity into compliance.
(d) COMPLIANCE ENFORCEMENT PILOT PROGRAMS.—
(1) IN GENERAL.—The Director of the Office of Management
and Budget may establish 1 or more pilot programs which
shall test potential accountability mechanisms with appropriate
incentives and consequences tied to success in ensuring compliance with this Act and eliminating improper payments.
(2) REPORT.—Not later than 5 years after the date of enactment of this Act, the Director of the Office of Management
and Budget shall submit a report to Congress on the findings
associated with any pilot programs conducted under paragraph
(1). The report shall include any legislative or other recommendations that the Director determines necessary.
(e) REPORT ON CHIEF FINANCIAL OFFICERS ACT OF 1990.—
Not later than 1 year after the date of the enactment of this
Act, the Chief Financial Officers Council established under section
302 of the Chief Financial Officers Act of 1990 (31 U.S.C. 901
note) and the Council of Inspectors General on Integrity and Efficiency established under section 7 of the Inspector General Reform
Act of 2009 (Public Law 110–409), in consultation with a broad
cross-section of experts and stakeholders in Government accounting
and financial management shall—
(1) jointly examine the lessons learned during the first
20 years of implementing the Chief Financial Officers Act of
1990 (31 U.S.C. 901) and identify reforms or improvements,
if any, to the legislative and regulatory compliance framework
for Federal financial management that will optimize Federal
agency efforts to—
(A) publish relevant, timely, and reliable reports on
Government finances; and
(B) implement internal controls that mitigate the risk
for fraud, waste, and error in Government programs; and
(2) jointly submit a report on the results of the examination
to—
(A) the Committee on Homeland Security and Governmental Affairs of the Senate;
(B) the Committee on Oversight and Government
Reform of the House of Representatives; and

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PUBLIC LAW 111–204—JULY 22, 2010

124 STAT. 2235

(C) the Comptroller General.

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Approved July 22, 2010.

LEGISLATIVE HISTORY—S. 1508 (H.R. 3393):
CONGRESSIONAL RECORD, Vol. 156 (2010):
June 23, considered and passed Senate.
July 14, considered and passed House.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
July 22, Presidential remarks.

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