Appendix A2. 2009 Executive Order 13520 - Reducing Improper Payments

APPENDIX A2
2009 EXECUTIVE ORDER 13520 REDUCING IMPROPER PAYMENTS

Administration of Barack H. Obama, 2009
Executive Order 13520—Reducing Improper Payments
November 20, 2009
By the authority vested in me as President by the Constitution and the laws of the United
States of America, and in the interest of reducing payment errors and eliminating waste, fraud,
and abuse in Federal programs, it is hereby ordered as follows:
Section 1. Purpose. When the Federal Government makes payments to individuals and
businesses as program beneficiaries, grantees, or contractors, or on behalf of program
beneficiaries, it must make every effort to confirm that the right recipient is receiving the right
payment for the right reason at the right time. The purpose of this order is to reduce improper
payments by intensifying efforts to eliminate payment error, waste, fraud, and abuse in the
major programs administered by the Federal Government, while continuing to ensure that
Federal programs serve and provide access to their intended beneficiaries. No single step will
fully achieve these goals. Therefore, this order adopts a comprehensive set of policies,
including transparency and public scrutiny of significant payment errors throughout the
Federal Government; a focus on identifying and eliminating the highest improper payments;
accountability for reducing improper payments among executive branch agencies and officials;
and coordinated Federal, State, and local government action in identifying and eliminating
improper payments. Because this order targets error, waste, fraud, and abuse—not legitimate
use of Government services—efforts to reduce improper payments under this order must
protect access to Federal programs by their intended beneficiaries.
Sec. 2. Transparency and Public Participation.
(a) Within 90 days of the date of this order, the Director of the Office of Management and
Budget (OMB) shall:
(i) identify Federal programs in which the highest dollar value or majority of
Government-wide improper payments occur (high-priority programs);
(ii) establish, in coordination with the executive department or agency (agency)
responsible for administering the high-priority program annual or semi-annual targets
(or where such targets already exist, supplemental targets), as appropriate, for
reducing improper payments associated with each high-priority program;
(iii) issue Government-wide guidance on the implementation of this order, including
procedures for identifying and publicizing the list of entities described in subsection
(b)(v) of this section and for administrative appeal of the decision to publish the
identity of those entities, prior to publication; and
(iv) establish a working group consisting of Federal, State, and local officials to make
recommendations to the Director of OMB designed to improve the Federal
Government's measurement of access to Federal programs by the programs'
intended beneficiaries. The working group's recommendations shall be prepared in
consultation with the Council of Inspectors General on Integrity and Efficiency
(CIGIE) and submitted within 180 days of the date of this order, and the
recommended measurements may be incorporated by the Secretary of the Treasury
in the information published pursuant to subsection (b) of this section.

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(b) Within 180 days of the date of this order, the Secretary of the Treasury in coordination
with the Attorney General and the Director of OMB, shall publish on the Internet information
about improper payments under high-priority programs. The information shall include, subject
to Federal privacy policies and to the extent permitted by law:
(i) the names of the accountable officials designated under section 3 of this order;
(ii) current and historical rates and amounts of improper payments, including, where
known and appropriate, causes of the improper payments;
(iii) current and historical rates and amounts of recovery of improper payments,
where appropriate (or, where improper payments are identified solely on the basis of
a sample, recovery rates and amounts estimated on the basis of the applicable
sample);
(iv) targets for reducing as well as recovering improper payments, where appropriate;
and
(v) the entities that have received the greatest amount of outstanding improper
payments (or, where improper payments are identified solely on the basis of a
sample, the entities that have received the greatest amount of outstanding improper
payments in the applicable sample).
Information on entities that have received the greatest amount of outstanding improper
payments shall not include any referrals the agency made or anticipates making to the
Department of Justice, or any information provided in connection with such referrals.
(c) Within 180 days of the date of this order, the Secretary of the Treasury in coordination
with the Attorney General and the Director of OMB and in consultation with the CIGIE, shall
establish a central Internet-based method to collect from the public information concerning
suspected incidents of waste, fraud, and abuse by an entity receiving Federal funds that have
led or may lead to improper payments by the Federal Government.
(d) Agencies shall place a prominently displayed link to Internet-based resources for
addressing improper payments, including the resources established under subsections (b) and
(c) of this section, on their Internet home pages.
Sec. 3. Agency Accountability and Coordination.
(a) Within 120 days of the date of this order, the head of each agency responsible for
operating a high-priority program shall designate an official who holds an existing Senateconfirmed position to be accountable for meeting the targets established under section 2 of this
order without unduly burdening program access and participation by eligible beneficiaries. In
those agencies where the majority of payments are isolated to a single component, the head of
the agency shall name a second accountable official for that component whose sole
responsibility would be for program integrity activities and, as appropriate, shall consolidate
and coordinate all program integrity activities within the component.
(b) Within 180 days of the date of this order, each agency official designated under
subsection (a) of this section, or otherwise designated by the Director of OMB, shall provide
the agency's Inspector General a report containing:
(i) the agency's methodology for identifying and measuring improper payments by
the agency's high-priority programs;

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(ii) the agency's plans, together with supporting analysis, for meeting the reduction
targets for improper payments in the agency's high-priority programs; and
(iii) the agency's plan, together with supporting analysis, for ensuring that initiatives
undertaken pursuant to this order do not unduly burden program access and
participation by eligible beneficiaries.
Following the receipt and review of this information, the agency Inspector General shall
assess the level of risk associated with the applicable programs, determine the extent of
oversight warranted, and provide the agency head with recommendations, if any, for modifying
the agency's methodology, improper payment reduction plans, or program access and
participation plans.
(c) If an agency fails to meet the targets established under section 2 of this order or
implement the plan described in subsection (b)(iii) of this section for 2 consecutive years, that
agency's accountable official designated under subsection (a) of this section shall submit to the
agency head, Inspector General, and Chief Financial Officer a report describing the likely
causes of the agency's failure and proposing a remedial plan. The agency head shall review this
plan and, in consultation with the Inspector General and Chief Financial Officer, forward the
plan with any additional comments and analysis to the Director of OMB.
(d) Within 180 days of the date of this order, the Chief Financial Officers Council
(CFOC) in consultation with the CIGIE, the Department of Justice, and program experts, shall
make recommendations to the Director of OMB and the Secretary of the Treasury on actions
(including actions related to forensic accounting and audits) agencies should take to more
effectively tailor their methodologies for identifying and measuring improper payments to
those programs, or components of programs, where improper payments are most likely to
occur. Recommendations shall address the manner in which the recommended actions would
affect program access and participation by eligible beneficiaries.
(e) Within 180 days of the date of this order, the Secretary of the Treasury and the
Director of OMB in consultation with the CIGIE, the Department of Justice, and program
experts, shall recommend to the President actions designed to reduce improper payments by
improving information sharing among agencies and programs, and where applicable, State and
local governments and other stakeholders. The recommendations shall address the ways in
which information sharing may improve eligibility verification and pre-payment scrutiny, shall
identify legal or regulatory impediments to effective information sharing, and shall address the
manner in which the recommended actions would affect program access and participation by
eligible beneficiaries.
(f) Within 180 days of the date of this order, and at least once every quarter thereafter, the
head of each agency shall submit to the agency's Inspector General and the CIGIE, and make
available to the public, a report on any high-dollar improper payments identified by the agency,
subject to Federal privacy policies and to the extent permitted by law. The report shall
describe any actions the agency has taken or plans to take to recover improper payments, as
well as any actions the agency intends to take to prevent improper payments from occurring in
the future. The report shall not include any referrals the agency made or anticipates making to
the Department of Justice, or any information provided in connection with such referrals.
Following the review of each report, the agency Inspector General and the CIGIE shall assess
the level of risk associated with the applicable program, determine the extent of oversight
warranted, and provide the agency head with recommendations, if any, for modifying the
agency's plans.
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Sec. 4. Enhanced Focus on Contractors and Working with State and Local Stakeholders.
(a) Within 180 days of the date of this order, the Federal Acquisition Regulatory Council,
in coordination with the Director of OMB, and in consultation with the National Procurement
Fraud Task Force (or its successor group), the CIGIE, and appropriate agency officials, shall
recommend to the President actions designed to enhance contractor accountability for
improper payments. The recommendations may include, but are not limited to, subjecting
contractors to debarment, suspension, financial penalties, and identification through a public
Internet website, subject to Federal privacy policies and to the extent permitted by law and
where the identification would not interfere with or compromise an ongoing criminal or civil
investigation, for knowingly failing timely to disclose credible evidence of significant
overpayments received on Government contracts.
(b) Within 30 days of the date of this order, the Director of OMB shall establish a working
group consisting of Federal and elected State and local officials to make recommendations to
the Director of OMB designed to improve the effectiveness of single audits of State and local
governments and non-profit organizations that are expending Federal funds. The Director of
OMB may designate an appropriate official to serve as Chair of the working group to convene
its meetings and direct its work. The working group's recommendations shall be prepared in
consultation with the CIGIE and submitted within 180 days of the date of this order. The
recommendations shall address, among other things, the effectiveness of single audits in
identifying improper payments and opportunities to streamline or eliminate single audit
requirements where their value is minimal.
(c) Within 30 days of the date of this order, the Director of OMB shall establish a working
group (which may be separate from the group established under subsection (b) of this section)
consisting of Federal and elected State and local officials to make recommendations to the
Director of OMB for administrative actions designed to improve the incentives and
accountability of State and local governments, as well as other entities receiving Federal funds,
for reducing improper payments. The Director of OMB may designate an appropriate official
to serve as Chair of the working group to convene its meetings and direct its work. The working
group's recommendations shall be prepared in consultation with the CIGIE and submitted
within 180 days of the date of this order.
Sec. 5. Policy Proposals. The Director of OMB, in consultation with the appropriate
agencies and the CIGIE, shall develop policy recommendations, including potential legislative
proposals, designed to reduce improper payments, including those caused by error, waste,
fraud, and abuse, across Federal programs without compromising program access, to be
included, as appropriate, in the Budget of the United States Government for Fiscal Year 2011
and future years, or other Administration proposals.
Sec. 6. General Provisions.
(a) Nothing in this order shall be construed to impair or otherwise affect:
(i) authority granted by law to a department, agency, the head thereof, or any agency
Inspector General; or
(ii) functions of the Director of OMB relating to budgetary, administrative, or
legislative proposals.

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(b) Nothing in this order shall be construed to require the disclosure of classified
information, law enforcement sensitive information, or other information that must be
protected in the interests of national security.
(c) This order shall be implemented consistent with applicable law and subject to the
availability of appropriations.
(d) This order is not intended to, and does not, create any right or benefit, substantive or
procedural, enforceable at law or in equity, by any party against the United States, its
departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA
The White House,
November 20, 2009.
[Filed with the Office of the Federal Register, 11:15 a.m., November 24, 2009]
NOTE: This Executive order was released by the Office of the Press Secretary on November
23, and it was published in the Federal Register on November 25.
Categories: Executive Orders : Government departments and agencies, reducing improper
payments, waste, and fraud in Federal programs.
Subjects: Government organization and employees : Accountability and transparency,
strengthening efforts; Government organization and employees : Federal programs,
improvement efforts; Government organization and employees : Improper payments in
Federal programs, reduction efforts.
DCPD Number: DCPD200900942.

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