Section 1 Short title
This Act may be cited as the “Zeroing Out Monetary Benefits Improperly Expended Act” or the “ZOMBIE Act”.
Zeroing Out Monetary Benefits Improperly Expended Act
AN ACT
To reform the Payment Integrity Information Act of 2019 to ensure executive agencies focus on fraud prevention, and for other purposes.
Sec. 2 Reforms to Payment Integrity Information Act of 2019
in paragraph (2)—
in subparagraph (A)—
in clause (i)—
by inserting “information on” before “improper payments”;
by striking “information with” and inserting “resulting in financial loss to the Government in the accompanying materials to”; and
by striking “and” at the end; and
by inserting after clause (ii) the following new clause:
“(iii) published information on improper payments resulting in financial loss to the Government with the annual budget justification of the executive agency for the most recent fiscal year;”
by redesignating subparagraphs (B) and (C) as clauses (iv) and (v), respectively (and adjusting the margins accordingly);
by redesignating subparagraphs (D) through (F) as subparagraphs (B) through (D), respectively;
in subparagraph (A)(iv), as so redesignated—
by striking “if required, has”; and
by inserting “and” after the semicolon at the end;
in subparagraph (A)(v), as so redesignated, by striking “if required, publishes” and inserting “published”;
by striking subparagraph (B), as so redesignated; and
by redesignating subparagraphs (C) and (D), as so redesignated, as subparagraphs (B) and (C); and
by adding at the end the following new paragraph:
“(9) Financial loss to the Government—The term “financial loss to the Government”—
“(A) means any payment or part of a payment made in excess of the correct amount authorized by law that results in a financial loss to the Federal Government; and
“(B) does not include any payment or part of a payment made to the correct person or entity for the correct amount authorized by law but not made in accordance with certain administrative procedures applicable to the executive agency (excluding any such procedure necessary to establish eligibility or to verify that any payment or part of a payment was made in such correct amount).”
Estimates of improper payments resulting in financial loss to the government and reports on actions to reduce such payments— Section 3352 of title 31, United States Code, is amended—
in the heading—
by inserting “resulting in financial loss to the Government” before “and reports” (and by conforming the item relating to such section in the table of sections in chapter 33); and
by striking “reduce improper payments” and inserting “reduce such payments” (and by conforming the item relating to such section in the table of sections in chapter 33);
in subsection (a)—
in paragraph (1)—
in subparagraph (A), by striking “periodically review all programs and activities” and inserting “submit annually a list of each program and activity required to be reported on the Program Inventory under section 1122”; and
in subparagraph (B)—
by striking “all programs and activities” and inserting “each program and activity from each such list”; and
by striking “(3)” and inserting “(2)”;
by striking paragraph (2);
by redesignating paragraph (3) as paragraph (2); and
in paragraph (2), as so redesignated—
in subparagraph (A), by striking “improper payments and payments whose propriety cannot be determined” and inserting “improper payments resulting in financial loss to the Government and payments lacking sufficient documentation to determine whether the payments result in financial loss to the Government”;
by redesignating subparagraphs (B) and (C) as subparagraphs (D) and (E), respectively;
by inserting after subparagraph (A) the following new subparagraphs:
“(B) Development of risk assessment guidance—Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall develop risk assessment guidance to assess the risk of improper payments resulting in financial loss to the Government that addresses the following:
“(i) The likelihood of payment errors and the magnitude of such errors that do not result in financial loss to the Government.
“(ii) The likelihood of payment errors and the magnitude of such errors that do result in financial loss to the Government.
“(iii) A formula for estimating financial loss to the Government.
“(iv) Relevant governmentwide documents and best practices for managing improper payments and mitigating fraud risks in Federal programs, such as the document of the Government Accountability Office entitled “A Framework for Managing Fraud Risks in Federal Programs” (or any successor document), as applicable and appropriate.
“(C) Scope—In preparing a list under paragraph (1)(A), the head of each executive agency shall require, within 6 months after issuing the risk assessment guidance, a risk assessment using the guidance developed under subparagraph (B) for each program or activity listed under paragraph (1)(A) for each—
“(i) existing programs or activities prior to the next disbursement of Federal funds with respect to the program or activity; and
“(ii) newly authorized programs and activities prior to any disbursement of Federal funds with respect to the program or activity.”
in subparagraph (D), as so redesignated—
in the heading, by striking “Scope” and inserting “Requirements”;
in the matter preceding clause (i)—
by striking “In conducting a review under paragraph (1), the head of each executive agency shall” and inserting “Risk assessments are to be conducted on an ongoing basis, but no less frequently than once every 3 years, and”; and
by inserting “, including with respect to fraud in any program or activity listed under paragraph (1)(A) that causes improper payments resulting in financial loss to the Government” before “, such as”;
in clause (x), by striking “data systems” and inserting “data assets”; and
in clause (xi)—
by inserting “or improper payments” before “as assessed”; and
by inserting “, or any successor document” after “(commonly known as the “Green Book”)”; and
in subparagraph (E), as so redesignated—
in the heading, by striking “Annual report” and inserting “Reports”;
in the matter preceding clause (i), by striking “Each executive agency shall publish an annual report” and inserting “Not less than once every 3 years, the head of each executive agency shall publish a report, which may be included in a report required under subsection (b)(2)(F) by such head with respect to a high-priority Federal program or activity,”;
in clause (i), by striking “; and” and inserting a semicolon;
in clause (ii), by striking the period at the end and inserting “; and”; and
by adding at the end the following new clause:
“(iii) a prioritized listing of risks identified in subparagraph (D) associated with each program and activity listed under paragraph (1)(A) and any corresponding financial and administrative control to mitigate any such risk, including the use of the Do Not Pay Initiative (or any successor system) and any other system or data asset maintained by the Secretary of the Treasury or the Inspector General of the executive agency to prevent fraud or improper payments resulting in financial loss to the Government prior to making an eligibility determination to receive Federal funds with respect to any such program or activity listed under paragraph (1)(A), issuing an award, or requesting a payment.”
in subsection (b)—
in the heading, by inserting “that result in financial loss to the Government” after “Improper payments”;
in paragraph (1)—
in subparagraph (A)—
by inserting “and activities” after “high-priority Federal programs”; and
by inserting “that result in financial loss” after “improper payments” each place it appears; and
in subparagraph (B), by striking “associated” and inserting “and financial loss associated”; and
in paragraph (2)—
in the heading, by inserting “that result in financial loss to the Government” after “improper payments”;
in subparagraph (A), by striking “shall on an annual basis” and inserting “, not less frequently than once every 3 years, shall”;
in subparagraph (B)—
in clause (i)—
in subclause (I)—
by inserting “that result in financial loss to the Government” after “improper payments”; and
by striking “; and” and inserting a semicolon;
in subclause (II), by inserting “that result in financial loss to the Government, including by making it harder for fraudulent actors to exploit the program” after “improper payments”; and
by adding at the end the following new subclause:
“(III) has taken or plans to take to reduce the percentage of improper payments that result in financial loss to the Government;”
by inserting after clause (i) the following new clause:
“(ii) shall include—
“(I) an estimate of the total amount of the payments that result in financial loss to the Government;
“(II) an estimate of the total amount of the payments that do not result in financial loss to the Government;
“(III) the percentage of payments that result in financial loss to the Government;
“(IV) an assessment of the portion of the total amount of payments that result in financial loss to the Government that are due to fraudulent actions by the recipient of such payments;
“(V) the total amount of disbursed payments; and
“(VI) a description of resources or legislative changes proposed to improve or maintain the integrity of the relevant program or activity; and”
by redesignating clause (iii) as clause (ii);
in subparagraph (E)(i)—
in subclause (I)—
by striking “improper payment” and inserting “improper payments that result in financial loss”; and
by striking “; and” and inserting a semicolon;
in subclause (II), by striking “improper payments” and inserting “improper payments that result in financial loss”; and
by adding at the end the following new subclause:
“(III) each statistically valid estimate developed under subsection (c)(1)(A) and make a recommendation to the head of the executive agency on whether the agency estimate should be reassessed and reestablished; and”
by amending subparagraph (F) to read as follows:
“(F) Agency liaison designation and mandatory coordination meetings—Not less frequently than once every fiscal year, the head of each executive agency with a high-priority Federal program or activity identified under paragraph (1)(B) shall designate a senior official of the executive agency to serve as the liaison of the executive agency for work under this subchapter who shall meet for a non-audit or investigative purpose with the Director of the Office of Management and Budget (or a designee of the Director), the Commissioner of the Bureau of the Fiscal Service of the Department of the Treasury (or a designee of the Commissioner), the Inspector General of the executive agency (or a designee of the Inspector General), and the Pandemic Response Accountability Committee established under section 15010 of the CARES Act (Public Law 116–136; 134 Stat. 533) (or any successor organization) to report on any action taken during the preceding fiscal year and any planned action, including any reform to any financial or administrative control, to prevent improper payments (with a focus on improper payments that lead to financial loss to the Government) and mitigate fraud in such program or activity.”
by adding at the end the following new subparagraph:
“(G) Federal-State coordination meetings—Not less frequently than once every fiscal year, the Director of the Office of Management and Budget and the Secretary of the Treasury shall convene a meeting of State officials responsible for program and payment integrity in programs administered on behalf of the Federal Government by a State or local government to review fraud prevention performance, share best practices, and identify ongoing coordination challenges.”
in subsection (c)—
in the heading, by inserting “that result in financial loss to the Government” after “Improper payments”;
in paragraph (1)—
by amending subparagraph (A) to read as follows:
“(A) develop a statistically valid estimate of improper payments that result in financial loss to the Government;”
by striking subparagraph (B); and
by adding at the end the following new subparagraphs:
“(B) include such estimate in the annual budget justification of the executive agency; and
“(C) revise such estimate if the head of the executive agency determines, which may be based on a recommendation from the Director in consultation with the Secretary of the Treasury and the Inspector General of the executive agency, that there is a need to reestablish the estimate of improper payments that result in financial loss to the Government due to—
“(i) a significant change, as determined by the agency head, to the program or activity’s appropriation or authorization;
“(ii) newly establishing the program or activity; or
“(iii) a recommendation from the agency Inspector General in the annual compliance report issued under section 3353(a).”
in paragraph (2)—
in subparagraph (A), by inserting “resulting in financial loss to the Government” after “improper payment”; and
in subparagraph (B), by striking “improper payments” before “estimate”;
in subsection (d)—
in the heading—
by striking “Reduce” and inserting “Reduce and prevent”; and
by inserting “that result in financial loss to the Government” after “Improper payments”;
in the matter preceding paragraph (1)—
by inserting “that result in financial loss to the Government” after “estimated improper payments”; and
by striking “reduce improper payments” and inserting “reduce and prevent such payments”;
in paragraph (1), by inserting “that result in financial loss to the Government (including actions used to commit fraud)” after “improper payments”;
in paragraph (2)—
in the matter preceding subparagraph (A), by inserting “that result in financial loss to the Government” after “in order to reduce improper payments”;
in subparagraph (B), by striking “; and” and inserting a semicolon at the end;
in subparagraph (C), by inserting “and” after the semicolon; and
by adding at the end the following new subparagraph:
“(D) access to appropriate records and data assets, whether maintained by an executive agency, a State or local government, or a private sector organization;”
in paragraph (4), by inserting “that result in financial loss to the Government” after “improper payments”;
in paragraph (5)—
by inserting “that result in financial loss to the Government” after “improper payments” each place it appears; and
in subparagraph (B)(ii), by striking “; and” and inserting a semicolon at the end;
by amending paragraph (6) to read as follows:
“(6) a description of how the level of planned or completed actions by the executive agency to address the causes of the improper payments that result in financial loss to the Government matched the level of improper payments that resulted in financial loss to the Government, including a breakdown by category of such improper payments and specific timelines for completion of those actions; and”
by adding at the end the following new paragraph:
“(7) information on the progress of the executive agency with respect to—
“(A) implementing the financial and administrative controls required to be established under subsection (a)(2)(E)(iii);
“(B) implementing relevant governmentwide documents and best practices for managing improper payments and mitigating fraud risks in Federal programs, such as the document of the Government Accountability Office entitled “A Framework for Managing Fraud Risks in Federal Programs” (or any successor document), as applicable and appropriate, including with respect to the identification of—
“(i) any dedicated entity that leads the fraud risk management activity of the executive agency;
“(ii) responsibilities of such entity, including any program or operation for which the entity is responsible;
“(iii) capacity, including any limitations, to strategically manage fraud risks;
“(iv) any program or operation within the executive agency for which there is not a dedicated entity that leads fraud risk management, along with a detailed justification for not having such a dedicated entity; and
“(v) the status of implementing the overarching concepts with associated leading practices identified in such document entitled “A Framework for Managing Fraud Risks in Federal Programs” (or any such successor document), as applicable and appropriate;
“(C) implementing the Office of Management and Budget Circular A–123, or any successor policy, with respect to leading practices for managing fraud and improper payments risk;
“(D) identifying fraud risks and vulnerabilities, including but not limited to payroll, beneficiary payments, grants, large contracts, and purchase and travel cards; and
“(E) establishing strategies, procedures, and other steps to prevent, detect, and respond to fraud.”
in subsection (e)—
in the matter preceding paragraph (1)—
by inserting “that result in financial loss to the Government,” after “With respect to improper payments”; and
by striking “the improper payments” and inserting “such payments”;
in paragraph (1), by inserting “that result in financial loss to the Government” after “improper payments”; and
in paragraph (2), by inserting “that result in financial loss to the Government,” after “improper payments”;
in subsection (f)—
in paragraph (1)—
in the matter preceding subparagraph (A)—
by inserting “that result in financial loss to the Government” after “regarding improper payments”; and
by inserting “such” after “recover”;
in subparagraph (B)—
by inserting “Government” before “Reform”; and
by striking “and” at the end;
by inserting after subparagraph (B) the following new subparagraphs:
“(C) the Committee on the Budget of the Senate;
“(D) the Committee on the Budget of the House of Representatives;
“(E) the Committee on Appropriations of the Senate;
“(F) the Committee on Appropriations of the House of Representatives; and”
by redesignating subparagraph (C) as subparagraph (G); and
in paragraph (2)—
in subparagraph (A), by inserting “that result in financial loss to the Government” after “improper payments”;
in subparagraph (C), by inserting “that result in financial loss to the Government” after “improper payment”;
in subparagraph (D), by inserting “that result in financial loss to the Government” after “improper payments”; and
in subparagraph (E), by inserting “that result in financial loss to the Government” after “improper payment”;
in subsection (g)—
in paragraph (1), by inserting “and periodically thereafter,” after “Not later than 1 year after the date of enactment of this section,”; and
in paragraph (2)(B), by striking “prepayment and postpayment” and inserting “pre-award, pre-payment, and post-payment”; and
in subsection (i)(2)—
in subparagraph (C), by striking “25” and inserting “10”; and
in subparagraph (D), by striking “25” and inserting “75”.
Sec. 3 Reforms to annual compliance report by inspectors general of executive agencies
OMB guidance— Section 3353(a)(3) of title 31, United States Code, is amended—
in the matter preceding subparagraph (A)—
by striking “date of enactment of this section” and inserting “date of the enactment of the amendments made to this section by the “Zeroing Out Monetary Benefits Improperly Expended Act” or the “ZOMBIE Act””; and
by striking “shall develop and promulgate guidance” and inserting “shall revise existing guidance issued under this section”;
in subparagraph (B)—
by striking “improper payment estimates methodology” and inserting “estimation methodologies”; and
by inserting “that result in financial loss to the Government” after “improper payments”;
in subparagraph (C), by inserting “that result in financial loss to the Government” after “improper payments”;
in subparagraph (D), by inserting “that result in financial loss to the Government” after “improper payments”; and
in subparagraph (E)—
by striking “Inspectors General include” and inserting “Inspectors General shall include”; and
by inserting “that result in financial loss to the Government” after “improper payments”.
CIGIE guidance— Section 3353(a)(4) of title 31, United States Code, is amended—
in the matter preceding subparagraph (A)—
by striking “date of enactment of this section” and inserting “date of the enactment of the amendments made to this section by the “Zeroing Out Monetary Benefits Improperly Expended Act” or the “ZOMBIE Act””; and
by striking “develop and promulgate guidance” and inserting “revise existing guidance issued under this section”;
in subparagraph (B)—
in clause (i)—
by striking “section 3351(2)(B)” and inserting “section 3351(2)(A)(iv)”; and
by inserting “that result in financial loss to the Government” after “improper payments” each place it appears;
in clause (ii), by striking “section 3351(2)(C)” and inserting “section 3351(2)(A)(v)”;
by striking clause (iii);
by redesignating clauses (iv) through (vi) as clauses (iii) through (v), respectively;
in clause (iii), as so redesignated, by inserting “that result in financial loss to the Government” after “improper payments”; and
in clause (iv), as so redesignated, by inserting “that result in financial loss to the Government” after “improper payments”.