Sec. 3. Anti-fraud controls for programs susceptible to significant improper payments and high-priority programs
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Subchapter IV of chapter 33 of title 31, United States Code, is amended by adding at the end the following: Not later than October 1 of each year, for that fiscal year and the next fiscal year, the head of each executive agency shall designate as a program susceptible significant improper payments each program that meets the following criteria: With respect any program of the agency established during the preceding two fiscal years, any such program making more than $100,000,000 in payments in any one fiscal year.
For any program of the agency not established during the preceding two fiscal years, any such program that had outlays that exceeded $1,500,000,000 in the preceding fiscal year. An agency administering a program susceptible to significant improper payments shall implement proactive analytics for one high-risk area of the program. Not later than two years after a head of an agency has designated a program as susceptible to improper payments, the head of the agency administering the program shall submit a report on efforts of the agency to reduce and prevent improper payments and fraud with respect to the program, including the following:
With respect to a program that is not a high-priority program at the time of the submission of the report, the following: A description of the proactive analytics implemented in the two fiscal years preceding the submission of the report to reduce improper payments and fraud with respect to such program. Metrics demonstrating the effectiveness of the proactive analytics implemented. An analysis of whether the agency anticipates the program will remain susceptible to improper payments and require continued designation as such.
A plan for— continuing to use proactive analytics with respect to that program; improving the proactive analytics used with respect to that program; and identifying, in consultation with the Administrator of the FRAUD, additional fraud and improper payment mitigation strategies, that could be employed by the agency if the program is redesginated as a program susceptible to significant improper payments. With respect to a program that is a high-priority program at the time of the submission of the report, the following:
A copy of the plan approved under section 3359 for the program. Analysis of whether implementation of that plan has reduced and prevented improper payments and fraud. If the plan has not reduced or prevented improper payments or fraud— an explanation of why the plan has not reduced or prevented improper payments or fraud; and a new plan with a different strategy developed in consultation with the Administrator of the FRAUD, to reduce or prevent improper payments or fraud. A statement of whether the agency has what is needed with respect to internal controls, human capital, and information systems and other infrastructure, to implement the requirements described in sections 3359 and 3360.
Estimates of— any costs avoided and dollars saved by the implementation of sections 3359 and 3360; any change in administrative burden because of the implementation of sections 3359 and 3360; and the number of persons eligible to obtain a thing of value that did not receive such thing of value because of the implementation of sections 3359 and 3360. Whether the information technology (as defined in section 11101 of title 40) used by the agency with respect to the program is capable of delivering real-time data— to the Administrator of the FRAUD for inclusion in the dashboard required to be established by section 508(b)(3); and for the purpose of implementing proactive analytics, as required under section 3359 and 3360.
A description of the quality of any improper payment estimates and methodology of the agency relating to the program, including— challenges to accurately estimating improper payments for the program; and plans to improve the quality of the estimates. By January 31 of each fiscal year, the Administrator shall designate for the remainder of that fiscal year and the next full fiscal year, any program with outlays in an amount equal to or in excess of $50,000,000,000 with respect to the preceding fiscal year as a high-priority program.
The head of an agency administering a high-priority program shall develop a plan to implement anti-fraud controls for that program, that— at a minimum includes a plan to use— any solution that verifies and authenticates identity, known as digital identity-proofing solutions , if determined necessary by the Administrator to effectively reduce and prevent fraud and improper payments in the high-priority program; threat intelligence, including open source intelligence and intelligence collected from locations on the internet referred to as the deep web and dark web , to identify and mitigate emerging fraud threats; and proactive analytics; and takes into consideration the administrative burden of implementing such anti-fraud controls, including considering the fraud risk profile (as defined in the study of the Government Accountability Office titled Framework for Managing Fraud Risks in Federal Programs ) of the program.
Not later than 90 days after the date on which a program is designated as a high-priority program under subsection (a), the agency administering the high-priority program shall submit to the Administrator the plan developed under paragraph (1). Not later than 60 days after the date on which the plan is submitted pursuant to subparagraph (A), the Administrator shall approve or deny such plan. An agency that submits a plan that is denied by the Administrator under paragraph
(2)shall, until such time as the Administrator approves the plan— revise the plan; and submit the plan as revised under clause
(i)to the Administrator. The Administrator shall approve or deny a plan submitted under subparagraph
(A)not later than 60 days after the Administrator receives the plan. The Administrator may provide technical assistance to any agency required to revise a plan under subparagraph (A). Not later than January 31 of each year, the Administrator shall provide to each agency administering a high-priority program criteria on the basis of which the Administrator will approve or deny a plan under this subsection. An agency required to submit a plan for approval under this subsection with respect a high-priority program, and has such plan denied by the Administrator three times, shall submit a report to Congress on why the plan has not been approved by the Administrator. There is established in the Treasury of the United States a fund to be known as the Program Integrity Fund. Amounts in the fund may be allocated by the Administrator to agencies to implement plans approved by the Administrator under subsection (b). Not later than 90 days after the date of the enactment of this paragraph, the Administrator shall— establish a process through which the head of an agency may request that funds be allocated from the Program Integrity Fund to the agency; and submit to Congress a report that describes the process established pursuant to clause (i). In determining the amount, if any, of funds to be allocated to an agency from the Program Integrity Fund under paragraph (2), the Administrator shall consider the extent to which the plan approved by the Administrator under subsection
(b)of the agency— implements the use of proactive analytics; is likely to significantly reduce or prevent improper payments and fraud; and considers the administrative burden of implementing the plan, including whether there is a clear indication that the agency considered whether there are any anti-fraud controls other than the anti-fraud controls to be implemented under the plan that could be implemented by the agency with less of an administrative burden on individuals who interact with the program. There are authorized to be appropriated $1,000,000,000 for fiscal year 2023 for the Program Integrity Fund, to remain available until expended. In this section: The term Administrator means the Administrator of the FRAUD. The term administrative burden means a cost that a person incurs in interacting with the agency to obtain a thing of value from the agency, including the following: The amount of time and effort expended by the person to learn about— the nature of the thing of value; and how to gain access to the thing of value, including— any program or service of the agency through which the person may obtain the thing of value from the agency; and any requirement and condition that must be satisfied for the person to obtain and maintain possession of the thing of value from the government program or service. The amount of time it takes to— provide information and documentation to satisfy requirements to obtain and maintain possession of the thing of value; and respond to discretionary requests of program administrators for the purpose of obtaining and maintaining possession of the thing of value. Any financial cost to access services that may be necessary to receive the thing of value (such as fees, legal representation, and travel costs). The term agency administering a program susceptible to significant improper payments means an agency that is responsible for administering at least one program that is designated as susceptible to significant improper payments under section 3359. The term agency administering a high-priority program means an agency that is responsible for administering at least one program that is designated as high-priority under this section. The term anti-fraud control means a process, system, or technology that can be implemented to prevent fraud and improper payments. The term data has the meaning given the term in section 3502 of title 44. The term device metadata means structural or descriptive data about a connected device (as defined in section 902(a) of the Consolidated Appropriations Act, 2021 ( 47 U.S.C. 1306(a) )), such as data about the type, model, IP address, and geolocation of the device. The term fraud means obtaining a thing of value through willful misrepresentation. The term proactive analytics means the collection and analysis of data (including data that is device metadata, administrative data controlled by the agency, and data from other governmental and non-governmental sources) to prevent fraud and improper payments from occurring, including by identifying anomalous or suspicious patterns that might warrant further investigation. .
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Anti-fraud controls for programs susceptible to significant improper payments and high-priority programs
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