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S. 614, Federal Improper Payments Coordination Act of 2015 1 (June 18, 2015)

handle is hein.congrec/cbo2304 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE
COST ESTIMATE
June 18, 2015
S. 614
Federal Improper Payments Coordination Act of 2015
As ordered reported by the Senate Committee on Homeland Security
and Governmental Affairs on March 4, 2015
S. 614 would amend federal law with an aim to reduce improper payments made by the
federal government. Improper payments occur when funds are paid to the wrong recipient,
the recipient receives the incorrect amount of funds, documentation is not available to
support a payment, or the recipient uses funds in an improper manner.1 Specifically, the
legislation would authorize the judicial and legislative branches, as well as state
government agencies that manage federal programs, to use the Treasury Department's Do
Not Pay (DNP) Program. (Agencies use that program to check various databases before
making payments or contract awards in order to identify ineligible recipients and to prevent
other payment errors.) S. 614 also would direct the Secretaries of State and Defense to
improve the accuracy of their payment systems by sharing information relating to the
deaths of individuals. Finally, the Secretary of the Treasury would be required to submit a
report to the Congress on efforts to reduce improper payments.
The Office of Management and Budget (OMB) reports that about $125 billion in improper
payments were made by the federal government in 2014, which represented about
4 percent of the $3 trillion in government-wide spending that year. Although implementing
the bill would probably result in fewer improper payments, any subsequent budgetary
savings would not be significant for several reasons:
* Most improper payments result from incomplete documentation related to the
payment and correcting that documentation usually does not alter the amount of the
payment;
* Over 80 percent of improper payments stem from the larger federal entitlement
programs such as Medicare, Medicaid, Unemployment Insurance, and
Supplemental Security Income. The bill would not provide any new authorities to
help those programs reduce improper payments;
1. A fraudulent payment (the intentional misuse of funds) may be related to an improper payment, but they are not
necessarily the same. Efforts to curtail improper payments do not exclusively target fraud prevention. For
additional information see: Congressional Budget Office: flow Initiatives to Reduce Fraud in Federal Health
Care Progranis Affect the Budget (October 2014).

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