Reducing Improper Payments, 62201-62205 [E9-28493]

Download as PDF Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Presidential Documents 62201 Presidential Documents Executive Order 13520 of November 20, 2009 Reducing Improper Payments 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; PWALKER on DSK8KYBLC1PROD with NOTICES6 (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. (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 VerDate Nov<24>2008 18:45 Nov 24, 2009 Jkt 220001 PO 00000 Frm 00001 Fmt 4790 Sfmt 4790 E:\FR\FM\25NOE0.SGM 25NOE0 62202 Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Presidential Documents publish on the Internet information about improper payments under highpriority 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 Senate-confirmed 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. PWALKER on DSK8KYBLC1PROD with NOTICES6 (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; (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, VerDate Nov<24>2008 18:45 Nov 24, 2009 Jkt 220001 PO 00000 Frm 00002 Fmt 4790 Sfmt 4790 E:\FR\FM\25NOE0.SGM 25NOE0 Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Presidential Documents 62203 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 prepayment 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. PWALKER on DSK8KYBLC1PROD with NOTICES6 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. VerDate Nov<24>2008 18:45 Nov 24, 2009 Jkt 220001 PO 00000 Frm 00003 Fmt 4790 Sfmt 4790 E:\FR\FM\25NOE0.SGM 25NOE0 62204 Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Presidential Documents (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. (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. PWALKER on DSK8KYBLC1PROD with NOTICES6 (c) This order shall be implemented consistent with applicable law and subject to the availability of appropriations. VerDate Nov<24>2008 18:45 Nov 24, 2009 Jkt 220001 PO 00000 Frm 00004 Fmt 4790 Sfmt 4790 E:\FR\FM\25NOE0.SGM 25NOE0 Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / Presidential Documents 62205 (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. THE WHITE HOUSE, November 20, 2009. [FR Doc. E9–28493 Filed 11–24–09; 11:15 am] VerDate Nov<24>2008 18:45 Nov 24, 2009 Jkt 220001 PO 00000 Frm 00005 Fmt 4790 Sfmt 4790 E:\FR\FM\25NOE0.SGM 25NOE0 OB#1.EPS</GPH> PWALKER on DSK8KYBLC1PROD with NOTICES6 Billing code 3195–W0–P

Agencies

[Federal Register Volume 74, Number 226 (Wednesday, November 25, 2009)]
[Presidential Documents]
[Pages 62201-62205]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28493]




                        Presidential Documents 



Federal Register / Vol. 74, No. 226 / Wednesday, November 25, 2009 / 
Presidential Documents

[[Page 62201]]


                Executive Order 13520 of November 20, 2009

                
Reducing Improper Payments

                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.

                (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

[[Page 62202]]

                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 Senate-confirmed 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;

(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,

[[Page 62203]]

                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.

                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.

[[Page 62204]]

                (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.

                (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.

[[Page 62205]]

                (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.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    November 20, 2009.

[FR Doc. E9-28493
Filed 11-24-09; 11:15 am]
Billing code 3195-W0-P