April 20, 2012
As ordered reported by the Senate Committee on Homeland Security and Governmental Affairs on October 19, 2011
S. 1409 would amend federal law to require federal agencies to expand their efforts to identify, recover, and prevent improper payments (including overpayments, underpayments, payments that were not adequately documented, and fraudulent payments). The legislation would require the Office of Management and Budget (OMB) to provide guidance, oversight, and review of agencies’ efforts to manage improper payments. S. 1409 also would establish additional responsibilities for agencies and require them to operate Recovery Audit Contracting (RAC) programs.
Based on information from federal agencies, CBO estimates that implementing S. 1409’s new requirements to identify, recover, and prevent improper payments would cost $735 million over the 2013-2017 period, subject to appropriation of the necessary funds. CBO expects that conducting RAC programs would lead to net recoveries that would exceed the costs of operating the programs, with net savings for the federal government that would probably be several million dollars. However, the savings cannot be attributed to S. 1409 because of long-standing rules established by the Congress for estimating the effects of proposed legislation that could generate programmatic savings stemming from new authority for administrative activity. Enacting S. 1409 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.
S. 1409 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments.