S. 80 — STEP Act

This section amends provisions governing federal improper payments under 31 U.S.C. §§3351-3357 as follows: (1) In the definitions in §3351, inserts a definition of "chief financial officer" (i.e., the CFO appointed under 31 U.S.C. §901(b) for applicable agencies, or the senior financial management official otherwise) as new paragraph (2), redesignates former paragraphs (2)-(8) as paragraphs (3)-(9) respectively, and makes conforming changes to cross-references in §3353(a)(4)(B). (2) In §3352 on improper payment estimates and reports, (A) requires agency heads to annually assess as susceptible to significant improper payments any new program or activity with expected outlays exceeding $100 million in any of its first three fiscal years and in its first four years of operation (unless a review under existing criteria deems it not susceptible); (B) revises §3352(c)(1) to require statistically valid estimates (or those approved by OMB and the agency CFO) for such programs; and (C) adds §3352(j) requiring annual reports on these matters to accompany agency annual financial statements, including a CFO certification on the reliability of susceptibility identifications and description of CFO monitoring of corrective actions. (3) In §3357 on financial and administrative controls relating to fraud, replaces subsection (d) to require agency heads, for 10 fiscal years beginning with the first full fiscal year after enactment, to report in their annual financial statements on progress implementing required controls and fraud risk principles (per GAO Standards for Internal Control and OMB Circular A-123), identifying risks (e.g., in payroll, grants, contracts), fraud-curbing strategies, and status of all 11 GAO leading practices from its July 28, 2015, fraud risk framework (with allowance for cross-references if already covered).