Pre-Payment Fraud Prevention and Treasury Data Access Act

(1) In general. The head of each executive agency shall establish and maintain appropriate preaward and prepayment procedures to prevent and recover improper payments, including payments resulting in financial loss to the Government, and to prevent financial fraud. Such procedures shall include, at a minimum—

(A) screening all persons or entities that receive, or seek to receive, Federal awards or payments against all appropriate Do Not Pay system data assets, including data assets described in paragraph (2)(a), and risk tools before an award is made or a payment request is submitted to the disbursing officer in accordance with section 3325a; and

(B) a periodic review of available data assets and notification to the Secretary of any data asset that the agency requires access to, either directly or through the Do Not Pay system.

(G) Information made available to such head pursuant to a request made under section 6103(i)(9)(A) of the Internal Revenue Code of 1986.

(H) Information made available to the Secretary of Treasury by the Commissioner of Social Security pursuant to section 235 of the Social Security Act.

(3) Publication of data assets; additional data assets

(A) Publication of data assets. The Secretary shall publish and maintain a System of Records Notice for the Do Not Pay system that identifies each data asset, the routine use authority under which the data asset is accessed, the specific permitted purposes, and the access controls applicable to each data asset. A data asset may not be accessed through the Do Not Pay system before publication of the applicable routine use in the System of Records Notice.

(B) Designation. The Secretary may designate additional categories of data assets for inclusion in the Do Not Pay system to address risks of fraud and improper payments.

(C) Privacy and notice. In designating data assets that include personally identifiable information, law enforcement sensitive information, or information subject to section 552a of title 5, the Secretary shall—

(i) act in coordination with the Director of the Office of Management and Budget; and

(ii) provide public notice and an opportunity for comment for not less than 30 days prior to designation.

(D) Database inclusion. Following designation of a category of data assets under subparagraph (A), the Secretary shall provide public notice and an opportunity for comment for not less than 30 days before adding any specific data asset within such category.

(E) Non-sensitive data. Data assets that do not include personally identifiable or law enforcement sensitive information may be added at the discretion of the Secretary without designation if a list of such data sets is disclosed to the public on a public website maintained by the Department of the Treasury.

(4) Treatment of data matching for purposes of agency use of do not pay system. For purposes of section 552a of title 5, or any other provision of law, a computerized comparison of two or more automated Federal systems of records, or a computerized comparison of a Federal system of records with other records or non-Federal records, carried out by the Secretary to verify payments or identify or recover improper payments under this section shall not be considered a matching program if such match-based inquiry is conducted in strict adherence to the limitations of use under paragraph (5), returns a binary verification response, resulting data is not retained by the agency for more than 30 days in order to address the immediate award eligibility or payment verification determination, and contains not more than 20 discrete record requests at a time for a particular agency program.

(5) Limitation on use

(A) In general. Information obtained through the Do Not Pay system may be used solely for the purposes described in paragraph (1), or for Federal or State law enforcement or investigative purposes and any officer, employee, contractor, subcontractor, or agent of a Federal or State entity may not publish, examine for a purpose not explicitly authorized under this section, or communicate such information furnished in such data assets other than in fulfillment of the purposes of this section.

(B) Implementation of system. The Do Not Pay system shall be implemented in a manner to strictly provide match-based queries that return only limited responses derived from the data submitted by any individual described in subparagraph (A) with the minimum data exchanged in order to conduct the verification match, if—

(i) such responses to match-based queries are limited to a confirmation or denial of a match, the level of confidence in a match, the data sources that informed the match, and other administrative metadata or the minimum additional data elements necessary to achieve the purposes described in paragraph (1); and

(ii) any individual described in subparagraph (A) may not retrieve, browse, make repeated and tailored match-based inquiries with the intention of reconstituting the underlying record in another system, or otherwise access any underlying record maintained in the Do Not Pay system under subsection (a)(2) beyond the information necessary to resolve a match-based query solely for the purposes described in paragraph (1).

(C) Individuals accessing information. Any individual described in subparagraph (A)—

(i) may not take an adverse action against any individual based solely upon the information obtained under such subparagraph;

(ii) shall take additional independent steps to verify the eligibility of a benefit recipient before taking any adverse action, when necessary or appropriate or when required by applicable law; and

(iii) shall make an independent judgment regarding the decision to certify a payment for disbursement or pursue recovery of a potentially improper payment.

(6) Confidentiality maintenance. The Secretary shall maintain, with respect to each data asset obtained through the Do Not Pay system, the same level of confidentiality required by the law governing the source of that data asset. Information obtained from a data asset may only be used for purposes for which the source statute authorizes disclosure, and access to such information shall be limited to persons and entities for whom the source statute authorizes access. The Secretary shall document, in the System of Records Notice required under paragraph (2), the specific confidentiality obligations applicable to each data asset and the means by which Treasury ensures compliance.

(7) Penalty for unlawful disclosure. Any individual described in paragraph (5)(A) who knowingly and willfully discloses information in violation of paragraph (5) shall be fined not more than $250,000, imprisoned not more than 5 years, or both.

(8) Exception when payment otherwise required under law. The head of an executive agency may be exempt from the requirements of paragraph (1) if a Federal statute expressly requires that a payment or award be made notwithstanding potential ineligibility, and the agency head notifies the Secretary of the Treasury and the Director of the Office of Management and Budget prior to certification of the payment under section 3325.

(9) Definition. In this section, the term data asset has the meaning given that term in section 3502(17) of title 44.

(b) Establishment of system. The Secretary of the Treasury shall establish and maintain a Do Not Pay system, which shall be administered and operated by the Fiscal Service of the Department of the Treasury. The Do Not Pay system shall include—

(1) the data assets described in subsection (a)(2); and

(2) such other data assets as the Secretary of the Treasury may designate, in consultation with the Director of the Office of Management and Budget, to assist agencies in carrying out subsection (a)(1).

(c) State and other governmental use

(1) In general. Each State and local government administering a federally funded program, and any contractor, subcontractor, or agent thereof, including State and local government auditors, shall have access to the Do Not Pay system to review preaward and prepayment data in order to prevent and recover improper payments, including payments resulting in financial loss to the Government, and to prevent financial fraud if procedures are established regarding—

(A) the screening of persons or entities that receive, or seek to receive Federal awards or payments against appropriate Do Not Pay system data assets, including data assets described in subsection (a)(2), and risk tools before an award is made or a payment request is submitted to the disbursing officer; and

(B) periodic review of available data assets and notification to the Secretary of any data asset that the agency requires access to, either directly or through the Do Not Pay system.

(2) Other governmental use. The judicial and legislative branches of the United States (as defined in section 202(e) of title 18) shall have access to the Do Not Pay system strictly for purposes of verifying eligibility for payments and preventing fraud and improper payments as authorized under subsection (a)(1).

(3) Privacy requirements. The Secretary, in consultation with the Director of the Office of Management and Budget, shall issue regulations implementing this section, including establishing privacy and other requirements applicable to such access, consistent with section 552a of title 5.

(d) Quarterly report. The Secretary shall submit to the appropriate authorizing and appropriations committees of Congress quarterly reports on the operation of the Do Not Pay system, which may be included as part of another report submitted to Congress by the Secretary, and which shall include the following:

(1) Performance measures for monitoring the effectiveness of the system in reducing improper payments.

(2) Information on the frequency of corrections and identification of erroneous data.

(3) Recommendations for legislative or administrative action to enhance the operations of the system.

(4) An assessment of agency, State, and local compliance with the requirements of this section, including a listing of all memorandums established with the head of an agency under subsection (a)(4) that documents agency use of the Do Not Pay system.

(e) Evaluation. Not less than annually, the Evaluation Officer of the agency, as designated under section 313 of title 5, shall provide the appropriate authorization and appropriations committees of Congress an evaluation of the Do Not Pay system, including the best available estimate of the effectiveness of the system in reducing fraud and improper payments that lead to financial loss of the Government in agency programs on a monthly and regional basis for such program. The evaluation shall include an analysis of which data sources maintained by the Do Not Pay system are attributed to identifying or reducing instances of likely fraudulent or improper payments by count and total dollar savings value to the Government.

(f) Continuity and transition

(1) Continuation of previous system if necessary. The Do Not Pay initiative in effect on the day before the date of the enactment of this section shall continue as necessary to support implementation of the Do Not Pay system.

(2) Guidance, rules, and procedures. Guidance, rules, and procedures in effect before the date of the enactment of this section shall remain in effect until modified by the Secretary or the Director of the Office of Management and Budget.

(3) Rules of construction. Nothing in this subsection may be construed—

(A) except as specifically provided in subsection (a)(4), to modify or supersede the requirements of section 552a of title 5, including the requirements for notice in section 552a(e)(12) and for due process rights of an individual under section 552a(p); or

(B) to limit any authority of an Inspector General under applicable law.

(2) Voluntary expedited process for computer matching by executive agencies for purposes of using the do not pay system

(A) In general. In accordance with section 552a of title 5 (commonly known as the Privacy Act of 1974), the head of each executive agency may enter into an expedited process for establishing a computer matching agreement with the head of another executive agency for the purposes of ongoing and automated data matching with the Do Not Pay system for purposes under this section in order to assist in the detection and prevention of fraudulent and improper payments.

(B) Requirement for use of treasury computer matching agreement template. Not later than 90 days after the effective date of this section, the Secretary of the Treasury, in consultation with the Director of the Office of Management and Budget, shall establish a standard computer matching agreement template for the Do Not Pay system which shall authorize an agency that adopts the standard template to be deemed to have satisfied the requirements of section 552a(o) of title 5 upon execution of the agreement without the need for review by a Data Integrity Board established under section 552a(u) of title 5.

(C) Requirement for federal record notices and publication. The standard computer matching agreement template described under paragraph (B), and any future modification to the template, shall be published in the Federal Register by the Secretary of the Treasury 30-days prior to putting any such template or modification of such template into effect. On a quarterly basis the Secretary of the Treasury shall publish in the Federal Register a consolidated listing of each computer matching agreement using the standardized template under paragraph (B) and maintain on a publicly available website all active computer matching agreements using such template or the process under paragraph (1) that shall include the agency name, data assets covered, authorized purposes, and date of the agreement. The consolidated quarterly listing under this subparagraph shall satisfy the matching program notice requirements of section 552a(e)(12) of title 5 for each computer matching agreement using the standardized template under paragraph (B), and no separate Federal Register publication under section 552a(e)(12) shall be required of any agency participating in such an agreement.

(D) Termination date. An agreement under this paragraph—

(i) shall have a termination date of less than 5 years; and

(ii) during the 3-month period ending on the date on which the agreement is scheduled to terminate, may be renewed by each executive agency that entered into the agreement for not more than 5 years if the head of the agency attests to the Secretary of the Treasury and the Director of the Office of Management and Budget that the agreement is not being modified.

(E) Requirement for OMB guidance. Not later than 60 days after the effective date of this section, the Director of the Office of Management and Budget, in consultation with the Secretary of the Treasury, shall issue guidance to implement this paragraph.

(F) Multiple agencies. For purposes of this paragraph, section 552a(o)(1) of title 5 shall be applied by substituting between the source agency and the recipient agency or non-Federal agency or an agreement governing multiple agencies for between the source agency and the recipient agency or non-Federal agency in the matter preceding subparagraph (A).