Plain Language Summary
# STEP Act Summary **What It Does:** The STEP Act (Safeguarding the Transparency and Efficiency of Payments Act) aims to reduce wasteful government spending by requiring federal agencies to better track and prevent "improper payments"—money sent out by mistake or in the wrong amount. The bill focuses on newer government programs, requiring agencies to automatically flag any new program in its first four years that spends over $100 million as potentially at-risk for improper payments. Agencies would then need to measure and report how much money they're losing to these errors. **Key Changes:** The bill gives federal agencies more flexibility by allowing them to use their own chief financial officers' approval methods to measure improper payments, rather than requiring approval from the central Office of Management and Budget.
This is intended to speed up the process while maintaining oversight. **Who It Affects:** Federal agencies and the programs they operate would bear the main responsibility for compliance. Taxpayers could benefit if the bill successfully reduces government waste, though the actual impact would depend on how effectively agencies use these new tools. **Current Status:** The bill is currently in committee and has not yet been voted on by the full Senate.
CRS Official Summary
Safeguarding the Transparency and Efficiency of Payments Act or the STEP ActThis bill requires federal agencies to take certain actions to prevent improper payments (i.e., payments that should not have been made or were made in an incorrect amount). The bill requires agencies to annually identify as susceptible to significant improper payments any new program or activity that is in its first four years of operation and has, or is expected to have, outlays exceeding $100 million in any of its first three fiscal years of operation, with exceptions for activities that are not susceptible to significant improper payments. (Agencies must report estimates of improper payments for activities identified as susceptible.) The bill allows agencies, when estimating improper payments, to use an estimation methodology approved by the agency's chief financial officer (CFO). (Currently, only methodologies approved by the Office of Management and Budget may be used.)An agency’s annual financial statement must include certain reports related to the agency’s improper payments. Such reports must also include a certification by the agency CFO that the identification of programs and activities susceptible to significant improper payments is reliable as well as a description of the CFO's actions to monitor required corrective action plans. Each agency must report to Congress for each of the 10 fiscal years after enactment on certain matters, including progress in managing fraud risks and implementing financial controls.
Latest Action
Read twice and referred to the Committee on Homeland Security and Governmental Affairs.