Stopping Fraudulent Payments Act

The agency obligation no longer is limited to agencies administering 'federally funded financial assistance or public benefit programs' - it now applies to any agency head, broadening the scope of covered programs.

New trigger (a)(2) allows a State or local government official to notify an agency that a payment from Federal funds disbursed by a State or local government under a State-administered federally-funded program presents elevated fraud risk, creating a new pathway for corrective action.

The maximum time before a paused payment must be issued is shortened from 45 days to 30 days after the corrective action determination is made.

Treasury must issue a corrective action order and notify the certifying official not later than 2 days after making a fraud-risk determination based on Do Not Pay system output.

A new reporting requirement mandates that Treasury submit a report to OMB and congressional committees 18 months after enactment (and annually thereafter) covering the number of pause orders, percentage of payments ultimately issued, total savings from caught fraud, and policy recommendations.

All amendments take effect 1 year after the date of enactment, providing a transition period before the new authorities become operative.

The Treasury trigger for corrective action orders is narrowed to require that the determination be based on an output of the Do Not Pay system under section 3354 AND in accordance with statutorily-defined eligibility requirements, rather than any flag in Do Not Pay or other validation programs.

Regulations must now specify minimum content including: the minimum seniority of agency officials authorized to issue corrective actions, procedures for Do Not Pay determinations, a dispute/appeal process for agencies (with a 5-day Treasury response requirement), and minimum information requirements for payee notifications.

Payee notification now has a specific 2-day deadline and must also be provided to relevant State or local government officials when the payment is from Federal funds disbursed under a State-administered program.

New provisions require payment disbursing officials to comply with orders to pause payments and add compliance with corrective action orders as a duty of certifying officials under section 3528(a).

Certifying officials receive liability protection if their certification was made in good faith compliance with the new section 3337 requirements.

New definitions added for 'Director' (OMB Director) and 'Secretary' (Treasury Secretary). The fraud-risk indicator definition is refined to reference programs 'administered by the Secretary' rather than 'provided by the Department of the Treasury.'