The STEP Act is about making sure the federal government catches and prevents wasteful or incorrect payments. Right now, government agencies are supposed to track programs that might be losing money to fraud, mistakes, or improper payments, but the rules are scattered and not always clear. This bill tightens those rules and makes agencies more accountable.

Here's what changes: First, the bill expands which programs get extra scrutiny. Any new government program that spends more than $100 million in its first three years of operation now has to be monitored closely for improper payments—even if it hasn't shown problems yet. Second, the bill requires the chief financial officer at each agency to personally certify that they've properly identified which programs are at risk and to report on what they're doing to fix problems. This adds a layer of personal accountability from top financial leaders.

Third, agencies now have to report more detailed information about their efforts to prevent fraud and waste. For the next 10 years, they must tell Congress about their progress in setting up financial controls, spotting fraud risks in areas like payroll and grants, and following best practices for managing fraud. The bill doesn't require any new money to be spent—agencies have to do this with their existing budgets. Essentially, this makes the federal government's financial oversight more transparent and holds agency leaders personally responsible for catching improper payments before they happen.

STEP Act

Lankford, James

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). &nbsp; 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&nbsp;as susceptible.) &nbsp; 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&nbsp;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. &nbsp; 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.