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ARTICLE · 01 SEPTEMBER 2010

Improper Payments Elimination Act Provides Opportunities For Contractors

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On July 22, 2010, President Obama signed into law the Improper Payments Elimination and Recovery Act of 2010 (the "Act"). The Act significantly modifies and expands the Improper Payments Information Act of 2002 by placing a greater obligation on the federal government to reduce the amount of improper payments made every year.

United StatesGovernment, Public Sector
Christopher Noon
Christopher Noon
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On July 22, 2010, President Obama signed into law the Improper Payments Elimination and Recovery Act of 2010 (the "Act"). The Act significantly modifies and expands the Improper Payments Information Act of 2002 by placing a greater obligation on the federal government to reduce the amount of improper payments made every year. The President estimated that approximately $110 billion was improperly paid by the government last year, including improper payments made to government contractors. The new legislation will now require executive agencies to conduct recovery audits in an effort to reduce this figure by $50 billion by 2012.

The Act requires that every agency conduct "recovery audits with respect to each program and activity of the agency that expends $1,000,000 or more annually." If past is prologue, such a renewed focus on auditing will likely create greater scrutiny of programs at all levels. Moreover, the Act specifically permits agencies to outsource the

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