Thompson Recovery Auditing Bill Approved by Governmental Affairs Committee

WASHINGTON, DC – Senate Governmental Affairs Committee Chairman Fred Thompson

(R- TN) today announced that the Committee has approved his legislation to assist federal agencies in recovering some of the billions of dollars they pay improperly each year. The bill, S. 3030, would require the use of a management technique called `recovery auditing’ which would be applied to a federal agency’s records to identify improper payments or payment errors.

“Recovery auditing will go a long way in addressing the wasted taxpayer dollars and government inefficiencies resulting from federal agency payment errors which are made each year,” said Senator Thompson. “We recently reported that $20.7 billion in taxpayer dollars was lost by just a handful of federal programs. Most agencies don’t even know how much they’re losing, and this legislation will help address that.”

Recovery auditing involves the use of computer software programs that are capable of analyzing contract and payment records in order to identify discrepancies in those records between what was owed and what was paid. The audits focus on items like duplicate payments or failure to get credit for applicable discounts and allowances.

The Thompson bill requires executive branch agencies to conduct recovery auditing for all of their payment activities that account for more than $500 million annually. The Office of Management and Budget (OMB) can grant exceptions where recovery auditing would not be

practical or cost-effective. Agencies could conduct recovery audits in-house or through contractors. The bill would also allow agencies to use a portion of their recoveries to improve the management of agency operations.

Similar legislation, authored by House Government Reform Chairman Dan Burton (R-IN-6), has passed the House. The Thompson bill now goes to the full Senate.

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