Wasteful spending disclosure rewards

Summary#

This bill changes how federal agencies can pay cash awards to employees who identify wasteful spending or who report fraud, waste, or mismanagement. The main changes are a higher award cap, a new definition and process for identifying “wasteful expenses,” and new reporting and oversight steps for agencies. The bill appears aimed at encouraging employees to point out avoidable government spending and to make agency responses more visible.

Key changes:

• Raises the maximum individual cash award for disclosures from $10,000 to $20,000.
• Adds a new definition of “wasteful expenses” and allows awards when an employee’s identification of those expenses leads to cost savings.
• Requires the agency Chief Financial Officer (CFO) to decide whether identified expenses are “not required” for their original purpose.
• If the CFO agrees, the agency head must notify the President so the expenses can be considered for rescission (proposing that Congress cancel the budget authority).
• Agencies must publish information about wasteful-expense disclosures and related awards alongside other routine financial reports.
• Bars Office of Inspector General employees and persons already ineligible under an existing award rule from receiving these awards.
• Directs the Office of Personnel Management to certify agency compliance and requires the Government Accountability Office to report on the program at 3 and 6 years after enactment.

What it means for you#

• Federal employees

  • Employees (other than specified excluded groups) could be eligible for larger cash awards if they identify wasteful spending that leads to savings.
  • Employees must report identified wasteful expenses to the agency CFO or a designated employee to be eligible.

• Agency leaders and financial staff

  • Agency CFOs must review employee reports and decide whether the identified amounts are “not required” for their original purpose.
  • Agency heads must notify the White House to propose rescinding identified funds when the CFO agrees.
  • Agencies must add disclosures about these reports and awards to their public financial reporting.

• Office of Personnel Management (OPM)

  • OPM must check agency award programs for compliance and send Congress an annual certification on that compliance.

• Comptroller General / GAO

  • The GAO must review and report on the program once after 3 years and again at 6 years.

• Taxpayers / the public

  • The public may see more information about employee-identified waste and the awards paid for those identifications.
  • There could be changes in how and when agencies propose returning or cancelling budgeted funds.

Expenses#

No publicly available information.

Possible cost items the bill could create or change:

• Agencies may pay larger cash awards because the individual cap doubles from $10,000 to $20,000.
• Administrative costs for CFO reviews, notifications to the President, and agency public reporting.
• OPM will need staff time to review and certify agency award programs annually.
• GAO will produce at least two formal reports, which has an audit/reporting cost.
• If rescissions are proposed and enacted, there could be budgetary effects on later spending, but the bill does not estimate net fiscal impact.

Proponents' View#

• The bill appears intended to encourage employees to report wasteful spending by raising the reward and clarifying a path to return unneeded funds.
• It could be seen as improving accountability by involving CFOs and by making disclosures and award amounts public in routine agency reports.
• Requiring OPM certification and GAO reviews could be viewed as adding oversight to ensure the award program works as intended.
• The process for proposing rescissions could allow unneeded budget authority to be canceled rather than spent.

Opponents' View#

• One concern is that doubling the award cap could raise program costs for agencies without a clear estimate of the total fiscal impact.
• The bill relies on agency CFOs to determine what spending is “not required,” which may raise questions about consistency and possible disagreements inside agencies.
• The requirement to notify the President to propose rescission could politicize decisions about which funds to cancel, depending on how the process is used.
• There is a risk of extra administrative burden on agencies to review reports, make determinations, publish disclosures, and manage additional award payments.
• The bill does not give detailed rules about how to evaluate borderline cases, appeal decisions, or prevent duplicate awards for the same finding.