The STEP Act strengthens requirements for federal agencies to prevent improper payments. It requires agencies to identify new programs as susceptible to significant improper payments and allows CFO-approved estimation methodologies. Agencies must report progress on fraud prevention for 10 years after enactment.
Latest Action
Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
AI Summary
Plain-English explanation of this bill
The STEP Act strengthens requirements for federal agencies to prevent improper payments. It requires agencies to identify new programs as susceptible to significant improper payments and allows CFO-approved estimation methodologies. Agencies must report progress on fraud prevention for 10 years after enactment.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Safeguarding the Transparency and Efficiency of Payments Act or the STEP Act</strong></p><p>This 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).<br/> <br/>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 as susceptible.)<br/> <br/>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.)</p><p>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 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.<br/> <br/>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.</p>
Key Points
Main provisions of the bill
Requires identification of programs susceptible to improper payments
Mandates CFO certification of payment risk assessments
Requires 10 years of congressional reporting on fraud prevention
Strengthens financial controls and corrective action plans
How This Impacts Americans
Potential effects on citizens and communities
Federal agencies would face stricter requirements to identify and reduce improper payments. Taxpayers could benefit from reduced waste as agencies implement better financial controls and fraud prevention measures.
Policy Areas
Primary Policy Area
Government Operations and Politics
Related Subjects
Congressional oversight
Executive agency funding and structure
Fraud offenses and financial crimes
Government information and archives
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
80, 119th Congress (2025). "STEP Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-80
