124 STAT. 2225 PUBLIC LAW 111–204—JULY 22, 2010 and Budget, that improper payments in the program or activity in the preceding fiscal year may have exceeded— ‘‘(I) $10,000,000 of all program or activity pay- ments made during that fiscal year reported and 1.5 percent of program outlays; or ‘‘(II) $100,000,000. ‘‘(B) SCOPE.—In conducting the reviews under para- graph (1), the head of each agency shall take into account those risk factors that are likely to contribute to a suscepti- bility to significant improper payments, such as— ‘‘(i) whether the program or activity reviewed is new to the agency; ‘‘(ii) the complexity of the program or activity reviewed; ‘‘(iii) the volume of payments made through the program or activity reviewed; ‘‘(iv) whether payments or payment eligibility decisions are made outside of the agency, such as by a State or local government; ‘‘(v) recent major changes in program funding, authorities, practices, or procedures; ‘‘(vi) the level, experience, and quality of training for personnel responsible for making program eligi- bility determinations or certifying that payments are accurate; and ‘‘(vii) significant deficiencies in the audit report of the agency or other relevant management findings that might hinder accurate payment certification.’’. (b) ESTIMATION OF IMPROPER PAYMENTS.—Section 2 of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by striking subsection (b) and inserting the following: ‘‘(b) ESTIMATION OF IMPROPER PAYMENTS.—With respect to each program and activity identified under subsection (a), the head of the relevant agency shall— ‘‘(1) produce a statistically valid estimate, or an estimate that is otherwise appropriate using a methodology approved by the Director of the Office of Management and Budget, of the improper payments made by each program and activity; and ‘‘(2) include those estimates in the accompanying materials to the annual financial statement of the agency required under section 3515 of title 31, United States Code, or similar provision of law and applicable guidance of the Office of Management and Budget.’’. (c) REPORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.— Section 2 of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) is amended by striking subsection (c) and inserting the following: ‘‘(c) REPORTS ON ACTIONS TO REDUCE IMPROPER PAYMENTS.— With respect to any program or activity of an agency with estimated improper payments under subsection (b), the head of the agency shall provide with the estimate under subsection (b) a report on what actions the agency is taking to reduce improper payments, including— ‘‘(1) a description of the causes of the improper payments, actions planned or taken to correct those causes, and the
