A substantive amendment. v2 introduces an entirely new section (Section 3) focusing on reforms to annual compliance reports by Inspectors General, directing OMB and CIGIE to revise guidance with a focus on financial loss. It also clarifies and expands reporting requirements for executive agencies regarding improper payments, notably adding a requirement for Federal-State coordination meetings and moving a key estimate review responsibility.
ZOMBIE Act
- Sponsor
- Rep. Palmer, Gary J. [R-AL-6]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Jun 11, 2026
Bottom line
The ZOMBIE Act aims to enhance federal fraud prevention and recovery efforts by narrowing the scope of improper payment reporting to focus on actual financial losses to the government.
What it actually does
This bill, known as the ZOMBIE Act, reforms the Payment Integrity Information Act of 2019 (PIIA) to shift the focus of executive agencies from general improper payments to those that specifically result in financial loss to the government, particularly those caused by fraud. It revises definitions, reporting requirements, risk assessment guidance, and compliance reporting for federal programs to emphasize prevention and recovery of funds lost due to fraud.
Proponents argue
Supporters argue that the current PIIA framework is too broad, leading agencies to spend resources tracking technical errors that do not result in actual financial loss. By focusing on "financial loss to the Government," the ZOMBIE Act will direct agency resources more efficiently towards preventing and recovering funds lost to fraud, thereby improving government accountability and protecting taxpayer money.
Opponents contend
Critics might argue that narrowing the definition of "improper payments" could obscure the full scope of payment integrity issues, potentially allowing administrative inefficiencies or non-compliance with procedures that don't immediately result in financial loss to go unaddressed. This could lead to a less comprehensive view of payment integrity and potentially create loopholes for future issues.
The bill is moderately complex due to its technical nature and numerous amendments to existing law, requiring careful reading to understand the full implications of the changes.
Section 1
Short Title
This section establishes the short title of the Act as the "Zeroing Out Monetary Benefits Improperly Expended Act" or the "ZOMBIE Act." This is the common name by which the bill would be known and referenced.
Supporters argue
A clear and memorable short title helps in public discourse and legislative tracking, making the bill's intent more accessible.
Critics contend
No specific opposition is typically raised against this provision.
Tradeoffs
None apparent for the short title.
Section 2(a)
Redefining "Improper Payments" and Introducing "Financial Loss to the Government"
This section significantly amends the definition of "improper payments" in 31 U.S.C. 3351 by focusing on those that result in "financial loss to the Government." It also introduces a new definition for "financial loss to the Government," explicitly excluding payments that are correct in amount and recipient but fail to meet certain administrative procedures (unless those procedures are necessary for eligibility or correct amount verification).
Section 2(b)(2)(C) (amending 31 U.S.C. 3352(a)(2))
Mandating New Risk Assessment Guidance for Financial Loss
Requires the Secretary of the Treasury to develop new risk assessment guidance within one year. This guidance must specifically address the likelihood and magnitude of payment errors that *do* and *do not* result in financial loss, include a formula for estimating financial loss, and incorporate best practices for managing fraud risks in federal programs. Agencies must use this guidance for existing and new programs.
Section 2(b)(2)(D) (amending 31 U.S.C. 3352(a)(2)(D))
Ongoing Risk Assessments with Fraud Focus
This provision mandates that risk assessments be conducted on an ongoing basis, but no less frequently than once every three years. It explicitly requires these assessments to include fraud in any program or activity that causes improper payments resulting in financial loss to the Government, incorporating best practices for fraud risk management.
Section 2(b)(2)(E) (amending 31 U.S.C. 3352(a)(2)(E))
Triennial Reports on Risks and Controls
Changes the reporting frequency for risk assessments from annual to "not less than once every 3 years." It requires these reports to include a prioritized listing of identified risks associated with each program and activity, and corresponding financial and administrative controls to mitigate those risks, including the use of the Do Not Pay Initiative and other Treasury/Inspector General systems to prevent fraud or improper payments resulting in financial loss *prior* to eligibility determination or payment.
Section 2(b)(3)(C)(ii) (amending 31 U.S.C. 3352(b)(2)(B))
Detailed Financial Loss and Fraud Reporting for High-Priority Programs
For high-priority federal programs, this provision mandates new reporting metrics. Agencies must include estimates of total payments resulting in financial loss, total payments *not* resulting in financial loss, the percentage of payments resulting in financial loss, an assessment of the portion of financial loss due to fraudulent actions, total disbursed payments, and descriptions of proposed resources or legislative changes to improve program integrity.
Section 2(b)(3)(C)(v) (amending 31 U.S.C. 3352(b)(2)(F))
Enhanced Inter-Agency Coordination for Fraud Prevention
Requires the head of each executive agency with a high-priority program to designate a senior official as a liaison. This liaison must meet at least annually with OMB, Treasury's Fiscal Service, the agency's Inspector General, and the Pandemic Response Accountability Committee (or successor) to report on actions taken and planned to prevent improper payments (with a focus on financial loss) and mitigate fraud.
Section 2(b)(3)(C)(vi) (amending 31 U.S.C. 3352(b)(2)(G))
Federal-State Coordination Meetings for Fraud Prevention
Requires OMB and the Secretary of the Treasury to convene annual meetings with State officials responsible for program and payment integrity in programs administered on behalf of the Federal Government by State or local governments. The purpose is to review fraud prevention performance, share best practices, and identify coordination challenges.
Explicitly excludes payments that are correct in amount and recipient but fail to meet certain administrative procedures from the definition of "financial loss to the Government," unless those procedures are necessary to establish eligibility or verify the correct payment amount.
Section 2(a)(2) (adding 31 U.S.C. 3351(9)(B))
Why it matters:This is standard legislative practice for defining terms, but its specific impact on what constitutes an "improper payment" for reporting purposes is significant and could be overlooked.
Case for: Proponents argue this streamlines agency focus to actual monetary losses, preventing resources from being wasted on tracking purely procedural errors that don't harm the Treasury.
Case against: Opponents might argue that ignoring procedural non-compliance, even if it doesn't immediately cause financial loss, could create systemic vulnerabilities that could be exploited for fraud in the future or indicate broader administrative weaknesses.
Estimated impact: Shifts the entire scope of improper payment reporting and fraud prevention efforts across all federal agencies, potentially reducing the reported volume of "improper payments" while focusing on actual financial losses.
Modifies the thresholds for an agency to be deemed "not compliant" by its Inspector General. Specifically, it changes the threshold from 25% to 10% for certain criteria (e.g., not publishing reports) and from 25% to 75% for others (e.g., not meeting reduction targets).
Section 2(b)(9) (amending 31 U.S.C. 3352(i)(2))
Why it matters:This is typical for technical adjustments to existing legal frameworks. It's not necessarily evasive, but its impact is significant for agency accountability.
Case for: Supporters argue these adjustments refine the accountability framework, making it stricter on transparency (lower threshold for reporting failures) while potentially more realistic on the pace of fraud reduction (higher threshold for missing reduction targets).
Case against: Critics might argue that raising the threshold for meeting reduction targets could be perceived as softening accountability for actual financial loss reduction, while lowering the threshold for administrative failures might be seen as overly stringent.
Estimated impact: Alters the performance metrics and accountability standards for all executive agencies regarding payment integrity, influencing how they are evaluated by their Inspectors General.