Increasing Cash Bonuses for Federal Employees Who Identify Unnecessary Spending (H.R. 378)

What is H.R. 378?

(Updated December 12, 2018)

This bill would authorize the head of a federal agency to pay a cash award to any employee whose identification of unnecessary expenses resulted in cost savings for the agency. The maximum dollar amount of such an award would be increased from $10,000 to $20,000. Current law only allows Inspectors General (IG) to pay bonuses for federal workers who identify waste, fraud, or mismanagement of funds.

If the agency’s Chief Financial Officer determines that the potential unnecessary expenses identified by the employee meet applicable, the unnecessary funds would be transferred to the Treasury’s general fund to be used to reduce the deficit or federal debt (if there’s no current deficit). An agency head wouldn’t be able to retain more than 10 percent of amounts transferred to the general fund.

Certain federal employees would be ineligible for the cash awards, including:

• An officer serving in a position at level I of the Executive Schedule;

• The head of an agency;

• An officer or employee of the Office of the Inspector General of an agency;

• A commissioner, board member, or other voting member of an independent establishment.

Argument in favor

Federal agencies should make a concerted effort to find ways to save taxpayer money, and increasing cash bonuses for employees who identify unnecessary expenses will get them proactively involved in that effort.

Argument opposed

There’s no reason to broaden the cash bonus program for federal employees who identify unnecessary costs — such awards are already available through agencies’ Office of the Inspector General on a smaller scale.

Impact

Federal employees who identify unnecessary expenses; federal agencies; and the Treasury.

Cost of H.R. 378

The CBO estimates that enacting this bill wouldn’t increase spending or significantly reduce the federal budget.

Additional Info

In-Depth: Sponsoring Rep. Chuck Fleischmann (R-TN) introduced this bill to strengthen the cash bonus incentive system for federal employees who identify and report unnecessary spending:

“Currently federal agencies strive to spend every cent they are allocated.  In the private sector, however, employees work hard to identify ways to save the organization money and they often get rewarded for their diligence. It is time for federal agencies to do the same and return that savings to the U.S. Treasury.  Our country is in immense debt and my bill presents a practical solution encouraging federal agencies to take a proactive approach to save taxpayer dollars.”

This legislation passed the House Oversight and Government Reform Committee on a voice vote and has the support of one cosponsor in the House — Rep. Jim Cooper (D-TN).

Media:

• Sponsoring Rep. Chuck Fleischmann (R-TN) Press Release
  
• CBO Cost Estimate
  
• Government Executive (Previous Version)