This Act may be cited as the “Bonuses for Cost-Cutters and Fraud Preventers Act of 2026”.

(a) Definitions.—Section 4511 of title 5, United States Code, is amended—

(1) in the section heading, by striking “Definition” and inserting “Definitions”; and

(2) in subsection (a)—

(A) by striking the period at the end and inserting a semicolon;

(B) by striking “this subchapter, the term” and inserting the following: “this subchapter—

“(1) the term”; and

(C) by adding at the end the following:

“(2) the terms ‘improper payment’ and ‘payment’ have the meanings given such terms, respectively, in section 3351 of title 31; and

“(3) the term ‘wasteful expenses’ means amounts made available for salaries and expenses accounts, operations and maintenance accounts, or other equivalent accounts—

“(A) that are identified by an employee of the agency under section 4512(a) as wasteful; and

“(B) that the Chief Financial Officer of the agency determines are not required for the purpose for which the amounts were made available.”.

(b) Authority.—Section 4512 of title 5, United States Code, is amended—

(1) in the heading, by inserting “and improper payment” before “disclosures”;

(2) in subsection (a)—

(A) by inserting after the first sentence the following: “The head of an agency may pay a cash award to any employee of such agency whose identification of wasteful expenses to the Chief Financial Officer of such agency, through a process determined by the head of such agency, has resulted in cost savings for the agency or prevented a payment that, if made, would be an improper payment resulting in financial loss to the Government.”;

(B) in paragraph (1) by striking “$10,000” and inserting “$20,000”;

(C) in paragraph (2)—

(i) by inserting “or prevented improper payments ” after “cost savings”;

(ii) by inserting “Chief Financial Officer,” after “Inspector General,”;

(iii) by striking “subsection (b)” and inserting “subsection (b) or (c), as applicable”; and

(iv) by inserting “or identification” after “disclosure”; and

(D) in the matter following paragraph (2)—

(i) by inserting “, Chief Financial Officer,” after “Inspector General”;

(ii) by inserting “or prevented improper payments” after “cost savings”; and

(iii) by inserting “or identification” after “disclosure”; and

(3) by adding at the end the following:

“(c) (1) If the Chief Financial Officer of an agency determines that potential wasteful expenses identified by an employee meet the requirements of section 4511(a)(3)(B), the head of such agency shall notify the President.

“(2) If the Chief Financial Officer of an agency determines that a payment identified by an employee would, if made, be an improper payment resulting in financial loss to the Government, the head of such agency shall notify the Secretary of the Treasury of such payment for purposes of preventing similar improper payments.

“(3) In the case of an agency for which there is no Chief Financial Officer, the head of the agency shall designate an agency employee who shall have the authority to make the determinations for identification of wasteful expenses or prevented improper payments under this section.

“(d) The head of each agency shall make available, along with, and in the same manner and form as, the provision of information required under section 1116 of title 31, information on disclosures of wasteful expenses or prevented improper payments pursuant to which an award was made under this section, including—

“(1) a description of each disclosure of possible wasteful expenses or improper payments identified by an employee and determined by the agency to have merit; and

“(2) the number and amount of cash awards provided by the agency under subsection (a).

“(e) An individual may not receive a cash award under this subchapter if the individual is—

“(1) an officer or employee of the Office of the Inspector General of an agency; or

“(2) ineligible for a cash award under section 4509.

“(f) The Director of the Office of Personnel Management, in coordination with the Director of the Office of Management and Budget and the Secretary of the Treasury, shall—

“(1) ensure that the cash award program of each agency under this section complies with this section; and

“(2) submit to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate an annual certification indicating whether the cash award program of each agency under this section complies with this section.

“(g) Not later than 3 years after the date of enactment of the Bonuses for Cost-Cutters and Fraud Preventers Act of 2026, and every 2 years thereafter for 4 years, the Comptroller General of the United States shall submit to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report on the operation of the cost savings and awards program under this section, including any recommendations for legislative changes.”.

(c) Office of Management and Budget guidance.—

(1) IN GENERAL.—Not later than six months after the date of the enactment of this Act, the Director of the Office of Management and Budget, in coordination with the Director of the Office of Personnel Management and the Secretary of the Treasury, shall issue guidance to Federal agencies on implementing the amendments made by this Act.

(2) CONTENTS.—The Director of the Office of Management and Budget shall include in the guidance required by paragraph (1) the following:

(A) Guidelines for employees of Federal agencies to identify and report within the agency of such employee a wasteful expense or improper payment.

(B) Guidelines for Federal agencies to make a determination as to whether an identification of a wasteful expense or improper payment is appropriate.

(C) Guidelines for determining an appropriate cash award for an employee of a Federal agency who identifies and reports a wasteful expense or improper payment, including any considerations for such employee’s grade, locality pay, and other considerations that may factor into the aggregate compensation limit applicable to such employee in a given calendar year.

(D) Procedures for reporting actions taken under the amendments made by this Act to the Office of Management and Budget, the Department of the Treasury, and the Office of Personnel Management, as appropriate.

(d) Effective date.—The amendments made by this section shall take effect on the date that is one year after the date of the enactment of this Act.

(e) Technical and conforming amendment.—The table of sections for subchapter II of chapter 45 of title 5, United States Code, is amended—

(1) by striking the item relating to section 4511 and inserting the following:

“4511. Definitions and general provisions.”; and

(2) by striking the item relating to section 4512 and inserting the following:

“4512. Agency awards for cost savings and improper payment disclosures.”.