HB 2056 — An Act amending the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929, providing for miscellaneous provisions relating to recovery audits.

PRINTER'S NO.   2634

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2056
                                               Session of
                                                 2025

     INTRODUCED BY GROVE, NOVEMBER 19, 2025

     REFERRED TO COMMITTEE ON APPROPRIATIONS, NOVEMBER 19, 2025


                                    AN ACT
 1   Amending the act of April 9, 1929 (P.L.177, No.175), entitled
 2      "An act providing for and reorganizing the conduct of the
 3      executive and administrative work of the Commonwealth by the
 4      Executive Department thereof and the administrative
 5      departments, boards, commissions, and officers thereof,
 6      including the boards of trustees of State Normal Schools, or
 7      Teachers Colleges; abolishing, creating, reorganizing or
 8      authorizing the reorganization of certain administrative
 9      departments, boards, and commissions; defining the powers and
10      duties of the Governor and other executive and administrative
11      officers, and of the several administrative departments,
12      boards, commissions, and officers; fixing the salaries of the
13      Governor, Lieutenant Governor, and certain other executive
14      and administrative officers; providing for the appointment of
15      certain administrative officers, and of all deputies and
16      other assistants and employes in certain departments, boards,
17      and commissions; providing for judicial administration; and
18      prescribing the manner in which the number and compensation
19      of the deputies and all other assistants and employes of
20      certain departments, boards and commissions shall be
21      determined," providing for miscellaneous provisions relating
22      to recovery audits.
23      The General Assembly of the Commonwealth of Pennsylvania
24   hereby enacts as follows:
25      Section 1.    The act of April 9, 1929 (P.L.177, No.175), known
26   as The Administrative Code of 1929, is amended by adding an
27   article to read:
28                             ARTICLE XXVIII-J
 1                          MISCELLANEOUS PROVISIONS
 2   Section 2801-J.    Recovery audits.
 3      (a)   Schedule of recovery audit.--
 4            (1)   The secretary shall establish a schedule for the
 5      review of Commonwealth agency expenditures for improper
 6      payments and payment recovery for a Commonwealth agency that
 7      has $50,000,000 or more in payments to individuals, vendors
 8      or entities.
 9            (2)   For the review under this section, the secretary
10      shall contract with an auditor to perform a recovery audit of
11      payments by a Commonwealth agency to individuals, vendors or
12      entities.
13      (b)   Contract for auditor.--A contract for an auditor:
14            (1)   May provide for reasonable compensation for services
15      provided under the contract, which may include compensation
16      as determined by the application of a specified percentage of
17      the total amount of State money recovered during the recovery
18      audit.
19            (2)   May permit or require the auditor to pursue a
20      judicial action in a court within or outside this
21      Commonwealth to recover an overpaid amount.
22            (3)   May allow for the performance of existing payment
23      auditing procedures.
24            (4)   Shall not allow a recovery audit of a payment during
25      the 90-day period after the date the payment was made.
26      (c)   Confidential information.--A Commonwealth agency being
27   audited by an auditor shall provide the auditor with any
28   confidential information in the custody of the Commonwealth
29   agency or secretary that is necessary for the performance of the
30   recovery audit. The auditor shall be subject to restrictions

20250HB2056PN2634                    - 2 -
 1   regarding the disclosure of confidential information under this
 2   section. These restrictions shall be included as part of the
 3   terms of the contract made between the secretary and
 4   Commonwealth agency. If the auditor discloses confidential
 5   information, the auditor shall be guilty of a misdemeanor of the
 6   third degree.
 7      (d)   Recovery of Federal money.--Federal money recovered
 8   during a recovery audit shall be expended or returned in
 9   accordance with rules associated with the program associated
10   with the Federal money.
11      (e)   Report.--Within seven days of receiving a report
12   regarding a recovery audit from an auditor, the secretary shall
13   transmit, by electronic means or otherwise, a copy of the
14   recovery audit performed by the auditor to the following:
15            (1)   The Governor.
16            (2)   The Inspector General.
17            (3)   The General Assembly.
18      (f)   Requirements for auditors.--
19            (1)   The terms of a contract between a Commonwealth
20      agency and an auditor under this section shall provide for
21      the prohibition on a conflict of interest between the auditor
22      and any Commonwealth agency or program that the auditor is
23      contracted to audit.
24            (2)   An auditor shall have experience in performing
25      recovery audits for public entities that successfully
26      recovered public money.
27            (3)   An auditor shall perform a recovery audit in
28      accordance with 31 U.S.C. Ch. 75 (relating to requirements
29      for single audits) and government auditing standards and
30      practices required by the United States Government

20250HB2056PN2634                    - 3 -
 1      Accountability Office.
 2      (g)   Rules and guidelines.--The secretary shall adopt rules
 3   or guidelines necessary for the implementation of this section.
 4      (h)   Definitions.--As used in this section, the following
 5   words and phrases shall have the meanings given to them in this
 6   subsection unless the context clearly indicates otherwise:
 7      "Auditor."    A private auditor or auditing firm with
 8   experience in performing a recovery audit and hired under this
 9   section to review a Commonwealth agency's expenditures.
10      "Commonwealth agency."    A department, office, board,
11   commission or agency under the direct or policy supervision of
12   the Governor.
13      "Improper payment."    A payment that should not have been made
14   by a Commonwealth agency or a contractor with a Commonwealth
15   agency under statutory, contractual, administrative or other
16   legal applicable requirements, including any of the following:
17            (1)   An overpayment.
18            (2)   An underpayment.
19            (3)   A payment to an ineligible recipient.
20            (4)   A payment for an ineligible service.
21            (5)   A payment for a duplicative or redundant service.
22            (6)   A payment for services not received.
23            (7)   A payment for goods and services that does not
24      utilize or was not given available discounts.
25            (8)   Invoice or pricing errors.
26            (9)   The failure to comply with a purchasing agreement.
27      "Recovery audit."    A financial management technique used to
28   identify improper payments made by a Commonwealth agency with
29   respect to individuals, vendors or entities in connection with a
30   payment activity.

20250HB2056PN2634                      - 4 -
1      "Secretary."   The Secretary of the Budget of the
2   Commonwealth.
3      Section 2.   This act shall take effect in 180 days.




20250HB2056PN2634                 - 5 -