Improper Payments Elimination and Recovery Act of 2008

Improper Payments Elimination and Recovery Act of 2008 - Amends the Improper Payments Information Act of 2002 to require the head of each federal agency to: (1) annually review all agency programs and identify those programs and activities that may be susceptible to significant improper payments; and (2) report on agency actions to reduce and recover improper payments. Defines "improper payment" as any payment that should not have been made, that was made in an incorrect or duplicate amount, or that was made to an ineligible recipient.

Requires the Director of the Office of Management and Budget (OMB) to: (1) provide guidance to agencies for reducing improper payments, addressing risks, and establishing appropriate prepayment and postpayment internal controls; and (2) prepare an annual report with an identification of the compliance status of each agency in identifying improper payments and the delinquent programs responsible for the agency's status.

Requires federal agencies with outlays of $1 million or more to conduct a recovery audit of all programs and activities to assist in recouping improper payments.

Requires: (1) each agency's Inspector General to report each fiscal year on agency compliance with the Improper Payments Information Act of 2002 and this Act; (2) the head of an agency determined not to be in compliance for two consecutive fiscal years to reprogram available funds to achieve compliance; and (3) an agency determined not to be in compliance for three consecutive fiscal years, with a delinquent program reported for two of those years consecutively, to transfer 5% of the appropriations for each of delinquent program to the Treasury.

Suspends appropriations to agencies that have a program that reports an improper payment rate greater than 15% for three consecutive fiscal years until the agency's Inspector General certifies that sufficient changes have been implemented to warrant resumed authorization of appropriations.