Chapter XIII: Section 510: of the Homeland Security Act of 2002 was redesignated (6)

(a) Audits of Grant Programs.--
(1) Compliance requirements.--
(A) Audit requirement.--Each recipient of a
grant administered by the Department that
expends not less than $500,000 in Federal funds
during its fiscal year shall submit to the
Administrator a copy of the organization-wide
financial and compliance audit report required
under chapter 75 of title 31, United States
Code.
(B) Access to information.--The Department
and each recipient of a grant administered by
the Department shall provide the Comptroller
General and any officer or employee of the
Government Accountability Office with full
access to information regarding the activities
carried out related to any grant administered
by the Department.
(C) Improper payments.--Consistent with the
Improper Payments Information Act of 2002 (31
U.S.C. 3321 note), for each of the grant
programs under sections 2003 and 2004 of this
title and section 662 of the Post-Katrina
Emergency Management Reform Act of 2006 (6
U.S.C. 762), the Administrator shall specify
policies and procedures for--
(i) identifying activities funded
under any such grant program that are
susceptible to significant improper
payments; and
(ii) reporting any improper
payments to the Department.
(2) Agency program review.--
(A) In general.--Not less than once every 2
years, the Administrator shall conduct, for
each State and high-risk urban area receiving a
grant administered by the Department, a
programmatic and financial review of all grants
awarded by the Department to prevent, prepare
for, protect against, or respond to natural
disasters, acts of terrorism, or other man-made
disasters, excluding assistance provided under
section 203, title IV, or title V of the Robert
T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5133, 5170 et seq.,
and 5191 et seq.).
(B) Contents.--Each review under
subparagraph (A) shall, at a minimum, examine--
(i) whether the funds awarded were
used in accordance with the law,
program guidance, and State homeland
security plans or other applicable
plans; and
(ii) the extent to which funds
awarded enhanced the ability of a
grantee to prevent, prepare for,
protect against, and respond to natural
disasters, acts of terrorism, and other
man-made disasters.
(C) Authorization of appropriations.--In
addition to any other amounts authorized to be
appropriated to the Administrator, there are
authorized to be appropriated to the
Administrator for reviews under this
paragraph--
(i) $8,000,000 for each of fiscal
years 2008, 2009, and 2010; and
(ii) such sums as are necessary for
fiscal year 2011, and each fiscal year
thereafter.
(3) Office of inspector general performance
audits.--
(A) In general.--In order to ensure the
effective and appropriate use of grants
administered by the Department, the Inspector
General of the Department each year shall
conduct audits of a sample of States and high-
risk urban areas that receive grants
administered by the Department to prevent,
prepare for, protect against, or respond to
natural disasters, acts of terrorism, or other
man-made disasters, excluding assistance
provided under section 203, title IV, or title
V of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5133, 5170
et seq., and 5191 et seq.).
(B) Determining samples.--The sample
selected for audits under subparagraph (A)
shall be--
(i) of an appropriate size to--
(I) assess the overall
integrity of the grant programs
described in subparagraph (A);
and
(II) act as a deterrent to
financial mismanagement; and
(ii) selected based on--
(I) the size of the grants
awarded to the recipient;
(II) the past grant
management performance of the
recipient;
(III) concerns identified
by the Administrator, including
referrals from the
Administrator; and
(IV) such other factors as
determined by the Inspector
General of the Department.
(C) Comprehensive auditing.--During the 7-
year period beginning on the date of enactment
of the Implementing Recommendations of the 9/11
Commission Act of 2007, the Inspector General
of the Department shall conduct not fewer than
1 audit of each State that receives funds under
a grant under section 2003 or 2004.
(D) Report by the inspector general.--
(i) In general.--The Inspector
General of the Department shall submit
to the appropriate committees of
Congress an annual consolidated report
regarding the audits completed during
the fiscal year before the date of that
report.
(ii) Contents.--Each report
submitted under clause (i) shall
describe, for the fiscal year before
the date of that report--
(I) the audits conducted
under subparagraph (A);
(II) the findings of the
Inspector General with respect
to the audits conducted under
subparagraph (A);
(III) whether the funds
awarded were used in accordance
with the law, program guidance,
and State homeland security
plans and other applicable
plans; and
(IV) the extent to which
funds awarded enhanced the
ability of a grantee to
prevent, prepare for, protect
against, and respond to natural
disasters, acts of terrorism
and other man-made disasters.
(iii) Deadline.--For each year, the
report required under clause (i) shall
be submitted not later than December
31.
(E) Public availability on website.--The
Inspector General of the Department shall make
each audit conducted under subparagraph (A)
available on the website of the Inspector
General, subject to redaction as the Inspector
General determines necessary to protect
classified and other sensitive information.
(F) Provision of information to
administrator.--The Inspector General of the
Department shall provide to the Administrator
any findings and recommendations from audits
conducted under subparagraph (A).
(G) Evaluation of grants management and
oversight.--Not later than 1 year after the
date of enactment of the Implementing
Recommendations of the 9/11 Commission Act of
2007, the Inspector General of the Department
shall review and evaluate the grants management
and oversight practices of the Federal
Emergency Management Agency, including
assessment of and recommendations relating to--
(i) the skills, resources, and
capabilities of the workforce; and
(ii) any additional resources and
staff necessary to carry out such
management and oversight.
(H) Authorization of appropriations.--In
addition to any other amounts authorized to be
appropriated to the Inspector General of the
Department, there are authorized to be
appropriated to the Inspector General of the
Department for audits under subparagraph (A)--
(i) $8,500,000 for each of fiscal
years 2008, 2009, and 2010; and
(ii) such sums as are necessary for
fiscal year 2011, and each fiscal year
thereafter.
(4) Performance assessment.--In order to ensure
that States and high-risk urban areas are using grants
administered by the Department appropriately to meet
target capabilities and preparedness priorities, the
Administrator shall--
(A) ensure that any such State or high-risk
urban area conducts or participates in
exercises under section 648(b) of the Post-
Katrina Emergency Management Reform Act of 2006
(6 U.S.C. 748(b));
(B) use performance metrics in accordance
with the comprehensive assessment system under
section 649 of the Post-Katrina Emergency
Management Reform Act of 2006 (6 U.S.C. 749)
and ensure that any such State or high-risk
urban area regularly tests its progress against
such metrics through the exercises required
under subparagraph (A);
(C) use the remedial action management
program under section 650 of the Post-Katrina
Emergency Management Reform Act of 2006 (6
U.S.C. 750); and
(D) ensure that each State receiving a
grant administered by the Department submits a
report to the Administrator on its level of
preparedness, as required by section 652(c) of
the Post-Katrina Emergency Management Reform
Act of 2006 (6 U.S.C. 752(c)).
(5) Consideration of assessments.--In conducting
program reviews and performance audits under paragraphs
(2) and (3), the Administrator and the Inspector
General of the Department shall take into account the
performance assessment elements required under
paragraph (4).
(6) Recovery audits.--The Administrator shall
conduct a recovery audit (as that term is defined by
the Director of the Office of Management and Budget
under section 3561 of title 31, United States Code) for
any grant administered by the Department with a total
value of not less than $1,000,000, if the Administrator
finds that--
(A) a financial audit has identified
improper payments that can be recouped; and
(B) it is cost effective to conduct a
recovery audit to recapture the targeted funds.
(7) Remedies for noncompliance.--
(A) In general.--If, as a result of a
review or audit under this subsection or
otherwise, the Administrator finds that a
recipient of a grant under this title has
failed to substantially comply with any
provision of law or with any regulations or
guidelines of the Department regarding eligible
expenditures, the Administrator shall--
(i) reduce the amount of payment of
grant funds to the recipient by an
amount equal to the amount of grants
funds that were not properly expended
by the recipient;
(ii) limit the use of grant funds
to programs, projects, or activities
not affected by the failure to comply;
(iii) refer the matter to the
Inspector General of the Department for
further investigation;
(iv) terminate any payment of grant
funds to be made to the recipient; or
(v) take such other action as the
Administrator determines appropriate.
(B) Duration of penalty.--The Administrator
shall apply an appropriate penalty under
subparagraph (A) until such time as the
Administrator determines that the grant
recipient is in full compliance with the law
and with applicable guidelines or regulations
of the Department.
(b) Reports by Grant Recipients.--
(1) Quarterly reports on homeland security
spending.--
(A) In general.--As a condition of
receiving a grant under section 2003 or 2004, a
State, high-risk urban area, or directly
eligible tribe shall, not later than 30 days
after the end of each Federal fiscal quarter,
submit to the Administrator a report on
activities performed using grant funds during
that fiscal quarter.
(B) Contents.--Each report submitted under
subparagraph (A) shall at a minimum include,
for the applicable State, high-risk urban area,
or directly eligible tribe, and each subgrantee
thereof--
(i) the amount obligated to that
recipient under section 2003 or 2004 in
that quarter;
(ii) the amount of funds received
and expended under section 2003 or 2004
by that recipient in that quarter; and
(iii) a summary description of
expenditures made by that recipient
using such funds, and the purposes for
which such expenditures were made.
(C) End-of-year report.--The report
submitted under subparagraph (A) by a State,
high-risk urban area, or directly eligible
tribe relating to the last quarter of any
fiscal year shall include--
(i) the amount and date of receipt
of all funds received under the grant
during that fiscal year;
(ii) the identity of, and amount
provided to, any subgrantee for that
grant during that fiscal year;
(iii) the amount and the dates of
disbursements of all such funds
expended in compliance with section
2021(a)(1) or under mutual aid
agreements or other sharing
arrangements that apply within the
State, high-risk urban area, or
directly eligible tribe, as applicable,
during that fiscal year; and
(iv) how the funds were used by
each recipient or subgrantee during
that fiscal year.
(2) Annual report.--Any State applying for a grant
under section 2004 shall submit to the Administrator
annually a State preparedness report, as required by
section 652(c) of the Post-Katrina Emergency Management
Reform Act of 2006 (6 U.S.C. 752(c)).
(c) Reports by the Administrator.--
(1) Federal preparedness report.--The Administrator
shall submit to the appropriate committees of Congress
annually the Federal Preparedness Report required under
section 652(a) of the Post-Katrina Emergency Management
Reform Act of 2006 (6 U.S.C. 752(a)).
(2) Risk assessment.--
(A) In general.--For each fiscal year, the
Administrator shall provide to the appropriate
committees of Congress a detailed and
comprehensive explanation of the methodologies
used to calculate risk and compute the
allocation of funds for grants administered by
the Department, including--
(i) all variables included in the
risk assessment and the weights
assigned to each such variable;
(ii) an explanation of how each
such variable, as weighted, correlates
to risk, and the basis for concluding
there is such a correlation; and
(iii) any change in the
methodologies from the previous fiscal
year, including changes in variables
considered, weighting of those
variables, and computational methods.
(B) Classified annex.--The information
required under subparagraph (A) shall be
provided in unclassified form to the greatest
extent possible, and may include a classified
annex if necessary.
(C) Deadline.--For each fiscal year, the
information required under subparagraph (A)
shall be provided on the earlier of--
(i) October 31; or
(ii) 30 days before the issuance of
any program guidance for grants
administered by the Department.
(3) Tribal funding report.--At the end of each
fiscal year, the Administrator shall submit to the
appropriate committees of Congress a report setting
forth the amount of funding provided during that fiscal
year to Indian tribes under any grant program
administered by the Department, whether provided
directly or through a subgrant from a State or high-
risk urban area.