Sec. 2405. REQUIREMENT OF REPORTS AND AUDITS BY STATES

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## SEC. 2405 REQUIREMENT OF REPORTS AND AUDITS BY STATES **[**300dd–4**]** ###

(a)Reports ####

(1)The Secretary may not make payments under section 2401(a) for a fiscal year unless the State involved agrees to prepare and submit to the Secretary, by not later than January 1 following the fiscal year, an annual report in such form and containing such information as the Secretary determines (after consultation with the States and the Comptroller General of the United States) to be necessary for— #####

(A)securing a record and a description of the purposes for which payments received by the State pursuant to section 2401(a) were expended and of the recipients of such payments; #####

(B)determining whether the payments were expended in accordance with the purpose of this part; and #####

(C)determining the percentage of payments received pursuant to section 2401(a) that were expended by the State for administrative expenses during the fiscal year involved. ####

(2)Each report by a State under paragraph

(1)for a fiscal year also shall include— #####

(A)information on the number and type of eligible individuals provided home and community-based health services by the State under this part for the fiscal year; #####

(B)information on the types of home and community-based health services so provided; #####

(C)information on the average monthly costs of such services and a comparison of such costs with costs of providing services in hospitals, nursing facilities, and similar institutions; and #####

(D)such other information as the Secretary may require to provide for an evaluation of the program under this part and its cost-effectiveness. ###

(b)Audits ####

(1)The Secretary may not make payments under section 2401(a) for a fiscal year unless the State involved agrees to establish such fiscal control and fund accounting procedures as may be necessary to ensure the proper disbursal of, and accounting for, amounts received by the State under such section. ####

(2)The Secretary may not make payments under section 2401(a) for a fiscal year unless the State involved agrees that— #####

(A)the State will provide for— ######

(i)a financial and compliance audit of such payments; or ######

(ii)a single financial and compliance audit of each entity administering such payments; #####

(B)the audit will be performed biennially and will cover expenditures in each fiscal year; and #####

(C)the audit will be conducted in accordance with standards established by the Comptroller General of the United States for the audit of governmental organizations, programs, activities, and functions. ####

(3)The Secretary may not make payments under section 2401(a) for a fiscal year unless the State involved agrees that, not later than 30 days after the completion of an audit under paragraph (2), the State will provide a copy of the audit report to the State legislature. ####

(4)For purposes of paragraph (2), the term “**financial and compliance audit**” means an audit to determine whether the financial statements of an audited entity present fairly the financial position, and the results of financial operations, of the entity in accordance with generally accepted accounting principles, and whether the entity has complied with laws and regulations that may have a material effect upon the financial statements. ###

(c)Availability to Public The Secretary may not make payments under section 2401(a) unless the State involved agrees to make copies of the reports and audits described in this section available for public inspection. ###

(d)Evaluations by Comptroller General The Comptroller General of the United States shall, from time to time, evaluate the expenditures by the States of payments under section 2401(a) in order to assure that expenditures are consistent with the provisions of this part.