To establish within the Office of the Inspector General of the Department of Homeland Security the Special Office of the Inspector General for Natural Disaster Response and Reconstruction.

SECTION 1. SPECIAL OFFICE OF THE INSPECTOR GENERAL FOR NATURAL DISASTER 
              RESPONSE AND RECONSTRUCTION.

    (a) Purposes.--The purposes of this section are as follows:
            (1) To ensure that funds, services, products, and programs 
        intended to meet the needs of victims of Hurricane Katrina are 
        effectively and efficiently provided by maintaining direct, 
        independent and objective conduct of related audits and 
        investigations.
            (2) To provide the Inspector General of the Department of 
        Homeland Security additional resources capable of making 
        recommendations and policies to prevent and detect fraud and 
        abuse, and ensure effective administration of programs and 
        services related to the aftermath of Hurricane Katrina.
    (b) Definitions.--In this section:
            (1) Affected area.--The term ``affected area'' means any 
        area determined in Presidential Disaster Declaration 1603, 
        1604, or 1605, issued August 29, 2005, to be adversely affected 
        by a major disaster.
            (2) The term ``Inspector General'' means the Inspector 
        General of the Department of Homeland Security.
            (3) The term ``Special Office'' means the Special Office of 
        the Inspector General for Natural Disaster Response and 
        Reconstruction established by this section.
            (4) The term ``Director'' means the Director of the Special 
        Office.
    (c) Special Office of the Inspector General for Natural Disaster 
Response and Reconstruction.--There is hereby established within the 
Office of the Inspector General of the Department of Homeland Security 
the Special Office of the Inspector General for Natural Disaster 
Response and Reconstruction.
    (d) Director of the Special Office of the Inspector General.--
            (1) In general.--The Director of the Special Office of the 
        Inspector General shall be the head of the Special Office and 
        shall be appointed by the Inspector General.
            (2) Basis for appointment.--The appointment of the Director 
        shall be made solely on the basis of integrity, administrative 
        expertise, and demonstrated ability in accounting, auditing, 
        financial analysis, law, management analysis, public 
        administration, or investigations.
            (3) Deadline for appointment.--The appointment of a 
        Director by the Inspector General shall be made not later than 
        30 days after the date of the enactment of this Act.
            (4) Basic pay.--The annual rate of basic pay of the 
        Director shall be set by the Inspector General, subject to the 
        provisions of chapter 51 and subchapter III of chapter 53 or 
        title 5, United States Code, governing classification and 
        General Schedule pay rates.
    (e) Supervision.--The Director shall report directly to, and be 
under the direct authority and general supervision of, the Inspector 
General.
    (f) Duties.--
            (1) In general.--It shall be the duty of the Special Office 
        to conduct, supervise, and coordinate audits and investigations 
        of the treatment, handling, and expenditure of Federal funds by 
        any organization providing relief, assistance, or 
        reconstruction related to Hurricane Katrina and of the 
        programs, operations, and contracts carried out utilizing such 
        funds, including--
                    (A) the oversight and accounting of the obligation 
                and expenditure of such funds;
                    (B) the monitoring and review of reconstruction 
                activities funded by such funds;
                    (C) the monitoring and review of contracts funded 
                by such funds;
                    (D) the monitoring and review of the transfer of 
                such funds and associated information between and among 
                the affected States, departments, agencies, and 
                entities of the Federal Government, and private and 
                nongovernmental entities; and
                    (E) the maintenance of records on the use of such 
                funds to facilitate future audits and investigations of 
                the use of such funds.
            (2) Systems, procedure, and controls.--The Director, in 
        consultation with the Inspector General, shall establish, 
        maintain, and oversee such systems, procedures, and controls as 
        shall be considered appropriate by them to discharge the duty 
        under paragraph (1).
    (g) Personnel, Facilities, and Other Resources.--
            (1) Additional employee.--The Inspector General may select, 
        appoint, and employ additional employees above authorized 
        levels as may be necessary for carrying out the duties of the 
        Special Office under this section, but no more than 40 
        additional full-time equivalent positions.
            (2) Field office.--The Inspector General may operate field 
        offices in the affected areas as may be necessary for the 
        Special Office to carry out the duties prescribed in subsection 
        (f).
    (h) Reports.--
            (1) In general.--Not later than 60 days after the date of 
        the enactment of this Act, or the end of the first fiscal 
        quarter beginning after the date of the enactment of this Act, 
        whichever is later, and every fiscal quarter thereafter, the 
        Inspector General shall submit to the Congress a report 
        summarizing the activities and findings, if any, of the Special 
        Office during the period after the last report issued/preceding 
        fiscal quarter? note that there will be no ``last report '' 
        before the first report . Each report shall include, for the 
        period covered by such report, a detailed statement of all 
        obligations, expenditures, and revenues associated with relief, 
        reconstruction, and rehabilitation activities in the areas 
        affected by Hurricane Katrina, including the following:
                    (A) Obligations and expenditures of appropriated 
                funds.
                    (B) Revenues attributable to or consisting of funds 
                provided by foreign nations or international 
                organizations, and any obligations or expenditures of 
                such revenues.
                    (C) Any contracts having a value of more than 
                $2,000,000 entered into by any Federal agency with any 
                public or private entity, to--
                            (i) provide products, services, or 
                        temporary or permanent housing to those persons 
                        affected by Hurricane Katrina; and
                            (ii) build or rebuild physical 
                        infrastructure in the affected areas.
                    (D) In the case of any contract described in 
                subparagraph (C)--
                            (i) the amount of the contract or other 
                        agreement;
                            (ii) a brief discussion of the scope of the 
                        contract or other agreement;
                            (iii) a discussion of how the contracting 
                        agency identified, and solicited offers from, 
                        potential contractors to perform the contract, 
                        together with a list of the potential 
                        contractors that were issued solicitations for 
                        the offers; and
                            (iv) the justification and approval 
                        documents on which was based the determination 
                        to use procedures other than procedures that 
                        provide for full and open competition.
                    (E) A discussion related to any administrative 
                delays in getting available services or products to the 
                their intended recipients in a timely manner.
            (2) Prohibition on disclosure of information.--Nothing in 
        this subsection shall be construed to authorize the public 
        disclosure of information that is specifically prohibited from 
        disclosure under law.
    (i) Transparency.--Not later than 60 days after the date of the 
submittal to the Congress of a report under subsection (h), the 
Secretary of Homeland Security shall make copies of such report 
available to the public upon request, and at a reasonable cost.
    (j) Funding.--Of the funds appropriated for the Department of 
Homeland Security in the Second Emergency Supplemental Appropriations 
Act to Meet Immediate Needs Arising From the Consequences of Hurricane 
Katrina, 2005, $15,000,000 shall be available to the Office of the 
Inspector General to carry out this section for fiscal year 2006.

Summary: Establishes within the Office of Inspector General of the Department of Homeland Security the Special Office of the Inspector General for Natural Disaster Response and Reconstruction. Requires the Special Office to conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of federal funds by any organization providing relief, assistance, or reconstruction related to Hurricane Katrina, and of the programs, operations, and contracts carried out utilizing such funds.