130
‘‘(g) EMPLOYMENT
AND TRAINING.—Each State
shall implement an employment and training program for
needy individuals under the program.
‘‘(h) ENFORCEMENT.—
‘‘(1) REVIEW
OF
COMPLIANCE
WITH
STATE
PLAN.—The Secretary shall review and monitor
State compliance with this section and the State
plan approved under subsection (d)(3).
‘‘(2) NONCOMPLIANCE.—
‘‘(A) IN GENERAL.—If the Secretary, after
reasonable notice to a State and opportunity for
a hearing, finds that—
‘‘(i) there has been a failure by the
State to comply substantially with any pro-
vision or requirement set forth in the State
plan approved under subsection (d)(3); or
‘‘(ii) in the operation of any program
or activity for which assistance is provided
under this section, there is a failure by the
State to comply substantially with any pro-
vision of this section, the Secretary shall
notify the State of the finding and that no
further payments will be made to the State
under this section (or, in the case of non-
compliance in the operation of a program
131
or activity, that no further payments to the
State will be made with respect to the pro-
gram or activity) until the Secretary is sat-
isfied that there is no longer any failure to
comply or that the noncompliance will be
promptly corrected.
‘‘(B) OTHER SANCTIONS.—In the case of a
finding of noncompliance made pursuant to
subparagraph (A), the Secretary may, in addi-
tion to, or in lieu of, imposing the sanctions de-
scribed in subparagraph (A), impose other ap-
propriate sanctions, including recoupment of
money improperly expended for purposes pro-
hibited or not authorized by this section and
disqualification from the receipt of financial as-
sistance under this section.
‘‘(C) NOTICE.—The notice required under
subparagraph (A) shall include a specific identi-
fication of any additional sanction being im-
posed under subparagraph (B).
‘‘(3) ISSUANCE
OF
REGULATIONS.—The Sec-
retary shall establish by regulation procedures for—
‘‘(A) receiving, processing, and deter-
mining the validity of complaints concerning
132
any failure of a State to comply with the State
plan or any requirement of this section; and
‘‘(B) imposing sanctions under this sec-
tion.
‘‘(i) PAYMENTS.—
‘‘(1) IN GENERAL.—For each fiscal year, the
Secretary shall pay to a State that has an applica-
tion approved by the Secretary under subsection
(d)(3) an amount that is equal to the allotment of
the State under subsection (l)(2) for the fiscal year.
‘‘(2) METHOD
OF
PAYMENT.—The Secretary
shall make payments to a State for a fiscal year
under this section by issuing 1 or more letters of
credit for the fiscal year, with necessary adjustments
on account of overpayments or underpayments, as
determined by the Secretary.
‘‘(3) SPENDING OF FUNDS BY STATE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), payments to a State from an
allotment under subsection (l)(2) for a fiscal
year may be expended by the State only in the
fiscal year.
‘‘(B) CARRYOVER.—The State may reserve
up to 10 percent of an allotment under sub-
section (l)(2) for a fiscal year to provide assist-
133
ance under this section in subsequent fiscal
years, except that the reserved funds may not
exceed 30 percent of the total allotment re-
ceived under this section for a fiscal year.
‘‘(4) PROVISION
OF
FOOD
ASSISTANCE.—A
State may provide food assistance under this section
in any manner determined appropriate by the State
to provide food assistance to needy individuals and
families in the State, such as electronic benefits
transfer limited to food purchases, coupons limited
to food purchases, or direct provision of commod-
ities.
‘‘(5) DEFINITION
OF
FOOD
ASSISTANCE.—In
this section, the term ‘food assistance’ means assist-
ance that may be used only to obtain food, as de-
fined in section 3(g).
‘‘(j) AUDITS.—
‘‘(1) REQUIREMENT.—After the close of each
fiscal year, a State shall arrange for an audit of the
expenditures of the State during the program period
from amounts received under this section.
‘‘(2) INDEPENDENT AUDITOR.—An audit under
this section shall be conducted by an entity that is
independent of any agency administering activities
that receive assistance under this section and be in
134
accordance with generally accepted auditing prin-
ciples.
‘‘(3) PAYMENT ACCURACY.—Each annual audit
under this section shall include an audit of payment
accuracy under this section that shall be based on a
statistically valid sample of the caseload in the
State.
‘‘(4) SUBMISSION.—Not later than 30 days
after the completion of an audit under this section,
the State shall submit a copy of the audit to the leg-
islature of the State and to the Secretary.
‘‘(5) REPAYMENT
OF
AMOUNTS.—Each State
shall repay to the United States any amounts deter-
mined through an audit under this section to have
not been expended in accordance with this section or
to have not been expended in accordance with the
State plan, or the Secretary may offset the amounts
against any other amount paid to the State under
this section.
‘‘(k) NONDISCRIMINATION.—
‘‘(1) IN
GENERAL.—The Secretary shall not
provide financial assistance for any program,
project, or activity under this section if any person
with responsibilities for the operation of the pro-
gram, project, or activity discriminates with respect
136
‘‘(II) the average per fiscal year
of the total dollar value of all benefits
issued under the food stamp program
by the State during each of fiscal
years 2000 through 2002; and
‘‘(ii) the greater of, as determined by
the Secretary—
‘‘(I) the total amount received by
the State for administrative costs and
the employment and training program
under subsections (a) and (h), respec-
tively, of section 16 of this Act for fis-
cal year 2002; or
‘‘(II) the average per fiscal year
of the total amount received by the
State for administrative costs and the
employment and training program
under subsections (a) and (h), respec-
tively, of section 16 of this Act for
each of fiscal years 2000 through
2002.
‘‘(B) INSUFFICIENT FUNDS.—If the Sec-
retary finds that the total amount of allotments
to which States would otherwise be entitled for
a fiscal year under subparagraph (A) will ex-
137
ceed the amount of funds that will be made
available to provide the allotments for the fiscal
year, the Secretary shall reduce the allotments
made to States under this subsection, on a pro
rata basis, to the extent necessary to allot
under this subsection a total amount that is
equal to the funds that will be made available.’’.
TITLE VIII—ABSTINENCE
EDUCATION
SEC. 801. EXTENSION OF ABSTINENCE EDUCATION FUND-
ING UNDER MATERNAL AND CHILD HEALTH
PROGRAM.
Section 510(d) (42 U.S.C. 710(d)) is amended by
striking ‘‘2002’’ and inserting ‘‘2007’’.
TITLE IX—TRANSITIONAL
MEDICAL ASSISTANCE
SEC. 901. ONE-YEAR REAUTHORIZATION OF TRANSITIONAL
MEDICAL ASSISTANCE.
(a) IN
GENERAL.—Section 1925(f) (42 U.S.C.
1396r–6(f)) is amended by striking ‘‘2002’’ and inserting
‘‘2003’’.
(b) 
CONFORMING
AMENDMENT.—Section
1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by
striking ‘‘2002’’ and inserting ‘‘2003’’.
138
SEC. 902. ADJUSTMENT TO PAYMENTS FOR MEDICAID AD-
MINISTRATIVE COSTS TO PREVENT DUPLICA-
TIVE PAYMENTS AND TO FUND A 1-YEAR EX-
TENSION OF TRANSITIONAL MEDICAL AS-
SISTANCE.
Section 1903 (42 U.S.C. 1396b) is amended—
(1) in subsection (a)(7), by striking ‘‘section
1919(g)(3)(B)’’ and inserting ‘‘subsection (x) and
section 1919(g)(3)(C)’’; and
(2) by adding at the end the following:
‘‘(x) ADJUSTMENTS TO PAYMENTS FOR ADMINISTRA-
TIVE COSTS TO FUND 1-YEAR EXTENSION OF TRANSI-
TIONAL MEDICAL ASSISTANCE.—
‘‘(1) REDUCTIONS IN PAYMENTS FOR ADMINIS-
TRATIVE COSTS.—Effective for each calendar quar-
ter in fiscal year 2003 and fiscal year 2004, the Sec-
retary shall reduce the amount paid under sub-
section (a)(7) to each State by an amount equal to
50 percent for fiscal year 2003, and 75 percent for
fiscal year 2004, of one-quarter of the annualized
amount determined for the medicaid program under
section 16(k)(2)(B) of the Food Stamp Act of 1977
(7 U.S.C. 2025(k)(2)(B)).
‘‘(2) 
ALLOCATION
OF
ADMINISTRATIVE
COSTS.—None of the funds or expenditures de-
scribed in section 16(k)(5)(B) of the Food Stamp
139
Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used
to pay for costs—
‘‘(A) eligible for reimbursement under sub-
section (a)(7) (or costs that would have been el-
igible for reimbursement but for this sub-
section); and
‘‘(B) allocated for reimbursement to the
program under this title under a plan submitted
by a State to the Secretary to allocate adminis-
trative costs for public assistance programs;
except that, for purposes of subparagraph (A), the
reference in clause (iii) of that section to ‘subsection
(a)’ is deemed a reference to subsection (a)(7) and
clause (iv)(II) of that section shall be applied as if
‘medicaid program’ were substituted for ‘food stamp
program’.’’.
TITLE X—EFFECTIVE DATE
SEC. 1001. EFFECTIVE DATE.
(a) IN GENERAL.—Except as otherwise provided, the
amendments made by this Act shall take effect on October
1, 2002.
(b) EXCEPTION.—In the case of a State plan under
part A or D of title IV of the Social Security Act which
the Secretary determines requires State legislation in
order for the plan to meet the additional requirements im-
140
posed by the amendments made by this Act, the effective
date of the amendments imposing the additional require-
ments shall be 3 months after the first day of the first
calendar quarter beginning after the close of the first reg-
ular session of the State legislature that begins after the
date of the enactment of this Act. For purposes of the
preceding sentence, in the case of a State that has a 2-
year legislative session, each year of the session shall be
considered to be a separate regular session of the State
legislature.
Æ