fers made by a State from amounts received under 
a grant under section 4, with respect to the fiscal 
year which such audit covers, to determine the ex-
tent to which such expenditures and transfers were 
expended in accordance with section 4. 
(3) ENTITY CONDUCTING AUDIT.— 
(A) IN
GENERAL.—With respect to a 
State, the audit under paragraph (2) shall be 
conducted by an approved auditing entity in ac-
cordance with generally accepted auditing prin-
ciples. 
(B) APPROVED
AUDITING
ENTITY.—For 
purposes of this section, the term ‘‘approved 
auditing entity’’ means, with respect to a State, 
an entity that is— 
(i) approved by the Secretary of the 
Treasury; 
(ii) approved by the chief executive of-
ficer of the State; and 
(iii) independent of any Federal, 
State, or local agency. 
(4) SUBMISSION
OF
AUDIT.—Not later than 
April 30, 2016, and annually thereafter, a State 
shall submit the results of the audit under para-
graph (2) (with respect to the fiscal year ending on 
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September 30 of such year) to the State legislature 
and to the Secretary of the Treasury. 
(b) REIMBURSEMENT AND PENALTY.—If, through an 
audit conducted under subsection (a), an approved audit-
ing entity finds that a State violated the requirements of 
subsection (d) or (e) of section 4, the State shall pay to 
the Treasury of the United States 100 percent of the 
amount of State funds that were used in violation of sec-
tion 4 as a penalty. Insofar as a State fails to pay any 
such penalty, the Secretary of the Treasury shall offset 
the amount not so paid against the amount of any grant 
otherwise payable to the State under this Act. 
(c) ANNUAL REPORTING REQUIREMENTS.— 
(1) IN GENERAL.—Not later than January 31, 
2016, and annually thereafter, each State shall sub-
mit to the Secretary of the Treasury and the State 
legislature a report on the activities carried out by 
the State during the most recently completed fiscal 
year with funds received by the State under a grant 
under section 4 for such fiscal year. 
(2) CONTENT.—A report under paragraph (1) 
shall, with respect to a fiscal year— 
(A) contain the results of the audit con-
ducted by an approved auditing entity for a 
State for such fiscal year, in accordance with 
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the requirements of subsection (a) of this sec-
tion; 
(B) specify the amount of the grant made 
to the State under section 4; and 
(C) be in such form and contain such other 
information as the State determines is nec-
essary to provide— 
(i) an accurate description of the ac-
tivities conducted by the State for the pur-
pose described under section 4; and 
(ii) a complete record of the purposes 
for which amounts were expended in ac-
cordance with this section. 
(3) PUBLIC AVAILABILITY.—A State shall make 
copies of the reports required under this section 
available on a public Web site and shall make copies 
available in other formats upon request. 
(d) FAILURE TO COMPLY WITH REQUIREMENTS.— 
The Secretary of the Treasury shall not make any pay-
ment to a State under a grant authorized by section 4— 
(1) if an audit for a State is not submitted as 
required under subsection (a), during the period be-
tween the date such audit is due and the date on 
which such audit is submitted; 
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(2) if a State fails to submit a report as re-
quired under subsection (c), during the period be-
tween the date such report is due and the date on 
which such report is submitted; or 
(3) if a State violates a requirement of section 
4, during the period beginning on the date the Sec-
retary becomes aware of such violation and the date 
on which such violation is corrected by the State. 
(e) ADMINISTRATIVE
SUPERVISION
AND
OVER-
SIGHT.— 
(1) LIMITED ROLE FOR SECRETARY OF TREAS-
URY AND THE ATTORNEY GENERAL.— 
(A) TREASURY.—The authority of the Sec-
retary of the Treasury under this Act is limited 
to— 
(i) promulgating regulations, issuing 
rules, or publishing guidance documents to 
the extent necessary for purposes of imple-
menting subsection (a)(3)(B), subsection 
(b), and subsection (d); 
(ii) making payments to the States 
under grants under section 4; 
(iii) approving entities under sub-
section (a)(3)(B) for purposes of the audits 
required under subsection (a); 
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(iv) withholding payment to a State of 
a grant under subsection (d) or offsetting 
a payment of such a grant to a State 
under subsection (b); and 
(v) exercising the authority relating to 
nondiscrimination that is specified in sec-
tion 6(b). 
(B) ATTORNEY GENERAL.—The authority 
of the Attorney General to supervise the 
amounts received by a State under section 4 is 
limited to the authority under section 6(b). 
(f) RESERVATION OF STATE POWERS.—Nothing in 
this section shall be construed to limit the power of a 
State, including the power of a State to pursue civil and 
criminal penalties under State law against any individual 
or entity that misuses, or engages in fraud or abuse re-
lated to, the funds provided to a State under section 4. 
SEC. 6. NONDISCRIMINATION PROVISIONS. 
(a) NO DISCRIMINATION AGAINST INDIVIDUALS.— 
No individual shall be excluded from participation in, de-
nied the benefits of, or subjected to discrimination under, 
any program or activity funded in whole or in part with 
amounts paid to a State under section 4 on the basis of 
such individual’s— 
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(1) disability under section 504 of the Rehabili-
tation Act of 1973 (29 U.S.C. 794); 
(2) sex under title IX of the Education Amend-
ments of 1972 (20 U.S.C. 1681 et seq.); or 
(3) race, color, or national origin under title VI 
of the Civil Rights Act of 1964 (42 U.S.C. 2000d 
et seq.). 
(b) COMPLIANCE.— 
(1) IN GENERAL.—If the Attorney General de-
termines that a State or an entity that has received 
funds from amounts paid to a State under a grant 
under section 4 has failed to comply with a provision 
of law referred to in subsection (a), the Secretary of 
the Treasury shall notify the chief executive officer 
of the State of such failure to comply and shall re-
quest that such chief executive officer secure such 
compliance. 
(2) ENFORCEMENT.—If, not later than 60 days 
after receiving notification under paragraph (1), the 
chief executive officer of a State fails or refuses to 
secure compliance with the provision of law referred 
to in such notification, the Attorney General may— 
(A) institute an appropriate civil action; or 
(B) exercise the powers and functions pro-
vided under section 505 of the Rehabilitation 
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(5) the Federal Pell Grant program under sub-
part 1 of part A of title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1070a), which shall be 
capped at $18,000,000,000 per fiscal year, and the 
Federal student loan programs under parts B and D 
of title IV of such Act (20 U.S.C. 1070 et seq.; 20 
U.S.C. 1087a et seq.) shall be transferred to the De-
partment of Health and Human Services. 
SEC. 8. GAO REPORT. 
Not later than 90 days after the date of enactment 
of this Act, the Comptroller General of the United States 
shall submit to the Committee on Education and the 
Workforce of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions of the 
Senate report, which shall include— 
(1) a review and evaluation as to the feasibility 
of enhancing the ability of States and local commu-
nities to fund education by reducing the Federal tax 
burden and commensurately eliminating Federal 
Government involvement in providing grants for edu-
cation programs; and 
(2) an evaluation of the feasibility of the suc-
cessor Federal agencies for maintaining the pro-
grams to be transferred under section 7. 
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SEC. 9. PLAN FOR WINDING UP AFFAIRS. 
Not later than 180 days after the date of the enact-
ment of this Act, the President shall submit to the Con-
gress a plan for winding up the affairs of the Department 
of Education in accordance with this Act. 
SEC. 10. DEFINITIONS. 
In this Act: 
(1) 
ELEMENTARY
SCHOOL; 
SECONDARY 
SCHOOL.—The terms ‘‘elementary school’’ and ‘‘sec-
ondary school’’ have the meanings given the terms 
in section 9101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 9101). 
(2) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 102 of the Ele-
mentary and Secondary Education Act of 1965 (20 
U.S.C. 1002). 
(3) STATE.—The term ‘‘State’’ has the mean-
ing given the term in section 103 of the Higher 
Education Act of 1965 (20 U.S.C. 1003). 
Æ 
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