(2) In fiscal year 2010, among the money sent 
to the States were $348 billion for health and 
human services, $64 billion for transportation, $55 
billion for housing and urban development, $73 bil-
lion for education, and $33 billion for agriculture. 
(3) States receive money from the Federal Gov-
ernment through grants, loans, loan guarantees, 
property, cooperative agreements, interest subsidies, 
insurance, food commodities, and direct appropria-
tions, among others means. 
(4) Every State spends money for common ac-
tivities such as health care, transportation, housing, 
education, agriculture and other issues, yet some 
States are more effective than others when spending 
these Federal taxpayer dollars. 
(5) Taxpayers, legislators, and agencies should 
be able to objectively and reliably share data com-
paring apples-to-apples performance measurements 
that identify what government does and what it real-
ly costs. 
(6) Activity-based total accountability will show 
which States are the most effective with taxpayer 
dollars and lead to competition among States. 
(7) States demonstrating that they are more ef-
ficient with tax dollars by having lower activity costs 
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will serve as models for others to ensure that there 
is more accountability for how tax dollars are spent 
and to ensure that the taxpayer is getting the best 
value for their dollar. 
(b) PURPOSE.—The purpose of this Act is to improve 
the policymaking process and government accountability 
at the State level by requiring annual accountings from 
State governments in a format that uses total account-
ability measures, including unit-cost data. 
SEC. 3. STATE FISCAL ACCOUNTING REPORTS. 
(a) IN GENERAL.—Not later than 15 days before the 
end of a Federal fiscal year, each State government that 
receives Federal financial assistance in that Federal fiscal 
year shall submit a State fiscal accounting report for the 
Federal fiscal year to the Director of the Office of Man-
agement and Budget (hereinafter in this Act referred to 
as the ‘‘Director’’). 
(b) CONTENTS OF REPORT.—Each State fiscal ac-
counting report shall include— 
(1) a one-page summary that lists the total 
funding and expenditures of each budget entity of 
the State government; and 
(2) for each budget entity of the State govern-
ment, a unit-cost summary for the Federal fiscal 
year. 
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(c) PUBLICATION OF REPORTS.—The Director shall 
publish each report received under this section on an 
Internet Web site of the Director not later than 30 days 
after receiving that report. 
SEC. 4. STANDARDIZATION OF STATE FISCAL ACCOUNTING 
REPORTS. 
(a) STANDARDIZATION OF REPORTS.—The Director 
shall ensure that each State fiscal accounting report is in 
such standardized form as the Director may prescribe. 
Such form shall permit the comparison of the information 
contained in a State fiscal accounting report with the in-
formation contained in every other State fiscal accounting 
report. 
(b) INITIAL REPORTS.—Not later than 180 days 
after the date of enactment of this Act, each State govern-
ment that is required to submit a report under section 
3 shall submit to the Director a description of the pro-
grams and other activities carried out by each budget enti-
ty of that State government over that fiscal year, including 
such information on those programs or activities as the 
Director may require. 
(c) CLASSIFICATION SYSTEM.—Based on the descrip-
tions submitted under subsection (b) and on what the Di-
rector determines to be the most relevant data available 
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(including data from the most recent census), the Director 
shall by rule do the following: 
(1) Establish a uniform system for classifying 
such programs and activities within categories (here-
inafter in this Act referred to as ‘‘agency activities’’) 
identified by the Director. 
(2) For each agency activity, identify conduct 
(hereinafter in this Act referred to as an ‘‘activity 
unit’’) that, in the determination of the Director, 
constitutes a completed instance of such agency ac-
tivity. 
(3) For each agency activity, identify, to the ex-
tent practicable, performance measures for that 
agency activity, and, in publishing a report under 
section 3(c), link electronically such performance 
measures to that agency activity. 
SEC. 5. UNIT-COST SUMMARY. 
Each unit-cost summary for a budget entity of a 
State government shall be in such form as the Director 
may prescribe, be one page long, and include the following: 
(1) A statement of funds available, as described 
under section 6. 
(2) For each agency activity that the budget en-
tity began, attempted, continued, or completed, a 
line-item listing as described under section 7. 
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(3) A reconciliation of funds available with ad-
justed expenditures as described under section 8. 
SEC. 6. STATEMENT OF FUNDS AVAILABLE. 
(a) IN GENERAL.—A statement of funds available 
shall identify— 
(1) in accordance with subsection (b), each 
source of funds available for expenditure or obliga-
tion by the budget entity and the amount of such 
funds; and 
(2) the sum of all amounts identified under 
paragraph (1). 
(b) IDENTIFICATION OF SOURCES.—In identifying 
the sources of funds available for expenditure or obligation 
by the budget entity, the budget entity shall include the 
following: 
(1) All funds made available by State appro-
priations laws. 
(2) Any Federal financial assistance provided 
by a Federal department or agency. 
(3) Any other sources the Director determines 
appropriate. 
SEC. 7. AGENCY ACTIVITY LINE ITEM LISTINGS. 
(a) IN GENERAL.—A line item listing for an agency 
activity shall— 
(1) identify— 
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(A) the agency activity; 
(B) in accordance with subsection (b), the 
total amount of funds that the budget entity ex-
pended in carrying out the agency activity; 
(C) the number of activity units of the 
agency activity the budget entity began, at-
tempted, continued, or completed; and 
(D) the unit-cost of the agency activity, de-
termined in accordance with subsection (c); and 
(2) describe as many of the following as are rel-
evant to the agency activity: 
(A) What conduct constitutes an activity 
unit. 
(B) Each purpose for which the budget en-
tity engaged in that agency activity. 
(C) Each person that is an intended bene-
ficiary of that agency activity. 
(b) SPECIAL RULES FOR DETERMINATION OF EX-
PENDITURES.— 
(1) ALLOCATION OF EXPENDITURES FOR CER-
TAIN
AGENCY
ACTIVITIES.—If the Director deter-
mines that there is an agency activity for which no 
method of measuring the accomplishment of the 
agency activity exists, an expenditure for that agen-
cy activity must be consistently allocated to what is, 
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in the determination of the Director, a sufficiently 
similar agency activity for which such a method ex-
ists. 
(2) PAYMENTS TO CONTRACTORS OR SUBORDI-
NATE ENTITIES INCLUDED.—An identification of the 
total amount of funds that a budget entity expended 
shall include any amounts paid to a contractor or 
subordinate entity. 
(c) DETERMINATION OF UNIT-COST.— 
(1) IN GENERAL.—The unit-cost of an agency 
activity shall be determined in accordance with the 
following formula: 
μ 
UC = ————————.
ϕ 
(2) DEFINITION OF TERMS IN FORMULA.—For 
purposes of the formula in paragraph (1)— 
(A) UC is the unit-cost of the agency activ-
ity; 
(B) μ is the amount described in sub-
section (a)(1)(B); and 
(C) ϕ is the number described in sub-
section (a)(1)(C). 
SEC. 8. RECONCILIATION OF FUNDS AVAILABLE WITH AD-
JUSTED EXPENDITURES. 
(a) IN GENERAL.—A reconciliation of funds available 
with adjusted expenditures shall— 
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(1) identify the adjusted expenditures of the 
budget entity; and 
(2) explain any difference between the adjusted 
expenditures and the sum of all funds available for 
expenditure or obligation by the budget entity (de-
termined in accordance with section 6). 
(b) DETERMINATION
OF
ADJUSTED
EXPENDI-
TURES.— 
(1) IN GENERAL.—The adjusted expenditures 
of the budget entity shall be determined in accord-
ance with the following formula: 
AE = EXP + PT + REV. 
(2) DEFINITION OF TERMS IN FORMULA.—For 
purposes of the formula in paragraph (1)— 
(A) AE is the adjusted expenditures; 
(B) EXP is the sum of all expenditures by 
the budget entity for agency activities; 
(C) PT is the sum of all pass-throughs 
identified by the budget entity under subsection 
(c); and 
(D) REV is the sum of all reversions iden-
tified by the budget entity under subsection (c). 
(c) IDENTIFICATION OF PASS-THROUGHS AND RE-
VERSIONS.—A budget entity may identify an amount as 
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a pass-through or a reversion if the amount satisfies cri-
teria established by the Director. 
SEC. 9. NONCOMPLIANCE. 
If the Director determines that a State government 
has failed, with respect to a Federal fiscal year, to file 
a sufficient and timely State fiscal accounting report 
under this Act, the Director shall so inform the head of 
each Federal department or agency. Each such head shall 
withhold 10 percent of any Federal financial assistance 
provided to the State government for the next Federal fis-
cal year. 
SEC. 10. RULES. 
The Director is authorized to make such rules as may 
be necessary to carry out this Act. 
SEC. 11. DEFINITIONS. 
In this Act: 
(1) The term ‘‘State government’’ means the 
government of each of the several States, the Dis-
trict of Columbia, and any commonwealth, territory, 
or possession of the United States. 
(2) The term ‘‘budget entity’’ means a State 
agency or the State judiciary. 
(3) The term ‘‘agency activity’’ means major 
operational activities carried out by a budget entity. 
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(4) The term ‘‘Federal financial assistance’’ has 
the meaning given such term in section 7501 of title 
31, United States Code, and also includes any other 
amounts that the Director determines appropriate. 
Æ 
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