HR 5129 RFS
the requirements of this subtitle, the Secretary 
may, after providing adequate notice and an op-
portunity for a hearing, initiate proceedings to 
reduce or eliminate the amount of funding ap-
portioned and allocated to the State as de-
scribed in section 675 or 676, as applicable 
(and, if necessary, deobligate such funding). 
‘‘(B) DIRECT
AWARDS
TO
OTHER
ENTI-
TIES.— 
‘‘(i) REDUCTION OR ELIMINATION OF 
STATE
FUNDING; 
LACK
OF
APPROVED 
STATE PLAN.—If the Secretary reduces or 
eliminates funding to a State under sub-
paragraph (A), the Secretary shall award 
funding directly as provided under clauses 
(ii) and (iii). If, for a particular fiscal year, 
a State plan is not approved by the Sec-
retary in accordance with section 678(c), 
the Secretary may award funding directly 
as provided under clauses (ii) and (iii). 
‘‘(ii) DIRECT FUNDING TO ELIGIBLE 
ENTITIES.—If funding specified in section 
679(a)(1) is reduced or eliminated due to 
the Secretary’s reduction or elimination of 
funding under subparagraph (A), or if the 
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Secretary chooses to award funding di-
rectly due to the lack of an approved State 
plan as authorized in clause (i), the Sec-
retary shall award financial assistance in 
the amount of such reduced or eliminated 
funding, or in the amount the State would 
have received for the purposes specified in 
section 679(a)(1) had a State plan been 
approved, directly (by grant or cooperative 
agreement) to affected eligible entities 
(provided that any such entity has not had 
its funding under this subtitle eliminated 
or its designation as an eligible entity ter-
minated by the State in accordance with 
subsections (b) and (c) of section 684) to 
carry out the activities described in section 
679(c). In awarding such funding, the Sec-
retary shall ensure that each such affected 
eligible entity receives the same propor-
tionate share of funding under section 
679(a)(1) that it received in the previous 
fiscal year. 
‘‘(iii) STATEWIDE FUNDS.—If funding 
specified in section 679(b) is reduced or 
eliminated due to the Secretary’s reduction 
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or elimination of funding under subpara-
graph (A), or if the Secretary chooses to 
award funding directly due to the lack of 
an approved State plan as authorized in 
clause (i), the Secretary shall reserve an 
amount equal to the amount of such re-
duced or eliminated funds, or to the 
amount the State would have received for 
the purposes specified in section 679(b) 
had a State plan been approved. The Sec-
retary may use such amount for such pur-
poses directly or through a grant or coop-
erative agreement to community services 
network organizations (other than the 
State itself). 
‘‘(iv) REDUCTION.—In the case of ex-
penditure as provided in accordance with 
this subparagraph, the Secretary shall re-
duce funding the State would otherwise 
have received under section 675 or 676 
(and, if necessary, deobligate such fund-
ing) for the appropriate fiscal year by an 
amount equal to the amount so expended. 
‘‘(6) TRAINING AND TECHNICAL ASSISTANCE.— 
The Secretary, through the Department’s own em-
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ployees or contractors (rather than under grants, 
contracts, or cooperative agreements issued under 
section 682), shall provide training and technical as-
sistance to States with respect to the development or 
implementation of the States’ corrective action 
plans. 
‘‘(b) DETERMINATION OF ELIGIBLE ENTITY FAIL-
URE TO COMPLY.— 
‘‘(1) CORRECTIVE ACTION BY ELIGIBLE ENTI-
TIES.—If the State determines, on the basis of a re-
view pursuant to section 683 or section 685, that 
there is a serious deficiency regarding an eligible en-
tity’s compliance with this subtitle, the State shall 
inform the entity of the serious deficiencies that 
shall be corrected and provide technical assistance 
for the corrective action. 
‘‘(2) ELIGIBLE
ENTITY
CORRECTIVE
ACTION 
PLANS.—An eligible entity that is found to have a 
serious deficiency under paragraph (1) shall develop, 
in a timely manner, a corrective action plan that 
shall be subject to the approval of the State, and 
that shall specify— 
‘‘(A) the deficiencies to be corrected; 
‘‘(B) the actions to be taken to correct 
such deficiencies; and 
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‘‘(C) the timetable for accomplishment of 
the corrective actions specified. 
‘‘(3) FINAL
DECISION.—If the State deter-
mines, on the basis of a final decision in a review 
conducted under section 683, that an eligible entity 
fails to comply with the terms of a corrective action 
plan under paragraph (2) relating to correction of a 
serious deficiency for the eligible entity, the State 
may, after providing adequate notice and an oppor-
tunity for a hearing, initiate proceedings to withhold, 
reduce, or eliminate the funding provided under sec-
tion 679(a)(1) to the eligible entity (including, in the 
case of elimination of funding, terminating the des-
ignation under this subtitle of the eligible entity) un-
less the entity corrects the serious deficiency. 
‘‘(c) REVIEW.—A State’s decision to withhold, re-
duce, or eliminate funding, or to terminate the designation 
of an eligible entity (or eligible entities, as applicable) may 
be reviewed by the Secretary. Upon request by a commu-
nity services network organization, the Secretary shall re-
view such a determination. The review shall be completed 
not later than 60 days after the Secretary receives from 
the State all necessary documentation relating to the de-
termination. The State shall submit such documentation 
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within a reasonable time frame established by the Sec-
retary. 
‘‘(d) DIRECT ASSISTANCE.—Whenever the Secretary 
determines that a State has violated the State plan de-
scribed in section 678(b) (including the assurance de-
scribed in section 678(b)(6)) and the State has reduced 
or eliminated the funding provided under section 679(a) 
to any eligible entity or entities or terminated the eligible 
entity designation of any eligible entity or entities before 
the completion of the State proceedings described in sec-
tion 678(b)(6) (including, if applicable, the proceedings re-
quired by subsection (b)) and the Secretary’s review as 
required by subsection (c), the Secretary may provide fi-
nancial assistance under this subtitle to the affected eligi-
ble entity or entities directly until the violation is corrected 
by the State. In such a case, the Secretary may reduce 
funding the State would otherwise have received under 
section 675 or 676 (and, if necessary, deobligate such 
funding) for the appropriate fiscal year by an amount 
equal to the financial assistance provided directly by the 
Secretary to such eligible entity or entities. 
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‘‘SEC. 685. STATE AND LOCAL FISCAL CONTROLS AND AU-
DITS. 
‘‘(a) FISCAL CONTROLS, PROCEDURES, AUDITS, AND 
INSPECTIONS.—A State that receives funds under this 
subtitle shall— 
‘‘(1) establish fiscal control and fund account-
ing procedures necessary to assure the proper dis-
bursal of, and accounting for, Federal funds paid to 
the State under this subtitle, including procedures 
for monitoring the funds provided under this sub-
title; 
‘‘(2) ensure that cost and accounting standards 
of the Office of Management and Budget apply to 
a subrecipient of the funds under this subtitle; 
‘‘(3) in accordance with subsections (b) and (c), 
prepare, not less than once each year, an audit of 
the expenditures of the State of amounts received 
under this subtitle; and 
‘‘(4) make appropriate books, documents, pa-
pers, and records available to the Secretary and the 
Comptroller General of the United States, or any of 
their duly authorized representatives, for examina-
tion, copying, or mechanical reproduction, on or off 
the premises of the appropriate entity, upon a rea-
sonable request for the items. 
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‘‘(b) INDEPENDENT ENTITY.—Subject to subsection 
(c), each audit required by subsection (a)(3) shall be con-
ducted by an entity independent of any agency admin-
istering activities or services under this subtitle and shall 
be conducted in accordance with generally accepted ac-
counting principles. 
‘‘(c) SINGLE AUDIT REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Any audit under this sub-
section shall be conducted in the manner and to the 
extent provided in chapter 75 of title 31, United 
States Code (commonly known as the ‘Single Audit 
Act Amendments of 1984’) except in the event a se-
rious financial deficiency is identified. 
‘‘(2) SERIOUS FINANCIAL DEFICIENCY.—In the 
event that such a deficiency is identified, the Sec-
retary shall order— 
‘‘(A) an audit conducted as described in 
subsection (a); or 
‘‘(B) an audit of each of the accounts in-
volved, in accordance with subsections (b) and 
(d). 
‘‘(d) SUBMISSION OF COPIES.—Not later than 30 
days after the completion of each audit in a State as re-
quired in subsection (a)(3), the chief executive officer of 
the State shall submit copies of such audit, at no charge, 
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to any eligible entity that was the subject of the audit, 
to the legislature of the State, and to the Secretary. 
‘‘(e) REPAYMENTS.—If the Secretary, after review of 
the audit, finds that a State has not expended an amount 
of funds in accordance with this subtitle, the Secretary 
is authorized to withhold funds from a State under this 
subtitle until the State remedies the improperly expended 
funds for the original purposes for which the grant funds 
were intended. 
‘‘(f) RESPONSE
TO COMPLAINTS.—The Secretary 
shall respond in an expeditious manner to complaints of 
a substantial or serious nature that a State has failed to 
use grant funds received under section 675 or 676 or to 
carry out State activities under this subtitle in accordance 
with the provisions of this subtitle. 
‘‘(g) INVESTIGATIONS.—Whenever the Secretary de-
termines that there is a pattern of complaints regarding 
failures described in subsection (f) or a complaint of a se-
rious deficiency concerning any State, the Secretary shall 
conduct an investigation of the use of the funds received 
under this subtitle by such State in order to ensure com-
pliance with the provisions of this subtitle. 
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‘‘SEC. 686. ACCOUNTABILITY AND REPORTING REQUIRE-
MENTS. 
‘‘(a) STATE ACCOUNTABILITY AND REPORTING RE-
QUIREMENTS.— 
‘‘(1) PERFORMANCE MEASUREMENT.— 
‘‘(A) IN
GENERAL.—Beginning with the 
first fiscal year following the transition period 
described in section 3 of the Community Serv-
ices Block Grant Modernization Act of 2022, 
each State that receives funds under this sub-
title shall participate, and shall ensure that all 
eligible entities in the State participate, in a re-
sults-oriented performance measurement system 
that the Secretary is satisfied meets the re-
quirements of section 689(b)(1). 
‘‘(B) SUBCONTRACTORS.—The State may 
elect to have subcontractors of the eligible enti-
ties under this subtitle participate in the re-
sults-oriented performance measurement sys-
tem. If the State makes that election, references 
in this section to eligible entities shall be con-
sidered to include such subcontractors. 
‘‘(C) ELIGIBLE ENTITY REPORTS.—Eligi-
ble entities shall provide the results measured 
by their performance measurement system and 
such other reports as the State may require. 
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‘‘(2) ANNUAL REPORT.—Each State receiving 
funds under this subtitle shall annually prepare, and 
submit to the Secretary by March 31 of each year, 
a report on the performance of the State and eligible 
entities in the State, including achievement with re-
spect to performance measurements that were used 
by community services network organizations in the 
State for the previous fiscal year. Each State shall 
also include in the report— 
‘‘(A) an accounting of the expenditure of 
funds received by the State through the com-
munity services block grant program, including 
an accounting of funds spent on administrative 
or indirect costs by the State and the eligible 
entities and funds spent by the eligible entities 
on local programs, projects, and services; 
‘‘(B) information on the number and char-
acteristics of participants served under this sub-
title in the State, based on data collected from 
the eligible entities; 
‘‘(C) a summary describing the training 
and technical assistance offered by the State 
under subparagraph (B) of section 679(b)(1) 
during the year covered by the report; 
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