‘‘(c) The Director shall designate a Federal clearing-
house to—
‘‘(1) receive copies of all reporting packages de-
veloped in accordance with this chapter;
‘‘(2) identify recipients that expend $300,000
or more in Federal awards or such other amount
specified by the Director under section 7502(a)(3)
during the recipient’s fiscal year but did not undergo
an audit in accordance with this chapter; and
‘‘(3) perform analyses to assist the Director in
carrying out responsibilities under this chapter.
‘‘§ 7505. Regulations
‘‘(a) The Director, after consultation with the Comp-
troller General, and appropriate officials from Federal,
State, and local governments and nonprofit organizations
shall prescribe guidance to implement this chapter. Each
Federal agency shall promulgate such amendments to its
regulations as may be necessary to conform such regula-
tions to the requirements of this chapter and of such guid-
ance.
‘‘(b)(1) The guidance prescribed pursuant to sub-
section (a) shall include criteria for determining the appro-
priate charges to Federal awards for the cost of audits.
Such criteria shall prohibit a non-Federal entity from
charging to any Federal awards—
‘‘(A) the cost of any audit which is—
‘‘(i) not conducted in accordance with this
chapter; or
‘‘(ii) conducted in accordance with this
chapter when expenditures of Federal awards
are less than amounts cited in section
7502(a)(1)(A) or specified by the Director
under section 7502(a)(3), except that the Direc-
tor may allow the cost of limited scope audits
to monitor subrecipients in accordance with sec-
tion 7502(f)(2)(B); and
‘‘(B) more than a reasonably proportionate
share of the cost of any such audit that is conducted
in accordance with this chapter.
‘‘(2) The criteria prescribed pursuant to paragraph
(1) shall not, in the absence of documentation demonstrat-
ing a higher actual cost, permit the percentage of the cost
of audits performed pursuant to this chapter charged to
Federal awards, to exceed the ratio of total Federal
awards expended by such non-Federal entity during the
applicable fiscal year or years, to such non-Federal entity’s
total expenditures during such fiscal year or years.
‘‘(c) Such guidance shall include such provisions as
may be necessary to ensure that small business concerns
and business concerns owned and controlled by socially
and economically disadvantaged individuals will have the
opportunity to participate in the performance of contracts
awarded to fulfill the audit requirements of this chapter.
‘‘§ 7506. Monitoring responsibilities of the Comptrol-
ler General
‘‘(a) The Comptroller General shall review provisions
requiring financial audits of non-Federal entities that re-
ceive Federal awards that are contained in bills and reso-
lutions reported by the committees of the Senate and the
House of Representatives.
‘‘(b) If the Comptroller General determines that a bill
or resolution contains provisions that are inconsistent with
the requirements of this chapter, the Comptroller General
shall, at the earliest practicable date, notify in writing—
‘‘(1) the committee that reported such bill or
resolution; and
‘‘(2)(A) the Committee on Governmental Af-
fairs of the Senate (in the case of a bill or resolution
reported by a committee of the Senate); or
‘‘(B) the Committee on Government Reform
and Oversight of the House of Representatives (in
the case of a bill or resolution reported by a commit-
tee of the House of Representatives).
‘‘§ 7507. Effective date
‘‘This chapter shall apply to any non-Federal entity
with respect to any of its fiscal years which begin after
June 30, 1996.’’.
SEC. 3. TRANSITIONAL APPLICATION.
Subject to section 7507 of title 31, United States
Code (as amended by section 2 of this Act), the provisions
of chapter 75 of such title (before amendment by section
2 of this Act) shall continue to apply to any State or local
government with respect to any of its fiscal years begin-
ning before July 1, 1996.
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