102 STAT. 3082 PUBLIC LAW 100-607—NOV. 4, 1988

monthly payments for eligible individuals provided home and
community-based health services under this part in the State
exceeds 65 percent of the national average monthly payments
determined and published for the fiscal year under paragraph
(1).
42 USC 300dd-4. "SEC. 2405. REQUIREMENT OF REPORTS AND AUDITS BY STATES.

"(a) REPORTS.—

"(1) The Secretary may not make payments under section
2401(a) for a fiscal year unless the State involved agrees to
prepare and submit to the Secretary, by not later than January
1 following the fiscal year, an annual report in such form and
containing such information as the Secretary determines (after
consultation with the States and the Comptroller General of the
United States) to be necessary for—

"(A) securing a record and a description of the purposes
for which payments received by the State pursuant to
section 2401(a) were expended and of the recipients of such
pavments;

(B) determining whether the payments were expended
in accordance with the purpose of this part; and

"(C) determining the percentage of payments received

pursuant to section 2401(a) that were expended by the State

for administrative expenses during the fiscal year involved.

"(2) Each report by a State under paragraph (1) for a fiscal

year also shall include—

"(A) information on the number and type of eligible
individuals provided home and community-based health
services by the State under this part for the fiscal year;
"(B) information on the types of home and community-
based health services so provided;

"(C) information on the average monthly costs of such
services and a comparison of such costs with costs of provid-
ing services in hospitals, nursing facilities, and similar
institutions; and

"(D) such other information as the Secretary may require
to provide for an evaluation of the program under this part
and its cost-effectiveness,
"(b) AUDITS.—

"(1) The Secretary may not make payments under section
2401(a) for a fiscal year unless the State involved agrees to
establish such fiscal control and fund accounting procedures as
may be necessary to ensure the proper disbursal of, and
accounting for, amounts received by the State under such
section.

"(2) The Secretary may not make payments under section
2401(a) for a fiscal year unless the State involved agrees
that—

"(A) the State will provide for—

"(i) a financial and compliance audit of such pay-
ments; or

"(ii) a single financial and compliance audit of each
entity administering such payments;
"(B) the audit will be performed biennially and will cover
expenditures in each fiscal year; and

"(C) the audit will be conducted in accordance with stand-
ards established by the Comptroller General of the United