102 STAT. 3096 PUBLIC LAW 100-607—NOV. 4, 1988

and containing such information as the Secretary determines to be
necessary for—

Records. "(1) securing a record and a description of the purposes for

which payments received by the State pursuant to such section
were expended and of the recipients of such payments;

"(2) determining whether the payments were expended in
accordance with the needs within the State required to be
identified pursuant to section 2503(aX2);

"(3) determining whether the payments were expended in
accordance with the purpose described in section 2501(b); and
"(4) determining the percentage of payments received pursu-
ant to such section that were expended by the State for adminis-
trative expenses during the preceding fiscal year,
"(b) AUDITS.—

"(1) The Secretary may not payments under section 2501(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 disbursed of, and accounting for,
amounts received by the State under such section.

"(2) The Secretary may not payments under section 2501(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

"(Q the audit will be conducted in accordance with stand-
ards established by the Comptroller General of the United
States for the audit of governmental organizations, pro-
grams, activities, and functions.

"(3) The Secretary may not make payments under section
2501(a) for a fiscal year unless the State involved agrees that,
not later than 30 days after the completion of an audit under
paragraph (2), the State will provide a copy of the audit report
to the State legislature.

"(4) For purposes of paragraph (2), the term 'financial and
compliance audit* means an audit to determine whether the
financial statements of an audited entity present fairly the
financial position, and the results of financial operations, of the
entity in accordance with generally accepted accounting prin-
ciples, and whether the entity has complied with laws and
regulations that may have a material effect upon the financial
statements.

ReP°rts- "(c) AVAILABILITY TO PUBLIC.—The Secretary may not make pay-

ments under section 2501(a) for a fiscal year unless the State
involved agrees to make copies of the reports and audits described in
this section available for public inspection.

"(d) EVALUATIONS BY COMPTROLLER GENERAL.—The Comptroller
General of the United States shall, from time to time, evaluate the
expenditures by States of payments received under section 2501(a) in
order to ensure that expenditures are consistent with the provisions
of this part.