34 U.S.C. § 60505 — Audit and accountability of grantees

(a) Definitions. This section defines four terms. A "covered grant program" means the grant programs under section 60511, 60521, or 60531 of this title, as amended by this Act. A "covered grantee" means anyone who receives a grant from a covered grant program. "Nonprofit" means an organization described in section 501(c)(3) of title 26 (the tax code) that is exempt from tax under section 501(a) of that title. An "unresolved audit finding" means a finding in a final audit report from the Department of Justice's Inspector General that says a covered grantee spent grant money on something unauthorized or otherwise not allowed — and that finding was not closed or resolved within the 12 months before the final report was issued.

(b) Audit requirement. Starting in fiscal year 2019, and every year after that, the Department of Justice's Inspector General must audit covered grantees to stop waste, fraud, and abuse of grant funds. The Inspector General decides how many grantees to audit each year.

(c) Mandatory exclusion. If an audit finds a grantee has an unresolved audit finding, that grantee cannot receive money from the same covered grant program in the fiscal year right after the year the finding relates to.

(d) Reimbursement. If a grantee is still awarded funds during that one-year ineligible period, the Attorney General must: (1) put an amount equal to the improperly awarded funds into the Treasury's General Fund; and (2) try to recover the cost of that repayment from the grantee who wrongly got the money.

(e) Priority of grant awards. When awarding grants, the Attorney General must give priority to applicants who have not had an unresolved audit finding in the two years before they applied.

(f) Nonprofit requirements. (1) Prohibition: A nonprofit that keeps money in offshore accounts to avoid the tax described in section 511(a) of title 26 cannot receive any covered grant program funds, directly or indirectly. (2) Disclosure: Any nonprofit covered grantee must disclose, in its grant application, how much it pays its officers, directors, and trustees, and explain the criteria it used to set that pay.

(g) Prohibition on lobbying activity. (1) In general: A covered grantee cannot use covered grant program money to lobby a Department of Justice representative about awarding grant funding, or to lobby any federal, state, local, or tribal government representative about awarding grant funding. (2) Penalty: If the Attorney General finds a grantee broke this rule, the Attorney General must make the grantee repay the full grant, and must bar that grantee from receiving another grant under the same program for at least five years starting on the date of the violation.