Federal Grant Accountability and Transparency Enhancement Act of 2025

This Act ensures accountability for federal funds provided to states under grant programs authorized by Congress, without commandeering state administrative systems. Section 1. Short Title. This Act may be cited as the 'Federal Grant Accountability and Transparency Enhancement Act of 2025'. Section 2. Purpose. The purpose of this Act is to enhance oversight of federal grant funds by requiring the federal government to conduct risk-based audits of state-administered programs that receive more than $10 million annually in federal funds, using existing federal auditing resources and without imposing new mandates on states. Section 3. Definitions. (a) 'Federal grant program' means any program authorized under Article I, Section 8 of the Constitution that provides funds to a state for administration. (b) 'State' includes the 50 states, the District of Columbia, and U.S. territories. Section 4. Audit Requirement. (a) The Comptroller General of the United States, through the Government Accountability Office (GAO), shall conduct biennial audits of a representative sample of federal grant programs administered by states. The sample shall be selected based on risk factors including total funding amount, prior audit findings, and program complexity. (b) The GAO shall prioritize audits of programs where federal funds exceed $50 million annually. (c) Audits shall assess compliance with federal statutory and regulatory requirements, efficiency of fund use, and achievement of program goals. Section 5. Public Reporting. (a) The GAO shall publish audit reports on a public website within 90 days of completion. Reports shall include findings, recommendations, and any corrective actions taken. (b) The Office of Management and Budget (OMB) shall maintain a centralized database of all federal grant awards to states, updated quarterly, accessible to the public. Section 6. Funding. (a) This Act authorizes appropriations of $25 million per fiscal year for fiscal years 2026 through 2030, to be derived from general Treasury revenues. (b) Funds shall be allocated to the GAO for audit activities and to the OMB for database maintenance. Section 7. Sunset. This Act shall sunset on September 30, 2030, unless reauthorized by Congress. Section 8. Effective Date. This Act shall take effect on October 1, 2025. Section 9. Enforcement. (a) If an audit identifies material noncompliance or waste of federal funds, the relevant federal agency may withhold up to 5% of future grant payments to the state until corrective actions are certified by the GAO. (b) The Attorney General may bring civil action to recover misused funds.