HR-9240-119
Referred to the House Committee on Oversight and Government Reform.
Sponsored by Byron Donalds (R-FL)
What it does
This bill would require any state, local government, or municipality that receives federal funds — directly or indirectly — to provide the Comptroller General (head of the Government Accountability Office) access to its budgets, financial records, expenditure reports, contracts, grants, and related documents upon request. It would also require states to proactively submit the prior fiscal year's records within 120 days after each fiscal year ends. If a state refuses, the Office of Management and Budget would be authorized to withhold, suspend, or condition that state's federal funding until it complies.
Who benefits
Federal taxpayers broadly, who would gain greater visibility into how federal dollars are spent at the state and local level. The Government Accountability Office (GAO), which would gain expanded audit authority. Members of Congress seeking oversight of federal grant programs. Journalists, watchdog organizations, and researchers who rely on GAO audit findings. Communities where federal funds may be misused or misallocated, who could see better accountability and corrective action.
Who is hurt
State and local governments, which would face new compliance burdens and potential loss of federal funding for non-compliance. State budget and finance agency staff who would bear the administrative workload of preparing and transmitting records annually. States with privacy or confidentiality laws protecting certain government records, which could face legal conflicts. Municipalities and local governments that receive federal funds indirectly and may lack the administrative capacity to respond to federal audit requests. Contractors and grantees whose records held by states could become subject to federal review.
Supporters argue
Supporters argue that the federal government distributes over $1 trillion annually in grants and transfers to states, yet the GAO's ability to audit how those funds are spent is inconsistently defined across existing statutes. They contend that requiring uniform access to state financial records is a straightforward accountability measure — if states accept federal money, taxpayers deserve assurance it is spent as intended. They point to recurring GAO findings of improper payments and unaudited grant expenditures at the state level as evidence that the current patchwork of access rules leaves significant oversight gaps.
Opponents argue
Opponents argue that conditioning all federal funding on compliance with open-ended federal audit access raises serious Tenth Amendment concerns, as it could effectively commandeer state record-keeping systems and override state confidentiality laws. They contend the bill's broad language — covering funds received "directly or indirectly" — could sweep in virtually every state and local government function, giving the federal executive branch (through OMB's funding-withholding power) coercive leverage over state governments in ways that go beyond legitimate oversight. They further argue that existing audit mechanisms, including single audit requirements under the Single Audit Act, already provide substantial federal access to state financial records.
Constitutional context
The Tenth Amendment reserves powers not delegated to the federal government to the states, and the Supreme Court's anti-commandeering doctrine limits Congress's ability to conscript state governments into federal programs. The spending power (Art. I, §8, cl. 1) generally permits Congress to attach conditions to federal funds, but South Dakota v. Dole (1987) — while not in the provided case list — established that conditions must be related to the federal interest in the program. The bill's "directly or indirectly" funding trigger and OMB's broad withholding authority could also raise questions under the major questions doctrine (West Virginia v. EPA, 2022) if interpreted to grant OMB sweeping discretion over federal fund flows without sufficiently clear congressional authorization.
Checks and balances
The legislative branch (via the GAO/Comptroller General) gains expanded audit access to state records, while the executive branch (OMB) gains new enforcement authority to withhold federal funds; checks on this power include judicial review of withholding decisions and constitutional limits on federal coercion of states under the Tenth Amendment.
Historical precedent
The Single Audit Act of 1984 (amended 1996) already requires states and localities receiving more than $750,000 in federal funds annually to undergo independent audits, giving the federal government significant — though not unlimited — access to state financial records.