H.R. 9588: Federal Responsibility and Accountability for Unchecked Dereliction Act

This bill would create a federal requirement for certain state officials to report serious allegations of fraud involving federal money.

What counts as a covered official

The bill applies to:

• A state governor
• The head of a state agency that administers, oversees, distributes, or certifies spending of covered federal funds
• A state inspector general, or similar state official, with responsibility for investigating, auditing, or overseeing those funds

What must be reported

If one of those officials receives a fraud warning, they must report it to the FBI within 180 days. A fraud warning is a written, evidence-supported allegation of a specific fraud case involving at least $250,000 in federal funds. The allegation can come from things like an audit, investigative report, referral, written finding, or whistleblower complaint.

What happens if a state does not comply

To keep receiving federal funds for a fiscal year, a state’s chief executive would have to certify that the state’s covered officials substantially complied with the reporting requirement during the previous fiscal year.

Penalties

A covered official who knowingly fails to report the fraud warning, or who knowingly obstructs, interferes with, or impedes a federal, state, or inspector general investigation into fraud involving covered federal funds, could be fined, imprisoned for up to 10 years, or both.

Additional consequences

If a covered official is convicted under the bill, the federal agency overseeing the relevant funds may prohibit that official from overseeing the distribution of those funds in the future.

Limits on the bill

The bill says it does not give the federal government authority to remove a state official from elected office, and it says it should not be read to violate the Constitution’s federalism principles.

Definitions

The bill defines covered federal funds broadly to include federal money sent to states or state agencies through grants, cooperative agreements, reimbursements, direct appropriations, or other funding methods.

Relevant Companies

None found