12 2 STA T . 2 7 1 9PUBLIC LA W 11 0– 2 8 9 —J UL Y3 0 , 2008 unders u b se ctio n ( e ) ( 1 )( B )toberei m bursed or returned to t h e S t a te or State desi g nated entit y during such year —‘ ‘(1) e x ce p taspro v ided in paragraph ( 2 )— ‘‘( A ) the amount o f the grant for the State or State designated entity for the succeeding year , as determined pursuant to this section, sha l l be reduced by the amount by w hich such amounts re q uired to be reimbursed or returned exceed the amount actually reimbursed or returned
and ‘‘(B) the amount of the grant for the succeeding year for each other State or State designated entity whose grant is not reduced pursuant to subparagraph (A) shall be increased by the amount determined by applying the for - mula established pursuant to this section to the total amount of all reductions for all State or State designated entities for such year pursuant to subparagraph (A); or ‘‘(2) in any case in which such failure to obtain reimburse- ment or return occurs during a year immediately preceding a year in which grants under this section will not be made, the State or State designated entity shall pay to the Secretary for reallocation among the other grantees an amount equal to the amount of the reduction for the entity that would other- wise apply under paragraph (1)(A) . ‘‘(e) A C C OUNTABIL IT Y O FRE CI P IENT S AN DGR ANTEES.— ‘‘(1) RECIPIENTS.— ‘‘(A) T RAC K IN G OF FUNDS.—The Secretary shall— ‘‘(i) require each State or State designated entity to develop and maintain a system to ensure that each recipient of assistance under this section uses such amounts in accordance with this section, the regula- tions issued under this section, and any requirements or conditions under which such amounts were provided; and ‘‘(ii) establish minimum requirements for agree- ments, between the State or State designated entity and recipients, regarding assistance under this section, which shall include— ‘‘( I ) appropriate periodic financial and pro j ect reporting, record retention, and audit require- ments for the duration of the assistance to the recipient to ensure compliance with the limitations and requirements of this section and the regula- tions under this section; and ‘‘(II) any other requirements that the Secretary determines are necessary to ensure appropriate administration and compliance. ‘‘(B) M ISUSE OF FUNDS.— ‘‘(i) REI M BURSEMENT RE Q UIREMENT.—If any recipient of assistance under this section is determined, in accordance with clause (ii), to have used any such amounts in a manner that is materially in violation of this section, the regulations issued under this sec- tion, or any requirements or conditions under which such amounts were provided, the State or State des- ignated entity shall require that, within 12 months after the determination of such misuse, the recipient shall reimburse the State or State designated entity Deadlin e .R e ports . Re c ord k eepin g . Re qu ire m ents. P a y ments.
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