the Post-Katrina
Emergency Management Reform Act of 2006 (6
U.S.C. 750); and
(D) ensure that each State receiving a
grant administered by the Department submits a
report to the Administrator on its level of
preparedness, as required by section 652(c) of
the Post-Katrina Emergency Management Reform
Act of 2006 (6 U.S.C. 752(c)).
(5) Consideration of assessments.--In conducting
program reviews and performance audits under paragraphs
(2) and (3), the Administrator and the Inspector
General of the Department shall take into account the
performance assessment elements required under
paragraph (4).
(6) Recovery audits.--The Administrator shall
conduct a recovery audit (as that term is defined by
the Director of the Office of Management and Budget
under section 3561 of title 31, United States Code) for
any grant administered by the Department with a total
value of not less than $1,000,000, if the Administrator
finds that--
(A) a financial audit has identified
improper payments that can be recouped; and
(B) it is cost effective to conduct a
recovery audit to recapture the targeted funds.
(7) Remedies for noncompliance.--
(A) In general.--If, as a result of a
review or audit under this subsection or
otherwise, the Administrator finds that a
recipient of a grant under this title has
failed to substantially comply with any
provision of law or with any regulations or
guidelines of the Department regarding eligible
expenditures, the Administrator shall--
(i) reduce the amount of payment of
grant funds to the recipient by an
amount equal to the amount of grants
funds that were not properly expended
by the recipient;
(ii) limit the use of grant funds
to programs, projects, or activities
not affected by the failure to comply;
(iii) refer the matter to the