FRAUD Act
- Bill Number
- H.R. 9588
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Status
- Introduced
- Latest Action
- 2026-07-02: Referred to the House Committee on Oversight and Government Reform.
- Last Updated
- 2026-07-07T08:53:25Z
AI-Generated Summary
Purpose This legislation establishes mandatory reporting requirements for certain state officials regarding suspected fraud involving federal funds. It aims to increase accountability in the use of federal money distributed to states by creating new duties, certifications, and penalties.
Key Provisions
- Reporting Requirement: Covered state officials must report any "fraud warning" (a written allegation of specific fraud involving at least $250,000 in federal funds, supported by evidence such as audits or whistleblower complaints) to the FBI Director within 180 days.
- Funding Eligibility: A state's governor must annually certify to federal agencies that covered officials substantially complied with the reporting duty in the prior year; failure to do so can affect eligibility for federal funds.
- Criminal Offense: Knowingly failing to report or obstructing a related federal, state, or inspector general investigation is punishable by fines, up to 10 years in prison, or both.
- Debarment: Federal agencies may bar convicted officials from overseeing distribution of the relevant federal funds.
- Rule of Construction: The Act explicitly does not authorize removal of elected state officials or violate Tenth Amendment principles of federalism.
Significant Changes to Existing Law This bill introduces new federal obligations on state officials that did not previously exist in this form. It links compliance with reporting to continued receipt of federal funds and adds specific criminal penalties and debarment authority tied to fraud involving covered federal funds.
Potential Impacts
- Government Agencies: Increases workload for the FBI (receiving reports) and federal agencies (handling certifications and potential debarments).
- States and Officials: Requires new internal processes for identifying and forwarding fraud warnings; noncompliance risks loss of federal funding and personal criminal liability.
- Citizens: May improve oversight of public funds but could lead to additional administrative burdens at the state level.
- No direct effects on international relations are outlined.
Main Stakeholders Affected
- State governors and heads of agencies that handle federal funds.
- State inspectors general or equivalent oversight officials.
- Federal agencies distributing grants and other funds to states.
- The FBI.
- Recipients and administrators of federal programs at the state level.
Notable Legal, Constitutional, or Political Implications The bill includes language designed to address federalism concerns by disclaiming any authority to remove state officials from office or violate the Tenth Amendment. It creates a new intersection between state operations and federal criminal enforcement, potentially raising questions about the scope of federal authority over state officials in the administration of federal funds.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Rep. Emmer, Tom [R-MN-6], Rep. Finstad, Brad [R-MN-1], Rep. Fischbach, Michelle [R-MN-7]
Recent Actions
- 2026-07-02: Referred to the House Committee on Oversight and Government Reform.
- 2026-07-02: Introduced in House
- 2026-07-02: Introduced in House
Bill Versions
- Federal Responsibility and Accountability for Unchecked Dereliction Act — issued 2026-07-02 — PDF (4 pages)