According to the Governor’s 2024-2025 Executive Budget Book, the Commonwealth of Pennsylvania is expecting to expend $48.9 billion in federal funds.  These funds are often accepted without any analysis or understanding of the short-term or long-term consequences.  Furthermore, we have seen the significant fraud associated with the federal government’s trillion-dollar stimulus packages.  Residents of the Commonwealth deserve better than just accepting federal dollars without understanding their consequences or later finding out these programs are riddled with fraud.

Therefore, I will be introducing legislation to provide oversight on federal funding.  This legislation will:

• Require the Office of the Budget and state agencies to complete a report prior to accepting federal funding which will include:
  • Summary of the program accepting federal funding including the citations for the statutory creation of the program;
  • Compelling reasons to accept the federal dollars;
  • Performance measures and achievable goals of the federal funding;
  • The amount of new federal funding the agency anticipates receiving;
  • The timeframe for the receipt of funds and when the federal funding ends;
  • Federal requirements, mandates, and maintenance of effort requirements attached to the federal funding and their impacts on the program, state funding, and goals of the program;
  • Fiscal note disclosing the total cost of federal funding, including an analysis of the cost of the federal mandates for the current fiscal year and the proceeding four fiscal years
  • Whether the anticipated funding is allocated through an existing or new federal program and, if an existing program, the current amount of state General Fund or state dedicated fund committed to the program;
  • Whether any additional state employees are necessary to oversee or administer the federal funds;
  • Requirements associated with spending the federal funds, including but not limited to state match or cost share requirements, percentage limitations and timeframes;
  • Analysis of internal controls used to prevent and eliminate improper payments and fraud; and
  • Process by which the agency will operate and distribute federal funds to meet the performance metrics and goals.
• Require state agencies to:
  • To the extent allowable under law, leverage the new federal funding to offset existing state General Fund obligations rather than apply the federal funds to new or expanded programs;
  • Only hire new personnel in connection with or because of the new federal funding to limited-service employees whose employment shall not last beyond the expenditure of the federal funds;
  • Financially manage federal funding to ensure loss of federal funding does not result in a budget deficit for the program;
  • Provide complete access for the Independent Fiscal Office to provide a quarterly update on federal funding and how it is meeting the performance metrics and goals;
  • Provide complete access for the auditor general to perform audits on the agencies internal control processes; and
  • Report all alleged or potential improper payments or fraud.
• Requires state agencies to create a transparency portal for federal dollars.
• File a close out report.
• Notify recipients and pass-through entities of their liabilities under the federal Improper Payments Elimination and Recovery Act (IPERA) and the Federal False Claims Act.  Further it ensures if a recipient or pass-through entity is in violate of the federal IPERA, the Commonwealth will hold the recipient or pass-through entity liability for any federal disallowances.
• Statutorily forbids the acceptance of federal finding for the following reasons:
  • Causes a budget deficit within the general fund, at any point, within five fiscal years;
  • Mandates any school in the commonwealth to teach a specific program, topic, subject, curriculum, or standard;
  • Funding requirements, mandates, or maintenance of effort are in contradiction to state laws;
  • Requirements, mandates, or maintenance of effort does not allow, bans, or hinders state agencies to enforce internal controls to prevent fraud and improper payments; and
  • Requires the creation of a new program.
• Requires the IFO to review current federal funding to ascertain the costs of federal strings attached to accepting the funds.

This legislation will allow the citizens of the Commonwealth and policymakers a better understanding of federal funding and its impacts prior to accepting federal dollars.  This important and enhanced oversight of federal funds is critically important to ensure state government is a good steward of tax dollars.

I hope you will join in cosponsoring this important legislation to provide the much-needed oversight of federal funds.

Statutes/Laws affected:
Printer's No. 2687 (Dec 09, 2025): P.L.343, No.176