The TRACKS Act increases transparency in federal spending by requiring the tracking and reporting of taxpayer dollars sent to adversarial countries and foreign entities of concern through subawards.
Elise Stefanik
Representative
NY-21
The TRACKS Act aims to increase transparency in federal spending by requiring prime recipients of federal awards to report subawards of any amount to entities located in or that are foreign entities of concern. This includes defining "subaward" and mandating the reporting of "covered subawards" to ensure taxpayer dollars are not inadvertently supporting adversarial countries. The Director will issue guidance within 90 days to ensure consistent compliance.
TRACKS Act Mandates New Reporting on Federal Funds Sent to 'Foreign Entities of Concern'
This bill, called the "Tracking Receipts to Adversarial Countries for Knowledge of Spending Act" or TRACKS Act, adds a new layer of scrutiny to how federal money flows overseas. It amends the existing Federal Funding Accountability and Transparency Act (FFATA) to require organizations receiving federal awards—think grants, contracts, or cooperative agreements—to report any portion of that money they pass along to entities located in certain countries or designated as "foreign entities of concern." The Director (likely from the Office of Management and Budget, which handles FFATA) gets 90 days after the bill passes to issue clear rules on how this reporting needs to happen.
Following the Money Trail Abroad
So, what's changing on the ground? If an organization, let's call them the 'prime recipient' (like a university getting a research grant or a company with a federal contract), gives part of that federal money to another group to help carry out the work, that's typically called a 'subaward.' The TRACKS Act focuses on what it calls "covered subawards." This means any amount, big or small, passed to a subrecipient that is either physically located in a country deemed adversarial or is officially labeled a "foreign entity of concern." The prime recipient is now on the hook for reporting these specific transactions. This aims to create a clearer picture of where U.S. taxpayer dollars end up, especially when national security might be a factor.
Defining 'Concern': The Known Unknown
The key definition here—"foreign entity of concern"—isn't actually spelled out in this bill. Instead, it points back to a definition established in the 2021 National Defense Authorization Act (specifically, section 9901, related to the CHIPS Act promoting semiconductor manufacturing). This definition is crucial because it determines who gets flagged for this extra reporting. Relying on an external definition means its scope could potentially shift, or interpretations could vary, adding a layer of uncertainty for organizations trying to comply. It's like being told to avoid certain ingredients, but the forbidden list might change depending on another law.
The Real-World Ripple: More Paperwork
While the goal is transparency, the immediate effect for many organizations receiving federal funds will be increased administrative work. Imagine a non-profit managing a federal grant for international development or a research lab collaborating with overseas partners. They'll need systems to track all subawards, identify which ones meet the "covered" criteria based on location or the 'entity of concern' designation, and report them accurately. This could be a heavier lift for smaller organizations that might not have robust compliance departments. While the bill aims for accountability, it inevitably adds steps and potential costs for those handling federal money.