TRACKS Act Mandates Total Transparency for Federal Funds Sent to 'Countries of Concern,' Regardless of Dollar Amount

The new Tracking Receipts to Adversarial Countries for Knowledge of Spending Act, or the TRACKS Act, is all about following the money—specifically, federal grant money that leaves the country. If you’re an organization that receives a federal grant or contract and then passes some of that cash along to another group (a subaward) to get the work done, this bill introduces some serious new oversight.

This legislation tightens the screws on reporting when those federal dollars end up in the hands of organizations located in a "foreign country of concern" or a "foreign entity of concern." Think of countries or groups that the U.S. government has already flagged in existing national security laws. The core change is simple but impactful: if you pass a subaward to one of these flagged entities, you must report it—no matter how small the amount is. Even if it's just a few hundred dollars, it needs to be tracked.

The Fine Print on Pass-Through Cash

To make sure there are no loopholes, the bill clearly defines a subaward as any agreement where a main recipient (the one who got the federal money first) gives funds to a subrecipient to perform part of the original federally funded project. This definition is crucial because it also covers money passed down from one subrecipient to another, ensuring the trail of funds is followed all the way down the line. However, the bill is clear that direct payments to individual program beneficiaries—like a stipend to a student or a direct relief payment to a person—don't count and don't need this special reporting. It’s targeting organizations, not individuals.

Who Feels the Paperwork Pinch?

The biggest impact here is on prime award recipients—universities, large NGOs, or research labs that manage federal grants and contracts, especially those running international programs. Right now, there are usually reporting thresholds, meaning you only have to report subawards above a certain dollar amount. The TRACKS Act eliminates that threshold entirely for subawards going to these covered foreign entities. For a major research university, this means a significant increase in administrative work. Every small contract, every tiny grant to a partner organization in a flagged region—maybe for purchasing local supplies or hiring local staff—now requires the full reporting treatment.

This could create a headache for organizations trying to do legitimate, necessary work in sensitive areas. Imagine an NGO using federal funds for a public health initiative that needs to contract a local lab in a “country of concern” for quick, small-scale testing. The prime U.S. recipient now has to process and report that small subaward, potentially slowing down the work. This is the trade-off: increased transparency for the government comes with increased administrative complexity for the organizations on the ground.

Standardization is Coming (Soon)

Recognizing that this is a major compliance shift, the bill mandates that the Director must issue standardized guidance within 90 days of the law being enacted. This guidance will set the rules for how agencies and recipients must comply and what exact data needs to be disclosed. This is important because it aims to prevent every federal agency from creating its own unique set of reporting forms and requirements. For the busy compliance officer, standardized rules are a lifeline, ensuring they only have to learn one new system instead of ten.