TRACKS Act Mandates Reporting on Federal Funds Flowing to Entities in 'Countries of Concern'

This bill, the 'Tracking Receipts to Adversarial Countries for Knowledge of Spending Act' or TRACKS Act, digs into how federal money gets spent once it leaves the initial recipient. Specifically, it amends the existing Federal Funding Accountability and Transparency Act (FFATA) – the law that governs how federal spending is publicly reported. The core change? It mandates new reporting requirements for federal dollars that end up going to entities located in or connected to what are defined as 'foreign countries of concern' or 'foreign entities of concern'.

Following the Money Trail Abroad

Here’s the breakdown: If an organization, let's say a university or a contractor, gets a federal award (like a grant or contract), they're known as the 'prime award recipient'. If they then pass a portion of that money to another entity to help carry out the work – that's a 'subaward'. The TRACKS Act introduces the term 'covered subaward'. This specifically refers to any subaward given to an entity that's either located in a 'foreign country of concern' or is itself designated as a 'foreign entity of concern'.

The key kicker here, as stated in Section 2, is that these 'covered subawards' must now be reported regardless of the dollar amount. Previously, there were often minimum thresholds for reporting subawards under FFATA. This change means even small payments to entities falling under these 'of concern' definitions will need to be documented and disclosed publicly, just like larger subawards already are. Imagine a university research project receiving federal funds uses a specialized lab service based in a designated 'country of concern' for a small part of the analysis – under this act, that transaction would need to be reported.

Defining 'Concern'

It's important to note that the TRACKS Act itself doesn't list which countries or entities are 'of concern'. Instead, Section 2 points to definitions already established in Section 9901 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (which was part of the CHIPS Act legislation). This means the scope of the TRACKS Act reporting depends entirely on how those terms are defined and potentially updated within that separate defense law. This reliance on an external definition introduces a layer of uncertainty, as changes to the NDAA definitions could broaden or narrow who needs to be reported under TRACKS without amending this act directly.

Paper Trails and Practicalities

What does this mean practically? For organizations receiving federal funds and working with international partners, it likely means more administrative work. They'll need systems in place to identify if any of their subrecipients, no matter how small the payment, fall under the 'covered' definition based on the NDAA list, and then report them accordingly. The goal is clearly increased transparency – allowing the government and the public to see where federal funds might be flowing internationally, particularly to potentially adversarial nations.

To smooth this out, the bill requires the Director (likely of the Office of Management and Budget, which oversees FFATA) to issue guidance within 90 days of the TRACKS Act becoming law. This guidance will be crucial, setting the specific standards for how agencies, prime recipients, and the foreign subrecipients themselves need to comply and what data needs to be disclosed. This guidance will hopefully clarify the process, but the fundamental requirement adds a new layer of scrutiny and paperwork for federally funded projects with specific international links.