Title I, SEC. 1361. MANAGEMENT OF FINANCES AND RECORDS. 
      (a) In General. Each regional alliance shall comply with standards 
    established under section 1571(b) (relating to the management of finances, 
    maintenance of records, accounting practices, auditing procedures, and 
    financial reporting) and under section 1591(d) (relating to employer 
    payments). 

      (b) Specific Provisions. In accordance with such standards 

        (1) Financial statements. 

          (A) In general. Each regional alliance shall publish periodic audited 
        financial statements. 

          (B) Annual financial audit. 

            (i) In general. Each regional alliance shall have an annual 
          financial audit conducted by an independent auditor in accordance 
          with generally accepted auditing standards. 

            (ii) Publication. A report on each such audit shall be made 
          available to the public at nominal cost. 

            (iii) Required actions for deficiencies. If the report from such an 
          audit does not bear an unqualified opinion, the alliance shall take 
          such steps on a timely basis as may be necessary to correct any 
          material deficiency identified in the report. 

          (C) Eligibility error rates. Each regional alliance shall make 
        eligibility determinations for premium discounts, liability reductions, 
        and cost sharing reductions under sections 6104 and 6123, section 6113, 
        and section 1371, respectively, in a manner that maintains the error 
        rates below an applicable maximum permissible error rate specified by 
        the Secretary (or the Secretary of Labor with respect to section 6123). 
        In specifying such a rate, the Secretary shall take into account 
        maximum permissible error rates recognized by the Federal Government 
        under comparable State-administered programs. 

        (2) Safeguarding of funds. Each regional alliance shall safeguard 
      family, employer, State, and Federal government payments to the alliance 
      in accordance with fiduciary standards and shall hold such payments in 
      financial institutions and instruments that meet standards recognized or 
      established by the Secretary, in consultation with the Secretaries of 
      Labor and the Treasury and taking into account current Federal laws and 
      regulations relating to fiduciary responsibilities and financial 
      management of public funds. 

        (3) Contingencies. Each regional alliance shall provide that any 
      surplus of funds resulting from an estimation discrepancy described in 
      section 9201(b)(1)(D), up to a reasonable amount specified by the 
      Secretary, shall be held in a contingency fund established by the 
      alliance and used to fund any future shortfalls resulting from such a 
      discrepancy. 

        (4) Auditing of employer payments. 

          (A) In general. Each regional alliance is responsible for auditing 
        the records of regional alliance employers to assure that employer 
        payments (including the payment of amounts withheld) were made in the 
        appropriate amount as provided under subpart A of part 2 of subtitle B 
        of title VI. 

          (B) Employers with employees residing in different alliance areas. In 
        the case of a regional alliance employer which has employees who reside 
        in more than one alliance area, the Secretary of Labor, in consultation 
        with the Secretary, shall establish a process for the coordination of 
        regional alliance auditing activities among the regional alliances 
        involved. 

          (C) Appeal. In the case of an audit conducted by a regional alliance 
        on an employer under this paragraph, an employer or other regional 
        alliance that is aggrieved by the determination in the audit is 
        entitled to review of such audit by the Secretary of Labor in a manner 
        to be provided by such Secretary.