(a) Supervision of each project shall be as specified in the initial cooperative agreement and shall include adequate and continuous inspection by the grantee. The project will be subject at all reasonable times to Federal inspection. The Director and the Comptroller General of the United States, or their duly authorized representatives, shall be given access by the grantee during regular business hours to any books, documents, papers, and records of the grantee which are pertinent to the project for the purposes of making audit, examination, excerpts, and transcripts.

(b) The State is required to conduct an audit at least every two years in accordance with the provisions of Attachment P of OMB Circular A-102. Failure to conduct audits as required may result in withholding of grant payments of such other sanctions as the Secretary may deem appropriate.