A bill to provide for improved financial management and audit of Federal assistance programs.

Requires the Director of the Office of Management and Budget to develop standard accounting, auditing and financial management policies for the administration, accounting, and financial auditing of Federal assistance programs to State and local governments and nonprofit tax-exempt organizations.

Directs that such standards shall include: (1) terms, definitions and conditions used in such grants, contracts, and cooperative agreements; (2) generally accepted accounting principles and standards; (3) uniform requirements for grant application forms; (4) uniform principles and standards for financial management; and (5) uniform payment policies for grants, contracts, and cooperative agreements.

Requires a single independent financial and compliance audit every two years of: (1) State and local governments and subgrantees; and (2) nonprofit organizations and subgrantees which receive Federal assistance in excess of $100,000 per year. Requires such an audit once every five years in the case of recipients of less than $100,000 per year. Directs that such audits shall be audits of the recipient, rather than audits of individual grants and programs.

Provides that State and local governments and nonprofit organizations shall have the responsibility for such financial and compliance audits. Requires that such audits be made by independent auditors. Requires the Director to prescribe appropriate means for the reimbursement of independent auditors.

Requires the Director to establish a quality review process for such audits. Provides that the Federal government shall be responsible through such quality review process for determining that such audits meet generally accepted standards.

States that nothing in this Act limits the authority of Federal agencies to make audits of Federal grants-in-aid, provided that, if such independent audits meet accepted standards, Federal agencies shall rely on these audits and any additional audit work shall build upon the work already done.