1. Short title This Act may be cited as the Transparency and Accountability of Failed Exchanges Act . 2. States awarded Exchange establishment grants that terminate State operation of such an Exchange required to provide audits of the use of grant funds and return funds to the Federal Government (a) In general Section 1311(a) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18031(a) ) is amended by adding at the end the following new paragraph: (6) Treatment in case of Exchange termination (A) In general In the case of a State that is awarded a grant under this section to establish an Exchange and that terminates the operation of such Exchange or otherwise transfers the operation of such Exchange to an entity other than such State— (i) not later than 30 days after the date of such termination or transfer (or, in the case of such a termination or transfer that occurred before the date of the enactment of this paragraph, not later than 30 days after such date of enactment), the State shall submit to Congress and the Secretary a report containing the results of an audit of how amounts awarded to such State pursuant to such grant were used; and (ii) not later than 30 days after the date of such termination or transfer (or, in the case of such a termination or transfer that occurred before the date of the enactment of this paragraph, not later than 30 days after such date of enactment)— (I) in accordance with subparagraph (B), there are rescinded any unobligated amounts awarded to such State pursuant to such grant