; and (B) any distribution from a military education savings account which is permitted under this Act shall not be includible in the gross income of the individual for whose benefit such account is maintained or the parent of such individual. (l) Privacy Section 444 of the General Education Provisions Act (commonly known as the Family Educational Rights and Privacy Act of 1974 ) ( 20 U.S.C. 1232g ) shall apply to a qualified educational service provider in the same manner that such section applies to an educational agency or institution (as that term is defined in such section). (m) Fraud prevention and reporting The Secretary of Education shall establish a website and a telephone hotline that enable individuals to anonymously report suspected fraud in the program under this section. The Secretary also shall conduct or contract for random, quarterly, or annual audits of accounts as needed to ensure compliance with this section. (n) Contract authority The Secretary of Education may enter into one or more contracts for the purpose of carrying out the responsibilities of the Secretary under this section. (o) Surety bond (1) In general The Secretary shall require each qualified educational service provider that receives not less than $100,000 in funds from Military Education Savings Accounts in a school year to post a surety bond, in an amount determined by the Secretary, for such school year. (2) Retention The Secretary shall prescribe the circumstances under which a surety bond under paragraph (1) may be retained by the Secretary. (p) Refunds The Secretary shall establish a process under which payments from a Military Education Savings Accounts to a qualified educational service provider may be refunded to the account in the event of fraud or nonperformance by the provider. (q) Rules of construction (1) Nonagency A qualified educational service provider that receives a payment from a Military Education Savings Account pursuant to this section shall not be considered an agent of the State or the Federal Government