AGREEMENT ON ELIGIBLE COSTS.

SEC. 203. AGREEMENT ON ELIGIBLE COSTS. Section 203(a) is amended by inserting “(1)” after “(a)”, by designating the last sentence as paragraph (3) and indenting such sentence as a paragraph, and by inserting before paragraph (3) as so designated the following: “(2) Agreement on eligible costs.— “(A) Limitation on modifications.—Before taking final action on any plans, specifications, and estimates submitted under this subsection after the 60th day following the date of the enactment of the Water Quality Act of 1987, the Administrator shall enter into a written agreement with the applicant which establishes and specifies which items of the proposed project are eligible for Federal payments under this section. The Administrator may not later modify such eligibility determinations unless they are found to have been made in violation of applicable Federal statutes and regulations. “(B) Limitation on effect.—Eligibility determinations under this paragraph shall not preclude the Administrator from auditing a project pursuant to section 501 of this Act, or other authority, or from withholding or recovering Federal funds for costs which are found to be unreasonable, unsupported by adequate documentation, or otherwise unallowable under applicable Federal cost principles, or which are incurred on a project which fails to meet the design 101 STAT. 17specifications or effluent limitations contained in the grant agreement and permit pursuant to section 402 of this Act for such project.”.