(a) Except as provided at paragraph (d) of this section, if, as a
result of financial and compliance audits or otherwise, the Governor
determines that there is a substantial violation of a specific provision
of this Act or the regulations under this Act, and corrective action has
not been taken, the Governor shall
(1) Issue a notice of intent to revoke approval of all or part of
the plan affected; or
(2) Impose a reorganization plan, which may include
(i) Restructuring the private industry council involved;
(ii) Prohibiting the use of designated service providers;
(iii) Selecting an alternative entity to administer the program for
the service delivery area involved;
(iv) Merging the service delivery area into 1 or more other existing
service delivery areas; or
(v) Other such changes as the Secretary or Governor determines
necessary to secure compliance (section 164(b)(1)).
(b)(1) The actions taken by the Governor pursuant to paragraph
(a)(1) of this section may be appealed to the Secretary as provided at
Sec. 628.426 of this chapter (section 164(b)(2)(A)).
(2) The actions taken by the Governor pursuant to paragraph (a)(2)
of this section may be appealed to the Secretary, as provided at
Sec. 627.471 of this part (section 164(b)(2)(B)).
(c) Allegations that the Governor failed to promptly take the
actions required under paragraph (a) of this section shall be handled
under Sec. 627.607 of this part (section 164(b)(3)).
(d) This section does not apply to remedial actions for SDA failures
to meet performance standards, which are provided for at Sec. 627.470 of
this part, and do not apply to remedial actions for the failure to
comply with procurement standards, which are provided for at
Sec. 627.703 of this part.
