(a) The recipient may request advance approval from the Grant
Officer for contemplated corrective actions, including debt collection
actions, which the recipient plans to initiate or to forego. The
recipient's request shall include a description and an assessment of all
actions taken by the subrecipient to collect the misspent funds.
(b) Based on the recipient's request, the Grant Officer may
determine that the recipient may forego certain collection actions
against a subrecipient where:
(1) The subrecipient was not at fault with respect to the liability
criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the
Act;
(2) The misexpenditure of funds:
(i) Was not made by that subrecipient but by an entity that received
JTPA funds from that subrecipient;
(ii) Was not a violation of section 164(e)(1) of the Act, or did not
constitute fraud; or
(iii) If fraud did exist, it was perpetrated against the
subrecipient, and:
(A) The subrecipient discovered, investigated, reported, and
prosecuted the perpetrator of said fraud; and
(B) After aggressive debt collection action, it can be documented
that there is no likelihood of collection from the perpetrator of the
fraud.
(3) A final determination which disallows the misexpenditure and
establishes a debt has been issued at the appropriate level;
(4) Final action within the recipient's appeal system has been
completed; and
(5) Further debt collection action by that subrecipient or the
recipient would be either inappropriate or futile.
