(a)(1) In the event that a substate grantee fails to submit a plan,
or submits a plan which is not approved by the Governor (see
Sec. 631.50(f) of this part), the Governor may direct the expenditure of
funds allocated to the substate area.
(2) The Governor's authority under this paragraph (a) to direct the
expenditure of funds remains in effect only until such time as a plan is
submitted and approved, or a new substate grantee is designated (section
313(c)).
(3) The Governor shall not direct the expenditure of funds under
this paragraph (a) until after the affected substate grantee has been
afforded advance written notice of the Governor's intent to exercise
such authority and an opportunity to appeal to the Secretary pursuant to
the provisions of Sec. 628.426(e) of this chapter.
(b)(1) If a substate grantee fails to expend funds allocated to it
in accordance with its plan, the Governor, subject to appropriate notice
and opportunity for comment in the manner required by section 105(b)(1),
(2), and (3) of the Act, may direct the expenditure of funds only in
accordance with the substate plan.
(2) The Governor's authority under this paragraph (b) to direct the
expenditure of funds shall remain in effect only until:
(i) The substate grantee corrects the failure;
(ii) The substate grantee submits an acceptable modification; or
(iii) A new substate grantee is designated (section 313(a) and (d)).
(3) The Governor shall not direct the expenditure of funds under
this paragraph (b) until after the affected substate grantee has been
afforded advance written notice of the Governor's intent to exercise
such authority and an opportunity to appeal to the Secretary pursuant to
the provisions of Sec. 628.426(e) of this chapter.
(c) When the substate area is the State, the Secretary shall have
the same authority as the Governor under paragraphs (a) and (b) of this
section.
