(a) Pursuant to sections 164 (d), (e), (f), (g), and (h) of the Act,
the Secretary may impose appropriate sanctions and corrective actions
for violations of the Act, Regulations, or grant terms and conditions.
Additionally, sanctions may include the following:
(1) Offsetting debts, arising from misexpenditure of grant funds,
against amounts to which the grantee is or may be entitled under the
Act, except as provided in section 164(e)(1) of the Act. The debt shall
be fully satisfied when the Secretary reduces amounts allotted to the
grantee by the amount of the misexpenditure; and
(2) Determining the amount of Federal cash maintained by the grantee
or its subgrantee or contract or in excess of reasonable grant needs,
establishing a debt for the amount of such excessive cash, and charging
interest on that debt.
(b) Except for actions under section 164(f) and 167 of the Act, to
establish a debt or violation subject to sanction and/or corrective
action, the Secretary shall utilize initial and final determination
procedures outlined in part 636.
(c) To impose a sanction or corrective action regarding a violation
of section 167 of the Act, the Secretary shall utilize the procedures of
29 CFR part 31.
(d) (1) The Secretary shall hold the grantee responsible for all
funds under the grant. The grantee shall hold its subgrantees and
contractors responsible for JTPA funds received through the grant.
(2) The Secretary shall determine the liability of the grantee for
misexpenditures of grant funds in accordance with section 164(e) of the
Act, including the requirement that the grantee shall have taken prompt
and appropriate corrective actions for misexpenditures by a subgrantee
or contractor.
(3) Prompt, appropriate, and aggressive debt collection action to
recover any funds misspent by subgrantees or contractors ordinarily
shall be considered a part of the corrective action required by section
164(e)(2)(D) of the Act.
(4) In making the determination required by section 164(e)(2) of the
Act, the Secretary may determine, based on a request from the grantee,
that the grantee may forego certain collection actions against a
subgrantee or contractor where that subgrantee or contractor was not at
fault with respect to the liability criteria set forth in section
164(e)(2)(A) through section 164(e)(2)(D) of the Act. The Secretary
shall consider such requests in assessing whether the grantee's
corrective action was appropriate in light of section 164(e)(2)(D) of
the Act.
(5) The grantee shall not be released from liability for misspent
funds under the determination required by section 164(e) of the Act
until the Secretary determines that further collection action, either by
the grantee or subgrantee or contractor, would be inappropriate or would
prove futile.
(e) Nothing in this section shall preclude the Secretary from
imposing a sanction directly against a subgrantee or contractor as
authorized in section 164(e)(3) of the Act. In such a case, the
Secretary shall inform the grantee of the Secretary's action.
