(a) Remedies for noncompliance. If a grantee or subgrantee
materially fails to comply with any term of an award, whether stated in
a Federal statute or regulation, an assurance, in a State plan or
application, a notice of award, or elsewhere, the awarding agency may
take one or more of the following actions, as appropriate in the
circumstances:
(1) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee or more severe enforcement
action by the awarding agency,
(2) Disallow (that is, deny both use of funds and matching credit
for) all or part of the cost of the activity or action not in
compliance,
(3) Wholly or partly suspend or terminate the current award for the
grantee's or subgrantee's program,
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding
agency will provide the grantee or subgrantee an opportunity for such
hearing, appeal, or other administrative proceeding to which the grantee
or subgrantee is entitled under any statute or regulation applicable to
the action involved.
(c) Effects of suspension and termination. Costs of grantee or
subgrantee resulting from obligations incurred by the grantee or
subgrantee during a suspension or after termination of an award are not
allowable unless the awarding agency expressly authorizes them in the
notice of suspension or termination or subsequently. Other grantee or
subgrantee costs during suspension or after termination which are
necessary and not reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly incurred
by the grantee or subgrantee before the effective date of suspension or
termination, are not in anticipation of it, and, in the case of a
termination, are noncancellable, and,
(2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude grantee or subgrantee from being subject to
``Debarment and Suspension'' under E.O. 12549 (see Sec. 97.35).
