[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR627.423]

[Page 208]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents
 
                   Subpart D--Administrative Standards
 
Sec. 627.423  Funding restrictions for ``high-risk'' recipients and subrecipients.

    (a) A recipient or subrecipient may be considered ``high-risk'' if 
an awarding agency determines that the recipient or subrecipient is 
otherwise responsible, but:
    (1) Has a history of unsatisfactory performance;
    (2) Is not financially stable;
    (3) Has a management system which does not meet the management 
standards set forth in this part; or
    (4) Has not conformed to terms and conditions of a previously 
awarded grant or subgrant.
    (b) If the awarding agency determines that an award will be made to 
a ``high-risk'' recipient or subrecipient, then special funding 
restrictions that address the ``high-risk'' status may be included in 
the award. Funding restrictions may include, but are not limited to:
    (1) Payment on a reimbursement basis;
    (2) Requiring additional and/or more detailed financial or 
performance reports;
    (3) Additional monitoring;
    (4) Requiring the recipient or subrecipient to obtain specific 
technical or management assistance; and/or
    (5) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such funding 
restrictions, the awarding official will notify the recipient or 
subrecipient as early as possible, in writing, of:
    (1) The nature of the funding restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions; and
    (4) The method of requesting reconsideration of the restrictions 
imposed.