[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: 20CFR632.44]

[Page 292-293]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 632--INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS--Table of Contents
 
           Subpart D--Administrative Standards and Procedures
 
Sec. 632.44  Sanctions for violation of the Act.

    (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

[[Page 293]]

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.