[Code of Federal Regulations]
[Title 32, Volume 1]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR22.820]

[Page 81-83]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
 
PART 22--DoD GRANTS AND AGREEMENTS--AWARD AND ADMINISTRATION--Table of 
Contents
 
                  Subpart H--Post-Award Administration
 
Sec. 22.820  Debt collection.

    (a) Purpose. This section prescribes procedures for establishing 
debts owed by recipients of grants and cooperative agreements, and 
transferring them to payment offices for collection.
    (b) Resolution of indebtedness. The grants officer shall attempt to 
resolve by mutual agreement any claim of a recipient's indebtedness to 
the United States arising out of a grant or cooperative agreement (e.g., 
by a finding that a recipient was paid funds in excess of the amount to 
which the recipient was entitled under the terms and conditions of the 
award).

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    (c) Grants officer's decision. In the absence of such mutual 
agreement, any claim of a recipient's indebtedness shall be the subject 
of a grants officer decision, in accordance with Sec. 22.815(b)(2). The 
grants officer shall prepare and transmit to the recipient a written 
notice that:
    (1) Describes the debt, including the amount, the name and address 
of the official who determined the debt (e.g., the grants officer under 
Sec. 22.815(d)), and a copy of that determination.
    (2) Informs the recipient that:
    (i) Within 30 calendar days of the grants officer's decision, the 
recipient shall either pay the amount owed to the grants officer (at the 
address that was provided pursuant to paragraph (c)(1) of this section) 
or inform the grants officer of the recipient's intention to appeal the 
decision.
    (ii) If the recipient elects not to appeal, any amounts not paid 
within 30 calendar days of the grants officer's decision will be a 
delinquent debt.
    (iii) If the recipient elects to appeal the grants officer's 
decision the recipient has 90 calendar days, or 150 calendar days if ADR 
procedures are used, after receipt of the grants officer's decision to 
file the appeal, in accordance with Sec. 22.815(e)(3)(i).
    (iv) The debt will bear interest, and may include penalties and 
other administrative costs, in accordance with the debt collection 
provisions in Chapters 29, 31, and 32 of Volume 5 and Chapters 18 and 19 
of Volume 10 of the DoD Financial Management Regulation (DoD 7000.14-R). 
No interest will be charged if the recipient pays the amount owed within 
30 calendar days of the grants officer's decision. Interest will be 
charged for the entire period from the date the decision was mailed, if 
the recipient pays the amount owed after 30 calendar days.
    (d) Follow-up. Depending upon the response from the recipient, the 
grants officer shall proceed as follows:
    (1) If the recipient pays the amount owed within 30 calendar days to 
the grants officer, the grants officer shall forward the payment to the 
responsible payment office.
    (2) If within 30 calendar days the recipient elects to appeal the 
grants officer's decision, further action to collect the debt is 
deferred, pending the outcome of the appeal. If the final result of the 
appeal is a determination that the recipient owes a debt to the Federal 
Government, the grants officer shall send a demand letter to the 
recipient and transfer responsibility for further debt collection to a 
payment office, as described in paragraph (d)(3) of this section.
    (3) If within 30 calendar days the recipient has neither paid the 
amount due nor provided notice of intent to file an appeal of the grants 
officer's decision, the grants officer shall send a demand letter to the 
recipient, with a copy to the payment office that will be responsible 
for collecting the delinquent debt. The payment office will be 
responsible for any further debt collection activity, including issuance 
of additional demand letters (see Chapter 19 of volume 10 of the DoD 
Financial Management Regulation, DoD 7000.14-R). The grants officer's 
demand letter shall:
    (i) Describe the debt, including the amount, the name and address of 
the official that determined the debt (e.g., the grants officer under 
Sec. 22.815(d)), and a copy of that determination.
    (ii) Notify the recipient that the debt is a delinquent debt that 
bears interest from the date of the grants officer's decision, and that 
penalties and other administrative costs may be assessed.
    (iii) Identify the payment office that is responsible for the 
collection of the debt, and notify the recipient that it may submit a 
proposal to that payment office to defer collection, if immediate 
payment is not practicable.
    (e) Administrative offset. In carrying out the responsibility for 
collecting delinquent debts, a disbursing officer may need to consult 
grants officers, to determine whether administrative offset against 
payments to a recipient owing a delinquent debt would interfere with 
execution of projects being carried out under grants or cooperative 
agreements. Disbursing officers may also ask grants officers whether it 
is feasible to convert payment methods under grants or cooperative 
agreements from advance payments to reimbursements, to facilitate use of 
administrative offset. Grants officers therefore should be familiar with 
guidelines

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for disbursing officers, in Chapter 19 of Volume 10 of the Financial 
Management Regulation (DoD 7000.14-R), concerning withholding and 
administrative offset to recover delinquent debts.