[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR98.66]

[Page 557-558]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 98--CHILD CARE AND DEVELOPMENT FUND--Table of Contents
 
                     Subpart G--Financial Management
 
Sec. 98.66  Disallowance procedures.

    (a) Any expenditures not made in accordance with the Act, the 
implementing regulations, or the approved Plan, will be subject to 
disallowance.
    (b) If the Department, as the result of an audit or a review, finds 
that expenditures should be disallowed, the Department will notify the 
Lead Agency of this decision in writing.
    (c)(1) If the Lead Agency agrees with the finding that amounts were 
not expended in accordance with the Act, these regulations, or the Plan, 
the Lead Agency shall fulfill the provisions of the disallowance notice 
and repay any amounts improperly expended; or
    (2) The Lead Agency may appeal the finding:
    (i) By requesting reconsideration from the Assistant Secretary, 
pursuant to paragraph (f) of this section; or
    (ii) By following the procedure in paragraph (d) of this section.
    (d) A Lead Agency may appeal the disallowance decision to the 
Departmental Appeals Board in accordance with 45 CFR part 16.
    (e) The Lead Agency may appeal a disallowance of costs that the 
Department has determined to be unallowable under an award. A grantee 
may not appeal the determination of award amounts or disposition of 
unobligated balances.
    (f) The Lead Agency's request for reconsideration in (c)(2)(i) of 
this section shall be postmarked no later than 30 days after the receipt 
of the disallowance notice. A Lead Agency may request an extension 
within the 30-day time frame. The request for reconsideration, pursuant 
to (c)(2)(i) of this section, need not follow any prescribed form, but 
it shall contain:
    (1) The amount of the disallowance;
    (2) The Lead Agency's reasons for believing that the disallowance 
was improper; and
    (3) A copy of the disallowance decision issued pursuant to paragraph 
(b) of this section.
    (g)(1) Upon receipt of a request for reconsideration, pursuant to 
(c)(2)(i) of this section, the Assistant Secretary or the Assistant 
Secretary's designee will inform the Lead Agency that the request is 
under review.
    (2) The Assistant Secretary or the designee will review any material 
submitted by the Lead Agency and any other necessary materials.
    (3) If the reconsideration decision is adverse to the Lead Agency's 
position,

[[Page 558]]

the response will include a notification of the Lead Agency's right to 
appeal to the Departmental Appeals Board, pursuant to paragraph (d) of 
this section.
    (h) If a Lead Agency refuses to repay amounts after a final decision 
has been made, the amounts will be offset against future payments to the 
Lead Agency.
    (i) The appeals process in this section is not applicable if the 
disallowance is part of a compliance review, pursuant to Sec. 98.90, the 
findings of which have been appealed by the Lead Agency.
    (j) Disallowances under the CCDF program are subject to interest 
regulations at 45 CFR part 30. Interest will begin to accrue from the 
date of notification.