[Code of Federal Regulations]
[Title 45, Volume 4]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR1303.14]

[Page 111-113]
 
                        TITLE 45--PUBLIC WELFARE
 
CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 
                           AND HUMAN SERVICES
 
PART 1303_APPEAL PROCEDURES FOR HEAD START GRANTEES AND CURRENT OR 
PROSPECTIVE DELEGATE AGENCIES--Table of Contents
 
                      Subpart B_Appeals by Grantees
 
Sec. 1303.14  Appeal by a grantee from a termination of financial 
assistance.

    (a) After receiving concurrence from the Commissioner, ACYF, the 
responsible HHS official may terminate financial assistance to a 
grantee. Financial assistance may be terminated in whole or in part.
    (b) Financial assistance may be terminated for any or all of the 
following reasons:
    (1) The grantee is no longer financially viable;
    (2) The grantee has lost the requisite legal status or permits;
    (3) The grantee has failed to comply with the required fiscal or 
program reporting requirements applicable to grantees in the Head Start 
program;
    (4) The grantee has failed to timely correct one or more 
deficiencies as defined in 45 CFR Part 1304;
    (5) The grantee has failed to comply with the eligibility 
requirements and limitations on enrollment in the Head Start program, or 
both;
    (6) The grantee has failed to comply with the Head Start grants 
administration requirements set forth in 45 CFR part 1301;
    (7) The grantee has failed to comply with the requirements of the 
Head Start Act;
    (8) The grantee is debarred from receiving Federal grants or 
contracts;
    (9) The grantee fails to abide by any other terms and conditions of 
its award of financial assistance, or any other applicable laws, 
regulations, or other applicable Federal or State requirements or 
policies.
    (c) A notice of termination shall set forth:
    (1) The legal basis for the termination under paragraph (b) of this 
section, the factual findings on which the termination is based or 
reference to specific findings in another document that form the basis 
for the termination (such as reference to item numbers in an on-site 
review report or instrument), and citation to any statutory provisions, 
regulations, or policy issuances on which ACF is relying for its 
determination.
    (2) The fact that the termination may be appealed within 30 days to 
the Departmental Appeals Board (with a

[[Page 112]]

copy of the appeal sent to the responsible HHS official and the 
Commissioner, ACYF) and that such appeal shall be governed by 45 CFR 
part 16, except as otherwise provided in the Head Start appeals 
regulations, and that any grantee that requests a hearing shall be 
afforded one, as mandated by 42. U.S.C. 9841.
    (3) That the appeal may be made only by the Board of Directors of 
the grantee or an official acting on behalf of such Board.
    (4) That, if the activities of a delegate agency are the basis, in 
whole or in part, for the proposed termination, the identity of the 
delegate agency.
    (5) That the grantee's appeal must meet the requirements set forth 
in paragraph (d) of this section.
    (6) That a failure by the responsible HHS official to meet the 
requirements of this paragraph may result in the dismissal of the 
termination action without prejudice, or the remand of that action for 
the purpose of reissuing it with the necessary corrections.
    (d) A grantee's appeal must:
    (1) Be in writing;
    (2) Specifically identify what factual findings are disputed;
    (3) Identify any legal issues raised, including relevant citations;
    (4) Include an original and two copies of each document the grantee 
believes is relevant and supportive of its position (unless the grantee 
has obtained permission from the Departmental Appeals Board to submit 
fewer copies);
    (5) Include any request for specifically identified documents the 
grantee wishes to obtain from ACF and a statement of the relevance of 
the requested documents, and a statement that the grantee has attempted 
informally to obtain the documents from ACF and was unable to do so;
    (6) Grantees may submit additional documents within 14 days of 
receipt of the documentation submitted by ACF in response to the 
grantee's appeal and initial submittals. The ACF response to the appeal 
and initial submittals of the grantee shall be filed no later than 30 
days after ACF's receipt of the material. In response to such a 
submittal, ACF may submit additional documents should it have any, or 
request discovery in connection with the new documents, or both, but 
must do so within 10 days of receipt of the additional filings;
    (7) Include a statement on whether the grantee is requesting a 
hearing; and
    (8) Be filed with the Departmental Appeals Board and be served on 
the responsible HHS official who issued the termination notice and on 
the Commissioner of ACYF. The grantee must also serve a copy of the 
appeal on any delegate agency that would be financially affected at the 
time the grantee files its appeal.
    (e) The Departmental Appeals Board sanctions with respect to a 
grantee's failure to comply with the provisions of paragraph (d) of this 
section are as follows:
    (1) If in the judgment of the Departmental Appeals Board a grantee 
has failed to substantially comply with the provisions of the preceding 
paragraphs of this section, its appeal must be dismissed with prejudice.
    (2) If the Departmental Appeals Board concludes that the grantee's 
failures are not substantial, but are confined to one or a few specific 
instances, it shall bar the submittal of an omitted document, or 
preclude the raising of an argument or objection not timely raised in 
the appeal, or deny a request for a document or other ``discovery'' 
request not timely made.
    (3) The sanctions set forth in paragraphs (e)(1) and (2) of this 
section shall not apply if the Departmental Appeals Board determines 
that the grantee has shown good cause for its failure to comply with the 
relevant requirements. Delays in obtaining representation shall not 
constitute good cause. Matters within the control of its agents and 
attorneys shall be deemed to be within the control of the grantee.
    (f) (1) During a grantee's appeal of a termination decision, funding 
will continue until an adverse decision is rendered or until expiration 
of the then current budget period. At the end of the current budget 
period, if a decision has not been rendered, the responsible HHS 
official shall award an interim grant to the grantee until a decision is 
made.

[[Page 113]]

    (2) If a grantee's funding has been suspended, no funding shall be 
available during the termination proceedings, or at any other time, 
unless the action is rescinded or the grantee's appeal is successful. An 
interim grantee will be appointed during the appeal period.
    (3) If a grantee does not appeal an administrative decision to court 
within 30 days of its receipt of the decision, a replacement grantee 
will be immediately sought. An interim grantee may be named, if needed, 
pending the selection of a replacement grantee.
    (4) An interim grantee may be sought even though the grantee has 
appealed an administrative decision to court within 30 days, if the 
responsible HHS official determines it necessary to do so. Examples of 
circumstances that warrant an interim grantee are to protect children 
and families from harm and Federal funds from misuse or dissipation or 
both.
    (g) If the Departmental Appeals Board informs a grantee that a 
proposed termination action has been set down for hearing, the grantee 
shall, within five days of its receipt of this notice, send a copy of it 
to all delegate agencies which would be financially affected by the 
termination and to each delegate agency identified in the notice. The 
grantee shall send the Departmental Appeals Board and the responsible 
HHS official a list of all delegate agencies notified and the dates of 
notification.
    (h) If the responsible HHS official initiated termination 
proceedings because of the activities of a delegate agency, that 
delegate agency may participate in the hearing as a matter of right. Any 
other delegate agency, person, agency or organization that wishes to 
participate in the hearing may request permission to do so from the 
Departmental Appeals Board. Any request for participation, including a 
request by a delegate agency, must be filed within 30 days of the 
grantee's appeal.
    (i) The results of the proceeding and any measure taken thereafter 
by ACYF pursuant to this part shall be fully binding upon the grantee 
and all its delegate agencies, whether or not they actually participated 
in the hearing.
    (j) A grantee may waive a hearing and submit written information and 
argument for the record. Such material shall be submitted within a 
reasonable period of time to be fixed by the Departmental Appeals Board 
upon the request of the grantee. The failure of a grantee to request a 
hearing, or to appear at a hearing for which a date had been set, unless 
excused for good cause, shall be deemed a waiver of the right to a 
hearing and consent to the making of a decision on the basis of written 
information and argument submitted by the parties to the Departmental 
Appeals Board.
    (k) The responsible HHS official may attempt, either personally or 
through a representative, to resolve the issues in dispute by informal 
means prior to the hearing.

[57 FR 59264, Dec. 14, 1992, as amended at 61 FR 57226, Nov. 5, 1996; 65 
FR 4768, Feb. 1, 2000]