section .1300 – Grant recipient compliance liability:
10a NCAC 97C .1301 SUSPENSION OF GRANT AGREEMENT
(a) "Suspension of a Grant Agreement" means the
temporary withdrawal of the grant recipient's authority to obligate funds pending
corrective action by the grant recipient, or pending a decision by the
Department to terminate a grant agreement.
(b) The basis for suspension shall be:
(1) When a grant recipient has materially
failed to comply with the terms of grant agreement applicable laws or
regulations, the Department may, upon reasonable notice to the grant recipient,
suspend the grant agreement in whole or in part.
(2) A grant agreement may be suspended for
failure of the grant recipient to submit a report including one from a prior
(c) The Department shall notify the grant recipient in
writing of its intent to suspend a grant agreement. The written notification
of suspension will state the reasons for the suspension, any corrective action
required of the grant recipient and the effective date of suspension.
(d) The conditions of a suspension of a grant agreement
(1) A suspension may be made effective at once
if a delayed effective date would be unreasonable considering the Department's
responsibilities to protect federal and state interests.
(2) A suspension shall remain in effect until
the grant recipient has taken corrective action satisfactory to the Department,
or given evidence satisfactory to the Office that such corrective action will
be taken, or until the Office terminates the contract.
(3) A suspension may apply to either all or
only a part of a grant recipient's agreement.
(4) If a grant agreement, or a portion of the
grant agreement, remains suspended for more than three consecutive months, the
grant agreement, or the portion suspended, shall be terminated in accordance
with the procedures set forth in Rule .1303 of this Section.
(e) New obligations incurred by the grant recipient during
the suspension period will not be allowed unless the Department expressly
authorizes them in the notice of suspension or an amendment to it. Necessary
and otherwise allowable costs which the grant recipient could not reasonably
avoid during the suspension period may be allowed, at the Department's discretion,
if they result from obligations properly incurred by the grant recipient before
the effective date of the suspension and not in anticipation of suspension or
(f) When a grant agreement, or part of a grant agreement,
is suspended, the Department will determine whether all or a portion of the
balance of funds on hand must be returned to the Department. The determination
will be based on:
(1) the amount of unearned funds on hand;
(2) the anticipated length of the suspension;
(3) the extent of the grant recipient's
operation, as suspended; and
(4) the fund balance on hand.
(g) Appropriate adjustments to payments under the suspended
grant agreement will be made either by withholding subsequent payments or by
not allowing the grant recipient credit for disbursements made in payment of
unauthorized obligations incurred during the suspension period.
(h) The Department may reinstate a suspended grant
agreement if it determines that conditions warrant such action. Such
reinstatement shall be made by the issuance of an amended agreement.
(i) Use of funds in a reinstated project may resume
immediately upon reinstatement. The funds unearned at the time of suspension
remain available to the grant recipient if approved by the Department.
History Note: Authority G.S. 143B‑10; 143B‑276;
Eff. December 1, 1983;
Amended Eff. October
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. April 25, 2015.