section .1300 – Grant recipient compliance liability: suspension: termination

Published: 2015

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section .1300 – Grant recipient compliance liability:

suspension: termination



(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

reporting period.

(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

shall be:

(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;

143B‑277; 143‑323(d);

Eff. December 1, 1983;

Amended Eff. October

1, 1984;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. April 25, 2015.