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those of Federal Management Circular 74-4).

§ 1050.115-5 Termination for cause.

Whenever it is determined that a grantee has failed to comply with the terms and conditions of its grant, CSA may terminate the grant in whole or in part at any time prior to its date of completion. CSA shall promptly notify the grantee of the determination and the reasons for the termination, together with its effective date. Pursuant to section 604(3) of the Economic Opportunity Act of 1964, as amended, such determination shall not be made unless the grantee has been afforded the opportunity for a full and a fair hearing on the termination of its grant. Payment made to grantees or recoveries by CSA or other Federal grantor agencies under grants terminated for cause shall be in accordance with the legal rights and liabilities of the parties.

§ 1050.115-6 Termination for convenience.

CSA or the grantee may terminate any grant in whole or in part if and only if both parties agree that the continuation of the project would not produce beneficial results commensurate with the further expenditure of funds. The two parties must agree on the termination conditions, including the effective date, and, in the case of partial terminations, the portion to be terminated. The grantee shall not incur new obligations for the terminated program or portion thereof after the effective date of termination and shall cancel as many outstanding obligations as possible. CSA shall allow full credit to the grantee for the Federal share of the noncancellable obligations properly incurred by the grantee prior to the effective date of termination.

§ 1050.115-7 CSA implementing policies and procedures governing suspensions.

(a) Purpose and scope. (1) This section establishes rules for the suspension of assistance provided under the Economic Opportunity Act of 1964, as amended (hereinafter the Act), if the assistance is administered by the Community Services Administration;

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grantee may be suspended for failure to comply with the terms and conditions of its grant, including applicable laws, regulations, CSA Instructions, grant conditions, or approved work programs.

(2) However, this section shall not apply to any administrative action of the Community Services Administration based upon any violation or alleged violation of title VI of the Civil Rights Act of 1964; in case of such violation or alleged violation the provisions of 45 CFR part 1010 (CSA Instruction 6004-01a) shall apply.

(3) Pursuant to section 604(2) of the Act and this subpart, the responsible CSA official may suspend a grant under the circumstances outlined in paragraph (a)(1) of this section. There are two kinds of suspension: (i) Suspension on notice, as provided for in paragraph (c) of this section, and (ii) summary suspension as provided for in paragraph (d) of this section. Summary suspension may be invoked only when the responsible CSA official determines that emergency situation exists (see paragraph (d)(1) of this section).

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(b) Definitions. (1) The term responsible CSA official means the Director, Deputy Director, and any other official who is authorized to make the grant in question, the Regional Director of the Regional Office administering the grant in question, or the designee of any of these officials.

(2) The term summary suspension means suspension of a grant without prior notice to the grantee.

(c) Suspension on notice. (1) The responsible CSA official shall notify the grantee by letter or telegram that CSA intends to suspend a grant in whole or in part unless good cause is shown why the grant should not be suspended. In such letter or telegram the responsible CSA official shall specify the grounds for the proposed suspension and the proposed effective date of the suspension.

(2) The responsible CSA official shall also inform the grantee of its right to submit written material in opposition to the intended suspension and of its right to request an informal meeting at which the grantee may respond an attempt to show why such suspension should not occur. The period of time

within which the grantee may submit such written material or request the informal meeting shall be established by the responsible CSA official in the notice of intent to suspend. However, in no event shall the period of time within which the grantee must submit written material or request such a meeting be less than 5 days after the notice of intent to suspend has been sent. If the grantee requests a meeting, the responsible CSA official shall fix a time and place for the meeting, which shall not be less than 5 days after the grantee's request is received by CSA.

(3) In lieu of the provisions of paragraph (c)(2) of this section dealing with the right of the grantee to request an informal meeting, the responsible CSA official may on his own initiative establish a time and place for such a meeting. However, in no event shall such a meeting be scheduled less than 7 days after the notice of intent to suspend is sent to the grantee.

(4) The responsible CSA official may in his discretion extend the period of time or date referred to in the previous paragraphs of this section and shall notify the grantee of any such extension.

(5) At the time the responsible CSA official sends the notification referred to in paragraphs (c)(1), (2), and (3) of this section to the grantee, he shall also send a copy of it to any delegate agency whose activities or failures to act are a substantial cause of the proposed suspension, and shall inform such delegate agency that it shall be entitled to submit written material or to participate in the informal meeting referred to in paragraph (c)(2) and (3) of this section. In addition, the responsible CSA official may in his discretion give such notice to any other delegate agency.

(6) Within 3 days of receipt of the notice referred to in paragraphs (c) (1), (2), and (3) of this section the grantee shall send a copy of these regulations to all delegate agencies which would be financially affected by the proposed suspension action. Any delegate agency that wishes to submit written material may do so within the time stated in the notice. Any delegate agency that wishes to participate in the informal meeting with the responsible CSA official contemplated herein (if not af

forded a right to participate under the previous paragraphs) may request permission to do so from the responsible CSA official, who may in his discretion grant or deny such permission. In acting upon any such request from a delegate agency, the responsible CSA official shall take into account the effect of the proposed suspension on the particular delegate agency, the extent to which the meeting would become unduly complicated as a result of granting such permission, and the extent to which the interests of the delegate agency requesting such permission appear to be adequately represented by other participants.

(7) In the notice of intent to suspend assistance the responsible CSA official shall invite voluntary action to adequately correct the deficiency which led to the initiation of the suspension proceeding.

(8) The responsible CSA official shall consider any timely material presented to him in writing, any material presented to him during the course of the informal meeting provided for in paragraphs (c) (2) and (3) of this section as well as any showing that the grantee has adequately corrected the deficiency which led to the initiation of suspension proceedings. If after considering the material presented to him the responsible CSA official concludes that the grantee has failed to show cause why the grant should not be suspended, he may suspend the grant in whole or in part and under such terms and conditions as he shall specify.

(9) Notice of such suspension shall be promptly transmitted to the grantee and shall become effective upon delivery. Suspension shall not exceed 30 days unless during such period of time termination proceedings are initiated in accordance with §1050.115-8, or unless the responsible CSA official and the grantee agree to a continuation of the suspension for an additional period of time. If termination proceedings are initiated, the suspension shall remain in full force and effect until such proceedings have been fully concluded.

(10) During a period of suspension no new expenditures shall be made and no new obligations shall be incurred in connection with the suspended program except as specifically authorized

in writing by the responsible CSA official. Expenditures to fulfill legally enforceable commitments made prior to the notice of suspension, in good faith and in accordance with the grantee's approved work program, and not in anticipation of suspension or termination, shall not be considered new expenditures. However, funds shall not be recognized as committed solely because the grantee has obligated them by contract or otherwise to a delegate agency.

NOTE: Willful misapplication of funds may violate section 627 of the Economic Opportunity Act of 1964, as amended, 42 U.S.C. 2971(f) or other criminal statutes.

(11) The responsible CSA official may in his discretion modify the terms, condition and nature of the suspension or rescind the suspension action at any time on his own initiative or upon a showing satisfactory to him that the grantee has adequately corrected the deficiency which led to the suspension and that repetition is not threatened. Suspensions partly or fully rescinded may in the discretion of the responsible CSA official be reimposed with or without further proceedings: Provided, however, that the total time of suspension may not exceed 30 days unless termination proceedings are initiated in accordance with §1050.115-8, or unless the responsible CSA official and the grantee agree to a continuation of the suspension for an additional period of time. If termination proceedings are initiated, the suspension shall remain in full force and effect until such proceedings have been fully concluded.

(d) Summary suspension. (1) As stated in (a)(3) of this section the responsible CSA official may invoke summary suspension procedures only if he determines that an emergency situation exists because there is a serious risk of: (i) Substantial injury to or loss of project funds or property, or (ii) violation of a Federal, State or local criminal statute, or (iii) violation of section 603(b) or 613 of the Economic Opportunity Act of 1964, as amended or of CSA Instructions implementing these sections of the Act. He must also determine that such risk is sufficiently serious to outweigh the general policy in favor of advance notice and opportunity to show cause.

(2) Notice of summary suspension shall be given to the grantee by letter or by telegram, shall become effective upon delivery to the grantee, and shall specifically advise the grantee of the effective date of the suspension and the extent, terms, and condition of any partial suspension. The notice shall also forbid the grantee to make any new expenditures or incur any new obligations in connection with the suspended portion of the program. Expenditures to fulfill legally enforceable commitments made prior to the notice of suspension, in good faith and in accordance with the grantee's approved work program, and not in anticipation of suspension or termination, shall not be considered new expenditures. However, funds shall not be recognized as committed by a grantee solely because the grantee obligated them by contract or otherwise to a delegate agency.

(3) In the notice of summary suspension the responsible CSA official shall advise the grantee that it may request CSA to provide it with an opportunity to show cause why the summary suspension should be rescinded. If the grantee requests such an opportunity, the responsible CSA official shall immediately inform the grantee in writing of the specific grounds for the suspension and shall within 7 days after receiving such request from the grantee hold an informal meeting at which the grantee may show cause why the summary suspension should be rescinded. Notwithstanding the provisions of this paragraph, the responsible CSA official may proceed to initiate termination proceedings at any time even though the grant has been suspended in whole or in part. In the event that termination proceedings are initiated, the responsible CSA official shall nevertheless afford the grantee, if it so requests, an opportunity to show cause why suspension should be rescinded pending the outcome of the termination proceedings.

(4) Notices of summary suspension shall also be furnished by the responsible CSA official and by the grantee to delegate agencies in the same manner as notices of intent to suspend as set forth in paragraphs (c) (5), (6), and (7) of this section. Delegate agencies shall have the same right to submit written

material to the responsible CSA official or to participate in the informal meetings as in the case of intended suspension proceedings set forth in paragraphs (c) (5) and (6) of this section.

(5) The effective period of a summary suspension may not exceed 10 days unless termination proceedings are initiated in accordance with § 1050.115-8 or unless the parties agree to a continuation of summary suspension for an additional period of time, or unless the grantee in accordance with paragraph (d)(3) of this section requests an opportunity to show cause why the summary suspension should be rescinded.

(6) If the grantee requests an opportunity to show cause why a summary suspension action should be rescinded the suspension shall continue in effect until the grantee has been afforded such opportunity and a decision has been made. Such a decision will be made within 5 days after the conclusion of the informal meeting referred to in paragraph (d)(3) of this section. If the responsible CSA official concludes after considering all material submitted to him, that the grantee has failed to show cause why the suspension should be rescinded, the responsible CSA official may continue the suspension in effect for an additional 10 days: Provided, however, That if termination proceedings are initiated, the summary suspension shall remain in full force and effect until all termination proceedings have been fully concluded.

(e) Right to counsel; travel expenses. In all proceedings under this section whether formal or informal, the grantee and CSA shall have the right to be represented by counsel or other authorized representatives. If the grantee and any delegate agencies which have a right to participate in an informal meeting pursuant to paragraphs (d) and (e) of this section do not have an attorney acting in that capacity as a regular member of the staff of the organization, the Boards of Directors of such grantees and delegate agencies will be authorized to designate an attorney to represent their organizations at any termination hearing and transfer sufficient funds from their current operating grants to pay the fees, travel, and per diem expenses of such attorney. The fees for such attorney shall be the

reasonable and customary fees for an attorney. However, such fees shall not exceed $100 per day without the express written approval of CSA. Travel and per diem expenses may be paid to such attorney from grant funds only in accordance with the policies set forth in the Standard Government. Travel Regulations and 45 CFR 1069.3-1, 1069.3-6 (CSA Instruction 6910-1a). The Board of Directors of the grantee or any delegate agency which has a right to participate in an informal meeting pursuant to paragraph (d) and (e) of this section will also be authorized to designate two persons in addition to an attorney whose travel and per diem expenses to attend the meeting or hearing may be paid from the organization's current operating grant. Such travel and per diem expenses shall conform to the policies set forth in the Standard Government Travel Regulations and in 45 CFR 1069.3-1 to 1069.3-6 (CSA Instruction 6910-1a).

§ 1050.115-8 CSA implementing policies and procedures governing termination of assistance.

(a) Purpose and scope. (1) This section establishes rules for the termination of assistance provided under the Economic Opportunity Act of 1964, as amended (hereinafter the Act), if the assistance is administered by the Community Services Administration; a grantee may be terminated for failure to comply with the terms and conditions of its grant, including applicable Laws, regulations, CSA Instructions, grant conditions, or approved work programs.

(2) However, this section shall not apply to any administrative action of the Community Services Administration based upon any violation or alleged violation of title VI of the Civil Rights Act of 1964; in case of such violation or alleged violation the provisions of 45 CFR part 1010 (CSA Instruction 6004-01a) shall apply.

(3) Pursuant to section 604(3) of the Act and CSA Instruction 6800-13, the responsible CSA official may terminate a grant under the circumstances outlined in paragraph (a)(1) of this section.

(b) Definitions. (1) The term responsible CSA official means the Director, Deputy Director, and any other official

who is authorized to make the grant in question.

(2) The term party means CSA, the grantee concerned, and any other agency or organization which, by right or by permission of the presiding officer, is a participant in a termination hearing.

(c) Notice and pre-hearing procedures. (1) If the responsible CSA official believes a grantee's violation of the terms and conditions of its grant is sufficiently serious to warrant termination, whether or not the grant has been suspended, he shall state that there appear to be grounds which warrant termination and shall set forth the specific reasons therefor. If the reasons result in whole or substantial part from the activities of a delegate agency, the notice shall identify that delegate agency. The notice shall also advise the grantee that the matter has been set down for hearing at a stated time and place, in accordance with paragraph (d) of this section. In the alternative the notice shall advise the grantee of its right to request a hearing and shall fix a period of time which shall not be less than 10 days in which the grantee may request such a hearing. (If the grant is Regionally administered, the Regional Director of the grantee's Region may initiate the notice of intent to terminate on behalf of CSA. Any notice initiated by the Regional Director shall inform the grantee of the name and address of the responsible CSA official and shall direct the grantee to address all communications concerning the termination hearing to that official.)

(2) Termination hearings shall be conducted in accordance with the provisions of paragraphs (e) and (f) of this section. They shall be scheduled for the earliest practicable date, but not later than 30 days after a grantee has requested such a hearing. Consideration shall be given to a request by a grantee to advance or postpone the date of a hearing scheduled by CSA. Any such hearing shall afford the grantee a full and fair opportunity to demonstrate that it is in compliance with all applicable laws, regulations, and other requirements specified in paragraph (a) of this section. In any termination hearing, CSA shall have the burden of

justifying the proposed termination. However, if the basis of the proposed termination is the failure of a grantee to take action required by law, regulation, or other requirement specified in paragraph (a) of this section, the grantee shall have the burden of proving that such action was timely taken.

(3) If a grantee requests CSA to hold a hearing in accordance with paragraph (c)(1) of this section, it shall send a copy of its request for such a hearing to all delegate agencies which would be financially affected by termination and to each delegate agency identified in the notice pursuant to paragraph (c)(1) of this section. This material shall be sent to these delegate agencies at the same time the grantee's request is made to CSA. The grantee shall promptly send CSA a list of the delegate agencies to which it has sent such material and the date on which it was sent.

(4) If the responsible CSA official pursuant to paragraph (c)(1) of this section informs a grantee that a proposed termination action has been set for hearing, the grantee shall within 5 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 pursuant to paragraph (c)(1) of this section. The grantee shall send the responsible CSA official a list of all delegate agencies notified and the date of notification.

(5) If the responsible CSA official has 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, in accordance with paragraph (e) of this section, request permission to do so from the presiding officer of the hearing. Such participation shall not, without the consent of CSA and the grantee, alter the time limitations for the delivery of papers or other procedures set forth in this section.

(6) The results of the proceeding and any measure taken thereafter by CSA pursuant to this section shall be fully binding upon the grantee and all its

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