(a) Initial determination. Upon the conclusion of a review of the
entire administrative record of an investigation conducted pursuant to
Sec. 636.6 or after the conclusion of the comment period for audits, the
Grant Officer shall make an initial determination of the matter in
controversy including the allowability of questioned costs or
activities. Such determination shall be based upon the requirements of
the Act, regulations, grants or other agreements, under the Act. The
determination may conclude either:
(1) That based upon the entire record there is no violation of the
Act, regulations, grants or other agreements under the Act; or
(2) That there is evidence to support the allegation, or finding of
questioned costs or activities.
(b) Contents of initial determination. (1) In the event that the
Grant Officer makes a finding that there is evidence to support the
allegation of a violation the initial determination shall:
(i) Be in writing;
(ii) State the basis of the determination, including factual
findings and conclusions;
(iii) Specify the costs or activities disallowed;
(iv) Specify the corrective actions required and/or that sanctions
may be imposed; and
(v) Give notice of an opportunity for informal resolution of the
matters as necessary to the appropriate parties, which should include
all interested parties specified by the Grant Officer.
(2) In the event that the Grant Officer makes a finding of no
violation the initial determination shall:
(i) Be in writing;
(ii) State the bases of the determination (factual findings and
conclusions); and
(iii) Give notice of the opportunity to present additional
information within 30 days of receipt of the initial determination.
(3) The initial determination shall be mailed by certified mail
return receipt requested to the parties and interested parties.
(c) Allowability of certain questioned costs. In any case in which
the Grant Officer determines that the recipient meets the requirements
of section 164(e)(2)(A)-(D) of the Act, the Grant Officer may waive the
imposition of sanctions (sec. 164(e)(3)). It is the responsibility of
the grantee to request such waiver by the Grant Officer and to submit
the evidence to be used to make the finding.
(d) Informal resolution. Except as provided by section 164(f) of the
Act, the Grant Officer shall not revoke a grant, in whole or in part,
nor institute corrective action or sanctions against a grantee without
first providing the grantee with an opportunity to informally resolve
those matters contained in the Grant Officer's initial determination. If
all matters are informally resolved, the Grant Officer shall notify the
parties in writing of the nature of the resolution, which shall
constitute final agency action, not subject to appeal, and shall close
the file.
(e) Final determination. (1) If all the parties and the Grant
Officer cannot informally resolve any matter pursuant to paragraph (d)
of this section, the Grant Officer shall provide each party with a final
written determination by certified mail, return receipt requested. In
the case of audits, the final determination shall be issued not later
than 180 days after the receipt by the Grant Officer of the final
approved audit report.
(2) The final determination shall:
(i) Indicate that efforts to informally resolve matters contained in
the initial determination pursuant to paragraph (a) of this section have
been unsuccessful;
(ii) List those matters upon which the parties continue to disagree;
(iii) List any modifications to the factual findings and conclusions
set in the initial determination;
(iv) List any sanctions, and required corrective actions, including
any other alteration or modification of the plan,
grant, agreement or program ordered by the Grant Officer; and
(v) Inform the parties of their opportunity to request a hearing
pursuant to these regulations.
(3) If it is determined in the final notice that the complaint does
not allege and/or the evidence does not indicate that there is reason to
believe there may have been a violation of the Act, regulations, grants
or other agreements under the Act, the Grant Officer shall dismiss the
complaint without an offer of a hearing. Such dismissal shall constitute
final agency action.
