(a) The Department may replace any grantee who during the grant
period has been terminated by first offering the Governor the
opportunity to submit an acceptable application. When such an offer is
made and should the Governor decline, within 15 days, or should the
Governor or his agent have been the terminated grantee, the Department
may replace the grantee by (1) designating another organization or
organizations, or (2) opening the area for competitive bidding.
(b) The Department may also require appropriate corrective action as
a condition of continued funding of a grantee whose performance has been
found deficient, but not sufficient to warrant termination for cause or
emergency treatment. Such appropriate corrective actions may include but
are not limited to termination of subrecipient agreements, development
of and compliance with corrective action plans, etc.
(c) In cases where deficiencies are identified and efforts at
corrective action have failed, the Department may apply sanctions, e.g.,
suspension of Letter of Credit, incremental funding, etc.
(d) Termination for cause can occur whenever there is a violation of
the governing rules and regulations, failure to comply with the grant
terms and conditions and in such cases as:
(1) Inability to meet Federal standards related to such debt
collection requirements as:
(i) Failure to respond to demand letters from DOL for repayment of
debts within the stated timeframe;
(ii) Failure to comply with approved repayment agreement;
(2) Nonperformance related to such requirements as:
(i) Failure to submit required quarterly financial reports for two
successive periods within 30 days after they are due;
(ii) Failure to submit required quarterly performance report for two
successive periods within 30 days after they are due;
(iii) Failure to develop a plan of action to correct deficiencies
identified in a final audit finding and determination or by an onsite
monitoring review;
(3) Nonperformance related to such requirements as:
(i) Failure to comply with formal corrective action after due
notice;
(ii) Failure to comply with the requirements of the Act related to a
grievance procedure and other requirements;
(e) In addition, the Department, by written notice, may terminate a
grant in whole or in part in the event of reduction in the funds
available for JTPA title IV, section 402 programs by reason of
congressional action, whether by authorization, appropriation, deferral,
rescission or otherwise, or by reason of other legislative action, such
as changes in service deliverers, program content or services to be
provided, which makes it impracticable to continue the agreement under
its original terms. In the event of a congressional reduction in funds,
the reduction shall be apportioned on an equitable basis among section
402 grantees. In the case of termination pursuant to this provision, the
Department shall be liable for payment, in accordance with the payment
provisions of this agreement, for services rendered and noncancellable
obligations properly incurred prior to the effective date of
termination.
(f) Notwithstanding the provisions of part 636 the Department may
terminate a grantee under emergency termination procedures in accordance
with section 164(f) of the Act.
(i) Instances under which emergency termination can occur include
but are not limited to: Final audit findings and determinations
identifying numerous adverse findings in the area of financial
management; information gathered through onsite monitoring which
substantiates serious management, fiscal and/or performance problems;
documented information from the Inspector General or gained through
incident reports of poor performance, serious administrative problems
and/or inability to protect and account for Federal funds.
(ii) Within 30 days of written termination notification to a
grantee, the Department will secure applicable documents onsite, seize
bank accounts relating to the program, arrange for the payment of
legitimate bills and debts and arrange, to the degree feasible, for the
continued provision of services to program enrollees.
