[Code of Federal Regulations]
[Title 45, Volume 1, Parts 1 to 199]
[Revised as of October 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR98.92]

[Page 560]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 98--CHILD CARE AND DEVELOPMENT FUND--Table of Contents
 
          Subpart J--Monitoring, Non-compliance and Complaints
 
Sec. 98.92  Penalties and sanctions.

    (a) Upon a final determination that the Lead Agency has failed to 
substantially comply with the Act, the implementing regulations, or the 
Plan, one of the following penalties will be applied:
    (1) The Secretary will disallow the improperly expended funds;
    (2) An amount equal to or less than the improperly expended funds 
will be deducted from the administrative portion of the State allotment 
for the following fiscal year; or
    (3) A combination of the above options will be applied.
    (b) In addition to imposing the penalties described in paragraph (a) 
of this section, the Secretary may impose other appropriate sanctions, 
including:
    (1) Disqualification of the Lead Agency from the receipt of further 
funding under the CCDF; or
    (2)(i) A penalty of not more than four percent of the funds allotted 
under Sec. 98.61 (i.e., the Discretionary Funds) for a Fiscal Year shall 
be withheld if the Secretary determines that the Lead Agency has failed 
to implement a provision of the Act, these regulations, or the Plan 
required under Sec. 98.16;
    (ii) This penalty will be withheld no earlier than the second full 
quarter following the quarter in which the Lead Agency was notified of 
the proposed penalty;
    (iii) This penalty will not be applied if the Lead Agency corrects 
the failure or violation before the penalty is to be applied or if it 
submits a plan for corrective action that is acceptable to the 
Secretary; or
    (iv) The Lead Agency may show cause to the Secretary why the amount 
of the penalty, if applied, should be reduced.
    (c) If a Lead Agency is subject to additional sanctions as provided 
under paragraph (b) of this section, specific identification of any 
additional sanctions being imposed will be provided in the notice 
provided pursuant to Sec. 98.91.
    (d) Nothing in this section, or in Sec. 98.90 or Sec. 98.91, will 
preclude the Lead Agency and the Department from informally resolving a 
possible compliance issue without following all of the steps described 
in Secs. 98.90, 98.91 and 98.92. Penalties and/or sanctions, as 
described in paragraphs (a) and (b) of this section, may nevertheless be 
applied, even though the issue is resolved informally.
    (e) It is at the Secretary's sole discretion to choose the penalty 
to be imposed under paragraphs (a) and (b) of this section.