20 C.F.R. Subpart G—Sanctions for Violations of the Act
Title 20 - Employees' Benefits
This subpart describes the sanctions and appropriate corrective actions that may be imposed by the Secretary for violations of the Act, regulations promulgated thereunder, or grant terms and conditions (sections 106(j)(5), 164 (b), (d), (e), (f), (g), and (h)). (a) Except for actions under sections 106(j), 164 (b) and (f), and 167 of the Act and the funding restrictions specified at §627.423 of this part, Funding restrictions for “high-risk” recipients and subrecipients, the Grant Officer shall utilize initial and final determination procedures outlined in §627.606, Grant Officer resolution, of this part to impose a sanction or corrective action. (b) To impose a sanction or corrective action regarding a violation of section 167 of the Act, the Department shall utilize the procedures of 29 CFR part 34. (c) To impose a sanction or corrective action for failure to meet performance standards, where the recipient has not acted as required at section 106(j)(4), the Grant Officer shall utilize the procedures set forth at §627.470 (d) and (f). (d) To impose a sanction or corrective action for noncompliance with the procurement standards provisions set forth at §§627.420 and 627.703 of this part, where the recipient has not acted, the Grant Officer may utilize the procedures set forth at section 164(b) of the Act. (e) To impose a sanction or corrective action for the Governor's failure to promptly take remedial action of a substantial violation as required by §627.477 of this part, the Grant Officer shall utilize the procedure set forth in §627.607 of this part. (f) The recipient shall be held responsible for all funds under its grant(s). The recipient shall hold subrecipients, including SDA's and SSG's, responsible for JTPA funds received through the grant, and may ultimately hold the units of local government which constitute the SDA or the SSG responsible for such funds. (g) Nothing in this section shall preclude the Grant Officer from imposing a sanction directly against a subrecipient, as authorized in section 164(e)(3) of the Act. In such a case, the Grant Officer shall inform the recipient of such action. (a) If, as part of the recipient's annual on-site monitoring of its SDA's/SSG's, the recipient determines that an SDA/SSG is not in compliance with the procurement requirements established in accordance with the provisions at section 164(a)(3) of the Act and §627.420, of this part, Procurement, and §627.422 of this part, Selection of service providers, the recipient shall: (1) Require corrective action to secure prompt compliance; and (2) Impose the sanctions provided for under the provisions at section 164(b) if the recipient finds that the SDA/SSG has failed to take timely corrective action under paragraph (a)(1) of this section (section 164(a) (4) and (5)). (b) An action by the recipient to impose a sanction against either an SDA or SSG, in accordance with this section, may be appealed to the Secretary under the same terms and conditions as the disapproval of the respective plan, or plan modification, as set forth at §628.426(e), Review and approval (section 164(b)(2)). (c) If, upon a determination under paragraph (a)(2) of this section to impose a sanction under section 164(b) of the Act, the recipient fails to promptly take the actions required under paragraph (a)(2) of this section, the Secretary shall take such actions against the recipient or the SDA/SSG as appropriate (section 164(b)(3)). (a) A recipient may request a waiver of liability as described in section 164(e)(2) of the Act. (b)(1) When the debt for which a waiver of liability is desired was established in a non-Federal resolution, such requests shall be accompanied by a resolution report. (2) When the ETA Grant Officer is resolving the finding(s) for which a waiver of liability is desired, such request shall be made no later than the informal resolution period described in §627.606(c) of this part. (c) A waiver of the recipient's liability can only be considered by the Grant Officer when the misexpenditure of JTPA funds: (1) Occurred at a subrecipient level; (2) Was not a violation of section 164(e)(1) of the Act, or did not constitute fraud; or (3) If fraud did exist, it was perpetrated against the recipient/subrecipient; and: (i) The recipient/subrecipient discovered, investigated, reported, and prosecuted the perpetrator of said fraud; and (ii) After aggressive debt collection action, it can be documented that there is no likelihood of collection from the perpetrator of the fraud. (4) The recipient has issued a final determination which disallows the misexpenditure, the recipient's appeal process has been exhausted, and a debt has been established; and (5) The recipient requests such a waiver and provides documentation to demonstrate that it has substantially complied with the requirements of section 164(e)(2)(A), (B), (C), and (D) of the Act. (d) The recipient shall not be released from liability for misspent funds under the determination required by section 164(e) of the Act unless the Grant Officer determines that further collection action, either by the recipient or subrecipient, would be inappropriate or would prove futile. (a) The recipient may request advance approval from the Grant Officer for contemplated corrective actions, including debt collection actions, which the recipient plans to initiate or to forego. The recipient's request shall include a description and an assessment of all actions taken by the subrecipient to collect the misspent funds. (b) Based on the recipient's request, the Grant Officer may determine that the recipient may forego certain collection actions against a subrecipient where: (1) The subrecipient was not at fault with respect to the liability criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the Act; (2) The misexpenditure of funds: (i) Was not made by that subrecipient but by an entity that received JTPA funds from that subrecipient; (ii) Was not a violation of section 164(e)(1) of the Act, or did not constitute fraud; or (iii) If fraud did exist, it was perpetrated against the subrecipient, and: (A) The subrecipient discovered, investigated, reported, and prosecuted the perpetrator of said fraud; and (B) After aggressive debt collection action, it can be documented that there is no likelihood of collection from the perpetrator of the fraud. (3) A final determination which disallows the misexpenditure and establishes a debt has been issued at the appropriate level; (4) Final action within the recipient's appeal system has been completed; and (5) Further debt collection action by that subrecipient or the recipient would be either inappropriate or futile. (a) In accordance with section 164(d) of the Act, the primary sanction for misexpenditure of JTPA funds is repayment. (b) A recipient may request that a debt, or a portion thereof, be offset against amounts allotted to the recipient, and retained at the recipient level for administrative costs, under the current or a future JTPA entitlement. (1) For title II grants, any offset shall be applied against the recipient level 5 percent administrative cost set-aside only and may not be distributed by the recipient among its subrecipients. (2) For title III grants, any such offset must be applied against that portion of funds reserved by the recipient for recipient level administration only and may not be distributed by the recipient among its subrecipients. (c) The Grant Officer may approve an offset request, under section 164(d) of the Act, if the misexpenditures were not in violation of section 164(e)(1) of the Act. (d) If offset is granted, the debt shall not be fully satisfied until the Grant Officer reduces amounts allotted to the State by the amount of the misexpenditure. (e) The recipient shall not have the authority to reduce allocations to an SDA or SSG for misexpenditure of JTPA funds under section 164(d) of the Act.
Title 20: Employees' Benefits
PART 627—GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT
Subpart G—Sanctions for Violations of the Act
§ 627.700 Purpose and scope.
§ 627.702 Sanctions and corrective actions.
§ 627.703 Failure to comply with procurement provisions.
§ 627.704 Process for waiver of State liability.
§ 627.706 Process for advance approval of a recipient's contemplated corrective actions.
§ 627.708 Offset process.
