1. (a) The ALJ assigned to the case under § 81.4 considers an application for review of a disallowance decision.

2. (b) The ALJ decides whether the notice of a disallowance decision meets the requirements of § 81.34, as provided by section 451(e) of GEPA.

   1. (1) If the notice does not meet those requirements, the ALJ—

      1. (i) Returns the notice, as expeditiously as possible, to the authorized Departmental official who made the disallowance decision;
      2. (ii) Gives the official the reasons why the notice does not meet the requirements of § 81.34; and
      3. (iii) Informs the recipient of the ALJ's decision by certified mail, return receipt requested.
   2. (2) An authorized Departmental official may modify and reissue a notice that an ALJ returns.

3. (c) If the notice of a disallowance decision meets the requirements of § 81.34, the ALJ decides whether the application for review meets the requirements of § 81.37.

   1. (1) If the application, including any supplements or amendments under § 81.37(d), does not meet those requirements, the disallowance decision becomes the final decision of the Department.

   2. (2) If the application meets those requirements, the ALJ—

      1. (i) Informs the recipient and the authorized Departmental official that the OALJ has accepted jurisdiction of the case; and
      2. (ii) Schedules a hearing on the record.

   3. (3) The ALJ informs the recipient of the disposition of its application for review by certified mail, return receipt requested. If the ALJ decides that the application does not meet the requirements of § 81.37, the ALJ informs the recipient of the reasons for the decision.

      (Authority: 20 U.S.C. 1221e-3, 1234 (e) and (f)(1), 1234a(b), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug. 16, 1993]