38 C.F.R. § 38.770 – Recovery of funds by VA.

(a) Recovery of funds. VA may recover from the grantee any funds that are not used in accordance with a grant agreement. If VA decides to recover such funds, VA will issue to the grantee a notice of intent to recover grant funds, and the grantee will then have 30 days to return the grant funds or submit documentation demonstrating why the grant funds should not be returned. After review of all submitted documentation, VA will determine whether action will be taken to recover the grant funds.
(b) Prohibition of additional VLGP payments. When VA makes a final decision to recover grant funds from the grantee, VA must stop further payments of grant funds under this part until the grant funds are recovered and the condition that led to the decision to recover grant funds has been resolved.
(Authority: 38 U.S.C. 501(d), 2400 note and 2 CFR 200.203)