N.Y. Comp. Codes R. & Regs. tit. 6, § 649.12 – Remedies.

(a) If a recipient has received CWSRF assistance for work which is not an allowable cost of a project, the recipient may be required to reimburse the CWSRF for the amount of misapplied CWSRF assistance received (reimbursed amounts may be applied to allowable project costs or to bond redemption) and until the full amount of such misapplied CWSRF assistance has been reimbursed, the corporation may apply any interest rate subsidy to such reimbursement or recoup any other benefit provided to the recipient, or reduce any future interest rate subsidy or such other benefit, or reduce any future interest rate subsidy or such other benefit for future CWSRF assistance for purposes of reimbursing the CWSRF in addition to any other remedy permitted pursuant to this section, the PFA, or by law.
(b) If the department or the corporation determines that the project is not in compliance with Federal or State laws or the terms of the applicable PFA, and following due written notice to the recipient, the project or recipient is not brought into compliance, the corporation may:
1. (1) withdraw the interest rate subsidy, recoup any other benefit provided to the recipient, or reduce any future interest rate subsidy or such other benefit, or reduce any future interest rate subsidy or such other benefit for future CWSRF assistance;
2. (2) refuse to approve CWSRF disbursement requests; and
3. (3) refuse execution of subsequent PFAs until the project or recipient is brought into compliance.
(c) Nothing in this section shall be construed to limit the rights of the department or the corporation to take action including, but not limited to, administrative enforcement actions and actions for breach of contract against a recipient that fails to carry out its obligations under this Part, the PFA, or any other applicable State or Federal law, rule or regulation.