1. (a) The OAG may withhold funds from a grantee if a grantee fails to comply with established guidelines, grant conditions, or contractual agreements, or when funds are depleted or insufficient to fund allocations. The OAG may withhold funds from a specific project for reasons that include, but are not limited to:

   1. (1) failure to comply with any applicable federal or state law, rule, regulation, policy, or guideline, or with the terms of any grant agreements;
   2. (2) failure to submit reports of expenditures and status of funds, grantee progress reports, or special required reports at the time and in the form established for such reporting;
   3. (3) failure to maintain proper records as required by these rules;
   4. (4) failure to conduct the grant project according to the terms of the application for a grant, the statement of grant award, the grantee acceptance notice, or a grant adjustment notice;
   5. (5) failure to comply with any condition that has been made a part of the statement of grant award by reference or inclusion therein or through the issuance of a grant adjustment notice;
   6. (6) failure to commence project operations within 60 days of the project start date;
   7. (7) failure to submit audit reports, including management letters and responses to audit findings;
   8. (8) failure to provide timely and adequate responses to audit or monitoring report findings; or
   9. (9) failure to provide accurate information in a grant application, in grantee records, or in reports to the OAG.

2. (b) The OAG may withhold funds from all projects operated by a grantee for reasons that include, but are not limited to:

   1. (1) failure to respond to any deficiency listed in this section;
   2. (2) failure to return to the OAG within the required time unused grant funds remaining in the expired grant; or
   3. (3) refusal to return to the OAG any grant funds improperly accounted for or expended for ineligible purposes under a grant that has expired.
3. (c) The OAG will not give advance notice that a grantee may be placed on financial hold. It is the responsibility of a grantee to submit all reports and other required information in a timely fashion and to comply with OAG grant guidelines.
4. (d) The OAG will notify a grantee when a grant is placed on financial hold. A grantee may, within 10 days of receiving notification, request in writing a reconsideration of the determination to withhold funds. A grantee should send this request to the OAG Grants Coordinator, together with any documentation in support of the reconsideration. The grants coordinator will review the determination to withhold funds based on the documentation submitted. The OAG will send the final determination to the grantee in writing.
5. (e) The OAG will release funds if the grantee has provided evidence satisfactory to the OAG that the deficient conditions have been corrected, unless the OAG has terminated the grant as provided in §66.95 of this title.

Source Note:The provisions of this §66.93 adopted to be effective June 24, 2001, 26 TexReg 4437.