1. (a) If available, CEAP grant funds shall be expended in a timely and effective manner, and services provided must be effective and in full compliance with federal and state requirements.
2. (b) The Department may continue to administer the program through the existing subrecipients that have demonstrated that they are operating the program in accordance with the Low-Income Home Energy Assistance Act of 1981, 10 CFR §440.15, and state regulations through contract renewal.

3. (c) If a subrecipient does not comply with the program requirements, the Department may terminate a contract, in whole or in part, in accordance with the Low-Income Home Energy Assistance Act of 1981 and 10 CFR §440.15, before the expiration date if:

   1. (1) The Department and the subrecipient mutually agree to terminate the contract;
   2. (2) Either the Department or the subrecipient provides the other party 30 days written notice that the notifying party intends to terminate the contract;
   3. (3) Federal or state laws are changed to reduce or terminate the program;
   4. (4) The subrecipient ceases to operate the program without the Department's approval; or
   5. (5) The subrecipient does not comply with the terms of the contract or the negotiated service improvement agreement.
4. (d) Failure to submit an annual financial and compliance audit, in accordance with the Single Audit Act Amendments of 1996 in a timely manner, shall result in immediate suspension of payments to the subrecipient and may result in termination and/or nonrenewal of contracts.
5. (e) Failure to implement proper compliance with materials requirements and the correct installation of materials shall result in contract termination.
6. (f) The Department shall send the subrecipient a written notice when a contract is terminated. The subrecipient has the right to appeal this action within 15 days of receiving the notice.
7. (g) Subrecipient shall not be relieved of any liability for damages due to the Department by virtue of any prior or future breach of their contract.
8. (h) Financial audits resulting in unresolved disallowed costs, and/or unresolved reportable conditions shall result in termination or nonrenewal of contracts.
9. (i) The Department shall not be liable for any costs incurred by subrecipient after termination or during the suspension of their contract.

Source Note:The provisions of this §6.206 adopted to be effective April 1, 2007, 32 TexReg 1739.