1. (a) Monitoring Reports. The Agency's monitoring department shall issue the following monitoring reports summarizing the results of monitoring activities. The reports may include the observations, findings, and recommendations of the monitoring team and Board, workforce service provider, AEL grant recipient, AEL service provider, or Agency grantee responses to the observations, findings, and recommendations.

   1. (1) Management Letter. If there are no findings (i.e., administrative findings and/or questioned costs), a management letter is issued.
   2. (2) Draft Monitoring Report. If there are findings, a draft monitoring report is issued, which sets forth a specified period in which to respond.
   3. (3) Final Monitoring Report. A final monitoring report is issued, which may include responses to the findings and recommendations.

2. (b) Initial Resolution. Based on the final monitoring report, the Agency's audit resolution department shall issue an initial resolution, which notifies a Board, workforce service provider, AEL grant recipient, AEL service provider, or Agency grantee of administrative findings and questioned costs and a specific time period for response.

   1. (1) Administrative Findings.

      1. (A) If the administrative findings set forth in the initial resolution are resolved, a closure letter is issued.
      2. (B) If the administrative findings set forth in the initial resolution are not resolved, the findings remain open until the following year's audit to ensure follow-up.

   2. (2) Questioned Costs.

      1. (A) If the questioned costs set forth in the initial resolution are resolved, a closure letter is issued.
      2. (B) If the questioned costs set forth in the initial resolution are not resolved, an initial determination is issued.

3. (c) Initial Determination. The Agency's audit resolution department shall issue an initial determination notifying a Board, workforce service provider, AEL grant recipient, AEL service provider, or Agency grantee of the following:

   1. (1) The unresolved questioned costs; and
   2. (2) The 60-day period, from issuance of the initial determination, to submit a response, including providing evidence or documentation of the appropriate actions taken.
4. (d) Final Determination. If the questioned costs remain unresolved at the end of the 60-day period, the Agency's audit resolution department shall issue a final determination to notify a Board, workforce service provider, AEL grant recipient, AEL service provider, or Agency grantee of allowed or disallowed costs and to establish debts.
5. (e) If the administrative findings or questioned costs remain unresolved, the Agency's Regulatory Integrity Division may request a sanction, as set forth in §802.125 of this chapter (relating to Sanction Determination).

6. (f) Appeal Process

   1. (1) Only final determinations regarding questioned costs issued by the Agency may be appealed, pursuant to §802.142 of this chapter (relating to Appeal).
   2. (2) Failure by a Board, workforce service provider, AEL grant recipient, AEL service provider, or Agency grantee to timely request a hearing waives the right to a hearing. The final determination shall constitute final Agency action and is not subject to further review.
   3. (3) If an appeal is requested and approved, a hearing officer is designated and the collection of debt is pending until final decision of the hearing.

Source Note:The provisions of this §802.65 adopted to be effective February 7, 2011, 36 TexReg 604; amended to be effective February 24, 2014, 39 TexReg 1201.