[Federal Register Volume 69, Number 70 (Monday, April 12, 2004)]
[Rules and Regulations]
[Pages 19110-19116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8208]


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CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

45 CFR Part 1206


Grants and Contracts: Suspension and Termination and Denial of 
Application for Refunding; Correction Technical Amendments and 
Reinstatement

AGENCY: Corporation for National and Community Service.

ACTION: Final rule.

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SUMMARY: The Corporation for National and Community Service published 
in the Federal Register of March 27, 2003, a document removing obsolete 
regulations from 45 CFR Chapter XII. Inadvertently, part 1206 
concerning procedures for suspension, termination, and denial of 
refunding of grants and contracts was removed. This document reinstates 
part 1206 in its entirety as part of 45 CFR Chapter XII and corrects 
the nonsubstantive errors found in the original text. It makes no 
changes to the original part 1206 other than substituting Corporation 
positions for the now obsolete ACTION agency positions.

DATES: Effective April 12, 2004.

FOR FURTHER INFORMATION CONTACT: Britanya Rapp, Associate General 
Counsel, Corporation for National and Community Service, telephone: 
202-606-5000, ext. 258; TDD: 800-833-3722; Internet e-mail address: 
[email protected].

SUPPLEMENTARY INFORMATION: The ACTION agency promulgated a regulation 
at part 1206 addressing the termination, suspension, and denial of 
refunding of programs funded under the Domestic Volunteer Service Act 
of 1973, as amended. The Corporation published a document in the 
Federal Register of March 27, 2003, (68 FR 14901) inadvertently 
removing part 1206. This correction adds part 1206 and replaces the 
obsolete references to the ACTION agency with references to the 
Corporation, its departments and offices, officials, and employees.

List of Subjects in 45 CFR Part 1206

    Community action programs, Grant programs--social programs.

    Dated: April 6, 2004.
Frank R. Trinity,
General Counsel.

0
Accordingly, and under the authority of 42 U.S.C. 12561 and for the 
reasons stated in the preamble, the Corporation reinstates part 1206 in 
45 CFR chapter XII as follows:

PART 1206--GRANTS AND CONTRACTS--SUSPENSION AND TERMINATION AND 
DENIAL OF APPLICATION FOR REFUNDING

Subpart A--Suspension and Termination of Assistance
Sec.
1206.1-1 Purpose and scope.
1206.1-2 Application of this part.
1206.1-3 Definitions.
1206.1-4 Suspension.
1206.1-5 Termination.
1206.1-6 Time and place of termination hearings.
1206.1-7 Termination hearing procedures.
1206.1-8 Decisions and notices regarding termination.
1206.1-9 Right to counsel; travel expenses.
1206.1-10 Modification of procedures by consent.
1206.1-11 Other remedies.
Subpart B--Denial of Application for Refunding
1206.2-1 Applicability of this subpart.
1206.2-2 Purpose.
1206.2-3 Definitions.
1206.2-4 Procedures.
1206.2-5 Right to counsel.

    Authority: 42 U.S.C. 5052.

Subpart A--Suspension and Termination of Assistance


Sec.  1206.1-1  Purpose and scope.

    (a) This subpart establishes rules and review procedures for the 
suspension and termination of assistance of National Senior Service 
Corps and AmeriCorps*VISTA grants of assistance provided by the 
Corporation for National and Community Service pursuant to sections of 
titles I and II of the Domestic Volunteer Service Act of 1973, 87 Stat. 
394, Pub. L. 93-113, (hereinafter the DVSA) because a recipient failed 
to materially comply with the terms and conditions of any grant or 
contract providing assistance under these sections of the DVSA, 
including applicable laws, regulations, issued program guidelines, 
instructions, grant conditions or approved work programs.
    (b) However, this subpart shall not apply to any administrative 
action of the Corporation for National and Community Service based upon 
any violation, or alleged violation, of title VI of the Civil Rights 
Act of 1964 and sections 417(a) and (b) of Pub. L. 93-113 relating to 
nondiscrimination. In the case of any such violation or alleged 
violation other provisions of this chapter shall apply.


Sec.  1206.1-2  Application of this part.

    This subpart applies to programs authorized under titles I and II 
of the DVSA.


Sec.  1206.1-3  Definitions.

    As used in this subpart--
    (a) The term Corporation means the Corporation for National and 
Community Service established pursuant to 42 U.S.C. 12651 and includes 
each Corporation State Office and Service Center.
    (b) The term CEO means the Chief Executive Officer of the 
Corporation.
    (c) The term responsible Corporation official means the CEO, Chief 
Financial Officer, the Director of the National Senior Service Corps 
programs, the Director of the AmeriCorps*VISTA program, the appropriate 
Service Center

[[Page 19111]]

Director and any Corporation Headquarters or State office official who 
is authorized to make the grant of assistance in question. In addition 
to the foregoing officials, in the case of the suspension proceedings 
described in Sec.  1206.1-4, the term ``responsible Corporation 
official'' shall also include a designee of a Corporation official who 
is authorized to make the grant of assistance in question.
    (d) The term assistance means assistance under titles I and II of 
the DVSA in the form of grants or contracts involving Federal funds for 
the administration of which the Directors of the National Senior 
Service Corps and AmeriCorps*VISTA have primary responsibility.
    (e) The term recipient means a public or private agency, 
institution or organization or a State or other political jurisdiction 
which has received financial assistance under titles I and II of the 
DVSA. The term ``recipient'' does not include individuals who 
ultimately receive benefits under any DVSA program of assistance or 
National Senior Service Corps volunteers or AmeriCorps*VISTA members 
participating in any program.
    (f) The term agency means a public or private agency, institution, 
or organization or a State or other political jurisdiction with which 
the recipient has entered into an arrangement, contract or agreement to 
assist in its carrying out of the development, conduct and 
administration of all or part of a project assisted under titles I and 
II.
    (g) The term party in the case of a termination hearing means the 
Corporation, the recipient concerned, and any other agency or 
organization which has a right or which has been granted permission by 
the presiding officer to participate in a hearing concerning 
termination of financial assistance to the recipient pursuant to Sec.  
1206.1-5(e).
    (h) The term termination means any action permanently terminating 
or curtailing assistance to all or any part of a program prior to the 
time that such assistance is concluded by the grant or contract terms 
and conditions, but does not include the refusal to provide new or 
additional assistance.
    (i) The term suspension means any action temporarily suspending or 
curtailing assistance in whole or in part, to all or any part of a 
program, prior to the time that such assistance is concluded by the 
grant or contract terms and conditions, but does not include the 
refusal to provide new or additional assistance.


Sec.  1206.1-4  Suspension.

    (a) General. The responsible Corporation official may suspend 
financial assistance to a recipient in whole or in part for a material 
failure or threatened material failure to comply with any requirement 
stated in Sec.  1206.1-1. Such suspension shall be pursuant to notice 
and opportunity to show cause why assistance should not be suspended as 
provided in paragraph (b) of this section. However, in emergency cases, 
where the responsible Corporation official determines summary action is 
appropriate, the alternative summary procedure of paragraph (c) of this 
section shall be followed.
    (b) Suspension on notice. (1) Except as provided in paragraph (c) 
of this section, the procedure for suspension shall be on notice of 
intent to suspend as hereinafter provided.
    (2) The responsible Corporation official shall notify the recipient 
by letter or by telegram that the Corporation intends to suspend 
assistance in whole or in part unless good cause is shown why 
assistance should not be suspended. In such letter or telegram the 
responsible Corporation official shall specify the grounds for the 
proposed suspension and the proposed effective date of the suspension.
    (3) The responsible Corporation official shall also inform the 
recipient of its right to submit written material in opposition to the 
intended suspension and of its right to request an informal meeting at 
which the recipient may respond and attempt to show why such suspension 
should not occur. The period of time within which the recipient may 
submit such written material or request the informal meeting shall be 
established by the responsible Corporation official in the notice of 
intent to suspend. However, in no event shall the period of time within 
which the recipient must submit written material or request such a 
meeting be less than 5 days after the notice of intent to suspend 
assistance has been sent. If the recipient requests a meeting, the 
responsible Corporation official shall fix a time and place for the 
meeting, which shall not be less than 5 days after the recipient's 
request is received by the Corporation.
    (4) In lieu of the provisions of paragraph (b)(3) of this section 
dealing with the right of the recipient to request an informal meeting, 
the responsible Corporation official may on his own initiative 
establish a time and place for such a meeting and notify the recipient 
in writing or by telegram. However, in no event shall such a meeting be 
scheduled less than seven days after the notice of intent to suspend 
assistance is sent to the recipient.
    (5) The responsible Corporation official may in his discretion 
extend the period of time or date referred to in the previous 
paragraphs of this section and shall notify the recipient in writing or 
by telegram of any such extension.
    (6) At the time the responsible Corporation official sends the 
notification referred to in paragraphs (b) (2), (3), and (4) of this 
section to the recipient, he shall also send a copy of it to any agency 
whose activities or failures to act have substantially contributed to 
the proposed suspension, and shall inform such agency that it is 
entitled to submit written material or to participate in the informal 
meeting referred to in paragraphs (b) (3) and (4) of this section. In 
addition the responsible Corporation official may in his discretion 
give such notice to any other agency.
    (7) Within 3 days of receipt of the notice referred to in 
paragraphs (b) (2), (3), and (4) of this section, the recipient shall 
send a copy of such notice and a copy of these regulations to all 
agencies which would be financially affected by the proposed suspension 
action. Any agency that wishes to submit written material may do so 
within the time stated in the notice. Any agency that wishes to 
participate in the informal meeting with the responsible Corporation 
official contemplated herein may request permission to do so from the 
responsible Corporation official, who may in his discretion grant or 
deny such permission. In acting upon any such request from an agency, 
the responsible Corporation official shall take into account the effect 
of the proposed suspension on the particular agency, the extent to 
which the meeting would become unduly complicated as a result of 
granting such permission, and the extent to which the interests of the 
agency requesting such permission appear to be adequately represented 
by other participants.
    (8) In the notice of intent to suspend assistance the responsible 
Corporation official shall invite voluntary action to adequately 
correct the deficiency which led to the initiation of the suspension 
proceeding.
    (9) The responsible Corporation official shall consider any timely 
material presented to him in writing, any material presented to him 
during the course of the informal meeting provided for in paragraphs 
(b)(3) and (4) of this section as well as any showing that the 
recipient has adequately corrected the deficiency which led to the 
initiation of suspension proceedings. If after considering the

[[Page 19112]]

material presented to him the responsible Corporation official 
concludes the recipient has failed to show cause why assistance should 
not be suspended, he may suspend assistance in whole or in part and 
under such terms and conditions as he shall specify.
    (10) Notice of such suspension shall be promptly transmitted to the 
recipient and shall become effective upon delivery. Suspension shall 
not exceed 30 days unless during such period of time termination 
proceedings are initiated in accordance with Sec.  1206.1-5, or unless 
the responsible Corporation official and the recipient agree to a 
continuation of the suspension for an additional period of time. If 
termination proceedings are initiated, the suspension of assistance 
shall remain in full force and effect until such proceedings have been 
fully concluded.
    (11) During a period of suspension no new expenditures shall be 
made and no new obligations shall be incurred in connection with the 
suspended program except as specifically authorized in writing by the 
responsible Corporation official. Expenditures to fulfill legally 
enforceable commitments made prior to the notice of suspension, in good 
faith and in accordance with the recipient's approved work program, and 
not in anticipation of suspension or termination, shall not be 
considered new expenditures. However, funds shall not be recognized as 
committed solely because the recipient has obligated them by contract 
or otherwise to an agency.

    Note: Willful misapplication of funds may violate Federal 
criminal statutes.

    (12) The responsible Corporation official may in his discretion 
modify the terms, conditions and nature of the suspension or rescind 
the suspension action at any time on his own initiative or upon a 
showing satisfactory to him that the recipient had adequately corrected 
the deficiency which led to the suspension and that repetition is not 
threatened. Suspensions partly or fully rescinded may, in the 
discretion of the responsible Corporation official be reimposed with or 
without further proceedings: Provided however, That the total time of 
suspension may not exceed 30 days unless termination proceedings are 
initiated in accordance with Sec.  1206.1-5 or unless the responsible 
Corporation official and the recipient agree to a continuation of the 
suspension for an additional period of time. If termination proceedings 
are initiated, the suspension of assistance shall remain in full force 
and effect until such proceedings have been fully concluded.
    (c) Summary suspension. (1) The responsible Corporation official 
may suspend assistance without the prior notice and opportunity to show 
cause provided in paragraph (b) of this section if he determines in his 
discretion that immediate suspension is necessary because of a serious 
risk of:
    (i) Substantial injury to or loss of project funds or property, or
    (ii) Violation of a Federal, State or local criminal statute, or
    (iii) Violation of section 403 of the DVSA or of Corporation rules, 
regulations, guidelines and instructions implementing this section of 
the DVSA, and that such risk is sufficiently serious to outweigh the 
general policy in favor of advance notice and opportunity to show 
cause.
    (2) Notice of summary suspension shall be given to the recipient by 
letter or by telegram, shall become effective upon delivery to the 
recipient, and shall specifically advise the recipient of the effective 
date of the suspension and the extent, terms, and condition of any 
partial suspension. The notice shall also forbid the recipient to make 
any new expenditures or incur any new obligations in connection with 
the suspended portion of the program. Expenditures to fulfill legally 
enforceable commitments made prior to the notice of suspension, in good 
faith and in accordance with the recipient's approved work program, and 
not in anticipation of suspension or termination, shall not be 
considered new expenditures. However, funds shall not be recognized as 
committed by a recipient solely because the recipient obligated them by 
contract or otherwise to an agency. (See note under paragraph (b)(11) 
of this section.)
    (3) In the notice of summary suspension the responsible Corporation 
official shall advise the recipient that it may request the Corporation 
to provide it with an opportunity to show cause why the summary 
suspension should be rescinded. If the recipient requests such an 
opportunity, the responsible Corporation official shall immediately 
inform the recipient in writing of the specific grounds for the 
suspension and shall within 7 days after receiving such request from 
the recipient hold an informal meeting at which the recipient may show 
cause why the summary suspension should be rescinded. Notwithstanding 
the provisions of this paragraph, the responsible Corporation official 
may proceed to initiate termination proceedings at any time even though 
assistance to the recipient has been suspended in whole or in part. In 
the event that termination proceedings are initiated, the responsible 
Corporation official shall nevertheless afford the recipient, if it so 
requests, an opportunity to show cause why suspension should be 
rescinded pending the outcome of the termination proceedings.
    (4) Copies of the notice of summary suspension shall be furnished 
by the recipient to agencies in the same manner as notices of intent to 
suspend as set forth in paragraphs (b)(6), (7), and (8) of this 
section. Agencies may submit written material to the responsible 
Corporation official or to participate in the informal meeting as in 
the case of intended suspension proceedings set forth in paragraphs 
(b)(6) and (7) of this section.
    (5) The effective period of a summary suspension of assistance may 
not exceed 30 days unless termination proceedings are initiated in 
accordance with Sec.  1206.1-5, or unless the parties agree to a 
continuation of summary suspension for an additional period of time, or 
unless the recipient, in accordance with paragraph (c)(3) of this 
section, requests an opportunity to show cause why the summary 
suspension should be rescinded.
    (6) If the recipient requests an opportunity to show cause why a 
summary suspension action should be rescinded the suspension of 
assistance shall continue in effect until the recipient has been 
afforded such opportunity and a decision has been made. Such a decision 
shall be made within 5 days after the conclusion of the informal 
meeting referred to in paragraph (c)(3) of this section. If the 
responsible Corporation official concludes, after considering all 
material submitted to him, that the recipient has failed to show cause 
why the suspension should be rescinded, the responsible Corporation 
official may continue the suspension in effect for an additional 7 
days: Provided however, That if termination proceedings are initiated, 
the summary suspension of assistance shall remain in full force and 
effect until all termination proceedings have been fully concluded.


Sec.  1206.1-5  Termination.

    (a) If the responsible Corporation official believes that an 
alleged failure to comply with any requirement stated in Sec.  1206.1-1 
may be sufficiently serious to warrant termination of assistance, 
whether or not assistance has been suspended, he shall so notify the 
recipient by letter or telegram. The notice shall state that there 
appear to be grounds which warrant terminating the assistance and shall 
set forth the specific reasons therefore. If the reasons result in 
whole or substantial part from

[[Page 19113]]

the activities of an agency other than the grantee, the notice shall 
identify that agency. The notice shall also advise the recipient that 
the matter has been set down for hearing at a stated time and place, in 
accordance with Sec.  1206.1-6. In the alternative the notice shall 
advise the recipient of its right to request a hearing and shall fix a 
period of time which shall not be less than 10 days in which the 
recipient may request such a hearing.
    (b) Termination hearings shall be conducted in accordance with the 
provision of Sec. Sec.  1206.1-7 and 1206.1-8. They shall be scheduled 
for the earliest practicable date, but not later than 30 days after a 
recipient has requested such a hearing in writing or by telegram. 
Consideration shall be given to a request by a recipient to advance or 
postpone the date of a hearing scheduled by the Corporation. Any such 
hearing shall afford the recipient a full and fair opportunity to 
demonstrate that it is in compliance with requirements specified in 
Sec.  1206.1-1. In any termination hearing, the Corporation shall have 
the burden of justifying the proposed termination action. However, if 
the basis of the proposed termination is the failure of a recipient to 
take action required by law, regulation, or other requirement specified 
in Sec.  1206.1-1, the recipient shall have the burden of proving that 
such action was timely taken.
    (c) If a recipient requests the Corporation to hold a hearing in 
accordance with paragraph (a) of this section, it shall send a copy of 
its request for such a hearing to all agencies which would be 
financially affected by the termination of assistance and to each 
agency identified in the notice pursuant to paragraph (a) of this 
section. This material shall be sent to these agencies at the same time 
the recipient's request is made to the Corporation. The recipient shall 
promptly send to the Corporation a list of the agencies to which it has 
sent such material and the date on which it was sent.
    (d) If the responsible Corporation official pursuant to paragraph 
(a) of this section informs a recipient that a proposed termination 
action has been set for hearing, the recipient shall within 5 days of 
its receipt of this notice send a copy of it to all agencies which 
would be financially affected by the termination and to each agency 
identified in the notice pursuant to paragraph (a) of this section. The 
recipient shall send the responsible Corporation official a list of all 
agencies notified and the date of notification.
    (e) If the responsible Corporation official has initiated 
termination proceedings because of the activities of an agency, that 
agency may participate in the hearing as a matter of right. Any other 
agency, person, or organization that wishes to participate in the 
hearing may, in accordance with Sec.  1206.1-7(d), request permission 
to do so from the presiding officer of the hearing. Such participation 
shall not, without the consent of the Corporation and the recipient, 
alter the time limitations for the delivery of papers or other 
procedures set forth in this section.
    (f) The results of the proceeding and any subsequent measure taken 
by the Corporation pursuant to this part shall be fully binding upon 
the recipient and all agencies whether or not they actually 
participated in the hearing.
    (g) A recipient may waive a hearing by notice to the responsible 
Corporation official in writing and submit written information and 
argument for the record. Such material shall be submitted to the 
responsible Corporation official within a reasonable period of time to 
be fixed by him upon the request of the recipient. The failure of a 
recipient to request a hearing, or to appear at a hearing for which a 
date has been set, unless excused for good cause, shall be deemed a 
waiver of the right to a hearing and consent to the making of a 
decision on the basis of such information as is then in the possession 
of the Corporation.
    (h) The responsible Corporation official may attempt, either 
personally or through a representative, to resolve the issues in 
dispute by informal means prior to the date of any applicable hearing.


Sec.  1206.1-6  Time and place of termination hearings.

    The termination hearing shall be held in Washington, DC, or in the 
appropriate Service Center or Corporation State Office, at a time and 
place fixed by the responsible Corporation official unless he 
determines that for the convenience of the Corporation, or of the 
parties or their representatives, requires that another place be 
selected.


Sec.  1206.1-7  Termination hearing procedures.

    (a) General. The termination hearing, decision, and any review 
shall be conducted in accordance with the rules of procedure in this 
section and Sec. Sec.  1206.1-8 and 1206.1-9.
    (b) Presiding officer. (1) The presiding officer at the hearing 
shall be the responsible Corporation official or, at the discretion of 
the responsible Corporation official, an independent hearing examiner 
designated as promptly as possible in accordance with section 3105 of 
title 5 of the United States Code. The presiding officer shall conduct 
a full and fair hearing, avoid delay, maintain order, and make a 
sufficient record for a full and true disclosure of the facts and 
issues. To accomplish these ends, the presiding officer shall have all 
powers authorized by law, and he may make all procedural and 
evidentiary rulings necessary for the conduct of the hearing. The 
hearing shall be open to the public unless the presiding officer for 
good cause shown shall otherwise determine.
    (2) After the notice described in paragraph (f) of this section is 
filed with the presiding officer, he shall not consult any person or 
party on a fact in issue unless on written notice and opportunity for 
all parties to participate. However, in performing his functions under 
this part the presiding officer may use the assistance and advice of an 
attorney designated by the General Counsel of the Corporation: 
Provided, That the attorney designated to assist him has not 
represented the Corporation or any other party or otherwise 
participated in a proceeding, recommendation, or decision in the 
particular matter.
    (c) Presentation of evidence. Both the Corporation and the 
recipient are entitled to present their case by oral or documentary 
evidence, to submit rebuttal evidence and to conduct such examination 
and cross-examination as may be required for a full and true disclosure 
of all facts bearing on the issues. The issues shall be those stated in 
the notice required to be filed by paragraph (f) of this section, those 
stipulated in a prehearing conference or those agreed to by the 
parties.
    (d) Participation. (1) In addition to the Corporation, the 
recipient, and any agency which has a right to appear, the presiding 
officer in his discretion may permit the participation in the 
proceedings of such persons or organizations as he deems necessary for 
a proper determination of the issues involved. Such participation may 
be limited to those issues or activities which the presiding officer 
believes will meet the needs of the proceeding, and may be limited to 
the filing of written material.
    (2) Any person or organization that wishes to participate in a 
proceeding may apply for permission to do so from the presiding 
officer. This application, which shall be made as soon as possible 
after the notice of suspension or proposed termination has been 
received by the recipient, shall state the applicant's interest in the 
proceeding, the evidence or arguments the applicant

[[Page 19114]]

intends to contribute, and the necessity for the introduction of such 
evidence or arguments.
    (3) The presiding officer shall permit or deny such participation 
and shall give notice of his decision to the applicant, the recipient, 
and the Corporation, and, in the case of denial, a brief statement of 
the reasons for his decision: Provided however, That the presiding 
officer may subsequently permit such participation if, in his opinion, 
it is warranted by subsequent circumstances. If participation is 
granted, the presiding officer shall notify all parties of that fact 
and may, in appropriate cases, include in the notification a brief 
statement of the issues as to which participation is permitted.
    (4) Permission to participate to any extent is not a recognition 
that the participant has any interest which may be adversely affected 
or that the participant may be aggrieved by any decision, but is 
allowed solely for the aid and information of the presiding officer.
    (e) Filing. All papers and documents which are required to be filed 
shall be filed with the presiding officer. Prior to filing, copies 
shall be sent to the other parties.
    (f) Notice. The responsible Corporation official shall send the 
recipient and any other party a written notice which states the time, 
place, nature of the hearing, the legal authority and jurisdiction 
under which the hearing is to be held. The notice shall also identify 
with reasonable specificity the facts relied on as justifying 
termination and the Corporation requirements which it is contended the 
recipient has violated. The notice shall be filed and served not later 
than 10 days prior to the hearing and a copy thereof shall be filed 
with the presiding officer.
    (g) Notice of intention to appear. The recipient and any other 
party which has a right or has been granted permission to participate 
in the hearing shall give written confirmation to the Corporation of 
its intention to appear at the hearing 3 days before it is scheduled to 
occur. Failing to do so may, at the discretion of the presiding 
officer, be deemed a waiver of the right to a hearing.
    (h) Form and date of service. All papers and documents filed or 
sent to party shall be signed in ink by the appropriate party or his 
authorized representative. The date on which papers are filed shall be 
the day on which the papers or documents are deposited, postage prepaid 
in the U.S. mail, or are delivered in person: Provided however, That 
the effective date of the notice that there appear to be grounds which 
warrant terminating assistance shall be the date of its delivery or 
attempted delivery at the recipient's last known address as reflected 
in the records of the Corporation.
    (i) Prehearing conferences. Prior to the commencement of a hearing 
the presiding officer may, subject to the provisions of paragraph 
(b)(2) of this section, require the parties to meet with him or 
correspond with him concerning the settlement of any matter which will 
expedite a quick and fair conclusion of the hearing.
    (j) Evidence. Technical rules of evidence shall not apply to 
hearings conducted pursuant to this subpart, but the presiding officer 
shall apply rules or principles designed to assure production of 
relevant evidence and to subject testimony to such examination and 
cross examination as may be required for a full and true disclosure of 
the facts. The presiding officer may exclude irrelevant, immaterial, or 
unduly repetitious evidence. A transcription shall be made of the oral 
evidence and shall be made available to any participant upon payment of 
the prescribed costs. All documents and other evidence submitted shall 
be open to examination by the parties and opportunity shall be given to 
refute facts and arguments advanced on either side of the issues.
    (k) Depositions. If the presiding officer determines that the 
interests of justice would be served, he may authorize the taking of 
depositions provided that all parties are afforded an opportunity to 
participate in the taking of the depositions. The party who requested 
the deposition shall arrange for a transcript to be made of the 
proceedings and shall upon request, and at his expense, furnish all 
other parties with copies of the transcript.
    (l) Official notice. Official notice may be taken of a public 
document, or part of a public document, such as a statute, official 
report, decision, opinion or published scientific data issued by any 
agency of the Federal Government or a State or local government and 
such document or data may be entered on the record without further 
proof of authenticity. Official notice may also be taken of such 
matters as may be judicially noticed in the courts of the United 
States, or any other matter of established fact within the general 
knowledge of the Corporation. If the decision of the presiding officer 
rests on official notice of a material fact not appearing in evidence, 
a party shall on timely request be afforded an opportunity to show the 
contrary.
    (m) Proposed findings and conclusions. After the hearing has 
concluded, but before the presiding officer makes his decision, he 
shall afford each participant a reasonable opportunity to submit 
proposed findings of fact and conclusions. After considering each 
proposed finding or conclusion the presiding officer shall state in his 
decision whether he has accepted or rejected them in accordance with 
the provisions of Sec.  1206.1-8(a).


Sec.  1206.1-8  Decisions and notices regarding termination.

    (a) Each decision of a presiding officer shall contain his findings 
of fact, and conclusions, and shall state whether he has accepted or 
rejected each proposed finding of fact and conclusion submitted by the 
parties, pursuant to Sec.  1206.1-7(m). Findings of fact shall be based 
only upon evidence submitted to the presiding officer and matters of 
which official notice has been taken. The decision shall also specify 
the requirement or requirements with which it is found that the 
recipient has failed to comply.
    (b) The decision of the presiding officer may provide for continued 
suspension or termination of assistance to the recipient in whole or in 
part, and may contain such terms, conditions, and other provisions as 
are consistent with and will effectuate the purposes of the DVSA.
    (c) If the hearing is held by an independent hearing examiner 
rather than by the responsible Corporation official, he shall make an 
initial decision, and a copy of this initial decision shall be mailed 
to all parties. Any party may, within 20 days of the mailing of such 
initial decision, or such longer period of time as the presiding 
officer specifies, file with the responsible Corporation official his 
written exceptions to the initial decision and any supporting brief or 
statement. Upon the filing of such exceptions, the responsible 
Corporation official shall, within 20 days of the mailing of the 
exceptions, review the initial decision and issue his own written 
decision thereof, including the reasons therefore. The decision of the 
responsible Corporation official may increase, modify, approve, vacate, 
remit, or mitigate any sanction imposed in the initial decision or may 
remand the matter to the presiding officer for further hearing or 
consideration.
    (d) Whenever a hearing is waived, a decision shall be made by the 
responsible Corporation official and a written copy of the final 
decision of the responsible Corporation official shall be given to the 
recipient.

[[Page 19115]]

    (e) The recipient may request the CEO to review a final decision by 
the responsible Corporation official which provides for the termination 
of assistance. Such a request must be made in writing within 15 days 
after the recipient has been notified of the decision in question and 
must state in detail the reasons for seeking the review. In the event 
the recipient requests such a review, the CEO or his designee shall 
consider the reasons stated by the recipient for seeking the review and 
shall approve, modify, vacate or mitigate any sanction imposed by the 
responsible Corporation official or remand the matter to the 
responsible Corporation official for further hearing or consideration. 
The decision of the responsible Corporation official will be given 
great weight by the CEO or his designee during the review. During the 
course of his review the CEO or his designee may, but is not required 
to, hold a hearing or allow the filing of briefs and arguments. Pending 
the decision of the CEO or his designee assistance shall remain 
suspended under the terms and conditions specified by the responsible 
Corporation official, unless the responsible Corporation official or 
the CEO or his designee otherwise determines. Every reasonable effort 
shall be made to complete the review by the CEO or his designee within 
30 days of receipt by the CEO of the recipient's request. The CEO or 
his designee may however extend this period of time if he determines 
that additional time is necessary for an adequate review.


Sec.  1206.1-9  Right to counsel; travel expenses.

    In all formal or informal proceedings under this subpart, the 
recipient and the Corporation shall have the right to be represented by 
counsel or other authorized representatives. If the recipient and any 
agency which has a right to participate in an informal meeting pursuant 
to Sec.  1206.1-4 or a termination hearing pursuant to Sec.  1206.1-7 
do not have an attorney acting in that capacity as a regular member of 
the staff of the organization or a retainer arrangement with an 
attorney, the Boards of Directors of such recipient and agency will be 
authorized to designate an attorney to represent their organizations at 
any such show cause proceeding or termination hearing and to transfer 
sufficient funds from the Federal grant monies they have received for 
the project to pay the fees, travel, and per diem expenses of such 
attorney. The fees for such attorney shall be the reasonable and 
customary fees for an attorney practicing in the locality of the 
attorney. However, such fees shall not exceed $100 per day without the 
prior express written approval of the Corporation. Travel and per diem 
expenses may be paid to such attorney only in accordance with the 
policies set forth in the federal government travel regulations. The 
Boards of Directors of the recipient or any agency which has a right to 
participate in an informal meeting pursuant to Sec.  1206.1-4 or a 
termination hearing pursuant to Sec.  1206.1-7 will also be authorized 
to designate two persons in addition to an attorney whose travel and 
per diem expenses to attend the meeting or hearing may be paid from 
Federal grant or contract monies. Such travel and per diem expenses 
shall conform to the policies set forth in the federal government 
travel regulations.


Sec.  1206.1-10  Modification of procedures by consent.

    The responsible Corporation official or the presiding officer of a 
termination hearing may alter, eliminate or modify any of the 
provisions of this subpart with the consent of the recipient and, in 
the case of a termination hearing, with the consent of all agencies 
that have a right to participate in the hearing pursuant to Sec.  
1206.1-5(e). Such consent must be in writing or be recorded in the 
hearing transcript.


Sec.  1206.1-11  Other remedies.

    The procedures established by this subpart shall not preclude the 
Corporation from pursuing any other remedies authorized by law.

Subpart B--Denial of Application for Refunding


Sec.  1206.2-1  Applicability of this subpart.

    This subpart applies to grantees and contractors receiving 
financial assistance and to sponsors who receive AmeriCorps*VISTA 
members under the DVSA. The procedures in this subpart do not apply to 
review of applications for the following:
    (a) University Year for VISTA projects which have received federal 
funds for five years;
    (b) Mini-grants;
    (c) Other projects for which specific time limits with respect to 
federal assistance are established in the original notice of grant 
award or other document providing assistance, where the specified time 
limit has been reached; and
    (d) AmeriCorps*VISTA project extensions of less than six months.


Sec.  1206.2-2  Purpose.

    This subpart establishes rules and review procedures for the denial 
of a current recipient's application for refunding.


Sec.  1206.2-3  Definitions.

    As used in this subpart--Corporation'', ``CEO'', and ``recipient'' 
are defined in accordance with Sec.  1206.1-3.
    Financial assistance and assistance include the services of 
National Senior Service Corps volunteers and AmeriCorps*VISTA members 
supported in whole or in part with Corporation funds provided under the 
DVSA.
    Program account means assistance provided by the Corporation to 
support a particular program activity; for example, AmeriCorps*VISTA, 
Foster Grandparent Program, Senior Companion Program and Retired Senior 
Volunteer Program.
    Refunding includes renewal of an application for the assignment of 
National Senior Service Corps volunteers and AmeriCorps*VISTA members.


Sec.  1206.2-4  Procedures.

    (a) The procedures set forth in paragraphs (b) through (g) of this 
section applies only where an application for refunding submitted by a 
current recipient is rejected or is reduced to 80 percent or less of 
the applied-for level of funding or the recipient's current level of 
operations, whichever is less. It is further a condition for 
application of these procedures that the rejection or reduction be 
based on circumstances related to the particular grant or contract. 
These procedures do not apply to reductions based on legislative 
requirements, or on general policy or in instances where, regardless of 
a recipient's current level of operations, its application for 
refunding is not reduced by 20 percent or more. The fact that the basis 
for rejecting an application may also be a basis for termination under 
subpart A of this part shall not prevent the use of this subpart to the 
exclusion of the procedures in subpart A.
    (b) Before rejecting an application of a recipient for refunding 
the Corporation shall notify the recipient of its intention, in 
writing, at least 75 days before the end of the recipient's current 
program year or grant budget period. The notice shall inform the 
recipient that a tentative decision has been made to reject or reduce 
an application for refunding. The notice shall state the reasons for 
the tentative decision to which the recipient shall address itself if 
it wishes to make a presentation as described in paragraphs (c) and (d) 
of this section.

[[Page 19116]]

    (c) If the notice of tentative decision is based on any reasons, 
other than those described in paragraph (d) of this section, including, 
but not limited to, situations in which the recipient has ineffectively 
managed Corporation resources or substantially failed to comply with 
Corporation policy and overall objectives under a contract or grant 
agreement with the Corporation, the recipient shall be informed in the 
notice, of the opportunity to submit written material and to meet 
informally with a Corporation official to show cause why its 
application for refunding should not be rejected or reduced. If the 
recipient requests an informal meeting, such meeting shall be held on a 
date specified by the Corporation. However, the meeting may not, 
without the consent of the recipient, be scheduled sooner than 14 days, 
nor more than 30 days, after the Corporation has mailed the notice to 
the recipient. If the recipient requests an informal meeting, the 
meeting shall be scheduled by the Corporation as soon as possible after 
receipt of the request. The official who shall conduct this meeting 
shall be a Corporation official who is authorized to finally approve 
the refunding in question, or his designee.
    (d) If the notice of tentative decision is based upon a specific 
charge of failure to comply with the terms and conditions of the grant 
or contract, alleging wrongdoing on the part of the recipient, the 
notice shall offer the recipient an opportunity for an informal hearing 
before a mutually agreed-upon impartial hearing officer. The authority 
of such hearing officer shall be limited to conducting the hearing and 
offering recommendations. The Corporation will retain all authority to 
make the final determination as to whether the application should be 
finally rejected or reduced. If the recipient requests an informal 
hearing, such hearing shall be held at a date specified by the 
Corporation. However, such hearing may not, without the consent of the 
recipient, be scheduled sooner than 14 days nor more than 30 days after 
the Corporation mails the notice to the recipient.
    (e) In the selection of a hearing official and the location of 
either an informal meeting or hearing, the Corporation, while mindful 
of considerations of the recipient, will take care to insure that costs 
are kept to a minimum. The informal meeting or hearing shall be held in 
the city or county in which the recipient is located, in the 
appropriate Service Center or Corporation State Office, or another 
appropriate location. Within the limits stated in the preceding 
sentence, the decision as to where the meeting shall be held will be 
made by the Corporation, after weighing the convenience factors of the 
recipient. For the convenience of the recipient, the Corporation will 
pay the reasonable travel expenses for up to two representatives of the 
recipient, if requested.
    (f) The recipient shall be informed of the final Corporation 
decision on refunding and the basis for the decision by the deciding 
official.
    (g) If the recipient's budget period expires prior to the final 
decision by the deciding official, the recipient's authority to 
continue program operations shall be extended until such decision is 
made and communicated to the recipient. If a National Senior Service 
Corps volunteer's or AmeriCorps*VISTA member's term of service expires 
after receipt by a sponsor of a tentative decision not to refund a 
project, the period of service of the volunteer or member may be 
similarly extended. No volunteers or members may be reenrolled for a 
full 12-month term, or new volunteers or members enrolled for a period 
of service while a tentative decision not to refund is pending. If 
program operations are so extended, the Corporation and the recipient 
shall provide, subject to the availability of funds, operating funds at 
the same levels as in the previous budget period to continue program 
operations.


Sec.  1206.2-5  Right to counsel.

    In all formal or informal proceedings under this subpart, the 
recipient and the Corporation shall have the right to be represented by 
counsel or other authorized representatives, at their own expense.

[FR Doc. 04-8208 Filed 4-9-04; 8:45 am]
BILLING CODE 6050-55-P