§ 2934. — Fiscal controls; sanctions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 29USC2934]
TITLE 29--LABOR
CHAPTER 30--WORKFORCE INVESTMENT SYSTEMS
SUBCHAPTER V--ADMINISTRATION
Sec. 2934. Fiscal controls; sanctions
(a) Establishment of fiscal controls by States
(1) In general
Each State shall establish such fiscal control and fund
accounting procedures as may be necessary to assure the proper
disbursal of, and accounting for, Federal funds allocated to local
areas under subchapter II of this chapter. Such procedures shall
ensure that all financial transactions carried out under subchapter
II of this chapter are conducted and records maintained in
accordance with generally accepted accounting principles applicable
in each State.
(2) Cost principles
(A) In general
Each State (including the Governor of the State), local area
(including the chief elected official for the area), and
provider receiving funds under this chapter shall comply with
the applicable uniform cost principles included in the
appropriate circulars of the Office of Management and Budget for
the type of entity receiving the funds.
(B) Exception
The funds made available to a State for administration of
statewide workforce investment activities in accordance with
section 2864(a)(3)(B) of this title shall be allocable to the
overall administration of workforce investment activities, but
need not be specifically allocable to--
(i) the administration of adult employment and training
activities;
(ii) the administration of dislocated worker employment
and training activities; or
(iii) the administration of youth activities.
(3) Uniform administrative requirements
(A) In general
Each State (including the Governor of the State), local area
(including the chief elected official for the area), and
provider receiving funds under this chapter shall comply with
the appropriate uniform administrative requirements for grants
and agreements applicable for the type of entity receiving the
funds, as promulgated in circulars or rules of the Office of
Management and Budget.
(B) Additional requirement
Procurement transactions under this chapter between local
boards and units of State or local governments shall be
conducted only on a cost-reimbursable basis.
(4) Monitoring
Each Governor of a State shall conduct on an annual basis onsite
monitoring of each local area within the State to ensure compliance
with the uniform administrative requirements referred to in
paragraph (3).
(5) Action by Governor
If the Governor determines that a local area is not in
compliance with the uniform administrative requirements referred to
in paragraph (3), the Governor shall--
(A) require corrective action to secure prompt compliance;
and
(B) impose the sanctions provided under subsection (b) of
this section in the event of failure to take the required
corrective action.
(6) Certification
The Governor shall, every 2 years, certify to the Secretary
that--
(A) the State has implemented the uniform administrative
requirements referred to in paragraph (3);
(B) the State has monitored local areas to ensure compliance
with the uniform administrative requirements as required under
paragraph (4); and
(C) the State has taken appropriate action to secure
compliance pursuant to paragraph (5).
(7) Action by the Secretary
If the Secretary determines that the Governor has not fulfilled
the requirements of this subsection, the Secretary shall--
(A) require corrective action to secure prompt compliance;
and
(B) impose the sanctions provided under subsection (e) of
this section in the event of failure of the Governor to take the
required appropriate action to secure compliance.
(b) Substantial violation
(1) Action by Governor
If, as a result of financial and compliance audits or otherwise,
the Governor determines that there is a substantial violation of a
specific provision of this chapter, and corrective action has not
been taken, the Governor shall--
(A) issue a notice of intent to revoke approval of all or
part of the local plan affected; or
(B) impose a reorganization plan, which may include--
(i) decertifying the local board involved;
(ii) prohibiting the use of eligible providers;
(iii) selecting an alternative entity to administer the
program for the local area involved;
(iv) merging the local area into one or more other local
areas; or
(v) making other such changes as the Secretary or
Governor determines necessary to secure compliance.
(2) Appeal
(A) In general
The actions taken by the Governor pursuant to subparagraphs
(A) and (B) of paragraph (1) may be appealed to the Secretary
and shall not become effective until--
(i) the time for appeal has expired; or
(ii) the Secretary has issued a decision.
(B) Additional requirement
The Secretary shall make a final decision under subparagraph
(A) not later than 45 days after the receipt of the appeal.
(3) Action by the Secretary
If the Governor fails to promptly take the actions required
under paragraph (1), the Secretary shall take such actions.
(c) Repayment of certain amounts to the United States
(1) In general
Every recipient of funds under this chapter shall repay to the
United States amounts found not to have been expended in accordance
with this chapter.
(2) Offset of repayment
If the Secretary determines that a State has expended funds made
available under this chapter in a manner contrary to the
requirements of this chapter, the Secretary may offset repayment of
such expenditures against any other amount to which the State is or
may be entitled, except as provided under subsection (d)(1) of this
section.
(3) Repayment from deduction by State
If the Secretary requires a State to repay funds as a result of
a determination that a local area of the State has expended funds
contrary to the requirements of this chapter, the Governor of the
State may use an amount deducted under paragraph (4) to repay the
funds, except as provided under subsection (e)(1) \1\ of this
section.
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\1\ So in original. Probably should be subsection ``(d)(1)''.
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(4) Deduction by State
The Governor may deduct an amount equal to the misexpenditure
described in paragraph (3) from subsequent program year allocations
to the local area from funds reserved for the administrative costs
of the local programs involved, as appropriate.
(5) Limitations
A deduction made by a State as described in paragraph (4) shall
not be made until such time as the Governor has taken appropriate
corrective action to ensure full compliance within such local area
with regard to appropriate expenditures of funds under this chapter.
(d) Repayment of amounts
(1) In general
Each recipient of funds under this chapter shall be liable to
repay the amounts described in subsection (c)(1) of this section,
from funds other than funds received under this chapter, upon a
determination by the Secretary that the misexpenditure of funds was
due to willful disregard of the requirements of this chapter, gross
negligence, failure to observe accepted standards of administration,
or a pattern of misexpenditure as described in paragraphs (2) and
(3) of subsection (c) of this section. No such determination shall
be made under this subsection or subsection (c) of this section
until notice and opportunity for a fair hearing has been given to
the recipient.
(2) Factors in imposing sanctions
In determining whether to impose any sanction authorized by this
section against a recipient for violations by a subgrantee or
contractor of such recipient under this chapter (including the
regulations issued under this chapter), the Secretary shall first
determine whether such recipient has adequately demonstrated that
the recipient has--
(A) established and adhered to an appropriate system for the
award and monitoring of grants and contracts with subgrantees
and contractors that contains acceptable standards for ensuring
accountability;
(B) entered into a written grant agreement or contract with
such subgrantee or contractor that established clear goals and
obligations in unambiguous terms;
(C) acted with due diligence to monitor the implementation
of the grant agreement or contract, including the carrying out
of the appropriate monitoring activities (including audits) at
reasonable intervals; and
(D) taken prompt and appropriate corrective action upon
becoming aware of any evidence of a violation of this chapter,
including regulations issued under this chapter, by such
subgrantee or contractor.
(3) Waiver
If the Secretary determines that the recipient has demonstrated
substantial compliance with the requirements of paragraph (2), the
Secretary may waive the imposition of sanctions authorized by this
section upon such recipient. The Secretary is authorized to impose
any sanction consistent with the provisions of this chapter and any
applicable Federal or State law directly against any subgrantee or
contractor for violation of this chapter, including regulations
issued under this chapter.
(e) Immediate termination or suspension of assistance in emergency
situations
In emergency situations, if the Secretary determines it is necessary
to protect the integrity of the funds or ensure the proper operation of
the program or activity involved, the Secretary may immediately
terminate or suspend financial assistance, in whole or in part, to the
recipient if the recipient is given prompt notice and the opportunity
for a subsequent hearing within 30 days after such termination or
suspension. The Secretary shall not delegate any of the functions or
authority specified in this subsection, other than to an officer whose
appointment is required to be made by and with the advice and consent of
the Senate.
(f) Discrimination against participants
If the Secretary determines that any recipient under this chapter
has discharged or in any other manner discriminated against a
participant or against any individual in connection with the
administration of the program involved, or against any individual
because such individual has filed any complaint or instituted or caused
to be instituted any proceeding under or related to this chapter, or has
testified or is about to testify in any such proceeding or investigation
under or related to this chapter, or otherwise unlawfully denied to any
individual a benefit to which that individual is entitled under the
provisions of this chapter or the Secretary's regulations, the Secretary
shall, within 30 days, take such action or order such corrective
measures, as necessary, with respect to the recipient or the aggrieved
individual, or both.
(g) Remedies
The remedies described in this section shall not be construed to be
the exclusive remedies available for violations described in this
section.
(Pub. L. 105-220, title I, Sec. 184, Aug. 7, 1998, 112 Stat. 1042.)
Prior Provisions
Provisions similar to this section were contained in section 1574 of
this title prior to repeal by Pub. L. 105-220.
Section Referred to in Other Sections
This section is referred to in sections 2822, 2833, 2936, 2937 of
this title.
