§ 710.306 - Withholding Federal participation.

(a) If the FHWA determines that any amount claimed is not adequately supported, it may approve Federal participation in the amount it determines is adequately supported and shall notify the SHD, in writing, citing the reasons why items and amounts are not eligible for Federal participation. Where correctable noncompliance with provisions of law or FHWA requirements exists, Federal funds may be withheld until compliance is obtained. Where the noncompliance is not correctable, the FHWA may deny participation in parcel or project costs in part or in total.

(b) If, at any time, the FHWA determines that the organization, practices, and procedures actually applied by the SHD are not in substantial conformity with those accepted by the FHWA, or are otherwise not acceptable, the FHWA shall notify the SHD in writing. No further authorizations for acquisition of right-of-way shall be issued by the FHWA after the date of such notification until:

(1) A review of the facts substantiates to the satisfaction of FHWA that the SHD's accepted practices and procedures are satisfactory and will be adhered to by the SHD, or

(2) Revised practices and procedures have been submitted by the SHD and accepted by FHWA. The FHWA may participate in claims made or to be made by the SHD following review of the facts pertaining to the matter.