§ 303.4 - Notice of intention to withhold payments.

(a) Whenever the Director has reason to believe that a State or person has failed to expend funds in accordance with the regulations, terms, or conditions governing a Federal financial contribution established pursuant to the Act, he shall notify the State and person, where applicable, of such fact and of his intention to withhold any further contributions or payments, or contributions or payments for specific programs or projects, unless the alleged failure is satisfactorily explained, or until he is satisfied that there is no longer such failure to comply.

(b) The notice shall specify (1) the date on which he will stop or withhold further payments; (2) the regulations, terms, or conditions which he believes have not been complied with in the expenditure of funds; and (3) the contributions or payments which he intends to withhold; and shall inform the State and person, where applicable, of the right to obtain a hearing.

(c) This notice shall be delivered by certified mail, return receipt requested.