§ 303.7 - Withholding of payments.

(a) If after the hearing, or after opportunity therefor, the Director finds that there has been a failure to expend funds in accordance with the regulations, terms, and conditions established pursuant to the Act, the Director will withhold such contributions and payments as he may consider advisable until the failure to expend funds in accordance with the regulations, terms, and conditions has been corrected or he is satisfied that there will no longer be any such failure.

(b) If, upon the expiration of the 15 day period stated in § 303.5, a hearing has not been requested, the Director may issue the finding described in paragraph (a) of this section, and thereupon withhold contributions and payments until he is satisfied that there will no longer be any failure to expend funds in accordance with regulations, terms, and conditions governing a Federal contribution for an approved program or project.