92-10

23. 24, 25. which the Subgrantee could not reasonably avoid during the period of suspension, provided they meet Federal and State requirements. The Subgrantee agrees that L&PS may terminate the grant in whole or in part whenever it is determined that the Subgrantee has failed to comply with the conditions of the grant. L&PS shall notify the Subgrantee in writing of the determination and the reasons for the termination together with the effective date. Payments made to the Subgrantee or recoveries by L&PS under the grant terminated for cause shall be in accord with the legal right and liability of the parties. L&PS and the Subgrantee may terminate the grant in whole, or in part, when both parties agree that the continuation of the project would not produce beneficial results commensurate with the further expenditure of funds. The two parties shall agree upon the termination conditions, including the effective date and in case of partial terminations, the portion to be terminated. The Subgrantee shall not incur new obligations for the terminated portion after the effective date and shall cancel as many outstanding obligations as possible. ‘The Subgrantee agrees that under certain instances it may be considered “High Risk”: a. If L&PS determines that a Subgrantee: i. Has a history of unsatisfactory performance. ii, Is not financially stable. iii, | Has a financial management, system which does not appear adequate according to the General Conditions, or meet the standards expressed according to State Circular Letter 07-05-OMB, Standard Grant Agreement Form, VIII Financial Management System. iv. Has not conformed to terms and conditions of previous awards. v. Is otherwise not responsible; and L&PS determines that an award will be made; special conditions and/or restrictions shall correspond to the high risk : condition and shall be included in the award. b. If a Subgrantee is considered “High Risk,” then L&PS may impose additional Special Conditions or restrictions on the Subgrantee at any time including: i. Issuing payment on a reimbursement basis. ii. Withholding authority to proceed to the next phase until receipt or evidence of acceptable performance within a given funding period. iii. Requiring additional, more detailed financial reports. iv. Requiring additional project monitoring. v. Requiring the Subgrantee obtain technical or

e performance within a given funding period. iii. Requiring additional, more detailed financial reports. iv. Requiring additional project monitoring. v. Requiring the Subgrantee obtain technical or management assistance. vi. Establishing additional prior approvals. c. IfL&PS decides to impose such special conditions, L&PS will notify the Subgrantee as soon as possible, in writing, of: i. The nature of the special conditions/restrictions. ii. The reason(s) for imposing the special conditions. iii. The corrective actions that must be taken before the special conditions will be removed by the Department and the time allowed for completing the corrective actions. 5.