34 CFR 110.37 - Procedure for disbursal of funds to an alternate recipient.
(a) If the Secretary withholds funds from a recipient under these regulations, the Secretary may disburse the funds withheld directly to an alternate recipient: any public or nonprofit private organization or agency, or State or political subdivision of the State.
(b) The Secretary requires any alternate recipient to demonstrate -
(1) The ability to comply with the Act and these regulations; and
(2) The ability to achieve the goals of the Federal statute authorizing the Federal financial assistance.