49 CFR 27.125 - Compliance procedure.
(a) General. If there is reasonable cause for the responsible Departmental official to believe that there is a failure to comply with any provision of this part that cannot be corrected by informal means, the responsible Departmental official may recommend suspension or termination of, or refusal to grant or to continue Federal financial assistance, or take any other steps authorized by law. Such other steps may include, but are not limited to:
(1) A referral to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States (including other titles of the Act), or any assurance or other contractural undertaking; and
(2) Any applicable proceeding under State or local law.
(b) Refusal of Federal financial assistance.
(1) No order suspending, terminating, or refusing to grant or continue Federal financial assistance becomes effective until:
(ii) There has been an express finding by the Secretary on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed by or pursuant to this part.
(2) Any action to suspend, terminate, or refuse to grant or to continue Federal financial assistance is limited to the particular recipient who has failed to comply, and is limited in its effect to the particular program or activity, or part thereof, in which noncompliance has been found.
(c) Other means authorized by law. No other action is taken until:
(1) The responsible Departmental official has determined that compliance cannot be secured by voluntary means;
(2) The recipient or other person has been notified by the responsible Departmental official of its failure to comply and of the proposed action;
(3) The expiration of at least 10 days from the mailing of such notice to the recipient or other person. During this period, additional efforts are made to persuade the recipient or other person to comply with the regulations and to take such corrective action as may be appropriate.