 
           CHAPTER 31--GENERAL PROVISIONS CONCERNING EDUCATION
 
                       SUBCHAPTER IV--ENFORCEMENT
 
Sec. 1234h. Use of recovered funds


(a) Repayment to recipient; factors considered

    Whenever the Secretary recovers funds paid to a recipient under a 
grant or cooperative agreement made under an applicable program because 
the recipient made an expenditure of funds that was not allowable, or 
otherwise failed to discharge its responsibility to account properly for 
funds, the Secretary may consider those funds to be additional funds 
available for that program and may arrange to repay to the recipient 
affected by that action an amount not to exceed 75 percent of the 
recovered funds if the Secretary determines that--
        (1) the practices or procedures of the recipient that resulted 
    in the violation of law have been corrected, and that the recipient 
    is in all other respects in compliance with the requirements of that 
    program, provided that the recipient was notified of any 
    noncompliance with such requirements and given a reasonable period 
    of time to remedy such noncompliance;
        (2) the recipient has submitted to the Secretary a plan for the 
    use of those funds pursuant to the requirements of that program and, 
    to the extent possible, for the benefit of the population that was 
    affected by the failure to comply or by the misuse of funds that 
    resulted in the recovery; and
        (3) the use of those funds in accordance with that plan would 
    serve to achieve the purposes of the program under which the funds 
    were originally paid.

(b) Terms and conditions of repayment

    Any payments by the Secretary under this section shall be subject to 
such other terms and conditions as the Secretary considers necessary to 
accomplish the purposes of the affected programs, including--
        (1) the submission of periodic reports on the use of funds 
    provided under this section; and
        (2) consultation by the recipient with students, parents, or 
    representatives of the population that will benefit from the 
    payments.

(c) Availability of funds

    Notwithstanding any other provisions of law, the funds made 
available under this section shall remain available for expenditure for 
a period of time deemed reasonable by the Secretary, but in no case to 
exceed more than three fiscal years following the later of--
        (1) the fiscal year in which final agency action under section 
    1234a(e) of this title is taken; or
        (2) if such recipient files a petition for judicial review, the 
    fiscal year in which final judicial action under section 1234g of 
    this title is taken.

(d) Publication in Federal Register of notice of intent to enter into 
        repayment arrangement

    At least 30 days prior to entering into an arrangement under this 
section, the Secretary shall publish in the Federal Register a notice of 
intent to enter into such an arrangement and the terms and conditions 
under which payments will be made. Interested persons shall have an 
opportunity for at least 30 days to submit comments to the Secretary 
regarding the proposed arrangement.

(Pub. L. 90-247, title IV, Sec. 459, as added Pub. L. 100-297, title 
III, Sec. 3501(a), Apr. 28, 1988, 102 Stat. 356; amended Pub. L. 103-
382, title II, Sec. 250(b), Oct. 20, 1994, 108 Stat. 3927.)


                               Amendments

    1994--Subsec. (a)(1). Pub. L. 103-382, Sec. 250(b)(1), inserted 
before semicolon ``, provided that the recipient was notified of any 
noncompliance with such requirements and given a reasonable period of 
time to remedy such noncompliance''.
    Subsec. (c). Pub. L. 103-382, Sec. 250(b)(2), amended subsec. (c) 
generally. Prior to amendment, subsec. (c) read as follows: 
``Notwithstanding any other provisions of law, the funds made available 
under this section shall remain available for expenditure for a period 
of time deemed reasonable by the Secretary, but in no case to exceed 
more than 3 fiscal years following the fiscal year in which final agency 
action under section 1234a(e) of this title is taken.''


                             Effective Date

    Section effective 180 days after Apr. 28, 1988, but not applicable 
to recipients receiving written notice to return funds prior to that 
date, see section 3501(b) of Pub. L. 100-297, set out as an Effective 
Date of 1988 Amendment note under section 1234 of this title.
