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the monthly payment rate by dividing the total grant award by the number of calendar months and fractions of calendar months during the grant year. At the end of the third quarter during the grant year, the department will compare the total amount of the actual allowable costs that the grantee accrued during the grant year before that quarter with the total amount of the department’s payments to the grantee for the same time period. If the amount of the grantee’s accrued expenditures was greater than, or equal to, the total amount of the payments by the department, the department will continue to pay at the agreed monthly rate for the next quarter. If the amount of the grantee’s actual expenditures was less than the total amount of the payments by the department, the department will reduce the next monthly payment to the grantee from the agreed amount by an amount equal to the difference. If the difference exceeds the amount of the next monthly payment, the department will offset the difference against each succeeding monthly payment in turn, until the department has accounted for the entire difference. The department will, in its discretion, continue to withhold such amounts from payments to the grantee under future grants to the grantee or continuation periods of the same grant. (d) If a grantee fails to submit a required facility report, a quarterly expenditure report or a final expenditure report within the time periods required by 7 AAC 53.901 — 7 AAC 53.999, the department, in its discretion, will delay the next payment due to the grantee under the grant, or any succeeding residential child care facility grant, for up to the same number of days that the grantee was late in submitting the report to the department. (Eff. 1/13/85, Register 93) Statutory Authority: Authority: AS 47.05.010 AS 47.40.011 AS 47.40.031 7 AAC 53.999. Definitions and general provisions. (a) The definitions in 7 AAC 50.990 apply to 7 AAC 53.901 — 7 AAC 53.999, except that the definitions in (b) of this section control if an inconsistency exists. (b) In 7 AAC 53.901 — 7 AAC 53.999,

(1) “cost-of-living allowance” means a percentage change in cost per bed, as set by the annual state operating budget request instructions prepared by the office of management and budget in the office of the Governor;

(2) “commissioner” means the commissioner of health;

(3) “credit” means an entry on the right-hand side of an account to show in addition to a