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AS 44.30.020 and AS 47.06.010. 7 AAC 78.290. Suspension and termination. (a) If a grantee fails to comply with the terms of a grant or the applicable provisions of this chapter, the commissioner may, no sooner than 15 days after providing the grantee with written notice of the failure to comply, suspend the grant. A grantee may not use grant money to pay an obligation incurred during the period of the suspension. However, the grantee may use grant money to pay an obligation incurred before the period of suspension, if the grantee obtains department approval and if payment of the obligation would otherwise be allowed under this chapter or under the terms of the grant. A suspension under this subsection remains in effect until

(1) the grantee takes corrective action and gives assurance of the corrective action that the department considers satisfactory;

(2) the grantee successfully appeals the suspension; or

(3) the department or grantee terminates the grant. (b) The commissioner may terminate a grant, in whole or in part, before the end of the grant period if the grantee fails to comply with the terms of the grant or the applicable provisions of this chapter. The commissioner will notify the grantee in writing at least 15 days before the termination. The notice will state the reasons for the termination, the effective date, and the portion of the grant to be terminated if the termination is partial. The department may make necessary arrangements for managing the grant before the effective date of the termination and for closing the grant. (c) The commissioner may terminate a grant before the end of the grant period, in whole or in part, with the consent of the grantee. (d) A grantee may terminate a grant, in whole or in part, before the end of the grant period upon written notification to the commissioner at least 30 days before the termination date. The written notification must state the reasons for the termination, the effective date, and the portion of the grant to be terminated if the termination is partial. (e) If a grant is terminated, payments to the grantee or recovery of grant money by the department will be made in accordance with the rights and liabilities of the grantee and the department. The grantee may not incur any new obligation to be paid with money from a terminated grant or the terminated portion of a grant after receiving notice of the termination of the grant. The grantee shall make a reasonable effort to cancel the grantee’s outstanding obligations that, but for the termination, would be payable, in whole or in part, with grant money. To the extent that the grantee cannot cancel a properly incurred obligation, the department may provide for payment to the grantee to satisfy that part of an obligation that, but for the termination, would be payable with grant money.