45 CFR 1156.20 – Alternate funds disbursal procedure
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(a) When the endowment withholds funds from a recipient under the regulations in this part, the Chairperson may disburse the withheld funds directly to an alternate recipient otherwise eligible for Endowment support: any public or nonprofit private organization or agency, or State or political subdivision of the State.
(b) The Chairperson will require any alternate recipient to demonstrate:
(1) The ability to comply with the regulations in this part; and
(2) The ability to achieve the goals of the Federal statute authorizing the Federal financial assistance.