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CHAPTER 2-270

ENFORCING AND TERMINATING ASSISTANCE AGREEMENTS 

2-270-00 What does this chapter do?

2-270-10 Where do these policies come from?

2-270-20 What enforcement actions may we take if you do not meet the requirements of

the assistance agreement? 

2-270-30 What process must we follow before we take any enforcement actions to reduce,

suspend or terminate an assistance agreement?

2-270-40 What specific steps must we take to stop payments?

2-270-50 What specific steps must we take to suspend an assistance agreement?

2-270-60 What specific steps must we take to terminate an assistance agreement for cause?

2-270-70 How can you or we agree to terminate an assistance agreement for convenience?

2-270-00 What does this chapter do?

This chapter explains the policies and procedures we may take if you materially fail to comply 

with any condition of an assistance award you received from us, the Office of Surface Mining 

Reclamation and Enforcement (OSMRE). It also explains how we may agree to terminate an 

agreement for our mutual convenience. 

2-270-10 Where do these policies come from?

These policies are found in the Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards, at 2 CFR 200 Subpart D. 

2-270-20 What enforcement actions may we take if you do not meet the requirements of

the assistance agreement?

A. We may determine that you are in noncompliance if you or your sub recipient materially

fails to comply with any terms of assistance agreement. This may be because of a

Federal law or regulation, a commitment or assurance in your application or approved

plan, a condition in the award, or any other requirement.

B. If you are in noncompliance, and do not appear to be taking steps to resolve the problem,

we may take one or more of the following actions as we consider appropriate:

1. Temporarily stop cash payments until you correct the problem or take more

severe enforcement action. Alternatively, we may review each drawdown request

you make and decide whether to approve it for payment.

2. Disallow both the Federal and non-Federal expenditures for all or part of the cost

of the activity that is not in compliance. When we disallow a cost, you cannot
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spend Federal funds for that cost, and if you spend non-Federal funds for it you 

cannot claim them as match.

3. Wholly or partly suspend the current award. Suspension means that we 

temporarily stop your authority to obligate additional OSMRE funds under this 

assistance agreement. We will suspend the assistance agreement until you correct 

the deficiency or we decide to terminate the agreement. 

4. Wholly or partly terminate the current award. Termination means that this 

assistance agreement ends immediately.

5. Do not approve any future assistance awards for the program.

6. Take other remedies that may be legally available.

C. In addition to these remedies, we may also consider debarment, which prohibits an entity 

or a person from receiving any Federal financial assistance. See Chapter 2-110 for more 

information on debarment and suspension.

2-270-30 What process must we follow before we take any enforcement actions to reduce, 

suspend or terminate an assistance agreement?

A. When we identify deficiencies, we must work with you to resolve the issue. If we cannot 

resolve the deficiency, our office which awarded the assistance agreement must propose 

an enforcement action to the appropriate Regional Director (RD) and obtain his 

concurrence. The region must also coordinate proposed enforcement actions with our 

Assistant Director, Program Support (AD-PS) and Division of Financial Management 

(DFM).

B. The awarding office must send you written notice of the proposed action by certified 

mail. The notice must inform you that reduction, suspension or termination of the grant 

agreement will begin no earlier than 30 days after the date of the notice if you do not take 

remedial action within that period.

C. The awarding office must give you opportunity to consult with OSMRE during the 30-

day notice period.

D. If you do not take any remedial action, or appeal the decision, within the 30-day notice 

period, the awarding office will take action to reduce, suspend or terminate the assistance 

agreement.

E. You may appeal the decision of the RD to the Director of OSMRE in writing. You must 

explain the reasons why you are requesting review. We must receive your appeal within 

30 days of the written notice.
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F. You may appeal the Director's decision to the Department of the Interior’s Office of 

Hearings and Appeals in writing, outlining the reasons for requesting review. You must 

file this appeal within 30 days of the Director's decision.

2-270-40 What specific steps must we take to stop payments?

A. The awarding office must coordinate with DFM when it first considers stopping 

payments on an assistance agreement, and throughout the process of deciding, and 

carrying out the suspension.

B. The awarding office must inform you that we have decided to withhold payments on your 

assistance agreement. We must tell you the date when we plan to stop payments. 

C. DFM will work with Treasury to stop payments.

D. When the issue has been resolved or the deficiency corrected, we will pay out all funds 

that we withheld during the period of the suspension.

2-270-50 What specific steps must we take to suspend an assistance agreement?

A. We will suspend any pending actions as of the effective date of the suspension. We will 

disallow any costs obligated or incurred. 

B. We will allow those costs which you properly incurred before the effective date of the 

suspension. They must have been necessary for the immediate needs of the program. 

They cannot have been incurred in anticipation of the suspension.

C. We will require that you refund any unobligated Federal assistance funds you may have 

on hand. 

D. The suspension will remain in effect until you correct the deficiency, or we take further 

enforcement action.

2-270-60 What specific steps must we take to terminate an assistance agreement for cause?

A. We may terminate an assistance agreement for cause in any of the following 

circumstances. We may terminate the whole agreement in its entirety or in part: 

1. We may terminate an agreement if you have materially failed to comply with the 

terms and conditions of the agreement and resolution does not seem probable.
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2. We may terminate all or part of your regulatory grant if approval of all or part of 

your regulatory program is withdrawn, or if we take over all or part of your 

regulatory program.

3. We may terminate your Abandoned Mine Land (AML) grant if approval of your

reclamation or regulatory program is withdrawn.

B. Costs incurred after termination of an award are not allowable except as follows:

1. Costs which we specifically authorize are allowable. 

2. Other costs after termination are allowable if they result from obligations which 

you properly incurred before the effective date of the termination, and were not 

able to cancel. The obligations cannot have been in anticipation of the 

termination.

C. You must return any unobligated funds to us.

2-270-70 How can you or we agree to terminate an assistance agreement for convenience?

A. You may terminate an assistance agreement for convenience by sending a written notice 

to OSMRE. Your notice must state the effective date and explain the reasons for the 

termination. If you are only terminating part of the agreement, you must identify the part 

to be terminated. If you propose a partial termination, and we determine that the 

remaining part of the award will not accomplish its purpose, we may terminate the entire 

award.

B. We may terminate an assistance agreement with your consent if we agree that continuing 

the project or program would not produce benefits worth the additional costs. We may 

terminate the entire agreement or a part of it. We must agree upon the termination 

conditions, including the effective date. For a partial termination, we must also agree on 

the part of the agreement to be terminated.

C. We will process a termination for convenience as an amendment to the assistance 

agreement. The amendment must be approved by the authorized official in our awarding 

office.

D. You must not incur costs after termination of an assistance agreement. Such costs are not 

allowable unless we approve them, or you properly incur the obligation before the 

termination date.

E. After termination, we must pay you for the Federal share of valid obligations. You must 

return any unobligated funds to us.