---
kind: "section"
citation: "34 C.F.R. § 300.605"
title: "34"
number: "300.605"
heading: "Withholding funds."
url: "https://uscodex.org/cfr/34/300.605"
---

# §300.605. Withholding funds.

- (a) **Opportunity for hearing.** Prior to withholding any funds under Part B of the Act, the Secretary provides reasonable notice and an opportunity for a hearing to the SEA involved, pursuant to the procedures in [§§ 300.180 through 300.183](/cfr/34/300.180..300.183.md).
- (b) **Suspension.** Pending the outcome of any hearing to withhold payments under [paragraph (a)](#a) of this section, the Secretary may suspend payments to a recipient, suspend the authority of the recipient to obligate funds under Part B of the Act, or both, after the recipient has been given reasonable notice and an opportunity to show cause why future payments or authority to obligate funds under Part B of the Act should not be suspended.
- (c) **Nature of withholding.**
  - (1) If the Secretary determines that it is appropriate to withhold further payments under § [300.604(b)(2)](/cfr/34/300.604.md?p=b-2) or [(c)(2)](/cfr/34/300.604.md?p=c-2), the Secretary may determine—
    - (i) That the withholding will be limited to programs or projects, or portions of programs or projects, that affected the Secretary's determination under [§ 300.603(b)(1)](/cfr/34/300.603.md?p=b-1); or
    - (ii) That the SEA must not make further payments under Part B of the Act to specified State agencies or LEAs that caused or were involved in the Secretary's determination under [§ 300.603(b)(1)](/cfr/34/300.603.md?p=b-1).
  - (2) Until the Secretary is satisfied that the condition that caused the initial withholding has been substantially rectified—
    - (i) Payments to the State under Part B of the Act must be withheld in whole or in part; and
    - (ii) Payments by the SEA under Part B of the Act must be limited to State agencies and LEAs whose actions did not cause or were not involved in the Secretary's determination under [§ 300.603(b)(1)](/cfr/34/300.603.md?p=b-1), as the case may be.

## Notes

### Authority

Authority: 20 U.S.C. 1221e-3, 1406, 1411-1419, and 3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted.

### Source

Source: 71 FR 46753, Aug. 14, 2006, unless otherwise noted.