KRS 273.451: Reduction of agency's funds -- Notice -- Exception -- Mediation -- Access to

evidence -- Appeal.

(1) The state administering agency may take adverse action in the form of reduction,

suspension, withdrawal or otherwise retraction of a community action agency's

funds under the federal act and other funds over which the state administering

agency has such authority, if:

(a) The state administering agency alleges a community action agency violated

any law, regulation or duly issued directive related to funds for which the state

administering agency has authority; and

(b) The state administering agency notifies the community action agency of its

intended adverse action and informs the community action agency of its right

to submit written material and of i ts right to request an informal hearing to

respond to the intended action. The submission of written material and

holding of an informal hearing shall not be required in less than five (5)

working days of the initial notice to the community action agency; and

(c) After review of written material submitted by the community action agency

and after convening an informal meeting with the community action agency,

the state administering agency informs the community action agency of its

intent to take adverse action. After sufficient prior notice to the public and the

community action agency, the state administering agency shall hold a hearing,

open to the public, during which the charges against the community action

agency and the intended adverse action again st the community action agency

shall be presented and during which the community action agency has the

opportunity to show cause why the intended adverse action should not be

taken; and

(d) After conducting said hearing, the community action agency shall be notified

by the state administering agency by letter or telegram not less than thirty (30)

days prior to the effective date of the adverse action.

(2) The state administering agency may take adverse action without prior notice and

opportunity to show cause provided in subsection (1) of this section if it determines

that immediate suspension is necessary because of:

(a) Substantial injury or loss of funds or property over which the state

administering agency has authority; or

(b) Violation of a federal, state or local criminal statute.

(3) In its notice to the community action agency of suspension the state administering

agency shall specifically advise the community action agency of the reason for the

suspension, effective date of the suspension and t he extent, terms and conditions of

any suspension and shall inform the community action agency of the date and

location of a hearing wherein the community action agency shall have the

opportunity to show cause as to why the suspension should be rescinded.

(4) The duration of a suspension without notice shall not exceed thirty (30) days except

that a suspension without notice may be renewed for an additional period not to

exceed thirty (30) days if during the initial suspension period, the state

administering agency has initiated the process described in subsection (1) of this

section.

(5) At any time during the processes described in this section the state administering

agency may convene an informal meeting with the community action agency to

attempt to resolve any contemplated or implemented adverse action.

(6) At all times during the processes described in this section, a community action

agency shall have access to evidence upon which the state administering agency has

based an intent or a final decisi on to take adverse action against the community

action agency.

(7) No provision of this section shall prevent a community action agency from

appealing a decision of adverse action by the state administering agency to the

appropriate courts of the Commonwealth or the United States.