Common use of Withholding of Funds Clause in Contracts

Withholding of Funds. 1. The department may authorize the withholding of a grant payment where the department determines, in writing, that a grantee has failed to comply with project objec- tives, grant award conditions or reporting requirements. With- holding shall be limited to only that amount necessary to assure compliance. 2. The department shall withhold payment of the amount of any indebtedness to the department, unless the department deter- mines that collection of the debt will impair accomplishment of the project objectives and that continuation of the project is in the best interest of the program.