34 CFR §81.30

1. (a)Subject to the provisions of § 81.31, an authorized Departmental official requires a recipient to return funds to the Department if—
   1. (1)The recipient made an unallowable expenditure of funds under a grant or cooperative agreement; or
   2. (2)The recipient otherwise failed to discharge its obligation to account properly for funds under a grant or cooperative agreement.
2. (b)An authorized Departmental offcial may base a decision to require a recipient to return funds upon an audit report, an investigative report, a monitoring report, or any other evidence.