(a) Notice. If the NIFA determines that there is a basis for disallowing a cost, NIFA shall provide the awardee written notice of its intent to disallow the cost. The written notice shall state the amount of the cost and the factual and legal basis for disallowing it.

(b) Awardee response. Within 60 days of receiving written notice of NIFA's intent to disallow the cost, the awardee may respond with written evidence and arguments to show the cost is allowable, or that , for equitable, practical, or other reasons, shall not recover all or part of the amount, or that the recovery should be made in installments. The 60-day time period may be extended for an additional 30 days upon written request by the awardee; however, such request for an extension of time must be made before the expiration of the 60-day time period specified in this paragraph. An extension of time will be granted only in extenuating circumstances.

(c) Decision. Within 60 days of receiving the awardee's written response to the notice of intent to disallow the cost, NIFA shall issue a management decision stating whether or not the cost has been disallowed, the reasons for the decision, and the method of appeal that has been provided under this section. If the awardee does not respond to the written notice under paragraph (a) of this section within the time frame specified in paragraph (b) of this section, NIFA shall issue a management decision on the basis of the information available to it. The management decision shall constitute the final action with respect to whether the cost is allowed or disallowed. In the case of a questioned cost identified in the context of an audit2 CFR 200.521, the management decision will constitute the management decision under 7 CFR 3052.405(a).

(d) Demand for payment. If the management decision under paragraph (c) of this section constitutes a finding that the cost is disallowed and, therefore, that a debt is owed to the Government, NIFA shall provide the required demand and notice pursuant to 7 CFR 3.11.

(e) Review process. Within 60 days of receiving the demand and notice referred to in paragraph (d) of this section, the awardee may submit a written request to the NIFAOffice of Grants and Financial Management (OGFM) Deputy Director for a review of the final management decision that the debt exists and the amount of the debt. Within 60 days of receiving the written request for a review, the NIFA Deputy Administrator (or other senior NIFA official designated by the NIFA Office of Grants and Financial Management (OGFM) Deputy Director) will issue a final decision regarding the debt. Review by the NIFA Office of Grants and Financial Management (OGFM) Deputy Director or designee constitutes, and will be in accordance with, the administrative review procedures provided for debts under 7 CFR part 3, subpart F.