(a) When VA withholds funds from a recipient under these regulations, the Secretary may disburse the withheld funds directly to an alternate recipient: Any public or non-profit private organization or agency, or State or political subdivision of the State.
(b) The Secretary will require any alternate recipient to demonstrate;
(1) The ability to comply with these regulations; and
(2) The ability to achieve the goals of the Federal statute authorizing the Federal financial assistance. (Authority: 42 U.S.C. 6101-1607) [50 FR 34133, Aug. 23, 1985, as amended at 68 FR 51372, Aug. 26, 2003]