A recipient that made an unallowable expenditure or otherwise failed to discharge its obligation to account properly for funds shall return an amount that—
    
    
        
        (a) 
         Meets the standards for proportionality in  § 81.32 ;
     
    
        
        (b) 
         In the case of a State or local educational agency, excludes any amount attributable to mitigating circumstances under the standards in  § 81.23; and
     
    
        
        (c) 
         Excludes any amount expended in a manner not authorized by law more than five years before the recipient received the notice of a disallowance decision under  § 81.34.
     
    
        
            Code of Federal Regulations
        
        (Authority: 
                20 U.S.C. 1221e-3, 1234(f)(1), 1234a(k), 1234b
             (a) and (b), and 3474(a))
    
    
        
            Code of Federal Regulations
        
        [54 FR 19512, May 5, 1989; 54 FR 21622, May 19, 1989. Redesignated and amended at 58 FR 43473, Aug. 16, 1993]