Health & Saf. Code, § 50651.4

(a) (1) Recipients shall have five years from the date of execution of a funding agreement with the department to expend all funds allocated to programs and services.

(2) Recipients shall have seven years from the date of execution of a funding agreement with the department to expend all funds allocated to projects.

(3) An extension to expend funds may be approved by the department when the recipient demonstrates significant progress toward completing the approved activities and a reasonable plan to complete them within the extension period.

(b) If it is determined, on the basis of a review of the recipient’s annual reports, that the eligible activities have not been completed or are unlikely to be completed in the required timeframes, the award may be reallocated to another eligible activity, reduced, or withdrawn except that funds already expended on eligible activities shall not be recaptured. A reallocation of an award will not be made until the recipient has submitted an explanation as to why the original eligible activity will not proceed and has requested reallocation to another eligible activity. A reduction or withdrawal of an award will not be made until the recipient has been provided notice, and only then if the recipient has not made an appropriate and timely response which may include submittal of revised implementation schedules and plans to achieve the eligible activities.