The department may terminate state and federal financial aid, in whole or in part, to any grantee when it finds, after reasonable notice and opportunity for appeal to the director, that the grantee has failed to comply with any of the conditions of the approved application or amendments thereto or any of the requirements or conditions imposed by or pursuant to these regulations or the Washington Clean Air Act.

Upon the effective date of termination, the grantee shall promptly render an accounting and final statement as would similarly be required for request for payment of state financial aid under WAC 173-450-070. The department may authorize payment of the state's share of the amount required to settle at minimum cost any contractual obligations properly incurred by the grantee prior to the date of termination, if the department finds that the grantee acted in good faith in incurring the obligations.