(1) Within 45 days following completion of an investigation initiated pursuant to ARM 37.19.102, or of a routine program audit conducted by the department, the department will send a written report to the local board or project director. If the department's investigation has revealed significant program deficiencies, the report shall identify such deficiencies and notify the local board or project director that the local program has been put on probation.

(2) The local board and project director will be given 1 month to correct the deficiencies. The notice of probationary status will indicate that if the deficiencies have not been corrected by the end of the 1 month probationary period, termination procedures will be initiated.