37.98—When will the Director conclude that compliance cannot be secured by voluntary means?
         The Director will conclude that compliance cannot be secured by voluntary means under the following circumstances:
    
    
        
        (a) 
         The grant applicant or recipient fails or refuses to correct the violation(s) within the time period established by the Letter of Findings, Notice to Show Cause or Initial Determination; or
    
    
        
        (b) 
         The Director has not approved an extension of time for agreement on voluntary compliance, under  § 37.95(b)(1)(ii), and he or she either:
    
    
        
        (1) 
         Has not been notified, under  § 37.95(b)(3), that the grant applicant or recipient has agreed to voluntary compliance;
    
    
    
        
        (3) 
         Has received notice from the Governor, under  § 37.95(b)(2), that the grant applicant or recipient will not comply voluntarily.