If a contractor does not meet obligations due to misappropriation of funds, the board's response may lead to which of the following?

When a contractor misappropriates funds, it constitutes a serious violation of professional conduct and financial responsibility. The board is tasked with protecting the public and maintaining ethical standards within the contracting industry. When such violations occur, one of the primary means of addressing them is through the suspension of the contractor's license.

License suspension serves as a critical corrective measure, allowing the board to investigate the contractor's actions further and determine the appropriate course of action. This not only acts as a deterrent to the contractor in question but also serves as a warning to other professionals in the field about the consequences of mismanagement or unethical behavior. A suspension signals that the board takes these matters seriously and seeks to uphold the integrity of the contracting process.

In contrast, options such as no investigation or immediate reinstatement do not align with the board's mandate to enforce standards and accountability. An increase in project costs, while a possible outcome of misappropriation, is not a direct response from the board, rather it may be an indirect consequence of the contractor's actions affecting their ability to fulfill project obligations.