[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR968.425]

[Page 528-529]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 968--PUBLIC HOUSING MODERNIZATION--Table of Contents
 
                  Subpart D--Vacancy Reduction Program
 
Sec. 968.425  HUD review of grantee performance.

    (a) Performance reviews. HUD shall carry out such reviews of the 
performance of each funded PHA as may be necessary or appropriate to 
determine

[[Page 529]]

compliance with the PHA's vacancy reduction plan and related HUD 
requirements. In these reviews HUD will determine whether the PHA has:
    (1) Carried out its vacancy reduction activities in a timely manner 
and in accordance with its vacancy reduction plan;
    (2) Completed, or made reasonable progress toward completing, the 
physical items funded under the vacancy reduction plan, and whether the 
work items being carried out conform with the modernization and energy 
standards in Sec. 968.115 of this chapter;
    (3) Implemented, or made reasonable progress toward implementing, 
the management improvements funded under the vacancy reduction program; 
and
    (4) Made reasonable progress in meeting the goals established in its 
vacancy reduction plan.
    (b) Notice of deficiency. If HUD finds any deficiency in a review of 
a grantee's performance under this part, HUD may issue to the grantee a 
notice of deficiency stating the specific program requirements that the 
grantee has violated and requesting the grantee to take corrective 
action.
    (c) Corrective action order. (1) Issuance. If HUD finds any of the 
deficiencies listed in paragraph (c)(3) of this section in its review of 
the grantee's performance, HUD may issue to the grantee a corrective 
action order, whether or not a notice of deficiency has previously been 
issued on the specific deficiency. The corrective action order shall 
notify the grantee of the specific program requirements that the grantee 
has violated and shall specify the corrective action.
    (2) Consultation with grantee. Before ordering corrective action, 
HUD will give the grantee an opportunity to consult with HUD regarding 
the proposed action.
    (3) Bases for corrective action. HUD may order a grantee to take 
corrective action only if HUD determines:
    (i) The grantee has not submitted a performance report as required 
by HUD;
    (ii) The grantee has not carried out activities under its vacancy 
reduction program in a timely manner and in accordance with HUD 
requirements;
    (iii) The grantee does not have continuing capacity to carry out 
activities in its vacancy reduction plan; or
    (iv) An audit conducted in accordance with 24 CFR part 44, or 
pursuant to other HUD reviews, reveals deficiencies that HUD reasonably 
believes require corrective action.
    (d) Nature of corrective action. (1) HUD shall design corrective 
action to prevent a continuation or recurrence of the same or a similar 
deficiency or to mitigate to the greatest extent feasible any adverse 
effects of the deficiency.
    (2) HUD may order a grantee to take the corrective action that HUD 
determines appropriate for carrying out the elements of the vacancy 
reduction plan. Corrective action may include, but is not limited to, 
suspension of grantee's authority to incur costs against the vacancy 
reduction funding and reimbursement, from sources other than HUD funds, 
of any amount spent improperly.
    (e) Failure to take corrective action. In cases where HUD has 
ordered corrective action and the grantee has failed to take the 
required action within a reasonable time, as specified by HUD, HUD may 
take one or more of the following steps:
    (1) Withhold vacancy reduction funds from the grantee;
    (2) Declare a breach of the ACC by the grantee; and
    (3) Any other sanctions authorized by law or regulation.