[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR941.501]



[Page 381-382]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 941_PUBLIC HOUSING DEVELOPMENT--Table of Contents

 

                      Subpart E_Performance Review

 

Sec.  941.501  HUD review of PHA performance; sanctions.





    (a) HUD determination. HUD shall carry out such reviews of the 

performance of each PHA as may be necessary or appropriate to make the 

determinations required by this paragraph (a), taking into consideration 

all available evidence.

    (1) Conformity with PHA proposal. HUD shall determine whether the 

PHA has carried out its activities under this subpart in a timely manner 

and in accordance with its approved proposal.

    (i) In making this determination, HUD shall review the PHA's 

performance under previous inspections, audit findings and other sources 

to determine whether the development activities undertaken during the 

period under review conform substantially to the activities specified in 

the approved PHA proposal. HUD also shall review a PHA's development 

schedule to determine whether the PHA has carried out its development 

activities in a timely manner;

    (ii) HUD shall review a PHA's performance to determine whether the 

activities carried out comply with the requirements of the Act, and 

other applicable laws and regulations.

    (2) Continuing capacity. HUD shall determine whether the PHA has a 

continuing capacity to carry out its development plan in a timely 

manner. The primary factors to be considered in arriving at a 

determination that a PHA has a continuing capacity are those described 

in paragraph (a)(1) of this section (``conformity with PHA proposal''). 

HUD shall give particular attention to PHA efforts to accelerate the 

progress of the program and to prevent the recurrence of past 

deficiencies or noncompliance with applicable laws and regulations.

    (b) Notice of deficiency. Based on HUD reviews of PHA performance 

and findings of any of the deficiencies in paragraph (d) of this 

section, HUD may issue to the PHA a notice of deficiency stating the 

specific program requirements that the PHA has violated and requesting 

the PHA to take any of the actions specified in paragraph (e) of this 

section.

    (c) Corrective action order. (1) Based on HUD reviews of PHA 

performance and findings of any of the deficiencies in paragraph (d) of 

this section, HUD may issue to the PHA a corrective action order, 

whether or not a notice of deficiency has been issued previously with 

respect to the specific deficiency on which the corrective action order 

is based. HUD may order corrective action at any time by notifying the 

PHA of the specific program requirements that the PHA has violated, and 

specifying that any of the corrective actions listed in paragraph (e) of 

this section must be taken. HUD shall design corrective action to 

prevent a continuation of the deficiency, mitigate any adverse effects 

of the deficiency to the extent possible, or prevent a recurrence of the 

same or similar deficiencies;

    (2) Before ordering corrective action, HUD shall notify the PHA and 

give it an opportunity to consult with HUD regarding the proposed 

action;



[[Page 382]]



    (3) Any corrective action ordered by HUD shall become a condition of 

the grant agreement (ACC);

    (d) Basis for corrective action. HUD may order a PHA to take 

corrective action only if it determines:

    (1) The PHA has not carried out its activities under the development 

program in a timely manner and in accordance with its approved proposal, 

or HUD requirements, as determined in paragraph (a)(l) of this section;

    (2) The PHA does not have a continuing capacity to carry out its 

proposal in a timely manner or in accordance with its proposal or HUD 

requirements, as determined in paragraph (a)(2) of this section;

    (3) The PHA has failed to repay HUD for amounts awarded under the 

development programs that were improperly expended;

    (e) Types of corrective action. HUD may direct a PHA to take one or 

more of the following corrective actions:

    (1) Submit additional information:

    (i) Concerning the PHA's administrative, planning, budgeting, 

accounting, management, and evaluation functions to determine the cause 

for a PHA not meeting the standards in paragraphs (a)(1) or (a)(2) of 

this section;

    (ii) Explaining any steps the PHA is taking to correct the 

deficiencies;

    (iii) Documenting that PHA activities were not inconsistent with the 

PHA's proposal or other applicable laws, regulations or program 

requirements; and

    (iv) Demonstrating that the PHA has a continuing capacity to carry 

out the proposal in a timely manner;

    (2) Submit schedules for completing the work identified in its 

proposal and report periodically on its progress in meeting the 

schedules;

    (3) Notwithstanding 24 CFR 941.205(c), 24 CFR 941.402(a) and 24 CFR 

85.36(g), submit to HUD documents for prior approval, which may include, 

but are not limited to:

    (i) Complete design, construction and bid documents (prior to 

soliciting bids);

    (ii) Complete rehabilitation drawings/specifications or work write-

ups;

    (iii) Development budgets, including modifications;

    (iv) Proposed award of contracts, including construction contracts, 

turnkey contracts of sale, letters of commitment, and contracts with the 

architect/engineer (prior to execution);

    (4) Submit additional material in support of one or more of the 

statements, resolutions, and certifications submitted as part of the PHA 

proposal, or periodic performance report;

    (5) Not incur financial obligations, or to suspend payments for one 

or more activities;

    (6) Reimburse, from non-HUD sources, one or more program accounts 

for any amounts improperly expended;

    (f) Failure to take corrective action. In cases where HUD has 

ordered corrective action and the PHA has failed to take the required 

actions within a reasonable time, as specified by HUD, HUD may take one 

or more of the following steps:

    (1) Terminate future draw downs and/or advances to the PHA. In such 

case, the amount of advances made to the PHA shall be repaid by the PHA 

from any funds or assets available for that purpose;

    (2) Require alternative management of development functions by an 

entity other than the PHA;

    (3) Cancel the fund reservation if the PHA fails to start (begin 

construction or rehabilitation), or complete (acquisition) within 30 

months from the date of the fund reservation pursuant to section 5(k) of 

the Act;

    (4) Recapture for good cause any grant amounts previously provided 

to a PHA, based upon a determination that the PHA has failed to comply 

with the requirements of the development program.

    (g) Right to appeal. Before taking any of the actions described in 

paragraph (f) of this section, HUD shall notify the PHA and give it an 

opportunity, within a prescribed period of time, to present any 

arguments or additional facts and data concerning the proposed action.



[61 FR 38021, July 22, 1996]



[[Page 383]]