Secretary may reduce the entitlement amount down to zero for a succeeding program year. Prior to making a reduction in the entitlement amount under this section, however, the recipient shall be notined and given an opportunity within a prescribed time for an informal consultation regarding the proposed action. [42 FR 5314, Jan. 27, 1977] § 570.912 Nondiscrimination compliance. Whenever the Secretary determines that a State or unit of general local government which is a recipient of either grant or loan assistance under this Part has failed to comply with the provisions of § 570.601, he shall notify the Governor of such State or the chief executive officer of such unit of general local government of the noncompliance and shall request the Governor or the chief executive officer to secure compliance. If within a reasonable period of time, not to exceed sixty days, the Governor or the chief executive officer fails or refuses to secure compliance, the Secretary is authorized to (a) refer the matter to the Attorney General with a recommendation that an appropriate civil action be instituted; (b) exercise the powers and functions provided by Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); (c) exercise the powers and functions provided for in § 570.913; or (d) take such other action as may be provided by law. When a matter is referred to the Attorney General pursuant to the preceding sentence, or whenever he has reason to believe that a State government or unit of general local government is engaged in a pattern or practice in violation of the provisions of § 570.601(a), the Attorney General may bring a civil cction in any appropriate United States district court for such relief as may be appropriate, including injunctive relief. § 570.913 Other remedies for noncompli ance. (a) Secretarial referral to the Attorney General. The Secretary may, if he has reason to believe that a recipient has failed to comply substantially with any provision of the Act, refer the matter to the Attorney General of the United States with a recommendation that an appropriate civil action be instituted. Upon such a referral the Attorney General may bring a civil action in any United States district court having venue thereof for such relief as may be appropriate, including an action to recover the amount of the assistance furnished under this Part which was not expended in accordance with it, or for mandatory or injunctive relief. (b) Secretarial actions on payments. If the Secretary finds a recipient has failed to comply substantially with any provision of this part, including the performance standards set forth in § 570.909, he may, provided his finding of failure to comply is made after reasonable notice and opportunity for hearing: (1) Terminate payments to the recipient; or (2) Reduce payments to the recipient by an amount equal to the amount of such payments which were not expended in accordance with this part; or (3) Limit the availability of payments to programs, projects, or activities not affected by such failure to comply. Provided, however, That the Secretary may on due notice revoke the recipient's letter of credit in whole or in part at any time after the initial finding of failure to comply, pending such hearing and a final decision of the Department, to the extent the Secretary determines such action necessary to preclude the further expenditure of funds for activities affected by such failure to comply. The following regulations govern the procedures and practice requirements involving adjudications where the Secretary desires to take action requiring reasonable notice and opportunity for hearing. The regulations in this part shall be liberally construed to secure just, expeditious, and efficient determination of the issues presented. The Administrative Procedures Act (5 U.S.C. 551 et seq.) where applicable shall be a guide in any situation not provided for or controlled by this subpart, but shall be liberally construed or relaxed when necessary. § 570.910 Corrective and remedial actions. (a) General. When the Secretary determines on the basis of a review of a recipient's performance under 570.909, that the objectives set forth 570.909 (a) have not been met, the retary will take one or more of the ons authorized in 88 570.910.913. In each instance, the action en will be designed to, first, prevent continuance of the deficiency (lack progress, nonconformance, noncomlance, lack of continuing capacity); cond, mitigate any adverse effects or nsequences of the deficiency to the ktent possible under the circumstances; and third, prevent a recurrence of the same or similar deficiencies. (b) Actions authorized. The following is a listing of actions that HUD may take in response to review of a recipient's performance. Such actions inay be taken with regard to either an entitlement recipient or a discretionary recipient and may be taken either singly or in combination, as appropriate to the circumstances. (1) Request the recipient to submit additional information: (i) Concerning the administrative, planning, budgeting, management and evaluation functions to determine any reasons for lack of progress; (ii) Explaining any actions being taken to correct or remove the causes for delay; (iii) Documenting that activities undertaken were not in nonconformance with the approved program or in noncompliance with applicable laws or regulations; or (iv) Demonstrating that the recipient has a continuing capacity to carry out the approved program in a timely surances will be required, as provided in § 570.311(b)(1). (5) Advise the recipient to suspend, discontinue or not incur costs for the affected activity. (6) Advise the recipient to reprogram funds from affected activities to other eligible activities: Provided, That such action shall not be taken in connection with any substantial violation of § 570.603 and 24 CFR Part 58. (7) Advise the recipient to reimburse the recipient's program account or letter of credit in any amounts improperly expended. (8) Change the method of payment from a letter of credit basis to a reimbursement basis. (9) Condition the approval of a succeeding year's application if there is substantial evidence of a lack of progress, nonconformance, noncompliance, or a lack of a continuing capacity. In such cases, the reasons for the conditional approval and the actions necessary to remove the condition shall be specified, as provided in § 570.311(f)(3). (10) Reduce the recipient's annual grant by up to the amount conditionally approved pursuant to § 570.311(f)(3) where such condition or conditions have not been satisfied. (11) In the case of discretionary grants made under Subpart F, adjust, reduce or withdraw the grant, except for funds already expended on otherwise eligible activities which may not be recaptured or deducted from future grants. [42 FR 5314, Jan. 27, 1977, as amended at 43 FR 8474, 8490, Mar. 1, 1978] § 570.911 Reduction of annual grant. When the Secretary determines on the basis of a review of an entitlement recipient's performance, that the objectives set forth in § 570.909(a) have not been met, the Secretary may make an appropriate reduction in the entitlement grant amount for the succeeding program year. A reduction will not be made in the entitlement grant amount until at least one of the corrective or remedial actions specified in § 570.910(b) has been taken, and only then if the recipient has not made an appropriate and timely response. The luce the entitlement ero for a succeeding ior to making a reentitlement amount 1, however, the recipiled and given an opa prescribed time for onsultation regarding tion. 27, 19771 matter to the Attorney General of the (b) Secretarial actions on payments. (1) Terminate payments to the re- (2) Reduce payments to the recipient by an amount equal to the amount of such payments which were not expended in accordance with this part; or scrimination compliance. Le Secretary determines or unit of general local which is a recipient of or loan assistance under failed to comply with the § 570.601, he shall notify r of such State or the ve officer of such unit of 1 government of the nonand shall request the Govè chief executive officer to liance. If within a reasonof time, not to exceed sixty overnor or the chief execufails or refuses to secure e, the Secretary is authorrefer the matter to the Ateneral with a recommendaan appropriate civil action be ; (b) exercise the powers and provided by Title VI of the ghts Act of 1964 (42 U.S.C. (c) exercise the powers and s provided for in § 570.913; or such other action as may be d by law. When a matter is reo the Attorney General pursuthe preceding sentence, or ver he has reason to believe State government or unit of l local government is engaged in tern or practice in violation of rovisions of § 570.601(a), the Aty General may bring a civil n in any appropriate United es district court for such relief as be appropriate, including injuncrelief. (3) Limit the availability of payments to programs, projects, or activities not affected by such failure to comply. Provided, however, That the Secretary may on due notice revoke the recipient's letter of credit in whole or in part at any time after the initial finding of failure to comply, pending such hearing and a final decision of the Department, to the extent the Secretary determines such action necessary to preclude the further expenditure of funds for activities affected by such failure to comply. The following regulations govern the procedures and practice requirements involving adjudications where the Secretary desires to take action requiring reasonable notice and opportunity for hearing. The regulations in this part shall be liberally construed to secure just, expeditious, and efficient determination of the issues presented. The Administrative Procedures Act (5 U.S.C. 551 et seq.) where applicable shall be a guide in any situation not provided for or controlled by this subpart, but shall be liberally construed or relaxed when 0.913 Other remedies for noncompli ance. a) Secretarial referral to the Attor- necessary. (c) Reasonable notice and opportunity for hearing. (1) Whenever the Secretary has reason to believe that a recipient has failed to comply substantially with any section of the Act or of the provisions of this part, and that termination, reduction, or limiting the availability of payments is required, he shall give reasonable notice and opportunity of hearing to such recipient prior to the invocation of any sanction under the Act. (2) Except in proceedings involving willfulness or those in which the public interest requires otherwise, a proceeding under this part will not be instituted until such facts or conduct which may warrant such action have been called to the attention of the chief executive officer of the recipient in writing and he has been accorded an opportunity to demonstrate or achieve compliance with the requirements of the Act and of this part. If the recipient fails to meet the requirements of the Act and regulations within such reasonable time as may be specified by the Secretary, a proceeding shall be initiated. Such proceeding shall be instituted by the Secretary by a complaint which names the recipient as the respondent. (3) A complaint shall give a plain and concise description of the allegations which constitute the basis for the proceeding. A complaint shall be deemed sufficient if it fairly informs the respondent of the charges against it so that it is able to prepare a defense to the charges. Notification shall be given in the complaint as to the place and time within which the respondent shall file its answer, which time shall be not less than 30 days from the date of service of the complaint. The complaint shall also contain notice that a decision by default will be rendered against the respondent in the event it fails to file its answer as required. (4)(1) Service of complaint. The complaint or a true copy therefor may be served upon the respondent registered or by certified mail, return receipt requested; or it may be served in any other manner which has been agreed to in writing by the respondent. Where the service is by certified mail, the return Postal Service receipt duly signed on behalf of the respondent shall be proof of service. (ii) Service of papers other than complaint. Any paper other than the complaint may be served upon the respondent or upon its attorney of record by registered or certified mail, return receipt requested. Such mailing shall constitute complete service. (iii) Filing of papers. Whenever the filing of a paper is required or permitted in connection with a proceeding under this Part, and the place of filing is not specified in this subpart, or by role or order of the administrative law judge, the paper shall be filed with the Secretary, Washington, D.C. 20410. All papers shall be filed in duplicate. (iv) Motions and requests. Motions and requests shall be filed with the designated administrative law judge, except that an application to extend the time for filing an answer shall be filed with the Secretary pursuant to § 570.913(c)(4)(iii). (5)(i) Filing. The respondent's answer shall be filed in writing within the time specified in the complaint, unless on application the time is extended by the Secretary. The respondent's answer shall be filed in duplicate with the Secretary. (ii) Contents. The answer shall contain a statement of facts which constitute the grounds of defense, and it shall specifically admit or deny each allegation set forth in the complaint, except that the respondent shall not deny a material allegation in the complaint which it knows to be true; nor shall a respondent state that it is without sufficient information to form a belief when in fact it possesses such information. The respondent may also state affirmatively special matters of defense. (iii) Failure to deny or answer allegation in the complaint. Every allegation in the complaint which is not denied in the answer shall be deemed to be admitted and may be considered as proved, and no further evidence in respect of such allegation need be adduced at a hearing. (iv) Failure to file answer. Failure to file an answer within the time prescribed in the complaint, except as the time for answer is extended under paragraph (c)(5)(i) of this section, shall constitute an admission of the allegations of the complaint and a waiver of hearing, and the administrative law judge shall make his findings and decision by default without a hearing or further procedure. (v) Reply to answer. No reply to the respondent's answer is required unless the administrative law judge so requests. Otherwise, the Secretary may file a reply in his discretion, but in any event within 10 days from his receipt of respondent's answer. (vi) Referral to administrative law judge. Upon receipt of the answer by the Secretary or upon filing a reply if one is deemed necessary, or upon failure of the respondent to file an answer within the time prescribed in the complaint or as extended under paragraph (c)(5)(i) of this section, the complaint (an answer, if one is filed) shall be referred to the administrative law judge. Where an answer has been filed, the administrative law judge shall set a time and place for hearing and shall serve notice thereof upon the parties at least 15 days in advance of the hearing date. (6)(i) If it appears to the Secretary that the respondent in its answer falsely and in bad faith, denies a material allegation of fact in the complaint or states that it has no knowledge sufficient to form a belief, when in fact it does possess such information, or if it appears that the respondent has knowingly introduced false testimony during the proceedings, the Secretary may thereupon file supplemental charges against the respondent. Such supplemental charges may be tried with other charges in the case, provided the respondent is given due r.otice thereof and is afforded an opportunity to prepare its defense thereto. (ii) In the case of a variance between the allegations in a pleading and the evidence adduced in support of the pleading, the administrative law judge may order or authorize amendment of the pleading to conform to the evidence: Provided, The party that would otherwise be prejudiced by the amendment is given reasonable opportunity to meet the allegation of the pleading as amended. The administrative law judge shall make findings on any issue presented by the pleadings as so amended. (iii) A respondent may appear in person through its chief executive officer and must be represented by counsel. Respondent's counsel may also appear as a witness in the proceeding. The Secretary shall be represented by the General Counsel of HUD. (d) Administrative law judge; powers. (1) Appointment. An administrative law judge, appointed as provided by Section 11 of the Administrative Procedure Act (5 U.S.C. 3105), shall conduct proceedings upon complaints filed under this subpart. (2) Powers of administrative law judge. Among other powers provided by law, the administrative law judge's authority, in connection with any proceeding under this subpart, shall include authority to: (i) Administer oaths and affirmations; (ii) Making ruling upon motions and requests. Prior to the close of the hearing no appeal shall lie from any such ruling except, at the discretion of the administrative law judge, in extraordinary circumstances; (iii) Determine the time and place of hearing and regulate its course and conduct. In determining the place of hearing the administrative law judge may take into consideration the requests and convenience of the respondent or its counsel; (iv) Adopt rules of procedure and modify the same from time to time as occasion requires for the orderly disposition of proceedings; (v) Rule upon offers of proof, receive relevant evidence, and examine witnesses; (vi) Take or authorize the taking of dispositions; (vii) Receive and consider oral or written arguments on facts or law; (viii) Hold or provide for the holding of conferences for the settlement or simplification of the issues by consent of the parties; (ix) Perform such acts and take such measures as are necessary or appropri |