ground of race, color, national origin or sex, has been excluded from participation in, denied the benefits of, or otherwise subjected to discrimination under any activity funded under this Part.

(ii) Criteria used in selecting sites for public facilities designed to further the accomplishment of the objectives of the programs or activities conducted under this Part with respect to any identifiable segment of the total group of lower-income persons in the community.

(iii) Any actions undertaken to overcome the effects of conditions which may have resulted in limited participation, in the past, in programs or activities of the type funded under this Part, by any identifiable segment of the total group of lower-income persons in the community.

(iv) Any actions undertaken to promote equal employment opportunities for any identifiable segment of the total group of lower-income persons in the community.

(2) The recipient will be required to document the actions undertaken to further fair housing. Such documentation should indicate:

(1) Any actions undertaken to encourage the development and enforcement of fair housing laws.

(ii) Any actions taken to prevent discrimination in housing and related facilities developed and operated with assistance under this Part, and in the lending practices, with respect to residential property and related facilities, of lending institutions.

(iii) Any action taken to assure that land use and development programs funded under this Part provide greater housing opportunities throughout the planning area for any identifiable segment of the total group of lower-income persons in the community.

(iv) Any site selection policies adopted to promote equal opportunity in housing.

(d) Citizen participation. (1) A local citizen participation plan has been developed and made public. The recipient shall specify in the plan how it intends to meet the citizen participation requirements of this Part, inclusive of a timetable specifying: (1) When and how information will be disseminated concerning the amount of funds available for projects that may be undertaken, along with other important program requirements; (ii) when in the initial stage of the planning process public hearings will be held; (iii) when and how citizens will have an opportunity to participate in

the development of the application prior to submission; (iv) when and how any technical assistance the recipient may choose to provide, will be made available to assist citizen participants to understand program requirements such as Davis-Bacon, environmental policies, equal opportunity requirements, relocation provisions and like requirements, in the preapplication process; and (v) the nature and timing of citizen participation in the development of any future community development program amendments, including reallocation of funds and designation of new activities or locations.

(2) A local process has been developed which permits citizens likely to be affected by community development and housing activities, including low and moderate income persons, to articulate needs, express preferences about proposed activities, assist in the selection of priorities, and otherwise participate in the development of the application, and have individual and other complaints answered in a timely and responsive manner. (Applicants may wish to provide bilingual opportunities for citizen participation, if feasible, where significant numbers of non-English speaking persons are likely to be affected by community development program activities.) § 570.905 Reports to be submitted by recipient.

(a) General. Recipients will submit such reports, including litigation reports as the Secretary may require.

(b) Financial management. Each recipient shall submit such financial reports as are deemed necessary by the Secretary, consistent with the requirements of Federal Management Circular 74-7.

(c) Relocation and acquisition reports. Recipients will report at least annually on a form prescribed by the Secretary on numbers of persons and businesses relocated, numbers remaining in the relocation workload, and a general breakdown of relocation costs and on real property acquired.

(d) Equal opportunity reports. Recipients shall submit such reports as may be necessary, pursuant to the rules and regulations under Title VI, Civil Rights Act of 1964; Title VIII, Civil Rights Act of 1968; Section 3 of the Housing and Urban Development Act of 1968; Section 109 of the Act, Execuvtie Order 11246 as amended, and Executive Order 11063, or

any reports as may be further prescribed by the Secretary.

§ 570.906 Annual performance report.

(a) Submission. Prior to the beginning of fiscal year 1977 and prior to each fiscal year thereafter, each recipient shall submit a performance report.

(a) Submission. Beginning with the application submitted in Fiscal Year 1976, and each fiscal year thereafter, each recipient shall submit a performance report.

(b) Contents—(1) Progress on planned activities. The recipient shall indicate, on a form prescribed by HUD, progress on each of the activities that were to be carried out pursuant to its approved application for the previous fiscal year, including requirements described in § 570.305(b).

(2) Recipient Assessment. The performance report must include the recipient's assessment of the effectiveness of the program of community development activities conducted under this Part in meeting the objectives of this Part and the needs and objectives identified in the recipient's previous fiscal year application for funding under this part.

(3) Housing Assistance Provided. If the recipient's last application indicated that any housing assistance planned under § 570.303 (c) (3) was to be provided, the performance report should indicate, on a form prescribed by HUD, progress in providing such assistance.

(4) Listing of Environmental Reviews. The performance report should indicate, on a form prescribed by HUD, the nature and status of all environmental reviews, including historic preservation reviews, and status of all environmental reviews required on projects funded pursuant to this part.

(5) Equal Opportunity. The recipient shall indicate compliance with the performance standards outlined in § 570.900

(c).

(6) Citizen Participation. The recipient shall indicate compliance with the performance standards outlined in § 570.900 (d).

(c) Public information. The recipient will, at the time of submission of the annual performance report, make public notice of the availability of the report for examination by the public. The recipient will keep copies of the performance report for release as public information and make such copies available to the public at no charge.

§ 570.907 Records to be maintained by recipient.

(a) Financial management. Recipients are to maintain records, in accordance with Federal Management Circular 74–7, Attachment G, which identify adequately the source and application of funds for grant supported activities. These records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.

(b) Citizen participation. Recipients shall maintain the following records with respect to the citizen participation requirements outlined in § 570.900(d):

(1) narrative or other records describing the process used to inform citizens concerning the amount of funds available for proposed community development and housing activities, the range of activities that may be undertaken, and other important program requirements.

(2) records of public hearings held to obtain the views of citizens on community development and housing needs.

(3) narrative or other records of the opportunities provided citizens to participate in the development of block grant applications.

(c) Other resources. All recipients, under the provisions of § 570.303 (b), are required to set forth a community development program which includes activities to be undertaken to meet identified community development needs and objectives and indicates resources other than block grants which are expected to be made available toward meeting identified needs and objectives. Records shall be maintained in & form prescribed by HUD which indicate what amount of the resources indicated in the previous application were annually provided for community development activities and for which activities they were used.

(d) Relocation. The recipient shall maintain a management control mechanism that indicates the overall status of the relocation workload and a separate relocation record for each person, business, organization, and farm operation displaced or in the relocation workload as a result of activities as described in § 570.602(a). Each separate record shall include:

(1) Name, address, and relocation needs of person(s) to be displaced; a description of the services and assistance provided; a statement of the type and amount of relocation payments made;

and the location and a description of the replacement dwelling or nonresidential accommodation to which the person(s) relocated.

(2) The pertinent claim form(s) and supporting documentation submitted by the displaced person and a copy of the worksheet or other document used by the recipient to determine eligibility for and the amount of the payment(s) made.

(3) A copy of any grievance filed by the displaced person, a description of the actions taken to resolve it, and a copy of all pertinent determinations.

(e) Acquisition. Recipients' files shall contain the following records concerning real property acquisition governed by the provisions of § 570.603:

(1) Invitation to owner to accompany appraiser during inspection.

(2) Property appraisal.

(3) Statement of basis for the determination of just compensation.

(4) Written offer of just compensation.

(5) Purchase agreement, deed, declaration of taking, and any similar or related documents involving conveyance.

(6) Settlement cost reporting statement.

(7) Notice to surrender possession of premises.

(f) Equal opportunity. (1) The recipient shall maintain demographic data by census tract. The data shall include prevailing population characteristics relating to race, ethnic group, sex, age, and head of household.

(2) The recipient shall maintain racial, ethnic, and gender data showing the extent to which these categories of persons have participated in, or benefited from, programs and activities funded under this Part.

(3) The recipient shall maintain data which records its affirmative action in equal opportunity employment, including but not limited to employment. upgrading, demotions, transfers, recruitment or recruitment advertising, layoffs or terminations, pay or other compensation, and selection for training.

(4) The recipient shall maintain data which records its good faith efforts to identify, train and/or hire lower-income residents of the project area and to utilize business concerns which are located in or owned in substantial part by persons residing in the area of the project.

(g) Labor Standards. Recipients shall maintain records regarding compliance of all contractors performing construc

tion work with grant funds, with the obligations imposed upon them by § 570.605.

(h) Unavailability of other Federal assistance. Recipients using funds provided under this Part for the provision of public services as described in § 570.200 (a) (8) or for the acquisition, construction, reconstruction, or installation of flood and drainage facilities as described in § 570.200 (a) (2), shall maintain records of compliance with the procedures as set forth in § 570.607 indicating that assistance for such facilities under other Federal laws or programs is unavailable.

(i) OMB Circular A-95 comments. The recipient shall retain copies of all letters, correspondence, or other records received as a result of review of the community development program application by the appropriate clearinghouse pursuant to the provisions of OMB Circular A-95.

(j) Record-keeping period. Records required to be retained under this section shall be kept for a period of three years, or such longer period as HUD may require in specific cases.

§ 570.908

HUD Reports [Reserved].

§ 570.909 Secretarial review and monitoring of recipient's performance. (a) General. The Secretary will review each recipient's annual performance. The review of the recipient's performance will take place where possible, prior to approval of the succeeding year's application for grant.

(b) Objective. The review system is designed to determine:

(1) Whether the recipient has carried out a program substantially as described in its application;

(2) Whether that program conformed to the requirements of this Part and other applicable laws and regulations;

(3) Whether the recipient has demonstrated a continuing capacity to carry out in a timely manner the approved community development program. To determine the recipient's continuing capacity, the Secretary will consider:

(i) The recipient's performance in moving activities into execution or accomplishing activities undertaken as a part of the community development program in substantial conformance with the recipient's schedule or timetable for its activities; and

(ii) The recipient's performance in utilizing its resources, including funds

received under this Part, at a rate which indicates substantial conformance with the recipient's planned rate of expenditure or utilization.

In making determinations concerning a recipient's continuing capacity, the Secretary will be guided by the experience of other recipients of similar size with similar entitlement amounts as judged by the above factors. Where a recipient's performance with respect to the above factors lags substantially behind that of similar recipients, or for any other reason, the Secretary desires further information, the Secretary may require submission of additional information concerning the administrative, planning, budgeting, management, and evaluation functions of the recipient to determine whether a lack of capacity is the source of the recipient's substantial nonperformance. The Secretary shall further determine by this review if action on the part of the recipient to eliminate the causes of substantial nonperformance will satisfy the requirement of a finding that the necessary capacity to carry out in a timely manner its community development program in succeeding years exists.

(c) Basis for Review. Each recipient shall assist the Secretary in performing his review function with respect to:

(1) Review of reports and records of recipients;

(2) Review of certification by the recipient of conformance to applicable laws and regulations;

(3) Site visits and inspections on a routine sampling basis including interviews with citizens and local officials. § 570.910 Evaluation by HUD.

(a) The Secretary shall, in addition to his annual reviews and audits, evaluate programs conducted under this Part and their effectiveness in meeting the objectives of this Part.

(b) The Secretary may conduct such evaluation using HUD personnel, or by contract or other arrangement with public or private agencies.

(c) Recipients under this Part may be required to supply data or make available such records as are necessary for the accurate completion of these evaluations.

as may be necessary or appropriate, that the recipient has not carried out a program substantially as described in its application, that the program did not conform to the requirements of the Act and other applicable laws, or that the recipient does not have a continuing capacity to carry out in a timely manner the approved community development program, he then may make appropriate adjustment in the amount of the annual grants in accordance with his findings pursuant to such reviews and audits. Adjustments may be made in annual grants for the current program period, the forthcoming program period, or both. Where the determination involves a failure to comply substantially with any provision of the Act, the provisions of § 570.913 shall apply.

§ 570.912 Nondiscrimination

ance.

compli

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 action in any appropriate United States district court for such relief as may be appropriate, including injunctive relief.

§ 570.913 Other remedies for noncompliance.

(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, 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 pended in accordance with this Part;

or

ex

(3) Limit the availability of payments to programs, projects, or activities not affected by such failure to comply.

The following regulations govern the procedure 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 Procedure 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.

(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) (i) Service of Complaint. The complaint or a true copy therefore 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 filling of a paper is required or permitted in connection with a proceeding under this