Compliance Reviews

HUD will conduct periodic monitoring reviews of a recipient agency to determine compliance. Compliance reviews can result from several sources, including a complaint alleging systemic problems, evidence of potential noncompliance noted during routine program office monitoring, and indications of noncompliance found in required reports.

Compliance reviews may be random or geographically dispersed to obtain a representative perspective of the extent to which various program participants are complying with the regulatory guidance. Program offices will also be including Section 3 compliance in their regular monitoring processes which includes an annual risk assessment that could result in monitoring reviews.

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Section 3 HUD Compliance Review Checklist

HUD may conduct a compliance review of the recipient agency to determine compliance. This sample checklist is designed to help grantees prepare for a HUD compliance review by identifying what type of records should maintained.

 

 
Examples of Records Recipients Should Maintain

Performance and Procedure Reports

  • Copies of signed Consolidated Plan or Public Housing Annual Plan certifications/ assurances
  • Annual Plans or other performance reports (i.e., Consolidated Plans, Action Plans, Quarterly Performance Reports (QPRs), CAPERs, PHA Annual Plans, and Budget documents, to determine the beginning and end dates of the recipient's program or fiscal year and the dollar amount of covered projects/activities that were completed during the program or fiscal years under review
  • Descriptions of procedures used by the recipient, subrecipients, developers, and contractors to verify the eligibility of Section 3 workers and businesses to determine if these procedures are consistent with the regulation and to ensure that they do not create any undue burden to prospective beneficiaries
  • Recipient procedures for monitoring subrecipients, developers, contractors, and subcontractors for compliance

Employment and Employee Information

  • Lists of Section 3 workers or Targeted Section 3 workers employed by the recipient and/or its contractors during the period under review. This information should include: name of low- or very low-income individual; address; telephone number; date hired; position; and current status (employed or terminated)
  • Evidence that developers, contractors, or subcontractors posted signs regarding job vacancies and/or subcontracting opportunities at the job site
  • Evidence that developers, contractors, or subcontractors notified local labor unions about their Section 3 obligations
  • Correspondence or other records from Section 3 workers and business concerns regarding training, employment or contracting opportunities (including Section 3 grievances), to determine how those inquiries were addressed or resolved
  • Labor hour records of recipients and contractors, to determine the percentage of Section 3 workers and Targeted Section 3 workers in comparison to total labor hours

Business Concern Information

  • Lists of Section 3 workers and Section 3 business concerns maintained by the recipient, to determine the extent to which the recipient is attempting to provide economic opportunities to prospective beneficiaries
  • Evidence of outreach efforts, to determine how Section 3 workers or Section 3 business concerns were targeted or recruited for employment, training, or contracting opportunities
  • Lists of Section 3 business concerns that received contracts/subcontracts during the period under review. This information should include name of contractor; address; telephone number; email address; contract amount; date awarded; and services provided

Contract, Proposal, and Bid Information

  • Minutes, sign-in sheets, agendas, or other relevant evidence from pre-construction meetings, to determine if Section 3 requirements were discussed with prospective bidders
  • Plans for meeting or exceeding benchmarks by recipients and contractors (i.e., contractors' proposals or business utilization plan)
  • Procurement records, to identify the dollar amount of each covered contract awarded during the time span under review
  • Copies of bid solicitations, to ensure that Section 3 applicability is referenced
  • Contract documents, to ensure that they include provisions that apply Section 3 to the contracts, or subcontracts awarded

Other Records

  • Other specific information related to Section 3 complaints that are currently pending HUD investigation
  • Other specific information related to steps taken by the recipient to address previous findings from Section 3 compliance reviews or other HUD monitoring reviews
  • Other relevant data that may demonstrate Section 3 compliance by the recipient