[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.495]

[Page 126-127]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
 
        Subpart I_State Community Development Block Grant Program
 
Sec. 570.495  Reviews and audits response.

    (a) If HUD's review and audit under Sec. 570.493 results in a 
negative determination, or if HUD otherwise determines that a state or 
unit of general local government has failed to comply with any 
requirement of this subpart, the state will be given an opportunity to 
contest the finding and will be requested to submit a plan for 
corrective action. If the state is unsuccessful in contesting the 
validity of the finding to the satisfaction of HUD, or if the state's 
plan for corrective action is not satisfactory to HUD, HUD may take one 
or more of the following actions to prevent a continuation of the 
deficiency; mitigate, to the extent possible, the adverse effects or 
consequence of the deficiency; or prevent a recurrence of the 
deficiency:
    (1) Issue a letter of warning that advises the State of the 
deficiency and puts the state on notice that additional action will be 
taken if the deficiency is not corrected or is repeated;
    (2) Advise the state that additional information or assurances will 
be required before acceptance of one or more of the certifications 
required for the succeeding year grant;
    (3) Advise the state to suspend or terminate disbursement of funds 
for a deficient activity or grant;
    (4) Advise the state to reimburse its grant in any amounts 
improperly expended;
    (5) Change the method of payment to the state from an advance basis 
to a reimbursement basis;
    (6) Based on the state's current failure to comply with a 
requirement of this subpart which will affect the use of the succeeding 
year grant, condition the use of the succeeding fiscal years grant funds 
upon appropriate corrective action by the state. When the use of funds 
is conditioned, HUD shall

[[Page 127]]

specify the reasons for the conditions and the actions necessary to 
satisfy the conditions.
    (b)(1) Whenever HUD determines that a state or unit of general local 
government which is a recipient of CDBG funds has failed to comply with 
section 109 of the Act (nondiscrimination requirements), HUD shall 
notify the governor of the State or chief executive officer of the 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 time, not to exceed sixty days, the governor or chief 
executive officer fails or refuses to secure compliance, HUD may take 
the following action:
    (i) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted;
    (ii) Exercise the powers and functions provided by title VI of the 
Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-7);
    (iii) Exercise the powers and functions provided for in Sec. 
570.496; or
    (iv) Take such other action as may be provided by law.
    (2) When a matter is referred to the Attorney General pursuant to 
paragraph (b)(1)(i) of this section, or whenever HUD has reason to 
believe that a State or unit of general local government is engaged in a 
pattern or practice in violation of the provisions of section 109 of the 
Act, 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.