Finding Text
24 CFR § 75.1 establishes the requirements to be followed to ensure the objectives of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) (Section 3) are met. The purpose of Section 3 is to ensure that economic opportunities, most importantly employment, generated by certain HUD financial assistance shall be directed to low- and very low-income persons, particularly those who are recipients of government assistance for housing or residents of the community in which the Federal assistance is spent. 24 CFR § 75.3(a)(2)(i) further states that Section 3 projects means housing rehabilitation, housing construction, and other public construction projects assisted under HUD programs that provide housing and community development financial assistance when the total amount of assistance to the project exceeds a threshold of $200,000. 24 CFR § 75.9(A)(1) states that, consistent with existing Federal, state, and local laws and regulations, PHAs and other recipients of public housing financial assistance, and their contractors and subcontractors must make their best efforts to award contracts and subcontracts to business concerns that provide economic opportunities to Section 3 workers. 24 CFR § 75.25(a) Reporting of labor hours. 1) For Section 3 projects, recipients must report in a manner prescribed by HUD: i. The total number of labor hours worked; ii. The total number of labor hours worked by Section 3 workers; and iii. The total number of labor hours worked by Targeted Section 3 workers. 2) Section 3 workers' and Targeted Section 3 workers' labor hours may be counted for five years from when their status as a Section 3 worker or Targeted Section 3 worker is established pursuant to § 75.31. 3) The labor hours reported under paragraph (a)(1) of this section must include the total number of labor hours worked on a Section 3 project, including labor hours worked by any subrecipients, contractors and subcontractors that the recipient is required, or elects pursuant to paragraph (a)(4) of this section, to report. 4) Recipients reporting under this section, as well as subrecipients, contractors and subcontractors who report to recipients, may report labor hours by Section 3 workers, under paragraph (a)(1)(ii) of this section, and labor hours by Targeted Section 3 workers, under paragraph (a)(1)(iii) of this section, from professional services without including labor hours from professional services in the total number of labor hours worked under paragraph (a)(1)(i) of this section. If a contract covers both professional services and other work and the recipient or contractor or subcontractor chooses not to report labor hours from professional services, the labor hours under the contract that are not from professional services must still be reported. 5) Recipients may report their own labor hours or that of a subrecipient, contractor, or subcontractor based on the employer's good faith assessment of the labor hours of a full-time or part-time employee informed by the employer's existing salary or time and attendance-based payroll systems, unless the project or activity is otherwise subject to requirements specifying time and attendance reporting. Grant Agreement No. B-22-CP-OH-0725 Article IV General Federal Requirements (M) states the grantee must comply with Section 3 of the Housing and Urban Development Act of 1968 (Section 3), 12 USC 1701u, and HUD's regulations at 24 CFR part 75 as applicable, including reporting requirements in 24 CFR 75.25. This section further states grantees that are not exempt from Section 3 must submit annual reports of Section 3 accomplishment performance measure in DRGR in January of the calendar year which reflects Section 3 accomplishments of the previous year. The County did not establish any policies/procedures related to Section 3. Further, the County did not include Section 3 accomplishments in their semi-annual performance reports submitted in the Disaster Recovery Grant Reporting System (DRGR). The failure to submit Section 3 accomplishments on semi-annual performance reports was due to insufficient controls and could result in action taken by the grantor. Further, the County did not have adequate policies and procedures in place to monitor the reporting of Section 3 requirements. Additional controls should be implemented to help ensure the County is adhering to Section 3 guidelines and submitting the required Section 3 accomplishments in their semi-annual performance reports submitted in DRGR. Further, the County should implement policies and procedures to ensure Section 3 requirements are met.