**CHAPTER 22**

**FAIR HOUSING AND EQUAL OPPORTUNITY (FHEO)**

1.  [PURPOSE.]{.underline} This Chapter provides guidance to CPD Field
    Office staff in carrying out their responsibilities to conduct
    limited monitoring reviews of:

-   civil rights-related program requirements (CRRPRs) in CPD programs;

-   program requirements for equal opportunity for persons with
    disabilities; and

-   the economic development requirements of Section 3 of the Housing
    and Urban Development Act of 1968 applicable to CPD programs.

    1.  [APPLICABILITY.]{.underline} Fair Housing and Equal Opportunity
        (FHEO) monitoring reviews are on specific fair housing and equal
        opportunity requirements that are established by the statutes
        and administered by CPD and FHEO and their program regulations.

> A. Compliance is based on requirements pertaining to nondiscrimination
> in programs receiving Federal financial assistance, including:

-   Title VI of the Civil Rights Act of 1964;

-   Section 109 of Title I of the Housing and Community Development Act
    of 1974;

-   Section 504 of the Rehabilitation Act of 1973; and

-   the Age Discrimination Act of 1975.

> These requirements are designed to prevent discrimination in the
> delivery of benefits and services because of race, color, religion
> (creed), sex, national origin, age, familial status or disability.

B.  Other issues reviewed are:

-   nondiscrimination in the sale, rental or financing of housing (the
    Fair Housing Act and Executive Order 11063) to ensure that HUD
    programs are conducted in a manner to affirmatively further the
    objectives of the Fair Housing Act; and

-   economic development requirements of Section 3 of the Housing and
    Urban Development Act of 1968 (Section 3) to ensure that, to the
    greatest extent feasible, employment and business opportunities
    generated by these programs are directed to low-income and very
    low-income residents and business concerns located within areas
    affected by such programs.

22-3 [CPD LIMITED MONITORING REVIEW RESPONSIBILITIES.]{.underline}
Primary responsibility for oversight of nondiscrimination requirements
rests with the Office of Fair Housing and Equal Opportunity (FHEO).
However, since "ensuring equal opportunity in housing" is a HUD
strategic goal, CPD staff are responsible for conducting limited
monitoring reviews as discussed in this Chapter. For purposes of this
Chapter, limited monitoring review is the means for collecting certain
data concerning program participants' implementation of their
nondiscrimination responsibilities within CPD's programs. CPD staff's
responsibilities include the following steps:

> A. [Pre-Monitoring Review]{.underline}.
>
> \(1\) Conduct risk analysis to determine monitoring review priorities
> (following the guidance in Chapter 2 of this Handbook) and provide the
> monitoring schedule as well as any updates to the FHEO Field Office
> Director.
>
> \(2\) Provide Grants Management Process (GMP) data to FHEO.
>
> \(3\) Examine the recommended materials specified in this Handbook for
> the program or programs being monitored. At minimum, this includes
> reviews of:
>
> \(i\) for CPD formula program participants, the CAPER and racial and
> ethnic direct beneficiary data in the Integrated Disbursement and
> Information System (IDIS);
>
> \(ii\) for CPD formula program participants, the Analysis of
> Impediments to Fair Housing Choice (AI) and any information available
> in the FHEO Field Office on known impediments to fair housing choice
> and any known actions (appropriate or inappropriate) taken to address
> these impediments.
>
> \(iii\) Grant agreements and other relevant legal documents (i.e.,
> voluntary compliance agreements, special assurances, etc.) containing
> civil rights-related clauses.
>
> \(iv\) CPD's update to CPD Notice 00-10, issued December 26, 2000,
> "Accessibility for Persons with Disabilities to Non-Housing Programs
> funded by Community Development Block Grant Funds \-- Section 504 of
> the Rehabilitation Act of 1973, the Americans With Disabilities Act,
> and the Architectural Barriers Act."
>
> CPD and FHEO staff may coordinate their monitoring strategies based on
> risk assessment results.
>
> B. [Monitoring Review]{.underline}.
>
> \(1\) Complete the appropriate Exhibits in this Chapter for the
> applicable program. The review is based primarily on an examination of
> the program participant's records. This includes the regulatory
> records required by:
>
> \(i\) 24 CFR 570.506(g), for Community Development Block Grant (CDBG)
> entitlement program participants,
>
> \(ii\) 24 CFR 91.520(a), for State CDBG program participants, and
>
> \(iii\) 24 CFR 92.509(b), for HOME participating jurisdictions,
>
> and which are identified by FHEO for CPD prior to the monitoring
> review.
>
> CPD staff does not make "findings of civil rights compliance" for
> program participants. However, CPD does identify civil rights/fair
> housing concerns for FHEO staff to further review. Civil rights
> concerns are identified on the appropriate Exhibit as well as the
> "Monitoring Summary Sheet." During the exit conference, CPD staff
> advises the program participant of nondiscrimination concerns, if any,
> that have been identified. CPD staff may provide guidance regarding
> civil rights-related program requirements (CRRPRs) although it is
> advisable to first discuss the guidance with FHEO staff. The CPD staff
> also advises the participants that any such concerns are being
> referred to FHEO for further review and possible action.
>
> \(2\) Within five (5) business days after the monitoring review has
> been completed, forward the completed Exhibit(s) and other relevant
> documentation to FHEO. FHEO follows up as needed and specified under
> FHEO responsibilities.
>
> \(3\) CPD reviewers are encouraged to discuss civil rights questions
> and issues with FHEO staff during the monitoring process.
>
> C. [Post-Monitoring Review]{.underline}.
>
> \(1\) Enter pertinent information into CPD's database(s) for future
> risk analyses.
>
> \(2\) Provide a copy of CPD's final monitoring letter to FHEO. (Note:
> It is preferable that CPD and FHEO engage in joint decision-making on
> advice given and/or actions taken to contribute to consistency in
> program oversight and management.)
>
> \(3\) Review any correspondence between FHEO and the program
> participant and discuss joint issues with FHEO.
>
> \(4\) Provide FHEO with any correspondence received from program
> participant in response to FHEO communication with the program
> participant.

22-4 [FHEO REVIEW AND FOLLOW-UP RESPONSIBILITY.]{.underline} FHEO
retains the authority to determine and resolve matters involving
compliance with non-discrimination requirements, as detailed in the
Delegation of Authority published in the [Federal Register]{.underline}
dated August 4, 2003 (see Vol. 68, No. 149, page 45844; FR-4837-D-27).
However, CPD may make noncompliance findings under specific program
regulations. FHEO uses the results of CPD staff's limited monitoring
reviews as one of the bases for risk determination. In sharing this
limited monitoring review responsibility, FHEO Field Office staff work
cooperatively with CPD staff throughout the process by:

> A. Providing training and technical assistance (TA) to CPD Field
> Office staff who will be conducting the limited monitoring reviews.
> This training and TA will be conducted upon request or on an as-needed
> basis.
>
> B. Conducting its FHEO risk analysis process to identify which program
> participants FHEO will recommend for review during the year. In years
> in which CPD reviews a specific program participant but FHEO does not
> conduct a Title VI and/or Section 109 limited monitoring review of
> that recipient, CPD staff will conduct the FHEO limited monitoring
> review, if CPD and/or FHEO risk assessment results indicate the need.
> FHEO risk assessment results will be provided to the CPD Field Office
> Director and a negotiated monitoring review schedule and monitoring
> strategies will be developed for the local Field Office based on risk
> analysis results.

C. Providing CPD with information on any Fair Housing Act, Section 504,
and other civil rights issues encountered with CPD program participants.
FHEO will coordinate provision of this information with Regional
Counsel. Headquarters FHEO, with assistance from the Office of General
Counsel for Fair Housing, and the Department [o]{.underline}f Justice
(DOJ), will update this information throughout the year and share with
FHEO Field Offices. This list is also available on FHEO's Civil Rights
Front-End and Limited Monitoring Review website at
<http://hudatwork.hud.gov/po/e/FEReview/threshold.cfm>. Within five (5)
business days of receipt, FHEO Field Offices will forward any
information to CPD that may be relevant for CPD staff with respect to
CPD's scheduled monitoring review of program participants during the
year.

> D. Reviewing all completed Exhibits for civil rights, Section 504, and
> Section 3 concerns to determine whether identified civil rights
> problems that surfaced during the limited monitoring review require
> further action (such as additional monitoring or referral to the FHEO
> Regional Hub office for possible compliance review). If deficiencies
> or concerns are raised, FHEO staff will take the following steps:
>
> i\. provide technical assistance to the program participant to resolve
> the findings, as needed, and/or
>
> ii\. conduct an FHEO program monitoring or compliance review.
>
> E. Reviewing a randomly selected sample of all Exhibits and
> attachments (approximately 35% of the universe) for quality control
> purposes.
>
> F. Providing copies of letters and related information to CPD staff on
> all follow-up and discussing problems, as necessary.
>
> G. If there are any civil rights-related program noncompliance
> findings, providing any requested guidance or technical assistance to
> the program participant to resolve any Fair Housing Act, Section 504,
> or other civil rights problems. Working directly with the program
> participant and keeping CPD staff apprised of all issues and progress,
> FHEO will do this by drafting language describing any noncompliance
> findings to be included in CPD's monitoring review letter within ten
> (10) days of a request, providing technical assistance to resolve the
> findings or following up with its own monitoring review, compliance
> reviews, etc.
>
> H. Using CPD's completed Exhibits for FHEO's future risk analyses. All
> limited monitoring review concerns referred to FHEO and any follow-up
> actions that FHEO may take will be entered into FHEO's risk analysis
> data management systems (RADMS). Information from RADMS will be used
> to assist FHEO in determining low, medium, or high-risk program
> participants in the following year.

5.  [CDBG EQUAL OPPORTUNITY AND FAIR HOUSING REVIEW
    CRITERIA.]{.underline} The requirements at 24 CFR 570.904 set
    performance review criteria for equal opportunity and fair housing
    for the CDBG Program in the reviews for equal opportunity, equal
    employment opportunity, fair housing, and actions to use minority
    and women's business firms. It is assumed that all CDBG program
    participants are in compliance with their certification for
    nondiscrimination and affirmatively furthering fair housing unless
    there is evidence that proves different treatment to beneficiaries
    based on race, color, national origin, sex, religion, familial
    status, and disability.

6.  [CDBG NONDISCRIMINATION COMPLIANCE.]{.underline} The requirements at
    24 CFR 570.912 establish what actions HUD may impose if a CDBG
    program participant is found to be in noncompliance with civil
    rights and fair housing statutes. Program participants are given
    sixty (60) days to come into compliance. If after 60 days, the
    program participant fails to comply, HUD may:

```{=html}
<!-- -->
```
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 24 CFR 570.913.

D.  Take such other action as may be provided by law.

    5.  [review of economic opportunity issues (section 3 of the Housing
        and Urban Development Act of 1968).]{.underline} The purpose of
        Section 3 of the Housing and Urban Development Act of 1968 (12
        USC 1701u) is to ensure that employment and other economic
        opportunities generated by certain HUD financial assistance
        shall, to the greatest extent feasible, and consistent with
        existing Federal, State, and local laws and regulations, be
        directed to low- and very low-income persons, particularly those
        who are recipients of government assistance for housing.

> Section 3 monitoring reviews are directed to reviewing whether
> economic opportunity is directed towards appropriate beneficiaries as
> described above. In years in which FHEO is not conducting its own
> program monitoring of Section 3 activities for a specific program
> participant, CPD Field Office staff will conduct a limited monitoring
> review of the participant's Section 3-based activities if it will be
> conducting a program monitoring review of that program for its own
> purposes. Because the Section 3 program is administered by
> Headquarters FHEO, the following protocol governs the Section 3
> limited monitoring review:

A.  The local FHEO Field Office will inform CPD as to which program
    participants will be monitored for Section 3 compliance by FHEO
    staff during the program year. This list must be provided prior to
    completion of the Field Office's Management Plan.

B.  CPD will use the FHEO listing to determine which of the programs it
    is monitoring in that year should be monitored for Section 3
    activities (using Exhibit 22-7).

C.  At the exit conference, CPD staff will advise the program
    participant if there are Section 3 concerns that will be referred to
    FHEO for further review and action.

D.  After conducting a Section 3 review, CPD is responsible for
    forwarding the completed Exhibit and related information and
    documents to its FHEO Field Office counterpart.

E.  FHEO is responsible for reviewing the limited monitoring review
    information and determining if further action is warranted.
    Additional actions will be conducted in accordance with Section 22-4
    above.

22-8 [CHAPTER ATTACHMENT AND EXHIBITS.]{.underline} This Chapter
contains an Attachment and seven (7) Exhibits. Attachment 22-1.
"Applicable Civil Rights Laws, Their Applicable Regulations and
Coverage," provides a summary table of the civil rights laws and their
applicable regulations by the categories of program participants that
must comply with these authorities. The 7 Exhibits, which contain the
limited monitoring review standards and procedures for CPD field staff
use, are briefly described below. CPD staff need only use the Exhibit
applicable to the on-going CPD monitoring review along with the Exhibits
to review Section 504 of the Rehabilitation Act and Section 3 of the
Housing and Urban Development Act. For example, if CPD staff is
conducting a HOME review, Exhibit 22-3, "Guide for Review of the HOME
Investment Partnerships Program," is used along with Exhibit 22-6, Guide
for Review of the Civil Rights-Related Program Requirements for Section
504 of the Rehabilitation Act of 1973, as amended," and Exhibit 22-7,
"Guide for Review of Section 3 of the Housing and Urban Development Act
of 1968."

> A. [Exhibit 22-1, "Guide for Review of Civil Rights-Related Program
> Requirements for the Community Development Block Grant (CDBG)
> Entitlement Program."]{.underline} This Exhibit is designed to
> determine whether:
>
> 1\. A program participant maintains records as required by 24 CFR
> 570.506(g).
>
> 2\. The records maintained by the program participant accurately
> portray its actions and, if the CPD reviewer is conducting an on-site
> monitoring review, the activities can be verified on-site.
>
> B. [Exhibit 22-2, "Guide for Review of Civil Rights-Related
> Requirements for the State Community Development Block Grant (CDBG)
> Program."]{.underline} This Exhibit is to be used when conducting a
> monitoring review of the State CDBG Program for record-keeping
> requirements by the program and monitoring of its recipients'
> record-keeping requirements.
>
> C. [Exhibit 22-3, "Guide for Review of the HOME Investment
> Partnerships Program."]{.underline} When reviewing a HOME
> participating jurisdiction (PJ), this Exhibit is designed to determine
> whether the PJ has records and data that document its implementation
> of the program's civil rights-related requirements.
>
> D. [Exhibit 22-4, "Guide for Review of the Emergency Shelter Grants
> (ESG) Program."]{.underline} This Exhibit is designed for use in
> conducting a monitoring review of either a local jurisdiction's or a
> State's ESG program with emphasis on record-keeping requirements.
>
> E. [Exhibit 22-5, "Guide for Review of the Civil Rights-Related
> Program Requirements for CPD Non-Formula Grant Programs."]{.underline}
> This Exhibit is to be used when conducting a monitoring review of the
> civil rights-related program requirements for any of CPD's non-formula
> grant programs. It covers competitively funded programs and, in the
> case of the Housing Opportunities for Persons With AIDS (HOPWA)
> program, it is to be used for either the formula or competitive
> portion of the HOPWA program.

F.  [Exhibit 22-6, "Guide for Review of the Civil Rights-Related Program
    Requirements for Section 504 of the Rehabilitation Act of 1973, as
    amended."]{.underline} This Exhibit is designed to assess the
    program participant's implementation of the requirements pertaining
    to persons with disabilities covered under this law. Section 109 of
    the Housing and Community Development Act makes Section 504
    requirements applicable to all programs under Title I of this Act.
    This Exhibit is to be used when monitoring the CDBG (Entitlement and
    State), HOME and ESG Programs.

> G. [Exhibit 22-7, "Guide for Review of Section 3 of the Housing and
> Urban Development Act of 1968."]{.underline} This Exhibit covers
> reviews of a program participant's Economic Opportunity (Section 3)
> activities and is to be used by CPD Field Office Staff if FHEO is not
> conducting its own program monitoring review during the same year.