+-----------+--------------------------------+-----+------------------+
| **Guide   |                                |     |                  |
| for       |                                |     |                  |
| Review of |                                |     |                  |
| Section 3 |                                |     |                  |
| of the**  |                                |     |                  |
|           |                                |     |                  |
| **Housing |                                |     |                  |
| and Urban |                                |     |                  |
| De        |                                |     |                  |
| velopment |                                |     |                  |
| Act of    |                                |     |                  |
| 1968**    |                                |     |                  |
+-----------+--------------------------------+-----+------------------+
| **Name of |                                |     |                  |
| Program   |                                |     |                  |
| Parti     |                                |     |                  |
| cipant:** |                                |     |                  |
|           |                                |     |                  |
|           |                                |     |                  |
+-----------+--------------------------------+-----+------------------+
| **Staff   |                                |     |                  |
| Con       |                                |     |                  |
| sulted:** |                                |     |                  |
|           |                                |     |                  |
|           |                                |     |                  |
+-----------+--------------------------------+-----+------------------+
| **Name of |                                |     |                  |
| Grant     |                                |     |                  |
| P         |                                |     |                  |
| rogram(s) |                                |     |                  |
| Re        |                                |     |                  |
| viewed:** |                                |     |                  |
|           |                                |     |                  |
|           |                                |     |                  |
+-----------+--------------------------------+-----+------------------+
| **Name(s) |                                | **D |                  |
| of        |                                | ate |                  |
| Revie     |                                | :** |                  |
| wer(s):** |                                |     |                  |
+-----------+--------------------------------+-----+------------------+

**NOTE:** All questions that address requirements contain the citation
for the source of the requirement (statute, regulation, NOFA, or grant
agreement). If the requirement is not met, HUD must make a finding of
noncompliance. All other questions (questions that do not contain the
citation for the requirement) do not address requirements, but are
included to assist the reviewer in understanding the participant\'s
program more fully and/or to identify issues that, if not properly
addressed, could result in deficient performance. Negative conclusions
to these questions may result in a \"concern\" being raised, but not a
\"**finding**.\"

**[Instructions]{.underline}:** This Exhibit is designed to examine the
program participant's records to determine:

-   whether the participant has included the Section 3 clause in its
    contracts;

-   the number of training opportunities coordinated;

-   employment records of Section 3 residents as 30 percent of new
    hires; and

-   the awarding of up to 10 percent of the contracting opportunities to
    Section 3 business concerns consistent with the requirements of 24
    CFR 135.30.

    It is divided into five sections: Program Participant
    Responsibilities; Use of Section 3 Residents as Trainees; Use of
    Section 3 Residents as Employees; Contract Awards to Section 3
    Business Concerns; and Procurement. (See Section 22-5 of the
    introduction to this Chapter.) The HUD reviewer is to respond to
    these questions through contract reviews and program
    participant/subrecipient staff interviews. Failure to maintain
    records is an indication of noncompliance with the record keeping
    regulations. While a lack of documentation may not imply
    discrimination, because the participant's data are a basis for
    further investigating compliance with nondiscrimination
    requirements, the CPD reviewer is responsible for transmitting this
    completed Exhibit (including any supporting documentation) to FHEO
    upon completion of the monitoring (see Sections 22-3 and 22-4 of the
    introduction to this Chapter).

**[Questions:]{.underline}**

a\. [program participant responsibilities]{.underline}

1\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include written procedures           |         |
| governing:                                                 |         |
+------------------------------------------------------------+---------+
| \(a\) notification to residents about employment and       |         |
| training opportunities generated by Section 3 covered      |         |
| assistance?                                                |         |
|                                                            |         |
| \[24CFR 135.32 (a)\]                                       |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| \(b\) notification to Section 3 business concerns about    |         |
| contracting opportunities generated by Section 3 covered   |         |
| assistance?                                                |         |
|                                                            |         |
| \[24 CFR 135.32 (b)\]                                      |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| \(c\) the setting of, and reaching, numerical goals for    |         |
| employment and training opportunities for residents and    |         |
| contracting opportunities for Section 3 business concerns? |         |
|                                                            |         |
| \[24 CFR 135.32(c)\]                                       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

2\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include documentation of the actions |         |
| taken to comply with the Section 3 regulations, the        |         |
| results of the actions taken, and any impediments          |         |
| encountered during the implementation of the program(s)    |         |
| covered by Section 3?                                      |         |
|                                                            |         |
| \[24 CFR 135.32(e)\]\]                                     |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

b\. [use of section 3 residents as trainees]{.underline}

3\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include:                             |         |
|                                                            |         |
| (a) information about the number of training positions     |         |
|     generated for Section 3 residents?                     |         |
|                                                            |         |
| (b) information on the how the program participant         |         |
|     implemented the eligibility criteria for residents     |         |
|     affected by the CPD program(s)?                        |         |
|                                                            |         |
|     \[24 CFR 135.34(a)(2) and 24 CFR 135.34(b)\]           |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

c\. [use of section 3 residents as employees]{.underline}

4\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include information about:           |         |
|                                                            |         |
| \(a\) the number of permanent full-time and part-time      |         |
| positions generated for Section 3 residents?               |         |
|                                                            |         |
| \(b\) how the program participant implemented the          |         |
| eligibility criteria for residents affected by housing and |         |
| community development programs?                            |         |
|                                                            |         |
| \[24 CFR 135.34(a)(2) and 24 CFR 135.34 (b)\]              |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

d\. [contract awards to section 3 business concerns]{.underline}

5\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include information on the number,   |         |
| dollar value, and types of procurement awards made to      |         |
| Section 3 business concerns that provide economic          |         |
| opportunities for residents of the service area or         |         |
| neighborhood in which the Section 3-covered project was    |         |
| located?                                                   |         |
|                                                            |         |
| \[24 CFR 135.36 (a)(2) and 24 CFR 135.36(b)\]              |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

6\.

+------------------------------------------------------------+---------+
| **\[OS\]** For the time period reviewed, did the program   |         |
| participant's records include evidence submitted by        |         |
| Section 3 business concerns to the program participant of  |         |
| the businesses' ability to perform successfully under the  |         |
| terms and conditions of the contract and comply with the   |         |
| requirements of Section 3?                                 |         |
|                                                            |         |
| \[24 CFR 135.36 (c)\]                                      |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

E. [PROCUREMENT]{.underline}

7\.

+------------------------------------------------------------+---------+
| **\[OS\]** Was the Section 3 clause included in all        |         |
| reviewed contracts to which it is applicable?              |         |
|                                                            |         |
| \[24 CFR 135.38\]                                          |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+