(a) We will take action to impose a penalty under § 262.1(a)(15) of this chapter if:
- (1) The requirements under § 261.64(a) and (b) have not been met; or
- (2) We determine that the State has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates.
- (b) If a State fails to submit an interim or complete Work Verification Plan by the due dates in § 261.64(a), we will reduce the SFAG payable for the immediately succeeding fiscal year by five percent of the adjusted SFAG.
(c) If a State fails to maintain adequate internal controls to ensure a consistent measurement of work participation, we will reduce the adjusted SFAG by the following percentages for a fiscal year:
- (1) One percent for the first year;
- (2) Two percent for second year;
- (3) Three percent for the third year;
- (4) Four percent for the fourth year; and,
- (5) Five percent for the fifth and subsequent years.
- (d) If a State complies with the requirements in this subpart for two consecutive years, then any penalty imposed for subsequent failures will begin anew, as described in paragraph (c) of this section.
- (e) If we take action to impose a penalty under § 261.64(b) or (c), we will reduce the SFAG payable for the immediately succeeding fiscal year.