1. A. Sanction Status. The purpose of imposing sanctions is to ensure accountability of local boards and other sub-recipients in meeting the needs of employers and job seekers, ensure performance in reaching outcome measures, ensure adequate return on New Mexico investments, and support New Mexico in achieving its goals. There are three levels of sanction status that may be assigned by DWS to a local board, or other sub-recipient, for failure to ensure compliance with one or more contracted performance measures, grant agreement provisions, federal or state laws, and related regulations.

   1. (1) Level one sanction status: A level one sanction status is assigned for significant inability or failure to perform as determined by DWS. A level one sanction status may be associated with the assessment of one or more corrective actions or penalties as referenced in the corrective actions and penalties section of this rule. Sanctionable acts that occur during or after the program, grant, fiscal, contract, or calendar year, include but are not limited to the following:

      1. (a) failure to submit timely and accurate required financial or performance reports;
      2. (b) failure to take corrective action to resolve findings identified during monitoring, investigative or program reviews, including failing to comply with a performance improvement plan;
      3. (c) failure to resolve all independent audit findings or questioned costs within required time frames;
      4. (d) failure to submit the annual audit required by WIOA federal regulations;
      5. (e) breach of administrative and service contract requirements;
      6. (f) failure to retain required service delivery and financial records; and
      7. (g) failure to meet one or more local negotiated performance levels in a single program year based on annual performance outcomes.

   2. (2) Level two sanction status: A level two sanction status is a higher sanction status than level one and is assigned for severe inability or failure to perform as determined by DWS. A level two sanction may be associated with the assessment of more severe penalties than those assessed to a local board or sub-recipient in level one sanction status. Sanctionable acts that occur during or after the program, grant, fiscal, contract, or calendar year include, but are not limited to the following:

      1. (a) failure to resolve or implement corrective action on a level one sanction within 180 days of notice.
      2. (b) committing the same violation a second time within an 18 month period.
      3. (c) failure to meet negotiated performance levels for the same performance measure(s) for two consecutive program years.

   3. (3) Level three sanction status: This is the highest sanction status assigned for extreme inability or failure to perform as determined by DWS. A level three sanction may be associated with the assessment of the most severe penalties being assessed against the local board or sub-recipient. Sanctionable acts that occur during the program, grant, fiscal, contract, or calendar year include, but are not limited to the following:

      1. (a) failure to resolve or implement corrective action on a level one sanction within 360 days of notice.
      2. (b) failure to resolve or implement corrective action on a level two sanction within 180 days of notice.
      3. (c) committing the same violation three or more times within a 36 month period.

2. B. Sanction Determination. If the local board remains in noncompliance after the prescribed timeline for completion of the corrective action, or performance improvement plan has passed, DWS on behalf of the governor, must determine whether it is appropriate to place a local board or sub-recipient in sanction status. DWS must officially notify the non-compliant local board or sub-recipient by sending the appropriate local administrative entity a sanction determination letterA via certified mail and return receipt requested at least 10 working ways in advance of the effective date of the sanction. The sanction determination letter must include the following:

   1. (1) the sanctionable act upon which the sanction was based;
   2. (2) the sanction status level in which the local board of sub-recipient is placed and the conditions upon which the local board or sub-recipient may be removed from sanction status;
   3. (3) the penalty and the effective date of the penalty;
   4. (4) the corrective action required, including the timeline for completing the corrective action; and
   5. (5) the technical assistance requested from DWS or other entity to assist in completing the corrective action.

[11.2.20.8 NMAC - N, 7/1/2018]