24 CFR § 1000.534 - What constitutes substantial noncompliance?
HUD will review the circumstances of each noncompliance with NAHASDA and the regulations on a case-by-case basis to determine if the noncompliance is substantial. This review is a two step process. First, there must be a noncompliance with NAHASDA or these regulations. Second, the noncompliance must be substantial. A noncompliance is substantial if:
(a) The noncompliance has a material effect on the recipient meeting its planned activities as described in its Indian Housing Plan;
(b) The noncompliance represents a material pattern or practice of activities constituting willful noncompliance with a particular provision of NAHASDA or the regulations, even if a single instance of noncompliance would not be substantial;
(c) The noncompliance involves the obligation or expenditure of a material amount of the NAHASDA funds budgeted by the recipient for a material activity; or
(d) The noncompliance places the housing program at substantial risk of fraud, waste or abuse.