45 CFR 261.65 - Under what circumstances will we impose a work verification penalty?
(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.
(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.