---
kind: "section"
citation: "45 C.F.R. § 261.65"
title: "45"
number: "261.65"
heading: "Under what circumstances will we impose a work verification penalty?"
url: "https://uscodex.org/cfr/45/261.65"
---

# §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)](/cfr/45/262.1.md?p=a-15) of this chapter if:
  - (1) The requirements under § [261.64(a)](/cfr/45/261.64.md?p=a) and [(b)](/cfr/45/261.64.md?p=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)](/cfr/45/261.64.md?p=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)](#c) of this section.
- (e) If we take action to impose a penalty under § [261.64(b)](/cfr/45/261.64.md?p=b) or [(c)](/cfr/45/261.64.md?p=c), we will reduce the SFAG payable for the immediately succeeding fiscal year.

## Notes

### Source

Source: 73 FR 6826, Feb. 5, 2008, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 601, 602, 607, and 609; Pub. L. 109-171.

### Source

Source: 64 FR 17884, Apr. 12, 1999, unless otherwise noted.