Section 3 Compliance

HUD’s Section 3 Compliance rules are a derivative of the long standing federal interest in the evaluation of demonstration programs executed by state and local governments. Since the early 1970’s federal agencies have sought to gauge the degree to which federal programs have been implemented in the spirit and the law of the regulations of the agency. These efforts have gone in two directions: accounting audits and program evaluations.

Solutient and its senior staffers have been engaged in program evaluations, including Section 3 Compliance, since 1984. Several of the individual engagements by Solutient staff preceded the formation of the firm. In addition to the hundreds of compliance evaluations performed for state and local governments, Solutient has been engaged by cabinet agencies including HUD, DOT, DOJ, and dozens of smaller federal agencies. The firm and its senior staff have issued more than 190 reports and publications addressing process outcomes, programmatic outcomes, and instructional documents focused on the theory and practice of validating compliance.

HUD Section 3 rules is an effort by the agency to create opportunities for low income persons and businesses within the larger goals of assisting in creating new housing, assisting homeowners devastated in natural disasters, and improving the urban fabric of towns and cities. These opportunities are intended to not only provide employment for eligible persons but to help them gain skills in trades, business operation and professional capabilities.

Solutient is uniquely positioned to evaluate compliance with Section 3 prescriptive requirements. The firm is one of the few in the country that has performed large Section 3 implementations and evaluations. Many of these engagements have occurred in states geographically scattered, with idiosyncratic histories and practices: California, Louisiana, New York, and cities such as Philadelphia and Baltimore. Some of these projects are presented in the accompanying section: Selected Engagements.

The key to Section 3 implementation, whether it be the project itself or the compliance analysis, is a business or project model and an evaluation design that is founded on the language provided by HUD. The history of program and project evaluations provides a clear and ample lesson to agencies using federal funds.

“Construct the compliance evaluation concurrently with the design of the program.”

Solutient adds value to agencies receiving HUD funding because when the compliance analysis has ended, what remains is a template to use in the execution of future HUD grants. Solutient clients believe they have paid for a compliance evaluation and surprised when one element of the deliverables is a business model for their future HUD grant programs. Solutient has always taken the position that understanding how grants will be evaluated is the key to a successful implementation.