[Title 45 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 1996 Edition]
[From the U.S. Government Printing Office]


          45



          Public Welfare



[[Page i]]

          PART 1200 TO END

          Revised as of October 1, 1996
          CONTAINING
          A CODIFICATION OF DOCUMENTS
          OF GENERAL APPLICABILITY
          AND FUTURE EFFECT

          AS OF OCTOBER 1, 1996
          With Ancillaries
          Published by
          the Office of the Federal Register
          National Archives and Records
          Administration

          as a Special Edition of
          the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 1996



               For sale by U.S. Government Printing Office
 Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328



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                            Table of Contents


                                                                    Page
  Explanation.................................................       v
  Title 45:
      Subtitle B--Regulations Relating to Public Welfare--
        Continued:
          Chapter XII--ACTION                                        5
          Chapter XIII--Office of Human Development Services, 
          Department of Health and Human Services                  199
          Chapter XVI--Legal Services Corporation                  425
          Chapter XVII--National Commission on Libraries and 
          Information Science                                      513
          Chapter XVIII--Harry S. Truman Scholarship 
          Foundation                                               531
          Chapter XXI--Commission of Fine Arts                     549
          Chapter XXII--Christopher Columbus Quincentenary 
          Jubilee Commission                                       569
          Chapter XXIII--Arctic Research Commission                581
          Chapter XXIV--James Madison Memorial Fellowship 
          Foundation                                               589
          Chapter XXV--Corporation for National and Community 
          Service                                                  607
  Finding Aids:
    Table of CFR Titles and Chapters..........................     789
    Alphabetical List of Agencies Appearing in the CFR........     805
    Redesignation Table.......................................     815
    List of CFR Sections Affected.............................     817

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                                  ----------------------------------------------------------                    
                                   Cite this Code:  CFR                                                         
                                                                                                                
                                   To cite the regulations in this volume use title, part                       
                                    and section number. Thus, 45 CFR 1201.735-101 refers to                     
                                    title 45, part 1201, section 735-101.                                       
                                                                                                                
                                  ----------------------------------------------------------                    
                                                                                                                


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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 1996), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I), and Acts Requiring Publication 
in the Federal Register (Table II). A list of CFR titles, chapters, and 
parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408.
SALES
    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call 202-512-1800, 
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Customer Service call 202-512-1803.

                              Richard L. Claypoole,
                                    Director,
                          Office of the Federal Register.

October 1, 1996.



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                               THIS TITLE

    Title 45--Public Welfare is composed of four volumes. The parts in 
these volumes are arranged in the following order: Parts 1-199, 200-499, 
500-1199, and 1200 to end. Volume one (parts 1-199) contains all current 
regulations issued under subtitle A--Department of Health and Human 
Services, General Administration. Volume two (parts 200-499) contains 
all current regulations issued under subtitle B--Regulations Relating to 
Public Welfare, chapter II--Office of Family Assistance (Assistance 
Programs), Administration for Children and Families, Department of 
Health and Human Services, chapter III--Office of Child Support 
Enforcement (Child Support Enforcement Program), Administration for 
Children and Families, Department of Health and Human Services, and 
chapter IV--Office of Refugee Resettlement, Administration for Children 
and Families, Department of Health and Human Services. Volume three 
(parts 500-1199) contains all current regulations issued under chapter 
V--Foreign Claims Settlement Commission of the United States, Department 
of Justice, chapter VI--National Science Foundation, chapter VII--
Commission on Civil Rights, chapter VIII--Office of Personnel 
Management, chapter X--Office of Community Services, Administration for 
Children and Families, Department of Health and Human Services, and 
chapter XI--National Foundation on the Arts and the Humanities. Volume 
four (part 1200 to end) contains all current regulations issued under 
chapter XII--ACTION, chapter XIII--Office of Human Development Services, 
Department of Health and Human Services, chapter XVI--Legal Services 
Corporation, chapter XVII--National Commission on Libraries and 
Information Science, chapter XVIII--Harry S Truman Scholarship 
Foundation, chapter XXI--Commission of Fine Arts, chapter XXII--
Christopher Columbus Quincentenary Jubilee Commission, chapter XXIII--
Arctic Research Commission, chapter XXIV--James Madison Memorial 
Fellowship Foundation, and chapter XXV--Corporation for National and 
Community Service. The contents of these volumes represent all of the 
current regulations codified under this title of the CFR as of October 
1, 1996.

    A subject index to 45 CFR parts 680-684 appears in the Finding Aids 
section of the volume containing parts 500-1199. Those amendments to 
part 801--Voting Rights Program, Appendixes A, B, and D, which apply to 
Texas also appear in Spanish following Appendix D.

    Redesignation tables appear in the Finding Aids section of volumes 
one and four.

    For this volume Gwendolyn J. Henderson was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Richard L. Claypoole, assisted by Alomha S. Morris.

[[Page viii]]




[[Page 1]]



                        TITLE 45--PUBLIC WELFARE




                  (This book contains part 1200 to end)

  --------------------------------------------------------------------

      SUBTITLE B--Regulations Relating To Public Welfare--Continued

                                                                    Part
chapter xii--ACTION.........................................        1201
chapter xiii--Office of Human Development Services, 
  Department of Health and Human Services...................        1300
chapter xvi--Legal Services Corporation.....................        1600
chapter xvii--National Commission on Libraries and 
  Information Science.......................................        1700
chapter xviii--Harry S. Truman Scholarship Foundation.......        1800
chapter xxi--Commission of Fine Arts........................        2101
chapter xxii--Christopher Columbus Quincentenary Jubilee 
  Commission................................................        2201
chapter xxiii--Arctic Research Commission...................        2301
chapter xxiv--James Madison Memorial Fellowship Foundation..        2400
chapter xxv--Corporation for National and Community Service.        2500

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     Subtitle B--Regulations Relating to Public Welfare (Continued)

[[Page 5]]



                           CHAPTER XII--ACTION




  --------------------------------------------------------------------

Part                                                                Page
120l            Standards of conduct........................           7
1203            Nondiscrimination in Federally assisted 
                    programs--effectuation of title VI of 
                    the Civil Rights Act of 1964............          20
1204            Official seal...............................          30
1206            Grants and contracts--suspension and 
                    termination and denial of application 
                    for refunding...........................          30
1207            Senior companion program....................          41
1208            Foster grandparent program..................          50
1209            Retired senior volunteer program............          61
1210            VISTA trainee deselection and volunteer 
                    early termination procedures............          69
1211            Volunteer grievance procedures..............          76
1212      Volunteer agencies procedures for National grant volunteers 
              [Reserved]
1213            ACTION cooperative volunteer program........          82
1214            Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by ACTION..........          89
1215            Procedures for disclosure of records under 
                    the Freedom of Information Act..........          94
1216            Nondisplacement of employed workers and 
                    nonimpairment of contracts for service..         103
1217            VISTA volunteer leader......................         104
1218            VISTA volunteers--hearing opportunity.......         105
1219            Competitive service eligibility.............         107
1220            Payment of volunteer legal expenses.........         107
1222            Participation of project beneficiaries......         109
1224            Implementation of the Privacy Act of 1974...         111
1225            Volunteer discrimination complaint procedure         119
1226            Prohibitions on electoral and lobbying 
                    activities..............................         126
1229            Governmentwide debarment and suspension 
                    (nonprocurement) and governmentwide 
                    requirements for drug-free workplace 
                    (grants)................................         131
1230            New restrictions on lobbying................         149

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1232            Non-discrimination on basis of handicap in 
                    programs receiving federal financial 
                    assistance from ACTION..................         160
1233            Intergovernmental review of ACTION programs.         166
1234            Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    state and local governments.............         169
1235            Locally generated contributions in Older 
                    American Volunteer Programs.............         196
                            Sec. 1201.735-101

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PART 1201--STANDARDS OF CONDUCT--Table of Contents




                           Subpart A--General

Sec.
1201.735-101  Introduction.
1201.735-102  Definitions.

      Subpart B--General Conduct and Responsibilities of Employees

1201.735-201  Proscribed actions--Executive Order 11222.
1201.735-202  General conduct prejudicial to the Government.
1201.735-203  Criminal statutory prohibitions--Conflict of interest.

       Subpart C--Outside Employment, Activities, and Associations

1201.735-301  In general.
1201.735-302  Association with a potential grantee or contractor prior 
          to ACTION employment.
1201.735-303  Association with ACTION grantee, contractor, or potential 
          grantee or contractor while an ACTION employee.
1201.735-304  Employment after leaving ACTION.
1201.735-305  Employment with ACTION grantee or contractor.
1201.735-306  Association with non-ACTION grantee or contractor while an 
          ACTION employee.
1201.735-307  Gifts, entertainment, and favors.
1201.735-308  Economic and financial activities of employees abroad.
1201.735-309  Information.
1201.735-310  Speeches; participation in conferences.
1201.735-311  Partisan political activities.
1201.735-312  Use of Government property.
1201.735-313  Indebtedness.
1201.735-314  Gambling, betting, and lotteries.
1201.735-315  Discrimination.
1201.735-316  Related statutes and regulations.

    Subpart D--Procedures for Submission by Employees and Review of 
            Statements of Employment and Financial Interests

1201.735-401  Submission of statements.
1201.735-402  Review of statements.

    Authority: E.O. 11222 of May 8, 1965, 30 FR 6469, 3 CFR 1964-1965, 
Supp., p. 306, 5 CFR 735.104.

    Source: 43 FR 46022, Oct. 5, l978, unless otherwise noted.



                           Subpart A--General



Sec. 1201.735-101  Introduction.

    (a) Executive Order No. 11222 directs the Civil Service Commission 
to require each agency head to review and reissue his or her agency's 
regulations regarding the ethical conduct and other responsibilities of 
all its employees. One of the main purposes of the regulations in this 
part is to encourage individuals faced with questions involving 
subjective judgment to seek counsel and guidance. The general counsel is 
designated to be the counselor for ACTION with respect to these matters. 
Associate and assistant general counsels are designated to be deputy 
counselors. They will provide authoritative advice and guidance in this 
area to any ACTION employee who seeks it.
    (b) The ACTION Committee on Conflict of Interests will review and 
monitor the agency's policies and procedures on conflict of interests. 
The committee shall consist of the general counsel, the Assistant 
Director of Administration and Finance, the Assistant Director of the 
Office of Compliance, the Director of Contracts and Grants Management 
Division, a Deputy Associate Director of Domestic Operations, a Deputy 
Associate Director for International Operations, a Deputy Assistant 
Director for the Office of Policy and Planning, and the Director's 
designee, who shall be a nonvoting member. The committee shall have the 
authority to:
    (1) Adopt the procedures necessary to insure the implementation of 
and compliance with the conflict of interest regulations found at 
Secs. 1201.735-301 through 1201.735-305.
    (2) Issue interpretive opinions or clarifying statements on actual 
or hypothetical situations involving the provisions of Secs. 1201.735-
301 through 1201.735-305.
    (3) Accept and review reports filed under Sec. 1201.735-302(b).
    (4) Grant specific relief from the provisions of Secs. 1201.735-303 
through 1201.735-305 by a majority vote of the committee, if, after due 
consideration, the committee finds that:
    (i) No actual conflict of interest exists, and

[[Page 8]]

    (ii) The purpose of the rule would not be served by its strict 
application, and
    (iii) A substantial inequity would otherwise occur. In each such 
case the committee shall issue a written decision setting forth its 
findings as required above. The committee may make any exception subject 
to such conditions and restrictions as it deems appropriate.
    (c) Any violation of the regulations in this part may be cause for 
disciplinary action. Violation of those provisions of the regulations in 
this part which reflect legal prohibitions may also entail penalties 
provided by law.
    (d) This part applies to all employees of ACTION. ``Employee'' as 
used in this part includes regular employees, Presidential appointees, 
``special Government employees,'' experts, and consultants whether 
employed on a full-time or intermittent basis.



Sec. 1201.735-102  Definitions.

    (a) Special Government employee as used herein means a person 
appointed or employed to perform temporary duties for ACTION with or 
without compensation, on a full-time or intermittent basis, for not to 
exceed 130 days during any period of 365 days.
    (b) Regular Government employee as used herein means any officer or 
employee other than a special Government employee.
    (c) Organization as used herein includes profit and nonprofit 
corporations, associations, partnerships, trusts, sole proprietorships, 
foundations, and State and local government units.
    (d) Grantee as used herein means any organization that receives 
financial assistance from ACTION including the assignment of volunteers.
    (e) Potential Grantee or Contractor means any organization that has 
submitted a proposal, application, or otherwise indicated in writing its 
intent to apply for or seek a specific grant or contract.
    (f) Associated with means:
    (1) That the person is a director of the organization or is a member 
of a board or committee which exercises a recommending or supervisory 
function in connection with an ACTION project;
    (2) That the person or his or her spouse, minor child or other 
member of his or her immediate household, serves as an employee, 
officer, owner, trustee, partner, consultant, or paid adviser (general 
membership in an organization is not included within the definition of 
associated with);
    (3) That the person, his or her spouse, minor child, or other member 
of his or her immediate household, owns, individually or collectively, 1 
percent or more of the voting shares of an organization;
    (4) That the person, his or her spouse, minor child, or other member 
of his or her immediate household, owns, individually or collectively, 
either beneficially or as trustee, a financial interest in an 
organization through stock, stock options, bonds, or other securities, 
or obligations, valued at $50,000 or more; or
    (5) That a person has a continuing financial interest in an 
organization, such as a bona fide pension plan, valued at $5,000 or 
more, through an arrangement resulting from prior employment or business 
or professional association.

The term associated does not include an indirect interest, such as 
ownership of shares in a mutual fund, bank or insurance company, which 
in turn owns an interest in an organization which has, or is seeking or 
under consideration for a grant or contract. Such and indirect interest, 
as well as financial interests of amounts less than those stated in 
paragraphs (f) (3) through (5) of this section, are hereby determined 
pursuant to 18 U.S.C. 208(b)(2) to be too remote to affect the integrity 
of the employee's services.



      Subpart B--General Conduct and Responsibilities of Employees



Sec. 1201.735-201  Proscribed actions--Executive Order 11222.

    As provided by the President in Executive Order No. 11222, whether 
specifically prohibited by law or in the regulations in this part, no 
U.S. regular or special Government employees shall take any action which 
might result in, or create the appearance of:

[[Page 9]]

    (a) Using public office or employment for private gain, whether for 
themselves or for another person, particularly one with whom they have 
family, business, or financial ties.
    (b) Giving preferential treatment to any person.
    (c) Impeding Government efficiency or economy.
    (d) Losing complete independence or impartiality.
    (e) Making a Government decision outside official channels.
    (f) Affecting adversely the confidence of the public in the 
integrity of the Government.
    (g) Using Government office or employment to coerce a person to 
provide financial benefit to themselves or to other persons, 
particularly anyone with whom they have family, business or financial 
ties.



Sec. 1201.735-202  General conduct prejudicial to the Government.

    An employee may not engage in criminal, infamous, dishonest, 
immoral, or notoriously disgraceful conduct prejudicial to the 
Government (5 CFR 735.209).



Sec. 1201.735-203  Criminal statutory prohibitions--Conflict of interest.

    (a) Regular Government employees. Regular employees of the 
Government are subject to the following major criminal prohibitions:
    (1) They may not, except in the discharge of their official duties, 
represent anyone else before a court or Government agency in a matter in 
which the United States is a party or has an interest. This prohibition 
applies to both paid and unpaid representation of another (18 U.S.C. 
205).
    (2) They may not, after Government employment has ended, represent 
anyone other than the United States in connection with a matter in which 
the United States is a party or has an interest and in which they 
participated personally and substantially for the Government (18 U.S.C. 
207).
    (3) They may not for 1 year after their Government employment has 
ended, represent anyone other than the United States in connection with 
a matter in which the United States is a party or has an interest and 
which was within the boundaries of their official responsibility during 
their last year of Government service. This temporary restraint gives 
way to the permanent restraint described in paragraph (a)(3) of this 
section if the matter is one in which the employee participated 
personally and substantially (18 U.S.C. 207).
    (4) They may not receive any salary, or supplementation of their 
Government salary, from a private source as compensation for services to 
the Government (18 U.S.C. 209).
    (b) Special Government employees. Special Government employees are 
subject to the following major criminal prohibitions:
    (1) They may not, except in the discharge of official duties, 
represent anyone else before a court or Government agency in a matter in 
which the United States is a party or has an interest and in which they 
have at any time participated personally and substantially for the 
Government (18 U.S.C. 205).
    (2) They may not, except in the discharge of official duties, 
represent anyone else in a matter pending before the agency they serve 
unless they have served there no more than 60 days during the past 365. 
They are bound by this restraint despite the fact that the matter is not 
one in which they have ever participated personally and substantially 
(18 U.S.C. 205). (See Sec. 1201.735-303(b) for additional nonstatutory 
Agency restrictions on a special employee representing any other person 
or organization in a matter pending before the Agency.) The restrictions 
described in paragraphs (b)(1) and (2) of this section apply to both 
paid and unpaid representation of another.
    (3) They may not participate in their governmental capacity in any 
matter in which they, their spouse, minor child, outside business 
associate, or persons with whom they are negotiating for employment have 
a financial interest (18 U.S.C. 208).
    (4) They may not, after their Government employment has ended, 
represent anyone other than the United States in connection with a 
matter in which the United States is a party or has an interest and in 
which they participated personally and substantially for the Government 
(18 U.S.C. 207).

[[Page 10]]

    (5) They may not, for 1 year after their Government employment has 
ended, represent anyone other than the United States in connection with 
a matter in which the United States is a party or has an interest and 
which was within the boundaries of their official responsibility during 
their last year of Government service. This temporary restraint gives 
way to the permanent restriction described in paragraph (b)(4) of this 
section if the matter is one in which they participated personally and 
substantially (18 U.S.C. 207).



        Subpart C--Outside Employment Activities and Associations



Sec. 1201.735-301  In general.

    (a) There is no general prohibition against ACTION employees holding 
outside employment, including teaching, lecturing, or writing. But no 
employee may engage in outside employment or associatons if they might 
result in a conflict or an appearance of conflict between the private 
interests of the employee and his or her official responsibility.
    (b) An employee shall not receive any salary or anything of monetary 
value from a private source as compensation for his or her services to 
the Government (18 U.S.C. 209).
    (c) An employee shall not have a direct or indirect financial 
interest that conflicts substantially or appears to conflict 
substantially with his or her Government duties and responsibilities. 
Nor may an employee engage in, directly or indirectly, a financial 
transaction as a result of or primarily relying on information obtained 
through his or her Government employment.



Sec. 1201.735-302  Association with a potential grantee or contractor prior to ACTION employment.

    (a) No employee, or any person subject to his or her supervision, 
may participate in the decision to award a grant or a contract to an 
organization with which that employee has been associated in the past 2 
years. When an employee becomes aware that such an organization is under 
consideration for or has applied for a grant or a contract with the 
Agency, the employee shall notify his or her immediate supervisor in 
writing. The supervisor shall take whatever steps are necessary to 
exclude the employee from all aspects of the decision processes 
regarding the grant or contract.
    (b) When the Director, Deputy Director, or an Associate or Assistant 
Director, becomes aware that an organization with which he or she has 
been associated in the past 2 years is under consideration for or has 
applied for a grant or contract with the Agency, he or she shall refrain 
from participating in the decision process and immediately notify the 
Assistant Director of the Office of Compliance, who shall select an 
independent third party, not in any way connected or associated with the 
concerned official. The third party shall participate in and review the 
decision process to the extent he or she deems necessary to insure 
objectivity and the absence of favoritism. Said third party shall 
preferably be a person experienced in the area of government contracts 
and grants. The third party shall file a report in writing with the 
Committee on Conflict of Interest stating his or her conclusions, 
observations, or objections, if any, to the decision process concerning 
the grant or contract, which document shall be attached to and become a 
part of the official file.



Sec. 1201.735-303  Association with ACTION grantee or contractor or potential grantee or contractor while an ACTION employee.

    (a) No regular employee may be associated with any ACTION grantee, 
contractor, or potential grantee or contractor. Any organization that is 
associated with a regular employee shall be suspended from consideration 
as a grantee or contractor.
    (b) No regular or special employee, except in his or her official 
capacity as an ACTION employee, shall either participate in any way on 
behalf of any orgainzation in the preparation or development of a grant 
or contract proposal involving ACTION or represent any other 
organization in a matter pending before ACTION. In the event that a 
regular or special employee participates while an employee of ACTION in 
any aspect of the development of a

[[Page 11]]

grant or contract proposal on behalf of an organization, or represents 
another organization in a matter pending before ACTION, that 
organization shall be suspended from consideration for the grant or 
contract.
    (c) No regular or special employee who, prior to his or her 
employment at ACTION, participated in the development of a grant or 
contract proposal on behalf of another organization, shall participate 
as an ACTION employee, in any aspect of the decision process regarding 
that grant or contract, or, if the grant or contract is awarded, in any 
oversight or management capacity in relation to that grant or contract. 
In addition, any such grant or contract shall only be awarded through a 
competitive process. In the event a regular or special employee who 
participated in the development of the grant or contract proposal prior 
to being employed at ACTION does participate as an ACTION employee in 
the decision process for such grant or contract, the organization shall 
be suspended from consideration.
    (d) If a special employee participates as an employee of ACTION in 
any aspect of the development of a proposal or project, whether or not 
such participation is minimal or substantial, any organization with 
which he or she is associated shall be suspended from consideration for 
the grant or contract.
    (e) If an organization with which a special employee is associated 
submits a proposal for a grant or contract, and the special employee did 
not participate either as an employee of ACTION or an associate of the 
organization in any aspect of the project or proposal or the application 
therefor, the matter shall be referred to the Committee on Conflict of 
Interests for determination. The Committee shall consider the following 
factors and any others it deems relevant:
    (1) The nature, length, and origin of the special employee's 
relationship with the Agency, the nature and scope of the employees's 
duties and responsibilities, the division or office to which the 
employee is assigned, and whether the employee's duties are in any way 
related to the proposed grant or contract.
    (2) The nature, length, and type of the employee's relationship with 
the organization, whether the employee's position involves policy making 
or supervision of other employees and the relationship of the position 
with the organization to the work to be performed under the proposed 
grant or contract.
    (3) Whether awarding the grant or contract to the organization would 
result in the appearance of or the potential for a conflict of interest.
    (4) The process to be used in awarding the grant or contract.
    (f) If a special employee wishes to become or remain associated with 
an ACTION grantee or contractor while he or she is an employee of 
ACTION, subject to the restrictions paragraphs (b) through (e) of 
Sec. 1201.735-303, the matter shall be referred to the Committee on 
Conflict of Interests for determination. The Committee shall consider 
the following factors and any others it deems relevant:
    (1) The nature, length, and origin of the special employee's 
relationship with the Agency, the nature and scope of the employee's 
duties and responsibilities, the division or office to which the 
employee is assigned, and whether the employee's duties are in any way 
related to the grant or contract.
    (2) The nature, length, and type of the employee's relationship with 
the organization, whether the employee's position involves policymaking 
or supervision of other employees and the relationship of the position 
with the organization to the work to be performed under the proposed 
grant or contract.
    (3) Whether such a relationship would result in the appearance of or 
the potential for a conflict of interest.
    (g) Any suspension involving proposed contracts under this rule 
shall be in accordance with procedures set forth in 41 CFR 1-1.600 et 
seq.



Sec. 1201.735-304  Employment after leaving ACTION.

    (a) Employees may negotiate for prospective employment with non-
Government organizations only when they have no duties as ACTION 
employees which could affect that organization's

[[Page 12]]

interest, or after they have disqualified themselves, on the written 
permission of their supervisor, from such duties.
    (b) For 1 year after leaving ACTION, no regular or special employee 
may serve pursuant to a personal or nonpersonal services contract or 
accept employment with an ACTION grantee or contractor for a position in 
which he or she would be working in any activity supported in whole or 
in part by ACTION funds received under an ACTION program which was 
within the boundaries of the employee's official responsibility or in 
which he or she participated personally while employed at ACTION.
    (c) If, within 1 year after leaving ACTION, an individual accepts 
employment in violation of this rule, ACTION will disallow the costs 
allocated under the grant or contract for that position. In addition, a 
letter describing the violation will be placed in the employee's 
personnel file.



Sec. 1201.735-305  Employment with ACTION grantee or contractor.

    An employee of an ACTION grantee or contractor who is compensated 
directly or indirectly from ACTION funds will be ineligible to be 
compensated under any personal or nonpersonal services contract with 
this Agency which will result in the employee being paid twice for the 
same time or product.



Sec. 1201.735-306  Association with non-ACTION grantee or contractor while an ACTION employee.

    (a) An employee shall not engage in outside employment which tends 
to impair the employee's mental or physical capacity to perform his or 
her official responsibility in an acceptable manner.
    (b) Teaching, lecturing, and writing. (1) Use of information. An 
employee shall not, either for or without compensation, engage in 
teaching, lecturing, or writing that is dependent on information 
obtained as a result of his or her Government employment, except when 
that information has been or on request will be made available to the 
general public or when the agency head gives advance written 
authorization for the use of nonpublic information on the basis that the 
proposed use is in the public interest.
    (2) Compensation. No employee may accept compensation or anything of 
value for any lecture, discussion, writing, or appearance the subject 
matter of which is devoted substantially to the ACTION programs or which 
draws substantially on official data or ideas which have not become part 
of the body of public information.
    (3) Clearance of publications. No employee may submit for 
publication any writing, other than recruiting information, the contents 
of which are devoted to the ACTION programs or to any other matter which 
might be of official concern to the U.S. Government without in advance 
clearing the writing with the Office of Communications or regional 
communications specialists, as appropriate. Before clearing any such 
writing, the Office of Communications will consult with the appropriate 
ACTION office.
    (c) State and local government employment. Regular employees may not 
hold office or engage in outside employment under a State or local 
government except with prior approval of the General Counsel, ACTION.
    (d) All employees not required by Sec. 1201.735-401 to report their 
outside employment and financial interests shall inform their 
supervisors of all outside employment they hold or accept.



Sec. 1201.735-307  Gifts, entertainment, and favors.

    (a) From donors dealing with ACTION. (1) No regular or special 
employees may solicit or accept, directly or indirectly, for themselves, 
for any member of their family, or for any person with whom they have 
business or financial ties, any gift, gratuity, favor, entertainment, or 
loan or any other thing of value, from any individual or organization 
which:
    (i) Has, or is seeking to obtain, contractual or other business or 
financial relations with ACTION;
    (ii) Has interests that may be substantially affected by the 
performance or nonperformance of the employee's official responsibility;
    (iii) Is in any way attempting to affect the employee's exercise of 
his or her official responsibility; or

[[Page 13]]

    (iv) Conducts operations or activities that are regulated by ACTION.
    (2) Paragraph (a)(1) of this section does not prohibit, even if the 
donor has dealings with ACTION:
    (i) Acceptance of things of value from parents, children, or spouse 
if those relationships rather than the business of the donor is the 
motivating factor for the gift;
    (ii) Acceptance of food and refreshments of nominal value on 
infrequent occasions in the ordinary course of breakfast, luncheon, or 
dinner meeting or other meetings;
    (iii) Solicitation and acceptance of loans from banks or other 
financial institutions to finance proper and usual activities of 
employees, such as home mortgage loans, solicited and accepted on 
customary terms;
    (iv) Acceptance on behalf of minor dependents of fellowships, 
scholarships, or educational loans awarded on the basis of merit and/or 
need;
    (v) Acceptance of awards for meritorious public contribution or 
achievement given by a charitable, religious, professional, social, 
fraternal, nonprofit educational and recreational, public service, or 
civic organization.
    (3) Regular or special employees need not return unsolicited 
advertising or promotional material, such as pens, pencils, note pads, 
calendars, and other things of nominal intrinsic value.
    (b) From other ACTION employees. No employees in superior official 
positions may accept any gifts presented as contributions from employees 
receiving less salary than themselves. No employees shall solicit 
contributions from other employees for a gift to an employee in a 
superior official position, nor shall any employees make a donation as a 
gift to an employee in a superior official position. However, this 
paragraph does not prohibit a voluntary gift of nominal value or 
donation in a nominal amount made on a special occasion such as 
marriage, illness, or retirement.
    (c) From foreign governments. No regular employee may solicit or, 
without the consent of the Congress, receive any present, decoration, 
emolument, pecuniary favor, office, title, or any other gift from any 
foreign government. See 5 U.S.C. 7342; Executive Order 11320; and 22 CFR 
part 3 (as added, 32 FR 6469).
    (d) Gifts to ACTION. Gifts to the United States or to ACTION may be 
accepted in accordance with ACTION regulations.
    (e) Reimbursement for expenses. Neither this section nor 
Sec. 1201.735-310(a) precludes an employee from receipt of bona fide 
reimbursement, unless prohibited by law, for expenses of travel and such 
other necessary subsistence as is compatible with this part and for 
which no Government payment or reimbursement is made. However, this 
paragraph does not allow an employee to be reimbursed, or payment to be 
made on his behalf, for excessive personal living expenses, gifts, 
entertainment, or other personal benefits. Nor does it allow an employee 
to receive non-Government reimbursement of travel expenses for travel on 
official business under ACTION orders; but rather, such reimbursement, 
if any, should be made to ACTION and amounts received should be credited 
to its appropriation. If an employee receives accommodations, goods, or 
services in kind from a non-Government source, this item or items will 
be treated as a donation to ACTION and an appropriate reduction will be 
made in per diem or other travel expenses payable.



Sec. 1201.735-308  Economic and financial activities of employees abroad.

    (a) Prohibitions in any foreign country. A U.S. citizen employee 
abroad is specifically prohibited from engaging in the activities listed 
below in any foreign country:
    (1) Speculation in currency exchange;
    (2) Transactions at exchange rates differing from local legally 
available rates, unless such transactions are duly authorized in advance 
by the agency;
    (3) Sales to unauthorized persons (whether at cost or for a profit) 
of currency acquired at preferential rates through diplomatic or other 
restricted arrangements;
    (4) Transactions which entail the use, without official sanction, of 
the diplomatic pouch;

[[Page 14]]

    (5) Transfers of funds on behalf of blocked nationals, or otherwise 
in violation of U.S. foreign funds and assets control;
    (6) Independent and unsanctioned private transactions which involve 
an employee as an individual in violation of applicable control 
regulations of foreign governments;
    (7) Acting as an intermediary in the transfer of private funds from 
persons in one country to persons in another country, including the 
United States;
    (8) Permitting use of one's official title in any private business 
transactions or in advertisements for business purposes.
    (b) Prohibitions in country of assignment. (1) A U.S. citizen 
employee shall not transact or be interested in any business or engage 
for profit in any profession or undertake other gainful employment in 
any country or countries to which he or she is assigned or detailed in 
his or her own name or through the agency of any other person.
    (2) A U.S. citizen employee shall not invest in real estate or 
mortgages on properties located in his or her country of assignment. The 
purchase of a house and land for personal occupancy is not considered a 
violation of this paragraph.
    (3) A U.S. citizen employee shall not invest money in bonds, shares, 
or stocks of commercial concerns headquartered in his or her country of 
assignment or conducting a substantial portion of business in such 
country. Such investments, if made prior to knowledge of assignment or 
detail to such country or countries, may be retained during such 
assignment or detail.
    (4) A U.S. citizen employee shall not sell or dispose of personal 
property, including automobiles, at prices producing profits which 
result primarily from import privileges derived from his or her official 
status as an employee of the U.S. Government.



Sec. 1201.735-309  Information.

    (a) Release of information to press.
    (1) Regular or special employees shall not withhold information from 
the press or public unless that information is classified or 
administratively controlled (limited official use). All responses to 
requests for information from the press should be referred to the Office 
of Communications or regional communications officers as appropriate who 
will be responsible for all releases. Regular and special employees 
should be certain that information given to the press and public is 
accurate and complete.
    (2) Any questions as to the classification or administrative control 
of information should be referred to the general counsel.
    (3) No regular or special employee may record by electronic or other 
device any telephone or other conversation. No regular or special 
employee may listen in on any telephone conversation without the consent 
of all parties thereto.
    (b) Disclosure and misuse of inside information. No employee may, 
directly or indirectly, disclose or use for his or her own benefit, or 
for the private benefit of another, inside information as described in 
paragraph (c) of this section. The use of such information by an 
employee is restricted to the proper performance of his or her official 
duties. The disclosure of such information is restricted to official 
ACTION channels unless disclosure is authorized by the Director, the 
Deputy Director, an Associate Director, or a Regional Director of 
ACTION. In particular, no employee may:
    (1) Engage in, directly or indirectly, a financial transaction as a 
result of or primarily relying on such information; or
    (2) Publish any book or article, or deliver any speech or lecture, 
based on or using such information.
    (c) Definition: The term ``inside information'' as used in this 
section means, generally, information obtained under Government 
authority which is not known by the general public and which could 
affect the rights or interests of the Government or of a non-Government 
organization or person. Such information includes information about 
ACTION operations or administration, and personnel which could influence 
someone's dealing with ACTION.

[[Page 15]]

    (d) This section is not intended to discourage the disclosure 
through proper channels of information which has been or should be made 
public, or which is by law to be made available to the public. Also, 
employees are encouraged to teach, lecture, and write, provided they do 
so in accordance with the provisions of this section and Secs. 1201.735-
301, and 1201.735-306.



Sec. 1201.735-310  Speeches; participation in conferences.

    (a) Fees and expenses. (1) Although an employee may not accept a fee 
for his or her own use or benefit for making a speech, delivering a 
lecture, or participating in a discussion if the subject is ACTION or 
ACTION programs or if such services are part of the employee's official 
ACTION duties, the employee may suggest that the amount otherwise 
payable as a fee or honorarium be contributed to ACTION.
    (2) When a meeting, discussion, etc., to which paragraph (a)(1) of 
this section refers takes place at a substantial distance from the 
employee's home he or she may accept reimbursement for the actual cost 
of transportation and necessary subsistence, or expenses, but in no case 
shall he or she receive any amount for personal benefit. Such 
reimbursements shall be reported by the employee to his or her immediate 
supervisors.
    (3) An employee may accept fees for speeches, etc., dealing with 
subjects other than ACTION or ACTION programs when no official funds 
have been used in connection with his or her appearance and such 
activities do not interfere with the efficient performance of his or her 
duties.
    (b) Racial segregation. No employee may participate for ACTION in 
conferences or speak for ACTION before audiences where any racial group 
has been segregated or excluded from the meeting, from any of the 
facilities or conferences, or from membership in the organization 
sponsoring the conference or meeting.
    (1) When a request for ACTION speakers or participation is received 
under circumstances where segregation may be practiced, the Director of 
the Office of Communications shall make specific inquiry as to the 
practices of the organization before the request is filled.
    (2) If the inviting organization shows a willingness to modify its 
practices for the occasion, ACTION will cooperate in such efforts.
    (3) Exceptions to this paragraph may be made only by the Director, 
ACTION and in his or her discretion.



Sec. 1201.735-311  Partisan political activities.

    (a) Prohibited activities: No employee may:
    (1) Use his or her official authority or influence for the purpose 
of interfering with an election or affecting the result thereof; or
    (2) Take any active part in partisan political management or in 
political campaigns, except as may be provided by or pursuant to statute 
5 U.S.C. 7324.
    (b) Intermittent employees: Persons employed on an irregular or 
occasional basis are subject to paragraph (a) of this section only while 
in active duty status and for the 24 hours of any day of actual 
employment.
    (c) Excepted activities: Paragraph (a) of this section does not 
apply to:
    (1) Nonpartisan campaigns and elections in which none of the 
candidates is to be nominated by or elected as representing a national 
or State political party, such as most school board elections; or
    (2) Political activities connected with questions of public interest 
which are not specifically identified with national or State political 
parties, such as constitutional amendments, referenda, and the like (5 
U.S.C. 7326).
    (d) Excepted communities: Paragraph (a) of this section does not 
apply to employees who are residents of certain communities. These 
communities, which have been designated by the Civil Service Commission 
(5 CFR 733.301), consist of a number of communities in suburban 
Washington, DC, and a few communities elsewhere in which a majority of 
the voters are Government employees. Employees who are residents of the 
designated communities may be candidates for, or campaign for others who 
are candidates for, local office if they or the candidates for whom they 
are campaigning are running as independent candidates.

[[Page 16]]

An employee may hold local office only in accordance with 
Secs. 1201.735-301 through 1201.735-306 relating to outside employment 
and associations.
    (e) Special Government employees are subject to the statute for the 
24 hours of each day on which they do any work for the Government.
    (f) While regular employees may explain and support governmental 
programs that have been enacted into law, in exercising their official 
responsibilities they should not publicly support or oppose pending 
legislation, except in testimony required by the Congress.
    (g) The Foreign Service Act generally prohibits any Foreign Service 
employee from:
    (1) Corresponding in regard to the public affairs of any foreign 
government, except with the proper officers of the United States; and
    (2) Recommending any person for employment in any position of trust 
or profit under the government of the country to which he or she is 
detailed or assigned.



Sec. 1201.735-312  Use of Government property.

    A regular or special employee shall not directly or indirectly use, 
or allow the use of, Government property of any kind, including property 
leased to the Government for other than officially approved activities. 
All employees have a positive duty to protect and conserve Government 
property, including equipment, supplies, and other property entrusted or 
issued to them. By law, penalty envelopes may be used only for official 
Government mail.



Sec. 1201.735-313  Indebtedness.

    ACTION considers the indebtedness of its employees to be a matter of 
their own concern and will not function as a collection agency. 
Nevertheless, a regular or special employee shall pay each just 
financial obligation in a proper and timely manner, especially one 
imposed by law such as Federal, State, or local taxes. For the purpose 
of this section, a ``just financial obligation'' means one acknowledged 
by the employee or reduced to judgment by a court, or one imposed by law 
such as Federal, State or local taxes, and ``in a proper and timely 
manner'' means in a manner which the agency determines does not, under 
the circumstances, reflect adversely on the Government as his or her 
employer. In the event of a dispute between an employee and an alleged 
creditor, this section does not require ACTION to determine the validity 
or amount of the disputed debt.



Sec. 1201.735-314  Gambling, betting, and lotteries.

    A regular or special employee shall not participate, while on 
Government owned or leased property or while on duty for the Government 
in any gambling activity including the operation of a gambling device, 
in conducting a lottery or pool, in a game for money or property, or in 
selling or purchasing a numbers slip or ticket.



Sec. 1201.735-315  Discrimination.

    No regular or special employee may make inquiry concerning the race, 
political affiliation, or religious beliefs of any employee or applicant 
in connection with any personnel action and may not practice, threaten, 
or promise any action against or in favor of an employee or applicant 
for employment because or race, color, religion, sex, or national origin 
and in the competitive service on the basis of politics, marital status, 
or physical handicap.



Sec. 1201.735-316  Related statutes and regulations.

    Each employee should be aware of the following related statutes and 
regulations:
    (a) House Concurrent Resolution 175, 8th Congress, second session, 
72A Stat. B12, the ``Code of Ethics for Government Service.''
    (b) The prohibition against lobbying with appropriated funds (18 
U.S.C. 1913).
    (c) The prohibitions against disloyalty and striking (5 U.S.C. 7311, 
18 U.S.C. 1918).
    (d) The prohibition against accepting honorariums of more than 
$2,000 per speech, appearance or article or aggregating more than 
$25,000 in any calendar year (2 U.S.C. 441i).
    (e) The prohibitions against: (1) The disclosure of classified 
information (18 U.S.C. 798, 50 U.S.C. 783); and (2) the

[[Page 17]]

disclosure of confidential information (18 U.S.C. 1905).
    (f) The provisions relating to the habitual use of toxicants to 
excess (5 U.S.C. 7352).
    (g) The prohibition against the misuses of a Government vehicle (31 
U.S.C. 638(a) (c)).
    (h) The prohibition against the misuses of the franking privilege 
(18 U.S.C. 1719).
    (i) The prohibition against the use of deceit in an examination or 
personnel action in connection with Government employment (18 U.S.C. 
1917).
    (j) The prohibition against fraud or false statements in a 
Government matter (18 U.S.C. 1001).
    (k) The prohibition against mutilating or destroying a public record 
(18 U.S.C. 2071).
    (l) The prohibition against counterfeiting and forging 
transportation requests (18 U.S.C. 508).
    (m) The prohibitions against: (1) Embezzlement of Government money 
or property (18 U.S.C. 641); (2) failing to account for public money (18 
U.S.C. 643); and (3) embezzlement of the money or property of another 
person in the possession of an employee by reason of his or her 
employment (18 U.S.C. 654).
    (n) The prohibition against unauthorized use of documents relating 
to claims from or by the Government (18 U.S.C. 285).
    (o) The prohibitions against political activities in subchapter III 
of chapter 73 of title 5, United States Code, and 18 U.S.C. 602, 603, 
607, and 608.
    (p) The prohibition against gifts to employee's superiors and the 
acceptance thereof (Rev. Stat. 1784, 5 U.S.C. 113).
    (q) Chapter 11 of title 18, United States Code, relating to bribery, 
graft, and conflicts of interest, which is specifically applicable to 
special Government employees as well as to regular employees.
    (r) The prohibitions against: (1) Accepting gifts from foreign 
governments; (2) engaging in business abroad; (3) corresponding on the 
affairs of foreign governments; and (4) discrimination on political, 
racial, or religious grounds contained in sections 1002 through 1005 of 
the Foreign Service Act of 1946, as amended.
    (s) The prohibition against an employee acting as the agent of a 
foreign principal registered under the Foreign Agents Registration Act 
(18 U.S.C. 219).
    (t) The prohibition against appointing or advocating the appointment 
of a relative to a position within the Agency (5 U.S.C. 3110).



    Subpart D--Procedures for Submission by Employees and Review of 
            Statements of Employment and Financial Interests



Sec. 1201.735-401  Submission of statements.

    (a) (1) Regulations of the Civil Service Commission (5 CFR part 735) 
require ACTION to adopt regulations providing for the submission of 
statements of employment and financial interests from certain regular 
ACTION employees and all special ACTION employees.
    (2) All special employees and those regular employees designated in 
paragraph (b) of this section shall complete statements of employment 
and financial interests and submit them to the Office of General Counsel 
not later than 5 days after their entrance on duty. The Director of 
Personnel Management shall be responsible for supplying all new 
employees with the necessary forms either prior to or on the first day 
of their employment.
    (3) The statement of employment and financial interests shall 
include information on organizations with which the employee was 
associated during the 2 years prior to his or her employment by ACTION, 
as well as information about current associations. Special employees 
shall also indicate to the best of their knowledge which organizations 
listed currently on their form have contracts with or grants from 
ACTION, or are applying for ACTION contracts or grants. If any 
information required to be included on the statement, including holdings 
placed in trust, is not known to an employee but is known to another 
person, he or she is required to request that other person to submit 
information on his or her behalf.

[[Page 18]]

    (4) Changes in or additions to the information contained in a 
regular or special employee's statement must be reported in a 
supplementary statement as of June 30 each year. The Director of 
Personnel Management shall be responsible for insuring that such 
supplementary statements are submitted by June 30. If there are no 
changes or additions, a negative report is required. Notwithstanding the 
filing of the annual report required by this paragraph, each employee 
shall at all times avoid acquiring a financial interest that could 
result, or taking an action that would result, in a conflict of interest 
and a violation of the conflict-of-interest provisions of section 208 of 
title 18, United States Code, or the conflict-of-interest provisions of 
this part.
    (5) In the case of temporary summer employees hired at FSR-7 or 
equivalent and below to perform duties other than those of an expert or 
consultant, the reporting requirement will be waived. It may also be 
waived by the Director of Personnel Management with respect to other 
appointments, except as experts or consultants, upon a finding that the 
duties of the position held by the special Government employee are of a 
nature and at such a level of responsibility that the reporting of 
employment and financial interests is not necessary to protect the 
integrity of the Government.
    (6) Regular or special employees are not required to submit in a 
statement of employment and financial interests or supplementary 
statements any information about their connection with or interest in a 
professional society or a charitable, religious, social, fraternal, 
recreational, public service, civic, or political organization not 
conducted as a business enterprise. For this purpose, any organizations, 
doing work involving or potentially involving grants of money from or 
contracts with the Government are considered business enterprises and 
are required to be included in a regular or special employee's statement 
of employment and financial interests.
    (7) The statements of employment and financial interests and 
supplementary statements required are in addition, and not in 
substitution for or in designation of, any similar requirement imposed 
by law, order, or regulation. The submission of a statement of 
supplementary statement by an employee does not permit him or her or any 
other person to participate in a matter in which his or her or other 
persons' participation is prohibited by law, order, or regulations.
    (8) A regular employee who believes that his or her position has 
been improperly included under ACTION regulations as one requiring the 
submission of a statement of employment and financial interests shall be 
given an opportunity for review through ACTION's grievance procedures to 
determine whether the position has been improperly included.
    (b) Statements shall be submitted by the following employees:
    (1) Office of the Director:
    (i) Director.
    (ii) Deputy Director.
    (iii) Executive Officer.
    (iv) Special Assistants to Director and Deputy.
    (v) Executive Assistants to Director and Deputy.
    (2) Office of Domestic and Anti-Poverty Operations:
    (i) Associate Director.
    (ii) Deputy Associate Directors.
    (iii) Special Assistants to Associate Director and to Deputy 
Associate Directors.
    (iv) Supervisory program specialists.
    (v) Program specialists and analysts.
    (vi) Regional Directors.
    (vii) Deputy Regional Directors.
    (viii) Regional training chiefs.
    (ix) Regional staff members with contracting and disbursing 
authority.
    (x) Regional program operations officers.
    (xi) State program directors.
    (xii) State program officers.
    (xiii) Deputy Directors, VISTA, and OAVP.
    (3) Office of Administration and Finance:
    (i) Assistant Director.
    (ii) Deputy Assistant Director.
    (iii) Director, Management and Organization.
    (iv) Director, Administrative Services.
    (v) Chief, Paperwork and Management.
    (vi) Chief, Transportation.

[[Page 19]]

    (vii) Chief, Communications and Property.
    (viii) Director, Accounting Division.
    (ix) Chief, Fiscal Services.
    (x) Chief, Accounting Operations.
    (xi) Cashier.
    (xii) Director, Personnel Management.
    (xiii) Deputy Director, Personnel Management.
    (xiv) Director, Health Services.
    (xv) Director, Contracts and Grants Management.
    (xvi) Chief, Procurement Division.
    (xvii) Contract specialists, negotiators, and administrators.
    (xviii) Purchasing agents.
    (xix) Chief, Grants Division.
    (xx) Senior Grants Administrator.
    (xxi) Grants Administrator.
    (xxii) Director, Computer Services.
    (xxiii) Director, Staff Training and Development.
    (4) Office of Recruitment and Communications:
    (i) Assistant Director.
    (ii) Deputy Assistant Director.
    (iii) Special Assistant to Assistant Director.
    (iv) Director, Planning and Evaluation.
    (v) Director, Recruitment Resources.
    (vi) Director, Office of Communications.
    (vii) Director, Public Affairs.
    (viii) Director, Creative Services.
    (5) Office of Voluntary Citizen Participation:
    (i) Assistant Director.
    (ii) Director program operations.
    (iii) Director, International and Special Assistance.
    (iv) Program specialists.
    (v) Director, School Partnership program.
    (6) Office of the General Counsel:
    (i) General Counsel.
    (ii) Deputy General Counsel.
    (iii) Associate General Counsels.
    (iv) Assistant General Counsels.
    (7) Office of Policy and Planning:
    (i) Assistant Director.
    (ii) Deputy Assistant Director.
    (iii) Special Projects Officer.
    (iv) Director, Budget Division.
    (v) Director, Policy Development.
    (vi) Director, Evaluation.
    (vii) Director, Planning.
    (viii) Special Assistants to Assistant Director.
    (ix) Program analysts.
    (x) Policy development analysts.
    (xi) Supervisory program specialists.
    (xii) Evaluation specialists.
    (8) Office of Legislative and Governmental Affairs:
    (i) Assistant Director.
    (9) Office of Compliance:
    (i) Assistant Director.
    (ii) Inspector General.
    (iii) Auditors, inspectors, program operations analysts.
    (iv) Director, Division of Equal Opportunity.
    (10) Office of International Operations:
    (i) Associate Director.
    (ii) Deputy Associate Directors.
    (iii) Director, Programing and Training.
    (iv) Director, Multilateral and Special programs.
    (v) Director, Special Services.
    (vi) Director, Office of Management.
    (vii) Director, Office of Peace Corps Volunteer Placement.
    (viii) Regional Directors.
    (ix) Country Directors and those overseas staff members to whom 
contracting or procurement authority has been duly delegated by the 
Country Director.



Sec. 1201.735-402  Review of statements.

    (a) The Office of General Counsel shall review all statements and 
forward the names of all listed organizations to the Director of 
Contracts and Grants Management. In addition, if the information 
provided in the statement indicates on its face a real, apparent, or 
potential conflict of interest under Secs. 1201.735-301 through 
1201.735-305 of these standards, the General Counsel will review the 
situation with the particular employee. If the General Counsel and the 
employee are unable to resolve the conflict to the General Counsel's 
satisfaction, or if the employee wishes to request an exception to any 
of the above enumerated rules, the case will be referred to the 
Committee on Conflict of Interests. The Committee is authorized to 
recommend appropriate remedial action to the Director, who is authorized 
to take such action as may include, but is not limited to, changing 
assigned duties, requiring the employee or special employee to divest 
himself of

[[Page 20]]

a conflicting interest, taking disciplinary action, or disqualifying or 
accepting the self-disqualification of the employe or special employee 
for a particular assignment.
    (b) The Office of Contracts and Grants Management shall maintain a 
list of all the organizations with which employees are or have been 
associated, as well as a list of all current grantees of and contractors 
with the Agency. When names of organizations with which new employees 
are or have been associated are submitted to the Grants office, they 
shall be checked against the list of current grantees or contractors. 
Similarly, before any new grants or contracts are awarded, the names of 
the potential grantees and contractors will be checked against the 
master list of organizations with which employees are or have been 
associated. Any real, apparent, or potential conflicts which come to 
light as a result of these cross checks will be referred to the Office 
of General Counsel for review. The General Counsel will proceed as in 
paragraph (a) of this section, referring the matter to the Committee on 
Conflict of Interests if necessary.
    (c) Whenever an organization submits a proposal or application or 
otherwise indicates in writing its intent to apply for or seek a 
specific grant or contract, ACTION shall immediately forward a copy of 
the Agency standards of conduct to that organization and shall note 
which particular rules apply to potential grantees and contractors.
    (d) Whenever a regular or special employee terminates his or her 
employment with ACTION, the Office of Personnel Management shall provide 
that employee with a copy of the rule which restricts a person's 
employment for a period of 1 year after leaving ACTION. Personnel shall 
also notify the Office of General Counsel when an employee terminates. 
One year after the date of termination, General Counsel will instruct 
the Office of Grants and Management to remove from the master list any 
organizations with which the terminated employee was associated. Three 
years after the date of termination, General Counsel will destroy the 
statement of employment and financial interests.



PART 1203--NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS--EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964--Table of Contents




Sec.
1203.1  Purpose.
1203.2  Application of this part.
1203.3  Definitions.
1203.4  Discrimination prohibited.
1203.5  Assurances required.
1203.6  Compliance information.
1203.7  Conduct of investigations.
1203.8  Procedure for effecting compliance.
1203.9  Hearings.
1203.10  Decisions and notices.
1203.11  Judicial review.
1203.12  Effect on other regulations, forms, and instructions.

Appendix A to Part 1203--Activities to Which This Part Applies
Appendix B to Part 1203--Programs to Which This Part Applies When a 
          Primary Objective of the Federal Financial Assistance is to 
          Provide Employment

    Authority: Sec. 602, 78 Stat. 252; 42 U.S.C. 2000d-1.

    Source: 39 FR 27322, July 26, 1974, unless otherwise noted.



Sec. 1203.1   Purpose.

    The purpose of this part is to effectuate the provisions of title VI 
of the Civil Rights Act of 1964 (hereafter referred to as title VI), to 
the end that a person in the United States shall not, on the ground of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under a program or activity receiving Federal financial assistance from 
ACTION.



Sec. 1203.2   Application of this part.

    (a) This part applies to each program for which Federal financial 
assistance is authorized under a law administered by ACTION, including 
the federally assisted programs listed in appendix A to this part. It 
also applies to money paid, property transferred, or other Federal 
financial assistance extended under a program after the effective date 
of this part pursuant to an application approved before that effective 
date. This part does not apply to:

[[Page 21]]

    (1) Federal financial assistance by way of insurance or guaranty 
contracts;
    (2) Money paid, property transferred, or other assistance extended 
under a program before the effective date of this part, except when the 
assistance was subject to the title VI regulations of an agency whose 
responsibilities are now exercised by ACTION;
    (3) Assistance to any individual who is the ultimate beneficiary 
under a program; or
    (4) Employment practices, under a program, of an employer, 
employment agency, or labor organization, except to the extent described 
in Sec. 1203.4(c).

The fact that a program is not listed in Appendix A to this part does 
not mean, if title VI is otherwise applicable, that the program is not 
covered. Other programs under statutes now in force or hereinafter 
enacted may be added to Appendix A to this part.
    (b) In a program receiving Federal financial assistance in the form, 
or for the acquisition, of real property or an interest in real 
property, to the extent that rights to space on, over, or under that 
property are included as part of the program receiving that assistance, 
the nondiscrimination requirement of this part extends to a facility 
located wholly or in part in that space.



Sec. 1203.3   Definitions.

    Unless the context requires otherwise, in this part:
    (a) Applicant means a person who submits an application, request, or 
plan required to be approved by ACTION, or by a primary recipient, as a 
condition to eligibility for Federal financial assistance, and 
``application'' means that application, request, or plan.
    (b) Facility includes all or any part of structures, equipment, or 
other real or personal property or interests therein, and the provision 
of facilities includes the construction, expansion, renovation, 
remodeling, alteration, or acquisition of facilities.
    (c) Federal financial assistance includes:
    (1) Grants and loans of Federal funds;
    (2) The grant or donation of Federal property and interests in 
property;
    (3) The detail of Federal personnel;
    (4) The sale and lease of, and the permission to use (on other than 
a casual or transient basis), Federal property or any interest in the 
property without consideration or at a nominal consideration, or at a 
consideration which is reduced for the purpose of assisting the 
recipient, or in recognition of the public interest to be served by the 
sale or lease to the recipient; and
    (5) A Federal agreement, arrangement, or other contract which has as 
one of its purposes the provision of assistance.
    (d) Primary recipient means a recipient that is authorized or 
required to extend Federal financial assistance to another recipient for 
the purpose of carrying out a program.
    (e) Program includes a program, project, or activity for the 
provision of services, financial aid, or other benefits to individuals 
(including education or training or other services whether provided 
through employees of the recipient of Federal financial assistance or 
provided by others through contracts or other arrangements with the 
recipient, and including work opportunities), or for the provision of 
facilities for furnishing services, financial aid, or other benefits to 
individuals. The services, financial aid, or other benefits provided 
under a program receiving Federal financial assistance are deemed to 
include a service, financial aid, or other benefits provided:
    (1) With the aid of Federal financial assistance,
    (2) With the aid of any non-Federal funds, property, or other 
resources required to be expended or made available for the program to 
meet the matching requirements or other conditions which must be met in 
order to receive the Federal financial assistance, or
    (3) In or through a facility provided with the aid of Federal 
financial assistance or such non-Federal resources.
    (f) Recipient may mean any State, the District of Columbia, the 
Commonwealth of Puerto Rico, a territory or possession of the United 
States, or any political subdivision thereof, or instrumentality 
thereof, any public or private agency, institution, or organization, or 
other entity, or any individual in any State, the District of Columbia,

[[Page 22]]

the Commonwealth of Puerto Rico, or territory or possession of the 
United States, to whom Federal financial assistance is extended, 
directly or through another recipient, for any program, including any 
successor, assignee, or transferee thereof, but the term does not 
include any ultimate beneficiary under a program.
    (g) Director means the Director of ACTION or any person to whom he 
has delegated his authority in the matter concerned.



Sec. 1203.4   Discrimination prohibited.

    (a) General. A person in the United States shall not, on the ground 
of race, color, or national origin be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under, a program to which this part applies.
    (b) Specific discriminatory actions prohibited. (1) A recipient 
under a program to which this part applies may not, directly or through 
contractual or other arrangements, on the ground of race, color, or 
national origin--
    (i) Deny a person a service, financial aid, or other benefit 
provided under the program;
    (ii) Provide a service, financial aid, or other benefit to a person 
which is different, or is provided in a different manner, from that 
provided to others under the program;
    (iii) Subject a person to segregation or separate treatment in any 
matter related to his receipt of a service, financial aid, or other 
benefit under the program;
    (iv) Restrict a person in any way in the enjoyment of an advantage 
or privilege enjoyed by others receiving a service, financial aid, or 
other benefit under the program;
    (v) Treat a person differently from others in determining whether he 
satisfies an admission, enrollment, quota, eligibility, membership, or 
other requirement or condition which persons must meet in order to be 
provided a service, financial aid, or other benefit provided under the 
program;
    (vi) Deny a person an opportunity to participate in the program 
through the provision of services or otherwise or afford him an 
opportunity to do so which is different from that afforded others under 
the program; or
    (vii) Deny a person the opportunity to participate as a member of a 
planning or advisory body which is an integral part of the program.
    (2) A recipient, in determining the types of services, financial 
aid, or other benefits, or facilities which will be provided under a 
program or the class of persons to whom, or the situations in which, the 
services, financial aid, other benefits, or facilities will be provided 
under a program, or the class of persons to be afforded an opportunity 
to participate in a program, may not, directly or through contractual or 
other arrangements, utilize criteria or methods of administration which 
have the effect of subjecting persons to discrimination because of their 
race, color, or national origin, or have the effect of defeating or 
substantially impairing accomplishment of the objectives of the program 
with respect to individuals of a particular race, color, or national 
origin.
    (3) The enumeration of specific forms of prohibited discrimination 
in this paragraph does not limit the generality of the prohibition in 
paragraph (a) of this section.
    (4)(i) In administering a program regarding which the recipient had 
previously discriminated against persons on the ground of race, color, 
or national origin, the recipient shall take affirmative action to 
overcome the effects of prior discrimination.
    (ii) Even in the absence of prior discrimination a recipient in 
administering a program may take affirmative action to overcome the 
effect of conditions which resulted in limiting participation by persons 
of a particular race, color, or national origin.
    (c) Employment practices. (1) When a primary objective of a program 
of Federal financial assistance to which this part applies is to provide 
employment, a recipient or other party subject to this part shall not, 
directly or through contractual or other arrangements, subject a person 
to discrimination on the ground of race, color, or national origin in 
its employment practices

[[Page 23]]

under the program (including recruitment or recruitment advertising, 
hiring, firing, upgrading, promotion, demotion, transfer, layoff, 
termination, rates of pay, or other forms of compensation or benefits, 
selection for training or apprenticeship, use of facilities, and 
treatment of employees). A recipient shall take affirmative action to 
insure that applicants are employed, and employees are treated during 
employment, without regard to race, color, or national origin. The 
requirements applicable to construction employment under a program are 
those specified in or pursuant to part III of Executive Order 11246 or 
any Executive order which supersedes it.
    (2) Federal financial assistance to programs under laws funded or 
administered by ACTION which have as a primary objective the providing 
of employment include those set forth in Appendix B to this part.
    (3) Where a primary objective of the Federal financial assistance is 
not to provide employment, but discrimination on the ground of race, 
color, or national origin in the employment practices of the recipient 
tends, on the ground of race, color, or national origin, to exclude 
persons from participation in, to deny them the benefits of, or to 
subject them to discrimination under any program to which this part 
applies, the provisions of paragraph (c)(1) of this section apply to the 
employment practices of the recipient to the extent necessary to assure 
equality of opportunity to and nondiscriminatory treatment of 
beneficiaries.
    (d) In determining the site or location of facilities, a recipient 
or applicant may not make selections with the purpose or effect of 
excluding individuals from, denying them the benefits of, or subjecting 
them to discrimination under, a program to which this part applies, on 
the ground of race, color, or national origin; or with the purpose or 
effect of defeating or substantially impairing the accomplishment of the 
objectives of title VI of this part.



Sec. 1203.5   Assurances required.

    (a) General. (1) An application for Federal financial assistance to 
carry out a program to which this part applies, except a program to 
which paragraph (d) of this section applies, and every application for 
Federal financial assistance to provide a facility shall, as a condition 
to its approval and the extension of Federal financial assistance 
pursuant to the application, contain or be accompanied by, assurances 
that the program will be conducted or the facility operated in 
compliance with the requirements imposed by or pursuant to this part. 
Every program of Federal financial assistance shall require the 
submission of these assurances. In the case where the Federal financial 
assistance is to provide or is in the form of personal property, or real 
property or interest therein or structures thereon, the assurances shall 
obligate the recipient, or, in the case of a subsequent transfer, the 
transferee, for the period during which the property is used for a 
purpose for which the Federal financial assistance is extended or for 
another purpose involving the provision of similar services or benefits, 
or for as long as the recipient retains ownership or possession of the 
property, whichever is longer. In other cases, the assurances obligate 
the recipient for the period during which the Federal financial 
assistance is extended to the program. In the case where the assistance 
is sought for the construction of a facility or part of a facility, the 
assurances shall extend to the entire facility and to the facilities 
operated in connection therewith. ACTION shall specify the form of the 
foregoing assurances for each program, and the extent to which like 
assurances will be required of subgrantees, contractors and 
subcontractors, transferees, successors in interest, and other 
participants in the program. The assurances shall include provisions 
which give the United States the right to seek judicial enforcement.
    (2) When Federal financial assistance is provided in the form of a 
transfer of real property, structures, or improvements thereon, or 
interest therein, from the Federal Government, the instrument effecting 
or recording the transfer shall contain a covenant running with the land 
assuring nondiscrimination for the period during which the real property 
is used for a purpose involving the provision of

[[Page 24]]

similar services or benefits. When no transfer of property of interest 
therein from the Federal Government is involved, but property is 
acquired or improved under a program of Federal financial assistance, 
the recipient shall agree to include a covenant in any subsequent 
transfer of the property. When the property is obtained from the Federal 
Government, the covenant may also include a condition coupled with a 
right to be reserved by ACTION to revert title to the property in the 
event of a breach of the covenant where, in the discretion of ACTION, 
such a condition and right of reverter is appropriate to the program 
under which the real property is obtained and to the nature of the grant 
and the grantee. In the event a transferee of real property proposes to 
mortgage or otherwise encumber the real property as security for 
financing construction of new, or improvement of existing, facilities on 
property for the purposes for which the property was transferred, ACTION 
may agree, on request of the transferee and if necessary to accomplish 
the financing, and on conditions as he deems appropriate, to subordinate 
a right of reversion to the lien of a mortgage or other encumbrance.
    (b) Assurances from Government agencies. In the case of an 
application from a department, agency, or office of a State or local 
government for Federal financial assistance for a specified purpose, the 
assurance required by this section shall extend to any other department, 
agency, or office of the same governmental unit if the policies of the 
other department, agency, or office will substantially affect the 
project for which Federal financial assistance is requested. That 
requirement may be waived by the responsible ACTION official if the 
applicant establishes, to the satisfaction of the responsible ACTION 
official, that the practices in other agencies or parts or programs of 
the governmental unit will in no way affect:
    (1) Its practices in the program for which Federal financial 
assistance is sought, or
    (2) The beneficiaries of or participants in or persons affected by 
the program, or
    (3) Full compliance with this part as respects the program.
    (c) Assurance from academic and other institutions. (1) In the case 
of an application for Federal financial assistance by an academic 
institution, the assurance required by this section extends to admission 
practices and to all other practices relating to the treatment of 
students.
    (2) The assurance required by an academic institution, detention or 
correctional facility, or any other institution or facility, relating to 
the institution's practices with respect to admission or other treatment 
of individuals as students, patients, wards, inmates, persons subject to 
control, or clients of the institution or facility or to the opportunity 
to participate in the provision of services, disposition, treatment, or 
benefits to these individuals, is applicable to the entire institution 
or facility unless the applicant establishes, to the satisfaction of the 
responsible ACTION official, that the practices in designated parts or 
programs of the institution or facility will in no way affect its 
practices in the program of the institution or facility for which 
Federal financial assistance is sought, or the beneficiaries of or 
participants in the program. If the assistance sought is for the 
construction of a facility or part of a facility, the assurance shall 
extend to the entire facility and to facilities operated in connection 
therewith.
    (d) Continuing State programs. Every application by a State or a 
State agency to carry out a program involving continuing Federal 
financial assistance to which this part applies (including the programs 
listed in Appendix A to this part) shall as a condition to its approval 
and the extension of Federal financial assistance pursuant to the 
application:
    (1) Contain or be accompanied by a statement that the program is 
(or, in the case of a new program, will be) conducted in compliance with 
the requirements imposed by or pursuant to this part, and
    (2) Provide or be accompanied by provision for methods of 
administration for the program as are found by ACTION to give reasonable 
guarantee that the applicant and all recipients of

[[Page 25]]

Federal financial assistance under the program will comply with the 
requirements imposed by or pursuant to this part.

(Approved by the Office of Management and Budget under control number 
3001-0016, paragraph (a)(1))

[39 FR 27322, July 26, 1974, as amended at 47 FR 3553, Jan. 26, 1982]



Sec. 1203.6   Compliance information.

    (a) Cooperation and assistance. ACTION, to the fullest extent 
practicable, shall seek the cooperation of recipients in obtaining 
compliance with this part and shall provide assistance and guidance to 
recipients to help them comply voluntarily with this part.
    (b) Compliance reports. Each recipient shall keep records and submit 
to ACTION timely, complete, and accurate compliance reports at the 
times, and in the form and containing the information ACTION may 
determine necessary to enable it to ascertain whether the recipient has 
complied or is complying with this part. In the case of a program under 
which a primary recipient extends Federal financial assistance to other 
recipients, the other recipients shall also submit compliance reports to 
the primary recipient as may be necessary to enable the primary 
recipient to carry out its obligations under this part. In general, 
recipients should have available for ACTION racial and ethnic data 
showing the extent to which members of minority groups are beneficiaries 
of federally assisted programs.
    (c) Access to sources of information. Each recipient shall permit 
access by ACTION during normal business hours to its books, records, 
accounts, and other sources of information, and its facilities as may be 
pertinent to ascertain compliance with this part. When information 
required of a recipient is in the exclusive possession of an other 
agency, institution, or person and this agency, institution, or person 
fails or refuses to furnish this information, the recipient shall so 
certify in its report and shall set forth what efforts it has made to 
obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons the information regarding the provisions of this part 
and its applicability to the program under which the recipient received 
Federal financial assistance, and make this information available to 
them in the manner, as ACTION finds necessary, to apprise the persons of 
the protections against discrimination assured them by title VI and this 
part.



Sec. 1203.7   Conduct of investigations.

    (a) Periodic compliance reviews. ACTION may from time to time review 
the practices of recipients to determine whether they are complying with 
this part.
    (b) Complaints. Any person who believes himself or any specific 
class of persons to be subjected to discrimination prohibited by this 
part may by himself or by a representative file with ACTION a written 
complaint. A complaint shall be filed not later than 180 days after the 
date of the alleged discrimination, unless the time for filing is 
extended by ACTION.
    (c) Investigations. ACTION will make a prompt investigation whenever 
a compliance review, report, complaint, or other information indicates a 
possible failure to comply with this part. The investigation will 
include, when appropriate, a review of the pertinent practices and 
policies of the recipient, the circumstances under which the possible 
noncompliance with this part occurred, and other factors relevant to a 
determination as to whether the recipient has failed to comply with this 
part.
    (d) Resolution of matters. (1) If an investigation pursuant to 
paragraph (c) of this section indicates a failure to comply with this 
part, ACTION will so inform the recipient and the matter will be 
resolved by voluntary means whenever possible. If it has been determined 
that the matter cannot be resolved by voluntary means, action will be 
taken as provided for in Sec. 1203.8.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) of this section, ACTION will so inform, in writing, the 
recipient and the complainant, if any.
    (e) Intimidatory or retaliatory acts prohibited. A recipient or 
other person shall not intimidate, threaten, coerce, or discriminate 
against an individual for the purpose of interfering with a right or 
privilege secured by section 601

[[Page 26]]

of title VI of this part, or because he has made a complaint, testified, 
assisted, or participated in any manner in an investigation, proceeding, 
or hearing under this part. The identity of complainants shall be kept 
confidential, except to the extent necessary to carry out the purposes 
of this part, including the conduct of an investigation, hearing, or 
judicial proceeding arising thereunder.



Sec. 1203.8   Procedure for effecting compliance.

    (a) General. (1) If there appears to be a failure or threatened 
failure to comply with this part, and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by the suspension or termination of or refusal 
to grant or to continue Federal financial assistance or by other means 
authorized by law.
    (2) Other means may include, but are not limited to: (i) A reference 
to the Department of Justice with a recommendation that appropriate 
proceedings be brought to enforce the rights of the United States under 
a law of the United States (including other titles of the Civil Rights 
Act of 1964) or an assurance or other contractual undertaking, and
    (ii) An applicable proceeding under State or local law.
    (b) Noncompliance with Sec. 1203.5. If an applicant fails or refuses 
to furnish an assurance required under Sec. 1203.5 or otherwise fails or 
refuses to comply with a requirement imposed by or pursuant to that 
section, Federal financial assistance may be refused in accordance with 
the procedures of paragraph (c) of this section. ACTION shall not be 
required to provide assistance in that case during the pendency of the 
administrative proceedings under this paragraph. Subject, however, to 
Sec. 1203.12, ACTION shall continue assistance during the pendency of 
the proceedings where the assistance is due and payable pursuant to an 
application approved prior to the effective date of this part.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. An order suspending, terminating, or refusing to 
grant or to continue Federal financial assistance shall not become 
effective until--
    (1) ACTION has advised the applicant or recipient of his failure to 
comply and has determined that compliance cannot be secured by informal 
voluntary means;
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part;
    (3) The action has been approved by the Director pursuant to 
Sec. 1203.10(e); and
    (4) The expiration of 30 days after the Director has filed with the 
committee of the House and the committee of the Senate having 
legislative jurisdiction over the program involved, a full written 
report of the circumstances and the grounds for the action.

An action to suspend or terminate or refuse to grant or to continue 
Federal financial assistance shall be limited to the particular 
political entity, or part thereof, or other applicant or recipient as to 
whom a finding has been made and shall be limited in its effect to the 
particular program, or part thereof, in which the noncompliance has been 
so found.
    (d) Other means authorized by law.  An action to effect compliance 
with title VI by other means authorized by law shall not be taken by 
ACTION until--
    (1) ACTION has determined that compliance cannot be secured by 
voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) The expiration of at least 10 days from the mailing of a notice 
to the recipient or person. During this period of at least 10 days, 
additional efforts shall be made to persuade the recipient or other 
person to comply with the regulation and to take corrective action as 
may be appropriate.



Sec. 1203.9   Hearings.

    (a) Opportunity for hearing. When an opportunity for a hearing is 
required by Sec. 1203.8(c), reasonable notice shall be given by 
registered or certified mail,

[[Page 27]]

return receipt requested, to the affected applicant or recipient. This 
notice shall advise the applicant or recipient of the action proposed to 
be taken, the specific provision under which the proposed action against 
it is to be taken, and the matters of fact or law asserted as the basis 
for this action, and either:
    (1) Fix a date not less than 20 days after the date of notice within 
which the applicant or recipient may request of ACTION that the matter 
be scheduled for hearing; or
    (2) Advise the applicant or recipient that the matter in question 
has been set down for hearing at a stated time and place. The time and 
place so fixed shall be reasonable and subject to change for cause. The 
complainant, if any, shall be advised of the time and place of the 
hearing. An applicant or recipient may waive a hearing and submit 
written information and argument for the record. The failure of an 
applicant or recipient to request a hearing under this paragraph or to 
appear at a hearing for which a date has been set is deemed to be a 
waiver of the right to a hearing under section 602 of title VI and 
Sec. 1203.8(c) and consent to the making of a decision on the basis of 
the information available.
    (b) Time and place of hearing. Hearings shall be held at the offices 
of ACTION in Washington, DC, at a time fixed by ACTION unless it 
determines that the convenience of the applicant or recipient or of 
ACTION requires that another place be selected. Hearings shall be held 
before the Director, or at his discretion, before a hearing examiner 
appointed in accordance with section 3105 of title 5, United States 
Code, or detailed under section 3344 of title 5, United States Code.
    (c) Right to counsel. In all proceedings under this section, the 
applicant or recipient and ACTION have the right to be represented by 
counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and 
an administrative review thereof shall be conducted in conformity with 
sections 554 through 557 of title 5, United States Code, and in 
accordance with the rules of procedure as are proper (and not 
inconsistent with this section) relating to the conduct of the hearing, 
giving of notices subsequent to those provided for in paragraph (a) of 
this section, taking of testimony, exhibits, arguments, and briefs, 
requests for findings, and other related matters. Both ACTION and the 
applicant or recipient are entitled to introduce relevant evidence on 
the issues as stated in the notice for hearing or as determined by the 
officer conducting the hearing at the outset of or during the hearing.
    (2) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where determined 
reasonably necessary by the officer conducting the hearing. The hearing 
officer may exclude irrelevant, immaterial, or unduly repetitious 
evidence. Documents and other evidence offered or taken for the record 
shall be open to examination by the parties and opportunity shall be 
given to refute facts and arguments advanced on either side of the 
issues. A transcript shall be made of the oral evidence except to the 
extent the substance thereof is stipulated for the record. Decisions 
shall be based on the hearing record and written findings shall be made.
    (e) Consolidated or joint hearings. In cases in which the same or 
related facts are asserted to constitute noncompliance with this part 
with respect to two or more programs to which this part applies, or 
noncompliance with this part and the regulations of one or more other 
Federal departments or agencies issued under title VI, ACTION may, by 
agreement with the other departments or agencies, when applicable, 
provide for the conduct of consolidated or joint hearings, and for the 
application to these hearings of rules or procedures not inconsistent 
with this part. Final decisions in these cases, insofar as this 
regulation is concerned, shall be made in accordance with Sec. 1203.10.



Sec. 1203.10   Decisions and notices.

    (a) Procedure on decisions by hearing examiner. If the hearing is 
held by a

[[Page 28]]

hearing examiner, the hearing examiner shall either make an initial 
decision, if so authorized, or certify the entire record including his 
recommended findings and proposed decision to the Director for a final 
decision, and a copy of the initial decision or certification shall be 
mailed to the applicant or recipient. When the initial decision is made 
by the hearing examiner, the applicant or recipient may, within 30 days 
after the mailing of a notice of initial decision, file with the 
Director his exceptions to the initial decision, with his reasons 
therefor. In the absence of exceptions, the Director may, on his own 
motion, within 45 days after the initial decision, serve on the 
applicant or recipient a notice that he will review the decision. On the 
filing of the exceptions or of notice of review, the Director shall 
review the initial decision and issue his own decision thereon including 
the reasons therefor. In the absence of either exceptions or a notice of 
review the initial decision, subject to paragraph (e) of this section, 
shall constitute the final decision of the Director.
    (b) Decisions on record or review by the Director. When a record is 
certified to the Director for decision or the Director reviews the 
decision of a hearing examiner pursuant to paragraph (a) of this 
section, or when the Director conducts the hearing, the applicant or 
recipient shall be given reasonable opportunity to file with it briefs 
or other written statements of the recipient's contentions, and a 
written copy of the final decision of the Director will be sent to the 
applicant or recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. When a hearing is 
waived pursuant to Sec. 1203.9, a decision shall be made by ACTION on 
the record and a written copy of the decision shall be sent to the 
applicant or recipient, and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing examiner or the 
Director shall set forth a ruling on each finding, conclusion, or 
exception presented, and shall identify the requirement or requirements 
imposed by or pursuant to this part with which it is found that the 
applicant or recipient has failed to comply.
    (e) Approval by ACTION. A final decision by an official of ACTION 
other than by the Director, which provides for the suspension or 
termination of, or the refusal to grant or continue Federal financial 
assistance, or the imposition of any other sanction available under this 
part or title VI, shall promptly be transmitted to the Director, who may 
approve the decision, vacate it, or remit or mitigate a sanction 
imposed.
    (f) Content of orders. The final decision may provide for suspension 
or termination of, or refusal to grant or continue Federal financial 
assistance, in whole or in part, under the program involved, and may 
contain the terms, conditions, and other provisions as are consistent 
with and will effectuate the purposes of title VI and this part, 
including provisions designed to assure that Federal financial 
assistance will not thereafter be extended under the programs to the 
applicant or recipient determined by the decision to be in default in 
its performance of an assurance given by it under this part, or to have 
otherwise failed to comply with this part, unless and until it corrects 
its noncompliance and satisfies ACTION that it will fully comply with 
this part.
    (g) Post-termination proceedings. (1) An applicant or recipient 
adversely affected by an order issued under paragraph (f) of this 
section shall be restored to full eligibility to receive Federal 
financial assistance if it satisfies the terms and conditions of the 
order for eligibility, or if it brings itself into compliance with this 
part and provides reasonable assurance that it will fully comply with 
this part.
    (2) An applicant or recipient adversely affected by an order entered 
pursuant to paragraph (f) of this section may at any time request ACTION 
to restore fully its eligibility to receive Federal financial 
assistance. A request shall be supported by information showing that the 
applicant or recipient has met the requirements of paragraph (g)(1) of 
this section. If ACTION determines that those requirements have been 
satisfied, it shall restore the eligibility.

[[Page 29]]

    (3) If ACTION denies a request, the applicant or recipient may 
submit a request for a hearing in writing, specifying why it believes 
ACTION is in error. The applicant or recipient shall be given an 
expeditious hearing, with a decision on the record in accordance with 
the rules or procedures issued by ACTION. The applicant or recipient 
shall be restored to eligibility if it proves at the hearing that it 
satisfied the requirements of paragraph (g)(1) of this section. While 
proceedings under this paragraph are pending, the sanctions imposed by 
the order issued under paragraph (f) of this section remain in effect.



Sec. 1203.11   Judicial review.

    Action taken pursuant to section 602 of title VI is subject to 
judicial review as provided in section 603 of title VI.



Sec. 1203.12   Effect on other regulations, forms, and instructions.

    (a) Effect on other regulations. Regulations, orders, or like 
directions issued before the effective date of this part by ACTION which 
impose requirements designed to prohibit discrimination against 
individuals on the ground of race, color, or national origin under a 
program to which this part applies, and which authorizes the suspension 
or termination of or refusal to grant or to continue Federal financial 
assistance to an applicant for or recipient of assistance under a 
program for failure to comply with the requirements, are superseded to 
the extent that discrimination is prohibited by this part, except that 
nothing in this part relieves a person of an obligation assumed or 
imposed under a superseded regulation, order, instruction, or like 
direction, before the effective date of this part. This part does not 
supersede any of the following (including future amendments thereof):
    (1) Executive Order 11246 (3 CFR, 1965 Supp.) and regulations issued 
there under or
    (2) Any other orders, regulations, or instructions, insofar as these 
orders, regulations, or instructions prohibit discrimination on the 
ground of race, color, or national origin in a program or situation to 
which this part is inapplicable, or prohibit discrimination on any other 
ground.
    (b) Forms and instructions. ACTION shall issue and promptly make 
available to all interested persons forms and detailed instructions and 
procedures for effectuating this part as applied to programs to which 
this part applies, and for which it is responsible.
    (c) Supervision and coordination. ACTION may from time to time 
assign to officials of ACTION, or to officials of other departments or 
agencies of the Government with the consent of the departments or 
agencies, responsibilities in connection with the effectuation of the 
purposes of title VI and this part (other than responsibilities for 
final decision as provided in Sec. 1203.10), including the achievement 
of effective coordination and maximum uniformity within ACTION and 
within the executive branch in the application of title VI and this part 
to similar programs and in similar situations. An action taken, 
determination made, or requirement imposed by an official of another 
department or agency acting pursuant to an assignment of responsibility 
under this paragraph shall have the same effect as though the action had 
been taken by ACTION.

      Appendix A to Part 1203--Programs to Which This Part Applies

    1. Grants for the development or operation of retired senior 
volunteer programs pursuant to section 601 of the Older Americans Act of 
1965, as amended (42 U.S.C. 3044).
    2. Grants for the development and operation of foster grandparents 
projects pursuant to section 611 of the Older Americans Act of 1965, as 
amended (42 U.S.C. 3044b).

  Appendix B to Part 1203--Programs to Which This Part Applies When a 
  Primary Objective of the Federal Financial Assistance is to Provide 
                               Employment

    1. Grants for the development or operation of retired senior 
volunteer programs pursuant to section 601 of the Older Americans Act of 
1965, as amended (42 U.S.C. 3044).
    2. Grants for the development and operation of foster grandparents 
projects pursuant to section 611 of the Older Americans Act of 1965, as 
amended (42 U.S.C. 3044b).

[[Page 30]]



PART 1204--OFFICIAL SEAL--Table of Contents




Sec.
1204.1  Authority.
1204.2  Description.
1204.3  Custody and authorization to affix.

    Authority: Sec. 402, Pub. L. 93-113, 87 Stat. 407 (42 U.S.C. 5042).

    Source: 38 FR 34118, Dec. 11, 1973, unless otherwise noted.



Sec. 1204.1  Authority.

    Pursuant to section 402(9) of Pub. L. 93-113, the ACTION official 
seal and design thereof which accompanies and is made part of this 
document, is hereby adopted and approved, and shall be judicially 
noticed.

[52 FR 20714, June 3, 1987]



Sec. 1204.2  Description.

    The official seal of ACTION is described as follows:
    (a) The words ``The Federal Domestic Volunteer Agency USA'' are in 
blue capital letters and form the outer circle of the seal.
    (b) Within the circle of letters, on a field of white, appears the 
logotype word ``ACTION'' in blue, capital letters and in Italic type.
    (c) The logotype word ``ACTION'' is split; ``ACT'' on a higher level 
and ``ION'' drops down to a slightly lower level.
    (d) Two red bars, also split on two levels, underline the logotype 
word ``ACTION.''
    The official seal of ACTION is modified when reproduced in black and 
white and when embossed, as it appears below.
[GRAPHIC] [TIFF OMITTED] TC03MR91.053


[52 FR 20714, June 3, 1987]



Sec. 1204.3   Custody and authorization to affix.

    (a) The seal is the official emblem of ACTION and its use is 
therefore permitted only as provided in this part.
    (b) The seal shall be kept in the custody of the General Counsel, or 
any other person he authorizes, and should be affixed by him, the 
Director or the Deputy Director to all commissions of officials of 
ACTION, and used to authenticate records of ACTION and for other 
official purposes. The General Counsel may redelegate and authorize 
redelegations of, this authority.
    (c) The Director shall designate and prescribe by internal written 
delegations and policies the use of the seal for other publication and 
display purposes and those ACTION officials authorized to affix the seal 
for these purposes.
    (d) Use by any person or organization outside of the Agency may be 
made only with the Agency's prior written approval. Such request must be 
made in writing to the General Counsel.



PART 1206--GRANTS AND CONTRACTS--SUSPENSION AND TERMINATION AND DENIAL OF APPLICATION FOR REFUNDING--Table of Contents




           Subpart A--Suspension and Termination of Assistance

Sec.
1206.1-1  Purpose and scope.

[[Page 31]]

1206.1-2  Application of this part.
1206.1-3  Definitions.
1206.1-4  Suspension.
1206.1-5  Termination.
1206.1-6  Time and place of termination hearings.
1206.1-7  Termination hearing procedures.
1206.1-8  Decisions and notices regarding termination.
1206.1-9  Right to counsel; travel expenses.
1206.1-10  Modification of procedures by consent.
1206.1-11  Other remedies.

             Subpart B--Denial of Application for Refunding

1206.2-1  Applicability of this subpart.
1206.2-2  Purpose.
1206.2-3  Definitions.
1206.2-4  Procedures.
1206.2-5  Right to counsel.

    Authority: 42 U.S.C. 4951 et R 1996, Jan. 16, 1974, unless otherwise 
noted.



           Subpart A--Suspension and Termination of Assistance



Sec. 1206.1-1   Purpose and scope.

    (a) This subpart establishes rules and review procedures for the 
suspension and termination of assistance provided by ACTION pursuant to 
various sections of titles I, II and III of the Domestic Volunteer 
Service Act of 1973, 87 Stat. 394, Pub. L. 93-113, (hereinafter the Act) 
because of a material failure of a recipient to comply with the terms 
and conditions of any grant or contract providing assistance under these 
sections of the Act, including applicable laws, regulations, issued 
program guidelines, instructions, grant conditions or approved work 
programs.
    (b) However, this subpart shall not apply to any administrative 
action of the ACTION Agency based upon any violation, or alleged 
violation, of title VI of the Civil Rights Act of 1964 and sections 417 
(a) and (b) of Pub. L. 93-113 relating to nondiscrimination. In the case 
of any such violation or alleged violation other provisions of this 
chapter shall apply.



Sec. 1206.1-2   Application of this part.

    This subpart applies to programs authorized under titles I, II, and 
III of the Act.



Sec. 1206.1-3   Definitions.

    As used in this subpart--
    (a) The terms ``ACTION'' or ``ACTION Agency'' include each Regional 
Office.
    (b) The term Director means the Director of the ACTION Agency.
    (c) The term responsible ACTION official means the Director and 
Deputy Director of ACTION, appropriate Regional Director and any ACTION 
headquarters or regional office official who is authorized to make the 
grant of assistance in question. In addition to the foregoing officials, 
in the case of the suspension proceedings described in Sec. 1206.1-4, 
the term ``responsible ACTION official'' shall also include a designee 
of an ACTION official who is authorized to make the grant of assistance 
in question.
    (d) The term assistance means assistance under titles I, II and III 
of the Act in the form of grants or contracts involving Federal funds 
for the administration of which ACTION has primary responsibility.
    (e) The term recipient means a public or private agency, institution 
or organization or a State or other political jurisdiction which has 
received assistance under title I, II, or III of the Act, but does not 
include individuals who ultimately receive benefits under any program of 
assistance or volunteers participating in any program.
    (f) The term agency means a public or private agency, institution, 
or organization or a State or other political jurisdiction with which 
the recipient has entered into an arrangement, contract or agreement to 
assist in its carrying out of the development, conduct and 
administration of all or part of a project assisted under titles I, II 
and III.
    (g) The term party in the case of a termination hearing means 
ACTION, the recipient concerned, and any other agency or organization 
which has a right or which has been granted permission by the presiding 
officer to participate in a hearing concerning termination of assistance 
to the recipient pursuant to Sec. 1206.1-5(e).
    (h) The term termination means any action permanently terminating or 
curtailing assistance to all or any part of a program prior to the time 
that

[[Page 32]]

such assistance is concluded by the terms and conditions of the document 
in which such assistance is extended, but does not include the refusal 
to provide new or additional assistance.
    (i) The term suspension means any action temporarily suspending or 
curtailing assistance in whole or in part, to all or any part of a 
program, prior to the time that such assistance is concluded by the 
terms and conditions of the document in which such assistance is 
extended, but does not include the refusal to provide new or additional 
assistance.



Sec. 1206.1-4   Suspension.

    (a) General. The responsible ACTION official may suspend assistance 
to a recipient in whole or in part for a material failure or threatened 
material failure to comply with any requirement stated in Sec. 1206.1-1. 
Such suspension shall be pursuant to notice and opportunity to show 
cause why assistance should not be suspended as provided in paragraph 
(b) of this section. However, in emergency cases, where the responsible 
ACTION official determines summary action is appropriate, the 
alternative summary procedure of paragraph (c) of this section shall be 
followed.
    (b) Suspension on notice. (1) Except as provided in paragraph (c) of 
this section, the procedure for suspension shall be on notice of intent 
to suspend as hereinafter provided.
    (2) The responsible ACTION official shall notify the recipient by 
letter or by telegram that ACTION intends to suspend assistance in whole 
or in part unless good cause is shown why assistance should not be 
suspended. In such letter or telegram the responsible ACTION official 
shall specify the grounds for the proposed suspension and the proposed 
effective date of the suspension.
    (3) The responsible ACTION official shall also inform the recipient 
of its right to submit written material in opposition to the intended 
suspension and of its right to request an informal meeting at which the 
recipient may respond and attempt to show why such suspension should not 
occur. The period of time within which the recipient may submit such 
written material or request the informal meeting shall be established by 
the responsible ACTION official in the notice of intent to suspend. 
However, in no event shall the period of time within which the recipient 
must submit written material or request such a meeting be less than 5 
days after the notice of intent to suspend assistance has been sent. If 
the recipient requests a meeting, the responsible ACTION official shall 
fix a time and place for the meeting, which shall not be less than 5 
days after the recipient's request is received by ACTION.
    (4) In lieu of the provisions of paragraph (b)(3) of this section 
dealing with the right of the recipient to request an informal meeting, 
the responsible ACTION official may on his own initiative establish a 
time and place for such a meeting and notify the recipient in writing or 
by telegram. However, in no event shall such a meeting be scheduled less 
than seven days after the notice of intent to suspend assistance is sent 
to the recipient.
    (5) The responsible ACTION official may in his discretion extend the 
period of time or date referred to in the previous paragraphs of this 
section and shall notify the recipient in writing or by telegram of any 
such extension.
    (6) At the time the responsible ACTION official sends the 
notification referred to in paragraphs (b) (2), (3), and (4) of this 
section to the recipient, he shall also send a copy of it to any agency 
whose activities or failures to act have substantially contributed to 
the proposed suspension, and shall inform such agency that it is 
entitled to submit written material or to participate in the informal 
meeting referred to in paragraphs (b) (3) and (4) of this section. In 
addition the responsible ACTION official may in his discretion give such 
notice to any other agency.
    (7) Within 3 days of receipt of the notice referred to in paragraphs 
(b) (2), (3), and (4) of this section, the recipient shall send a copy 
of such notice and a copy of these regulations to all agencies which 
would be financially affected by the proposed suspension action. Any 
agency that wishes to submit written material may do so within the time 
stated in the notice. Any agency

[[Page 33]]

that wishes to participate in the informal meeting with the responsible 
ACTION official contemplated herein may request permission to do so from 
the responsible ACTION official, who may in his discretion grant or deny 
such permission. In acting upon any such request from an agency, the 
responsible ACTION official shall take into account the effect of the 
proposed suspension on the particular agency, the extent to which the 
meeting would become unduly complicated as a result of granting such 
permission, and the extent to which the interests of the agency 
requesting such permission appear to be adequately represented by other 
participants.
    (8) In the notice of intent to suspend assistance the responsible 
ACTION official shall invite voluntary action to adequately correct the 
deficiency which led to the initiation of the suspension proceeding.
    (9) The responsible ACTION official shall consider any timely 
material presented to him in writing, any material presented to him 
during the course of the informal meeting provided for in paragraphs (b) 
(3) and (4) of this section as well as any showing that the recipient 
has adequately corrected the deficiency which led to the initiation of 
suspension proceedings. If after considering the material presented to 
him the responsible ACTION official concludes the recipient has failed 
to show cause why assistance should not be suspended, he may suspend 
assistance in whole or in part and under such terms and conditions as he 
shall specify.
    (10) Notice of such suspension shall be promptly transmitted to the 
recipient and shall become effective upon delivery. Suspension shall not 
exceed 30 days unless during such period of time termination proceedings 
are initiated in accordance with Sec. 1206.1-5, or unless the 
responsible ACTION official and the recipient agree to a continuation of 
the suspension for an additional period of time. If termination 
proceedings are initiated, the suspension of assistance shall remain in 
full force and effect until such proceedings have been fully concluded.
    (11) During a period of suspension no new expenditures shall be made 
and no new obligations shall be incurred in connection with the 
suspended program except as specifically authorized in writing by the 
responsible ACTION official. Expenditures to fulfill legally enforceable 
commitments made prior to the notice of suspension, in good faith and in 
accordance with the recipient's approved work program, and not in 
anticipation of suspension or termination, shall not be considered new 
expenditures. However, funds shall not be recognized as committed solely 
because the recipient has obligated them by contract or otherwise to an 
agency.

    Note: Willful misapplication of funds may violate Federal criminal 
statutes.

    (12) The responsible ACTION official may in his discretion modify 
the terms, conditions and nature of the suspension or rescind the 
suspension action at any time on his own initiative or upon a showing 
satisfactory to him that the recipient had adequately corrected the 
deficiency which led to the suspension and that repetition is not 
threatened. Suspensions partly or fully rescinded may, in the discretion 
of the responsible ACTION official be reimposed with or without further 
proceedings: Provided however, That the total time of suspension may not 
exceed 30 days unless termination proceedings are initiated in 
accordance with Sec. 1206.1-5 or unless the responsible ACTION official 
and the recipient agree to a continuation of the suspension for an 
additional period of time. If termination proceedings are initiated, the 
suspension of assistance shall remain in full force and effect until 
such proceedings have been fully concluded.
    (c) Summary suspension. (1) The responsible ACTION official may 
suspend assistance without the prior notice and opportunity to show 
cause provided in paragraph (b) of this section if he determines in his 
discretion that immediate suspension is necessary because of a serious 
risk of: (i) Substantial injury to or loss of project funds or property, 
or
    (ii) Violation of a Federal, State or local criminal statute, or
    (iii) Violation of section 403 of Pub. L. 93-113 or of ACTION rules, 
regulations, guidelines and instructions, published in accordance with 
section 420 of

[[Page 34]]

Pub. L. 93-113, implementing this section of the Act, and that such risk 
is sufficiently serious to outweigh the general policy in favor of 
advance notice and opportunity to show cause.
    (2) Notice of summary suspension shall be given to the recipient by 
letter or by telegram, shall become effective upon delivery to the 
recipient, and shall specifically advise the recipient of the effective 
date of the suspension and the extent, terms, and condition of any 
partial suspension. The notice shall also forbid the recipient to make 
any new expenditures or incur any new obligations in connection with the 
suspended portion of the program. Expenditures to fulfill legally 
enforceable commitments made prior to the notice of suspension, in good 
faith and in accordance with the recipient's approved work program, and 
not in anticipation of suspension or termination, shall not be 
considered new expenditures. However, funds shall not be recognized as 
committed by a recipient solely because the recipient obligated them by 
contract or otherwise to an agency. (See note under paragraph (b)(11) of 
this section.)
    (3) In the notice of summary suspension the responsible ACTION 
official shall advise the recipient that it may request ACTION to 
provide it with an opportunity to show cause why the summary suspension 
should be rescinded. If the recipient requests such an opportunity, the 
responsible ACTION official shall immediately inform the recipient in 
writing of the specific grounds for the suspension and shall within 7 
days after receiving such request from the recipient hold an informal 
meeting at which the recipient may show cause why the summary suspension 
should be rescinded. Notwithstanding the provisions of this paragraph, 
the responsible ACTION official may proceed to initiate termination 
proceedings at any time even though assistance to the recipient has been 
suspended in whole or in part. In the event that termination proceedings 
are initiated, the responsible ACTION official shall nevertheless afford 
the recipient, if it so requests, an opportunity to show cause why 
suspension should be rescinded pending the outcome of the termination 
proceedings.
    (4) Copies of the notice of summary suspension shall be furnished by 
the recipient to agencies in the same manner as notices of intent to 
suspend as set forth in paragraphs (b) (6), (7), and (8) of this 
section. Agencies may submit written material to the responsible ACTION 
official or to participate in the informal meeting as in the case of 
intended suspension proceedings set forth in paragraphs (b) (6) and (7) 
of this section.
    (5) The effective period of a summary suspension of assistance may 
not exceed 30 days unless termination proceedings are initiated in 
accordance with Sec. 1206.1-5, or unless the parties agree to a 
continuation of summary suspension for an additional period of time, or 
unless the recipient, in accordance with paragraph (c)(3) of this 
section, requests an opportunity to show cause why the summary 
suspension should be rescinded.
    (6) If the recipient requests an opportunity to show cause why a 
summary suspension action should be rescinded the suspension of 
assistance shall continue in effect until the recipient has been 
afforded such opportunity and a decision has been made. Such a decision 
shall be made within 5 days after the conclusion of the informal meeting 
referred to in paragraph (c)(3) of this section. If the responsible 
ACTION official concludes, after considering all material submitted to 
him, that the recipient has failed to show cause why the suspension 
should be rescinded, the responsible ACTION official may continue the 
suspension in effect for an additional 7 days: Provided however, That if 
termination proceedings are initiated, the summary suspension of 
assistance shall remain in full force and effect until all termination 
proceedings have been fully concluded.



Sec. 1206.1-5   Termination.

    (a) If the responsible ACTION official believes that an alleged 
failure to comply with any requirement stated in Sec. 1206.1-1 may be 
sufficiently serious to warrant termination of assistance, whether or 
not assistance has been suspended, he shall so notify the recipient by 
letter or telegram. The notice shall state that there appear to be 
grounds

[[Page 35]]

which warrant terminating the assistance and shall set forth the 
specific reasons therefor. If the reasons result in whole or substantial 
part from the activities of an agency other than the grantee, the notice 
shall identify that agency. The notice shall also advise the recipient 
that the matter has been set down for hearing at a stated time and 
place, in accordance with Sec. 1206.1-6. In the alternative the notice 
shall advise the recipient of its right to request a hearing and shall 
fix a period of time which shall not be less than 10 days in which the 
recipient may request such a hearing.
    (b) Termination hearings shall be conducted in accordance with the 
provision of Secs. 1206.1-7 and 1206.1-8. They shall be scheduled for 
the earliest practicable date, but not later than 30 days after a 
recipient has requested such a hearing in writing or by telegram. 
Consideration shall be given to a request by a recipient to advance or 
postpone the date of a hearing scheduled by ACTION. Any such hearing 
shall afford the recipient a full and fair opportunity to demonstrate 
that it is in compliance with requirements specified in Sec. 1206.1-1. 
In any termination hearing, ACTION shall have the burden of justifying 
the proposed termination action. However, if the basis of the proposed 
termination is the failure of a recipient to take action required by 
law, regulation, or other requirement specified in Sec. 1206.1-1, the 
recipient shall have the burden of proving that such action was timely 
taken.
    (c) If a recipient requests ACTION to hold a hearing in accordance 
with paragraph (a) of this section, it shall send a copy of its request 
for such a hearing to all agencies which would be financially affected 
by the termination of assistance and to each agency identified in the 
notice pursuant to paragraph (a) of this section. This material shall be 
sent to these agencies at the same time the recipient's request is made 
to ACTION. The recipient shall promptly send ACTION a list of the 
agencies to which it has sent such material and the date on which it was 
sent.
    (d) If the responsible ACTION official pursuant to paragraph (a) of 
this section informs a recipient that a proposed termination action has 
been set for hearing, the recipient shall within 5 days of its receipt 
of this notice send a copy of it to all agencies which would be 
financially affected by the termination and to each agency identified in 
the notice pursuant to paragraph (a) of this section. The recipient 
shall send the responsible ACTION official a list of all agencies 
notified and the date of notification.
    (e) If the responsible ACTION official has initiated termination 
proceedings because of the activities of an agency, that agency may 
participate in the hearing as a matter of right. Any other agency, 
person, or organization that wishes to participate in the hearing may, 
in accordance with Sec. 1206.1-7(d), request permission to do so from 
the presiding officer of the hearing. Such participation shall not, 
without the consent of ACTION and the recipient, alter the time 
limitations for the delivery of papers or other procedures set forth in 
this section.
    (f) The results of the proceeding and any measure taken thereafter 
by ACTION pursuant to this part shall be fully binding upon the 
recipient and all agencies whether or not they actually participated in 
the hearing.
    (g) A recipient may waive a hearing by notice to the responsible 
ACTION official in writing and submit written information and argument 
for the record. Such material shall be submitted to the responsible 
ACTION official within a reasonable period of time to be fixed by him 
upon the request of the recipient. The failure of a recipient to request 
a hearing, or to appear at a hearing for which a date has been set, 
unless excused for good cause, shall be deemed a waiver of the right to 
a hearing and consent to the making of a decision on the basis of such 
information as is then in the possession of ACTION.
    (h) The responsible ACTION official may attempt, either personally 
or through a representative, to resolve the issues in dispute by 
informal means prior to the date of any applicable hearing.

[[Page 36]]



Sec. 1206.1-6   Time and place of termination hearings.

    The termination hearing shall be held in Washington, DC, or in the 
appropriate Regional Office, at a time and place fixed by the 
responsible ACTION official unless he determines that the convenience of 
ACTION, or of the parties or their representatives, requires that 
another place be selected.



Sec. 1206.1-7   Termination hearing procedures.

    (a) General. The termination hearing, decision, and any review 
thereof shall be conducted in accordance with the rules of procedure set 
forth in this section and Secs. 1206.1-8 and 1206.1-9.
    (b) Presiding officer. (1) The presiding officer at the hearing 
shall be the responsible ACTION official or, at the discretion of the 
responsible ACTION official, an independent hearing examiner designated 
as promptly as possible in accordance with section 3105 of title 5 of 
the United States Code. The presiding officer shall conduct a full and 
fair hearing, avoid delay, maintain order, and make a sufficient record 
for a full and true disclosure of the facts and issues. To accomplish 
these ends, the presiding officer shall have all powers authorized by 
law, and he may make all procedural and evidentiary rulings necessary 
for the conduct of the hearing. The hearing shall be open to the public 
unless the presiding officer for good cause shown shall otherwise 
determine.
    (2) After the notice described in paragraph (f) of this section is 
filed with the presiding officer, he shall not consult any person or 
party on a fact in issue unless on written notice and opportunity for 
all parties to participate. However, in performing his functions under 
this part the presiding officer may use the assistance and advice of an 
attorney designated by the General Counsel of ACTION or the appropriate 
Regional Counsel: Provided, That the attorney designated to assist him 
has not represented ACTION or any other party or otherwise participated 
in a proceeding, recommendation, or decision in the particular matter.
    (c) Presentation of evidence. Both ACTION and the recipient are 
entitled to present their case by oral or documentary evidence, to 
submit rebuttal evidence and to conduct such examination and cross-
examination as may be required for a full and true disclosure of all 
facts bearing on the issues. The issues shall be those stated in the 
notice required to be filed by paragraph (f) of this section, those 
stipulated in a prehearing conference or those agreed to by the parties.
    (d) Participation. (1) In addition to ACTION, the recipient, and any 
agency which has a right to appear, the presiding officer in his 
discretion may permit the participation in the proceedings of such 
persons or organizations as he deems necessary for a proper 
determination of the issues involved. Such participation may be limited 
to those issues or activities which the presiding officer believes will 
meet the needs of the proceeding, and may be limited to the filing of 
written material.
    (2) Any person or organization that wishes to participate in a 
proceeding may apply for permission to do so from the presiding officer. 
This application, which shall be made as soon as possible after the 
notice of suspension or proposed termination has been received by the 
recipient, shall state the applicant's interest in the proceeding, the 
evidence or arguments the applicant intends to contribute, and the 
necessity for the introduction of such evidence or arguments.
    (3) The presiding officer shall permit or deny such participation 
and shall give notice of his decision to the applicant, the recipient, 
and ACTION, and, in the case of denial, a brief statement of the reasons 
therefor: Provided however, That the presiding officer may subsequently 
permit such participation if, in his opinion, it is warranted by 
subsequent circumstances. If participation is granted, the presiding 
officer shall notify all parties of that fact and may, in appropriate 
cases, include in the notification a brief statement of the issues as to 
which participation is permitted.
    (4) Permission to participate to any extent is not a recognition 
that the participant has any interest which may be adversely affected or 
that the participant may be aggrieved by any decision, but is allowed 
solely for the aid

[[Page 37]]

and information of the presiding officer.
    (e) Filing. All papers and documents which are required to be filed 
shall be filed with the presiding officer. Prior to filing, copies shall 
be sent to the other parties.
    (f) Notice. The responsible ACTION official shall send the recipient 
and any other party a written notice which states the time, place, 
nature of the hearing, the legal authority and jurisdiction under which 
the hearing is to be held. The notice shall also identify with 
reasonable specificity the facts relied on as justifying termination and 
the ACTION requirements which it is contended the recipient has 
violated. The notice shall be filed and served not later than 10 days 
prior to the hearing and a copy thereof shall be filed with the 
presiding officer.
    (g) Notice of intention to appear. The recipient and any other party 
which has a right or has been granted permission to participate in the 
hearing shall give written confirmation to ACTION of its intention to 
appear at the hearing 3 days before it is scheduled to occur. Failing to 
do so may, at the discretion of the presiding officer, be deemed a 
waiver of the right to a hearing.
    (h) Form and date of service. All papers and documents filed or sent 
to party shall be signed in ink by the appropriate party or his 
authorized representative. The date on which papers are filed shall be 
the day on which the papers or documents are deposited, postage prepaid 
in the U.S. mail, or are delivered in person: Provided however, That the 
effective date of the notice that there appear to be grounds which 
warrant terminating assistance shall be the date of its delivery or 
attempted delivery at the recipient's last known address as reflected in 
the records of ACTION.
    (i) Prehearing conferences. Prior to the commencement of a hearing 
the presiding officer may, subject to the provisions of paragraph (b)(2) 
of this section, require the parties to meet with him or correspond with 
him concerning the settlement of any matter which will expedite a quick 
and fair conclusion of the hearing.
    (j) Evidence. Technical rules of evidence shall not apply to 
hearings conducted pursuant to this subpart, but the presiding officer 
shall apply rules or principles designed to assure production of 
relevant evidence and to subject testimony to such examination and 
crossexamination as may be required for a full and true disclosure of 
the facts. The presiding officer may exclude irrelevant, immaterial, or 
unduly repetitious evidence. A transcription shall be made of the oral 
evidence and shall be made available to any participant upon payment of 
the prescribed costs. All documents and other evidence submitted shall 
be open to examination by the parties and opportunity shall be given to 
refute facts and arguments advanced on either side of the issues.
    (k) Depositions. If the presiding officer determines that the 
interests of justice would be served, he may authorize the taking of 
depositions provided that all parties are afforded an opportunity to 
participate in the taking of the depositions. The party who requested 
the deposition shall arrange for a transcript to be made of the 
proceedings and shall upon request, and at his expense, furnish all 
other parties with copies of the transcript.
    (l) Official notice. Official notice may be taken of a public 
document, or part thereof, such as a statute, official report, decision, 
opinion or published scientific date issued by any agency of the Federal 
Government or a State or local government and such document or data may 
be entered on the record without further proof of authenticity. Official 
notice may also be taken of such matters as may be judicially noticed in 
the courts of the United States, or any other matter of established fact 
within the general knowledge of ACTION. If the decision of the presiding 
officer rests on official notice of a material fact not appearing in 
evidence, a party shall on timely request be afforded an opportunity to 
show the contrary.
    (m) Proposed findings and conclusions. After the hearing has 
concluded, but before the presiding officer makes his

[[Page 38]]

decision, he shall afford each participant a reasonable opportunity to 
submit proposed findings of fact and conclusions. After considering each 
proposed finding or conclusion the presiding officer shall state in his 
decision whether he has accepted or rejected them in accordance with the 
provisions of Sec. 1206.1-8(a).



Sec. 1206.1-8   Decisions and notices regarding termination.

    (a) Each decision of a presiding officer shall set forth his 
findings of fact, and conclusions, and shall state whether he has 
accepted or rejected each proposed finding of fact and conclusion 
submitted by the parties, pursuant to Sec. 1206.1-7(m). Findings of fact 
shall be based only upon evidence submitted to the presiding officer and 
matters of which official notice has been taken. The decision shall also 
specify the requirement or requirements with which it is found that the 
recipient has failed to comply.
    (b) The decision of the presiding officer may provide for continued 
suspension or termination of assistance to the recipient in whole or in 
part, and may contain such terms, conditions, and other provisions as 
are consistent with and will effectuate the purposes of the Act.
    (c) If the hearing is held by an independent hearing examiner rather 
than by the responsible ACTION official, he shall make an initial 
decision, and a copy of this initial decision shall be mailed to all 
parties. Any party may, within 20 days of the mailing of such initial 
decision, or such longer period of time as the presiding officer 
specifies, file with the responsible ACTION official his written 
exceptions to the initial decision and any supporting brief or 
statement. Upon the filing of such exceptions, the responsible ACTION 
official shall, within 20 days of the mailing of the exceptions, review 
the initial decision and issue his own written decision thereof, 
including the reasons therefore. The decision of the responsible ACTION 
official may increase, modify, approve, vacate, remit, or mitigate any 
sanction imposed in the initial decision or may remand the matter to the 
presiding officer for further hearing or consideration.
    (d) Whenever a hearing is waived, a decision shall be made by the 
responsible ACTION official and a written copy of the final decision of 
the responsible ACTION official shall be given to the recipient.
    (e) The recipient may request the Director to review a final 
decision by the responsible ACTION official which provides for the 
termination of assistance. Such a request must be made in writing within 
15 days after the recipient has been notified of the decision in 
question and must state in detail the reasons for seeking the review. In 
the event the recipient requests such a review, the Director or his 
designee shall consider the reasons stated by the recipient for seeking 
the review and shall approve, modify, vacate or mitigate any sanction 
imposed by the responsible ACTION official or remand the matter to the 
responsible ACTION official for further hearing or consideration. The 
decision of the responsible ACTION official will be given great weight 
by the Director or his designee during the review. During the course of 
his review the Director or his designee may, but is not required to, 
hold a hearing or allow the filing of briefs and arguments. Pending the 
decision of the Direct or his designee assistance shall remain suspended 
under the terms and conditions specified by the responsible ACTION 
official, unless the responsible ACTION official or the Director or his 
designee otherwise determines. Every reasonable effort shall be made to 
complete the review by the Director or his designee within 30 days of 
receipt by the Director of the recipient's request. The Director or his 
designee may however extend this period of time if he determines that 
additional time is necessary for an adequate review.



Sec. 1206.1-9   Right to counsel; travel expenses.

    In all proceedings under this subpart, whether formal or informal, 
the recipient and ACTION shall have the right to be represented by 
counsel or other authorized representatives. If the recipient and any 
agency which has a right to participate in an informal meeting pursuant 
to Sec. 1206.1-4 or a termination hearing pursuant to Sec. 1206.1-7 do 
not

[[Page 39]]

have an attorney acting in that capacity as a regular member of the 
staff of the organization or a retainer arrangement with an attorney, 
the Boards of Directors of such recipient and agency will be authorized 
to designate an attorney to represent their organizations at any such 
show cause proceeding or termination hearing and to transfer sufficient 
funds from the Federal grant monies they have received for the project 
to pay the fees, travel, and per diem expenses of such attorney. The 
fees for such attorney shall be the reasonable and customary fees for an 
attorney practicing in the locality of the attorney. However, such fees 
shall not exceed $100 per day without the prior express written approval 
of ACTION. Travel and per diem expenses may be paid to such attorney 
only in accordance with the policies set forth in the Standard 
Government Travel Regulations and in Secs. 1206.3-1 and 1206.3-6 of this 
chapter. The Boards of Directors of the recipient or any agency which 
has a right to participate in an informal meeting pursuant to 
Sec. 1206.1-4 or a termination hearing pursuant to Sec. 1206.1-7 will 
also be authorized to designate two persons in addition to an attorney 
whose travel and per diem expenses to attend the meeting or hearing may 
be paid from Federal grant or contract monies. Such travel and per diem 
expenses shall conform to the policies set forth in the Standard 
Government Travel Regulations and in Secs. 1206.3-1 and 1206.3-6 of this 
chapter.



Sec. 1206.1-10   Modification of procedures by consent.

    The responsible ACTION official or the presiding officer of a 
termination hearing may alter, eliminate or modify any of the provisions 
of this subpart with the consent of the recipient and, in the case of a 
termination hearing, with the consent of all agencies that have a right 
to participate in the hearing pursuant to Sec. 1206.1-5(e). Such consent 
must be in writing or be recorded in the hearing transcript.



Sec. 1206.1-11   Other remedies.

    The procedures established by this subpart shall not preclude ACTION 
from pursuing any other remedies authorized by law.



             Subpart B--Denial of Application for Refunding

    Source: 47 FR 5719, Feb. 8, 1982, unless otherwise noted.



Sec. 1206.2-1  Applicability of this subpart.

    This subpart applies to grantees and contractors receiving financial 
assistance and to sponsors who receive volunteers under the Domestic 
Volunteer Service Act of 1973, as amended, 42 U.S.C. 4951 et seq. The 
procedures in this subpart do not apply to review of applications for 
the following:
    (a) University Year for ACTION projects which have received federal 
funds for five years;
    (b) Mini-grants;
    (c) Other projects for which specific time limits with respect to 
federal assistance are established in the original notice of grant award 
or other document providing assistance, where the specified time limit 
has been reached; and
    (d) VISTA project extensions of less than six months.



Sec. 1206.2-2  Purpose.

    This subpart establishes rules and review procedures for the denial 
of a current recipient's application for refunding.



Sec. 1206.2-3  Definitions.

    As used in this subpart--``ACTION,'' ``Director,'' and ``recipient'' 
shall be defined in accordance with Sec. 1206.1-3.
    Financial assistance and assistance include the services of 
volunteers supported in whole or in part with ACTION funds.
    Program account means assistance provided by ACTION to support a 
particular program activity; for example, VISTA, Foster Grandparent 
Program, Senior Companion Program and Retired Senior Volunteer Program.
    Refunding includes renewal of an application for the assignment of 
volunteers.



Sec. 1206.2-4  Procedures.

    (a) The procedures set forth in paragraphs (b) through (g) of this 
section shall apply only where an application for refunding submitted by 
a current recipient is rejected or is reduced to 80

[[Page 40]]

percent or less of the applied-for level of funding or the recipient's 
current level of operations, whichever is less. It is further a 
condition for application of these procedures that the rejection or 
reduction be based on circumstances related to the particular grant or 
contract. These procedures do not apply to reductions based on 
legislative requirements, or on general policy or in instances where, 
regardless of a recipient's current level of operations, its application 
for refunding is not reduced by 20 percent or more. The fact that the 
basis for rejecting an application may also be a basis for termination 
under subpart A of this part shall not prevent the use of this subpart 
to the exclusion of the procedures in subpart A.
    (b) Before rejecting an application of a recipient for refunding 
ACTION shall notify the recipient of its intention, in writing, at least 
75 days before the end of the recipient's current program year or grant 
budget period. The notice shall inform the recipient that a tentative 
decision has been made to reject or reduce an application for refunding. 
The notice shall state the reasons for the tentative decision to which 
the recipient shall address itself if it wishes to make a presentation 
as described in paragraphs (c) and (d) of this section.
    (c) If the notice of tentative decision is based on any reasons, 
other than those described in paragraph (d) of this section, including, 
but not limited to, situations in which the recipient has ineffectively 
managed Agency resources or substantially failed to comply with agency 
policy and overall objectives under a contract or grant agreement with 
the Agency, the recipient shall be informed in the notice, of the 
opportunity to submit written material and to meet informally with an 
ACTION official to show cause why its application for refunding should 
not be rejected or reduced. If the recipient requests an informal 
meeting, such meeting shall be held on a date specified by ACTION. 
However, the meeting may not, without the consent of the recipient, be 
scheduled sooner than 14 days, nor more than 30 days, after ACTION has 
mailed the notice to the recipient. If the recipient requests an 
informal meeting, the meeting shall be scheduled by ACTION as soon as 
possible after receipt of the request. The official who shall conduct 
this meeting shall be an ACTION official who is authorized to finally 
approve or make the grant of assistance in question, or his designee.
    (d) If the notice of tentative decision is based upon a specific 
charge of failure to comply with the terms and conditions of the grant 
or contract, alleging wrongdoing on the part of the recipient, the 
notice shall offer the recipient an opportunity for an informal hearing 
before a mutually agreed-upon impartial hearing officer. The authority 
of such hearing officer shall be limited to conducting the hearing and 
offering recommendations. ACTION will retain all authority to make the 
final determination as to whether the application should be finally 
rejected or reduced. If the recipient requests an informal hearing, such 
hearing shall be held at a date specified by ACTION. However, such 
hearing may not, without the consent of the recipient, be scheduled 
sooner than 14 days nor more than 30 days after ACTION has mailed the 
notice to the recipient.
    (e) In the selection of a hearing official and the location of 
either an informal meeting or hearing, the Agency, while mindful of 
considerations of the recipient, will take care to insure that costs are 
kept to a minimum. The informal meeting or hearing shall be held in the 
city or county in which the recipient is located, in the appropriate 
Regional Office, or another appropriate location. Within the limits 
stated in the preceding sentence, the decision as to where the meeting 
shall be held will be made by ACTION, after weighing the convenience 
factors of the recipient. For the convenience of the recipient, ACTION 
will pay the reasonable travel expenses for up to two representatives of 
the recipient, if requested.
    (f) The recipient shall be informed of the final Agency decision on 
refunding and the basis for the decision by the deciding official.
    (g) If the recipient's budget period expires prior to the final 
decision by the deciding official, the recipient's authority to continue 
program operations shall be extended until such decision is

[[Page 41]]

made and communicated to the recipient. If a volunteer's term of service 
expires after receipt by a sponsor of a tentative decision not to refund 
a project, the period of service of the volunteer may be similarly 
extended. No volunteers may be reenrolled for a full 12-month term, or 
new volunteers enrolled for a period of service while a tentative 
decision not to refund is pending. If program operations are so 
extended, ACTION and the recipient shall provide, subject to the 
availability of funds, operating funds at the same levels as in the 
previous budget period to continue program operations.

[50 FR 42025, Oct. 17, 1985]



Sec. 1206.2-5  Right to counsel.

    In all proceedings under this subpart, whether formal or informal, 
the recipient and ACTION shall have the right to be represented by 
counsel or other authorized representatives, at their own expense.



PART 1207--SENIOR COMPANION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
1207.1-1  Purpose of the program.
1207.1-2  Definitions.
1207.1-3  Coordination.

               Subpart B--Project Development and Funding

1207.2-1  Inquiries.
1207.2-2  Local support.
1207.2-3  Sponsor eligibility and solicitation of proposals.
1207.2-4  Project proposals.
1207.2-5  Review of project proposals.
1207.2-6  Awards.
1207.2-7  Grand management.
1207.2-8  Suspension, termination and denial of refunding.

                      Subpart C--Project Operations

1207.3-1  Sponsor responsibility.
1207.3-2  Project staff.
1207.3-3  Advisory Council.
1207.3-4  Volunteer station responsibility.
1207.3-5  Senior companions.
1207.3-6  Senior companion assignments.
1207.3-7  Non-stipended volunteers.

                  Subpart D--Non-ACTION Funded Projects

1207.4-1  Memorandum of agreement.

              Subpart E--Sanctions and Legal Representation

1207.5-1  Special limitations.
1207.5-2  Legal representation.

    Authority: Secs. 211(d), (e); 212, 213, 221, 222, 223, 402(14) and 
420 of Pub. L. 93-113, 87 Stat. 402, 403, 404, 407 and 414, sec. 213 of 
Pub. L. 97-35, 97 Stat. 487, 42 U.S.C. 5011 (b), (d) and (e); 5012, 
5021, 5022, 5023, 5042(14), 5060 and 5013.

    Source: 48 FR 26803, June 10, 1983, unless otherwise noted.



                           Subpart A--General



Sec. 1207.1-1  Purpose of the program.

    The Senior Companion Program (SCP) is authorized under title II, 
part C, of the Domestic Volunteer Service Act of 1973, as amended (Pub. 
L. 93-113). The dual purpose of the program is to create part-time 
stipended volunteer community service opportunities for low-income 
persons aged 60 and over, and to provide supportive person-to-person 
services to assist adults having exceptional needs, developmental 
disabilities or other special needs for companionship.



Sec. 1207.1-2  Definitions.

    Terms used in this part are defined as follows:
    Act is the Domestic Volunteer Service Act of 1973, as amended (Pub. 
L. 93-113, 87 Stat. 394, 42 U.S.C. 4951).
    Adult is any person aged 21 or over.
    Advisory Council is a group of persons formally organized by the 
project sponsor for the purpose of advising and supporting the sponsor 
in operating the project effectively.
    Agency is the federal ACTION agency.
    Allowable medical expenses are annual out-of-pocket expenses for 
health insurance premiums, health care services, and medications 
provided to the applicant, enrollee, or spouse and were not and will not 
be paid for by Medicare, Medicaid, other insurance, or by any other 
third party and, shall not exceed 15 percent of the applicable ACTION 
income guideline.
    Annual income is counted for the past 12 months and includes: The 
applicant or enrollee's income and, the applicant or enrollee's spouse's 
income, if the spouse lives in the same residence. Project directors may 
count the value

[[Page 42]]

of shelter, food, and clothing, if provided at no cost by persons 
related to the applicant, enrollee, or spouse.
    Direct Benefits are stipends, meals, transportation, annual physical 
examinations, volunteer insurance, recognition and uniforms included in 
the budget as Volunteer Expenses.
    Director is the Director of ACTION.
    Exceptional Needs are one or more physical, emotional, or mental 
health limitation(s).
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement Act, 85 
Stat. 688) certified by the Secretary of Interior as eligible for the 
special programs and services provided through the Bureau of Indian 
Affairs.
    Handbook is the SCP Handbook No. 4405.91, which contains policies 
for implementing these regulations.
    Handicapped is a person or persons having physical or mental 
impairments that substantially limit one or more major life activities.
    Hard-to-reach individuals are those who are physically or socially 
isolated because of factors such as language, disability, or inadequate 
transportation.
    Letter of Agreement is a written agreement between a volunteer 
station, the project sponsor and the adult served or the person legally 
responsible for the adult. It authorizes the assignment of a Senior 
Companion in the client's home, defines Senior Companion activities and 
delineates the specific arrangements for supervision.
    Memorandum of Understanding is a written statement prepared and 
signed by the Senior Companion sponsor and the volunteer station which 
identifies project requirements, working relationships and mutal 
responsibilities.
    OAVP refers to the Older American Volunteer Programs, which include: 
The Senior Companion Program, the Foster Grandparent Program, and the 
Retired Senior Volunteer Program.
    Project is the locally planned and implemented Senior Companion 
Program activity as agreed upon between ACTION and the sponsor.
    Service Area is a geographically defined area in which Senior 
Companions are recruited, enrolled, and placed on assignments.
    Service Schedule is the 20 hours per week that a Senior Companion 
serves.
    Sponsor is a public agency or private nonprofit organization which 
is responsible for the operation of the Senior Companion project.
    Stipend is a payment to Senior Companions to enable them to serve 
without cost to themselves.
    United States and States means the several states, the District of 
Columbia, the Virgin Islands, Puerto Rico, Guam, American Samoa and the 
Trust Territory of the Pacific Islands.
    Volunteer Station is a public agency, private nonprofit organization 
or proprietary health care agency or organization that accepts the 
responsibility for assignment and supervision of Senior Companions. Each 
volunteer station must be licensed or otherwise certified, when 
required, by the appropriate state or local government. Private homes 
are not volunteer stations.

[48 FR 26803, June 10, 1983, as amended at 59 FR 15122, Mar. 31, 1994]



Sec. 1207.1-3  Coordination.

    The sponsor shall coordinate activities with project-related groups 
and individuals, including those representing government, industry, 
labor, volunteer organizations, programs for the aging, including State 
and Area Agencies on Aging, and other ACTION programs, to facilitate 
cooperation with existing or planned community services and to develop 
community support.



               Subpart B--Project Development and Funding



Sec. 1207.2-1  Inquiries.

    Inquiries regarding the Senior Companion Program application 
process, program criteria, or the availability of funds, should be 
directed to the ACTION State Office serving the inquirer's own state. 
ACTION headquarters office in Washington, DC will assist in directing 
inquiries to the appropriate State office.

[[Page 43]]



Sec. 1207.2-2  Local support.

    An ACTION grant may be awarded to fund up to 90% of the cost of 
development and operation of a Senior Companion project. The sponsor is 
required to contribute at least 10% of the total project cost. Stipend 
payments in excess of the amount established by ACTION may not be 
included as part of the local support commitment. In exceptional 
circumstances the Director may approve assistance for more than 90% of 
the total project costs if:
    (a) The project is located in an area where local resources are too 
limited to provide 10%; or
    (b) A test project is determined to be of exceptional value, 
sufficient to warrant Federal support in excess of 90% of the total 
project cost.



Sec. 1207.2-3  Sponsor eligibility and solicitation of proposals.

    (a) Sponsor eligibility. ACTION will award grants only to public 
agencies and private non-profit organizations in the United States which 
have the authority to accept and the capability to administer such 
grants.
    (b) Solicitation of proposals. Any eligible organization may file an 
application for a grant. Applicants may also be solicited by ACTION 
pursuant to its objective of achieving equitable program resource 
distribution. Solicited applications are not assured of selection or 
approval and may have to compete with other solicited or unsolicited 
applications.

[48 FR 26803, June 10, 1983; 48 FR 44797, Sept. 30, 1983]



Sec. 1207.2-4  Project proposals.

    (a) Applicants shall use standard forms prescribed by ACTION. ACTION 
State Offices will provide applicants with guidance and any additional 
instruction necessary to plan and budget proposed program activities.
    (b) Agencies and organizations submitting grant applications must 
comply with provisions of Executive Order 12372, the ``Intergovernmental 
Review of Federal Programs and Activities,'' as set forth in 45 Code of 
Federal Regulations (CFR) part 1233.
    (c) A potential sponsor must submit one copy of an application for a 
new SCP project to the State Agency on Aging, which has 45 days to 
review the application and make recommendations. The State Agency on 
Aging shall state in writing to ACTION its recommendations and reasons 
within this time period or will be considered to have waived its rights 
under this part.



Sec. 1207.2-5  Reveiw of project proposals.

    (a) The ACTION State Office for the applicant's state will review 
the grant application to ensure that program requirements are complied 
with and that required documentation has been attached.
    (b) If not approved, the application will be returned to the 
applicant with explanation of ACTION's decision. The unsuccessful 
applicant may reapply when the inadequacy, if any, found in the 
application is resolved.



Sec. 1207.2-6  Awards.

    (a) ACTION will, within funds available, award a grant in writing to 
those applicants whose grant proposals provide the best potential for 
serving the purpose of the program. The award will be documented by 
Notice of Grant Award (NGA).
    (b) The parties to the NGA are ACTION and the sponsoring 
organization. The NGA will document the sponsor's commitment to fulfill 
specific programmatic objectives and financial obligations. It will 
document the extent of ACTION's obligation to provide financial support 
to the sponsor.
    (c) A sponsor may receive a grant award for more than one OAVP 
project.



Sec. 1207.2-7  Grant management.

    (a) Sponsors shall manage grants awarded to them in accordance with 
these regulations, ACTION Handbook 2650.2, entitled Grants Management 
Handbook for Grantees, and SCP Handbook No. 4405.91. A copy of each 
document will be furnished the sponsor at the time the initial grant is 
awarded.
    (b) Project support provided under an ACTION grant shall be 
furnished at the lowest possible cost consistent with the effective 
operation of the project.
    (c) Project costs for which ACTION funds are budgeted must be 
justified as being essential to project operation.

[[Page 44]]



Sec. 1207.2-8  Suspension, termination and denial of refunding.

    Grant suspension, termination and denial of refunding procedures are 
set forth in 45 CFR part 1206, chapter XII, and in ACTION Handbook 
2650.2.



                      Subpart C--Project Operations



Sec. 1207.3-1  Sponsor responsibility.

    The sponsor is responsible for all programmatic and fiscal aspects 
of the project and may not delegate or contract this responsibility to 
another entity. The sponsor has the responsibility to:
    (a) Employ, supervise and support a Project Director who will be 
directly responsible to the sponsor for the management of the project, 
including selection, training and supervision of project staff;
    (b) Provide for the recruitment, assignment, supervision and support 
of Senior Companions. Special efforts are to be made to recruit and 
assign persons from minority groups, handicapped and hard-to-reach 
individuals, and groups in the community which are underrepresented in 
the project. The sponsor will stress the recruitment and enrollment of 
persons not already volunteering;
    (c) Provide financial and in-kind support to fulfill the project's 
local share commitment;
    (d) Establish, orient, and support an independent SCP Advisory 
Council;
    (e) Provide the Senior Companions with not less than the minimum 
accident, personal liability, and excess auto liability insurance 
required by ACTION;
    (f) Provide for appropriate recognition of the Senior Companions and 
their activities;
    (g) Establish personnel practices, including provision of position 
descriptions for project staff, and service policies for Senior 
Companions, including grievance and appeal procedures for both 
volunteers and project staff;
    (h) Ensure compliance with ACTION requirements relating to 
nondiscrimination, religious activity, political activity, lobbying, 
patronage toward persons related by blood or marriage, labor or anti-
labor organization or related activities, nondisplacement of employed 
workers, nonimpairment of contracts, and noncompensation for services;
    (i) Maintain project records in accordance with generally accepted 
accounting practice and provide for the accurate and timely preparation 
and submission of reports required by ACTION;
    (j) Develop Senior Companion service opportunities through volunteer 
stations;
    (k) Obtain ACTION concurrence in the selection of volunteer stations 
prior to the placement of Senior Companions;
    (l) Negotiate, prior to placement of Senior Companions; a written 
Memorandum of Understanding with each volunteer station, identifying 
sponsor responsibilities, volunteer station responsibilities, and joint 
responsibilities;
    (m) Orient volunteer station staff to the program and its 
activities;
    (n) Provide not less than 40 hours of pre-service orientation to the 
Senior Companions;
    (o) Arrange group in-service training for Senior Companions for a 
minimum of four hours each month;
    (p) Provide or arrange for direct benefits (insurance, meals, 
physical examinations, recognition, stipends, transportation, and 
uniforms, if needed) for the Senior Companions in a timely manner;
    (q) Ensure provision for volunteer safety;
    (r) Comply with program regulations, policies and procedures 
prescribed by ACTION;
    (s) Ensure that appropriate liability insurance is maintained for 
owned, nonowned, or hired vehicles used in the project;
    (t) Develop a realistic transportation plan for the project based on 
lowest cost transportation modes; and
    (u) Conduct an annual appraisal of volunteers' performance and an 
annual review of volunteers' income eligibility.
    (v) Assure that individuals whose income is at or below 100 percent 
of the poverty level receive special consideration for participation in 
the Program.

[48 FR 26803, June 10, 1983, as amended at 59 FR 15122, Mar. 31, 1994]

[[Page 45]]



Sec. 1207.3-2  Project staff.

    (a) Project staff are employees of the sponsor and are subject to 
its personnel policies and practices.
    (b) ACTION must concur in writing with the sponsor's selection of a 
project director before such person is employed or earns pay from grant 
funds.
    (c) The SCP project director shall serve full time and may not be 
employed or serve concurrently in another capacity, paid or unpaid, 
during established working hours without prior approval from ACTION. 
This does not preclude participation of the project director in 
activities of related local agencies, boards or organizations for the 
purposes of coordination and facilitating achievement of project goals 
and objectives.
    (d) Compensation levels for project staff, including wages, salaries 
and fringe benefits, should be comparable to like or similar positions 
in the sponsor organization and in the community.



Sec. 1207.3-3  Advisory Council.

    An Advisory Council shall be established to advise and assist the 
project sponsor and staff. There shall be a separate Advisory Council 
for each Older American Volunteer project administered by the sponsor. 
When a small number of volunteers is enrolled or other special 
conditions prevail, this requirement may be waived by the Director of 
OAVP. The Advisory Council shall:
    (a) Advise the project director in the formulation of local policy, 
planning, and the development of operational procedures and practices 
consistent with program policies;
    (b) Assist the sponsor by promoting community support for the 
project, advise on personnel actions affecting volunteers and project 
staff, and assist in developing local financial and in-kind resources;
    (c) Include in its membership, when available: Community, business 
and labor leaders, representatives from volunteer stations, public and 
private agencies, and persons specializing in the fields of aging and 
voluntarism. In addition, at least one-fourth of the Advisory Council 
shall be low-income persons aged 60 or over. This group must include 
Senior Companions as voting members. The sponsor's chief executive or 
designee, one member of its governing board, and the project director 
should be members of the Advisory Council but may not be officers of the 
Advisory Council. The sponsor's chief executive and the project director 
may not be voting members. The member representing the sponsor's 
governing board may be a voting member. The provisions of section 
1207.5-1, Nondiscrimination, apply to the Advisory Council;
    (d) Meet on a regular schedule and establish its own procedures, 
including election of officers and terms of office;
    (e) Conduct an annual appraisal of project operation and submit a 
report to the sponsor, which shall be attached to the continuation grant 
application;
    (f) Have an opportunity to advise the sponsor in advance on the 
selection or termination of the project director; and
    (g) Ensure procedures are in effect to hear an appeal to actions 
affecting a Senior Companion adversely.



Sec. 1207.3-4  Volunteer station responsibility.

    (a) Normally the volunteer station is an organization other than the 
sponsoring organization. The sponsor may function as a Senior Companion 
station only if the sponsor is: (1) A state organization administering a 
statewide Senior Companion project where the volunteer station is part 
of the state organization; (2) a federally-recognized Indian tribal 
government; or (3) in a sparsely populated area. In such sparsely 
populated areas, up to 10% of the enrolled volunteers may be placed 
directly by the sponsor.
    (b) Volunteer station responsibilities include:
    (1) Assisting with or arranging for volunteer transportation on or 
between assignments;
    (2) Assisting in the provision of appropriate volunteer recognition;
    (3) Developing and monitoring volunteer assignments, selecting 
adults to be served, supervising the volunteers, assisting the sponsor 
in matching volunteers to assignments and in providing

[[Page 46]]

pre-service orientation and in-service training for the Senior 
Companions;
    (4) Providing for volunteer safety;
    (5) Keeping records and preparing reports required by the sponsor; 
and
    (6) Signing, prior to the placement of Senior Companions, a 
Memorandum of Understanding with the sponsor establishing working 
relationships and mutual responsibilities, and detailing the 
responsibilities outlined above as well as other agreed upon 
responsibilities, including the particulars of the volunteers' 
supervision.
    (i) When Senior Companions are to serve in private homes, the 
Memorandum of Understanding shall also require that the volunteer 
station obtain a Letter of Agreement from the person to be served, or 
the person legally responsible for that person, authorizing or 
requesting volunteer service in the home and indicating what specific 
activities are to be performed.
    (ii) The Memorandum of Understanding is to be reviewed and, as 
appropriate, changed annually. The Memorandum may be amended at any time 
by mutual agreement and must be signed and dated annually to indicate 
that review and update, if needed, have been accomplished.



Sec. 1207.3-5  Senior Companions.

    (a) Eligibility. (1) Senior Companions shall be 60 years of age or 
older, no longer in the regular work force, determined by a physical 
examination to be capable of serving adults with exceptional or special 
needs without detriment to either themselves or the adult served, and 
willing to accept supervision as required.
    (2) Eligibility to be a Senior Companion may not be restricted on 
the basis of education, experience, citizenship, race, color, creed, 
belief, sex, national origin, handicap, or political affiliation.
    (3) To be enrolled, a Senior Companion cannot have an annual income 
from all sources, after deducting allowable medical expenses, which 
exceeds ACTION's income eligibility guidelines for the state in which he 
or she resides. The ACTION income eligibility guideline for each state 
is 125 percent of the poverty line as set forth in section 625 of the 
Economic Opportunity Act of 1964, as amended by Pub. L. 92-424 (42 
U.S.C. 2971d), except (i) in those primary metropolitan statistical 
areas (PMSA), metropolitan statistical areas (MSA) and nonmetropolitan 
counties identified by the Director as being higher in cost of living, 
as determined by application of the VISTA subsistence rates, in which 
case the guideline shall be 10 percent above that amount; and (ii) in 
Alaska, where the guideline may be waived by the ACTION State Director 
for individual locations if a project demonstrates that low-income 
individuals, in that location, are participating in the project. No 
Senior Companion currently participating in the Program, shall become 
ineligible as a result of this change in guidelines.
    (4) Once enrolled, a Senior Companion shall remain eligible to serve 
and to receive a stipend as long as his or her annual income, after 
deducting allowable medical expenses, does not exceed the prescribed 
ACTION income eligibility guideline by 20 percent. Income eligibility 
shall be reviewed annually by the sponsor.
    (5) Recruitment and selection of a Senior Companion may not be based 
on any requirement of employment experience or formal education.
    (b) Terms of service. (1) Senior Companions serve a total of twenty 
hours a week, usually five days a week. Travel time between the 
volunteer's home and place of assignment may not be considered part of 
the service schedule and is not stipended. Travel time between 
individual assignments is a part of the service schedule. Meal time may 
be part of the service schedule only if meals are taken with the 
individual served, and the taking of meals together is deemed by the 
sponsor and the volunteer station to be beneficial to the person served.
    (2) Senior Companions are volunteers, not employees, of the sponsor.
    (c) Direct benefits. The total of direct benefits for Senior 
Companions, including stipends, insurance, transportation, meals, 
physical examinations, recognition, and uniforms if appropriate, shall 
be a sum equal to at least 90% of the amount of the ACTION Federal share 
of the grant. In exceptional circumstances, the Director may waive

[[Page 47]]

this requirement. Federal and non-federal resources can be used to make 
up this sum. Direct benefits may not be subject to any tax or charge or 
be treated as wages or compensation for the purposes of unemployment 
insurance, temporary disability, retirement, public assistance, or 
similar benefit payments or minimum wage laws. Direct benefits include:
    (1) Insurance. Senior companions shall be provided with the ACTION 
specified minimum levels of accident insurance, personal liability 
insurance and, when appropriate, excess automobile liability insurance.
    (i) Accident insurance. Accident insurance shall cover Senior 
Companions for personal injury during travel between their homes and 
places of assignment, during their volunteer service, during meal 
periods while serving as a volunteer, and while attending project-
sponsored activities, such as recognition activities, orientation and 
Advisory Council meetings.
    Protection shall be provided against claims in excess of any 
benefits or services for medical care or treatment available to the 
volunteer from other sources including:
    (A) Health insurance coverage;
    (B) Other hospital or medical service plans;
    (C) Any coverage under labor-management trusteed plans, union 
welfare plans, employer organization plans, or employee benefit 
organization plans; and
    (D) Coverage under any governmental programs or coverage provided by 
any statute.

When benefits are provided in the form of services rather than by cash 
payments, the reasonable cash value of each service rendered shall be 
considered in determining the applicability of this provision. The 
benefits payable under a plan shall include the benefits that would have 
been payable had a claim been duly made therefor. The benefits payable 
shall be reduced to the extent necessary so that the sum of such reduced 
benefits and all the benefits provided for by any other plan shall not 
exceed the total expenses incurred by the volunteer.
    (ii) Personal liability insurance. Protection shall be provided 
against claims in excess of protection provided by other insurance.
    (iii) Excess automobile liability insurance. Protection shall be 
provided against claims in excess of the greater of either:
    (A) Liability insurance volunteers carry on their own automobiles, 
or
    (B) The limits of the applicable state financial responsibility law, 
or
    (C) In the absence of a state financial responsibility law, levels 
of protection to be determined by ACTION for each person, each accident, 
and for property damage.

Senior Companions who drive their personal vehicles to or on assignments 
or project related activities must maintain personal automobile 
liability insurance equal to or exceeding the levels established by 
paragraph (c)(1)(iii) (B) or (C) of this section.
    (2) Meals. Within the limits of available resources and project 
policy, Senior Companions will be provided or will receive assistance 
with the cost of meals taken during their service schedule.
    (3) Physical examinations. Senior Companions are required to have a 
physical examination prior to assignment and annually thereafter.
    (4) Appropriate recognition will be provided for Senior Companions.
    (5) Stipends. A Senior Companion will receive a stipend in an amount 
determined by ACTION and payable in regular installments. The minimum 
amount of the stipend is set by law and may be adjusted by the Director 
from time to time. When both the eligible husband and wife serve as a 
Foster Grandparent or Senior Companion, only one spouse shall be 
entitled to receive a stipend. Both spouses in such cases shall be 
entitled to other direct benefits. Only in cases where enrolled Foster 
Grandparents or Senior Companions marry, may each continue to receive a 
stipend.
    (6) Transportation. Senior Companions shall be provided 
transportation or receive assistance with the cost of transportation to 
and from volunteer assignments and official project activities, 
including orientation, training, advisory council meetings and 
recognition events. Reimbursement will be within the limits of available 
resources

[[Page 48]]

and project policy. Project funds may not be utilized to reimburse 
Senior Companions for transportation provided for or on behalf of 
clients.

[48 FR 26803, June 10, 1983, as amended at 59 FR 15122, Mar. 31, 1994]



Sec. 1207.3-6  Senior companion assignments.

    (a) Assignments and activities must involve person-to-person 
relationships with the individuals served and may not include service to 
the volunteer station.
    (b) Individuals served by Senior Companions must be adults, 
primarily older adults, who have one or more physical, emotional, or 
mental health limitations and are in need of assistance to achieve and 
maintain their highest level of independent living.



Sec. 1207.3-7  Non-stipended volunteers

    (a) Purpose: Projects are encouraged to enroll persons aged 60 and 
over, who are not low-income, as non-stipended volunteers in order to:
    (1) Open opportunities for and tap the unused resources of older 
Americans, and
    (2) Expand needed services to unserved and underserved populations.
    (b) Conditions of Service: (1) Over-income persons, age 60 or over, 
may not be enrolled in SCP projects as non-stipended volunteers in 
communities where a Retired Senior Volunteer Program (RSVP) project is 
available and the RSVP project is willing and able to assume the 
management role of placing the volunteer at an SCP volunteer station. 
When a Senior Companion project is contacted by an individual expressing 
an interest in serving as a non-stipended volunteer, the project shall 
contact the ACTION State Office for its determination as to whether:
    (i) Enrollment in the project is appropriate,
    (ii) The volunteer should be referred to an RSVP project that has 
agreed, in writing, to serve in the prescribed management role.
    (2) Non-stipended volunteers serve under the following conditions:
    (i) Their service must not supplant, replace, or displace any 
stipended volunteers.
    (ii) No special privilege or status is granted or created among 
volunteers, stipended or non-stipended, and equal treatment is required.
    (iii) Training, supervision, and other support services and direct 
benefits, other than the stipend, are available equally to all 
volunteers.
    (iv) All regulations and requirements applicable to the program, 
with the exception listed in paragraph (b)(2)(vi) of this section, apply 
to all volunteers.
    (v) Non-stipended volunteers may be placed in separate volunteer 
stations where warranted.
    (vi) Non-stipended volunteers serving in SCP volunteer stations will 
be encouraged but not required to serve 20 hours per week and 50 weeks 
per year. Volunteers will maintain a close one-to-one relationship with 
clients, and will serve a minimum of two clients on a regular basis.
    (vii) Non-stipended volunteers may contribute the cost of direct 
benefits.
    (3) There are no requirements on either SCP or RSVP projects to 
enroll non-stipended volunteers. Implementation of these regulations by 
a local project may not be a factor in awarding new or renewal grants.
    (c) Funding: No appropriated funds for SCP may be used to pay any 
cost, including any administrative cost, incurred in implementing these 
regulations. Such costs may be paid with:
    (1) Funds received by the Director as unrestricted gifts.
    (2) Funds received by the Director as gifts to pay such costs.
    (3) Funds contributed by non-stipended volunteers.
    (4) Locally-generated contributions in excess of the amount required 
by law.

[52 FR 32133, Aug. 26, 1987]



                  Subpart D--Non-ACTION Funded Projects



Sec. 1207.4-1  Memorandum of agreement.

    (a) If an eligible agency or organization wishes to sponsor a 
project without ACTION funding, and wishes to receive technical 
assistance and materials from ACTION, it must sign a

[[Page 49]]

Memorandum of Agreement with ACTION identifying mutual responsibilities 
and certifying its intent to comply with ACTION regulations.
    (b) A non-ACTION funded project sponsor's noncompliance with the 
Memorandum of Agreement may result in suspension or termination of 
ACTION's technical assistance to the project.
    (c) Termination of the agreement by either the project sponsor or 
ACTION will result in loss of the tax exempt status of volunteer direct 
benefits allowable to Senior Companions and loss of coverage by the 
statutory provision that receipt of the stipend will not affect the 
volunteers' eligibility for any governmental assistance.
    (d) Entry into a Memorandum of Agreement with a sponsoring agency 
which does not receive ACTION funds will not, under any circumstances, 
create a financial obligation on the part of ACTION for costs associated 
with the project including increases in required payments to volunteers 
which may result from changes in the Act or in ACTION regulations.



              Subpart E--Sanctions and Legal Representation



Sec. 1207.5-1  Special limitations.

    (a) Political activities. (1) No part of any grant shall be used to 
finance, directly or indirectly, any activity to influence the outcome 
of any election to public office, or any voter registration activity.
    (2) No project shall be conducted in a manner involving the use of 
funds, the provision of services, or the employment or assignment of 
personnel in a manner supporting or resulting in the identification of 
such project (i) any partisan or nonpartisan political activity 
associated with a candidate, or contending faction or group, in an 
election or, (ii) any activity to provide voters or prospective voters 
with transportation to the polls or similar assistance in connection 
with any such election, or (iii) any voter registration activity.
    (3) No Senior Companion or employee of a sponsor or volunteer 
station may take any action, when serving in such capacity, with respect 
to a partisan or nonpartisan political activity that would result in the 
identification or apparent identification of the Senior Companion 
Program with such activity.
    (4) No grant funds may be used by the sponsor in any activity for 
the purpose of influencing the passage or defeat of legislation or 
proposals by initiative petition, except
    (i) In any case in which a legislative body, a committee of a 
legislative body, or a member of a legislative body requests a Senior 
Companion, a sponsor chief executive, his or her designee, or project 
staff to draft, review or testify regarding measures or to make 
representation to such legislative body, committee or member, or (ii) In 
connection with an authorization or appropriations measure directly 
affecting the operation of the Senior Companion Program.

Prohibitions on Electoral and Lobbying Activities are fully set forth in 
45 CFR part 1226 and in ACTION Handbook 2650.2.
    (b) Restrictions on State or local government employees. If the 
sponsor is a State or local government agency which received a grant 
from ACTION, certain restrictions contained in chapter 15 of title 5 of 
the United States Code are applicable. They are related to persons who 
are principally employed in activities associated with the project. The 
restrictions are not applicable to employees of educational or research 
institutions. An employee subject to these restrictions may not:
    (1) Use his/her official authority or influence for the purpose of 
interfering with or affecting the result of an election or nomination 
for office; or
    (2) Directly or indirectly coerce, attempt to coerce, command or 
advise a State or local officer or employee to pay, lend, or contribute 
anything of value to a political party, committee, organization, agency, 
or person for a political purpose; or
    (3) Be a candidate for elective office, except in a nonpartisan 
election. ``Nonpartisan election'' means an election at which none of 
the candidates is to be nominated or elected as representing a political 
party any of whose candidates for Presidential elector received votes in 
the last preceding election at which Presidential electors were 
selected.

[[Page 50]]

    (c) Religious activities. Senior Companions and project staff funded 
by ACTION shall not give religious instruction, conduct worship services 
or engage in any form of proselytization as part of their duties.
    (d) Nondiscrimination. For purposes of this subpart, and for 
purposes of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000 d 
et seq.), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
and the Age Discrimination Act of 1975 (Pub. L. 94-135, title III; 42 
U.S.C. 6101 et seq.), any program, project, or activity to which 
volunteers are assigned under this Act shall be deemed to be receiving 
federal financial assistance.
    (1) No person with responsibility in the operation of a project 
shall discriminate with respect to any activity or program because of 
race, creed, belief, color, national origin, sex, age, handicap, or 
political affiliation.
    (2) Sponsors are required to take affirmative action to overcome the 
effects of prior discrimination. Even in the absence of prior 
discrimination, a sponsor may take affirmative action to overcome 
conditions which resulted in limiting participation.
    (3) No person in the United States shall on the ground of sex be 
excluded from participation in, be denied the benefits of, be subjected 
to discrimination under, or be denied employment in connection with a 
Senior Companion project.
    (e) Labor and anti-labor activity. No grant funds shall be directly 
or indirectly utilized to finance labor or anti-labor organization or 
related activity.
    (f) Nondisplacement of employed workers. A Senior Companion may not 
perform any service or duty or engage in any activity which would 
otherwise be performed by an employed worker or which would supplant the 
hiring of employed workers.
    (g) Nonimpairment of contracts. A Senior Companion may not perform 
any service, or duty, or engage in any activity which impairs an 
existing contract for service. The term ``contract for service'' 
includes but is not limited to contracts, understandings, and 
arrangements, either written or oral, to provide professional, 
managerial, technical, or administrative services.
    (h) Noncompensation for services. No person, organization, or agency 
shall request or receive any compensation for services of Senior 
Companions.
    (i) Nepotism. Persons selected for projects staff positions may not 
be related by blood or marriage to other project staff, sponsor staff or 
officers, or members of the sponsor Board of Directors, unless there is 
concurrence by the Advisory Council, with notification to ACTION.
    (j) Volunteer separation. A sponsor may separate a volunteer for 
cause, including, but not limited to, extensive or unauthorized 
absences, misconduct, inability to perform assignments or having income 
in excess of the eligibility level established by ACTION.



Sec. 1207.5-2  Legal representation.

    Counsel may be employed and counsel fees, court costs, bail, and 
other expenses incidental to the defense of a Senior Companion may be 
paid in a criminal, civil or administrative proceeding, when such a 
proceeding arises directly out of the performance of the Senior 
Companion activities. 45 CFR part 1220 establishes the circumstances 
under which ACTION may pay such expenses.



PART 1208--FOSTER GRANDPARENT PROGRAM--Table of Contents




                           Subpart A--General

Sec.
1208.1-1  Purpose of the program.
1208.1-2  Definitions.
1208.1-3  Coordination.

               Subpart B--Project Development and Funding

1208.2-1  Inquiries.
1208.2-2  Local support.
1208.2-3  Sponsor eligibility and solicitation of proposals.
1208.2-4  Project proposals.
1208.2-5  Review of project proposals.
1208.2-6  Awards.
1208.2-7  Grant management.
1208.2-8  Suspension, termination and denial of refunding.

                      Subpart C--Project Operations

1208.3-1  Sponsor responsibility.
1208.3-2  Project staff.
1208.3-3  Advisory Council.

[[Page 51]]

1208.3-4  Volunteer station responsibility.
1208.3-5  Foster grandparents.
1208.3-6  Foster grandparent assignments.
1208.3-7  Children served.
1208.3-8  Non-stipended volunteers.

                  Subpart D--Non-ACTION Funded Projects

1208.4-1  Memorandum of agreement.

              Subpart E--Sanctions and Legal Representation

1208.5-1  Special limitations.
1208.5-2  Legal representation.

    Authority: Secs. 211(a), 212, 221, 222, 223, 402(14) and 420 of Pub. 
L. 93-113, 87 Stat. 402, 403, 404, 407 and 414, 42 U.S.C. 5011 (a) and 
(f), 5012, 5021, 5022, 5023, 5042(14), and 5060.

    Source: 48 FR 26809, June 10, 1983, unless otherwise noted.



                           Subpart A--General



Sec. 1208.1-1  Purpose of the program.

    The Foster Grandparent Program (FGP) is authorized under title II, 
part B, of the Domestic Volunteer Service Act of 1973, as amended (Pub. 
L. 93-113). The dual purpose of the program is to provide opportunities 
for low-income persons aged 60 or over to give supportive person-to-
person service in health, education, welfare or related settings to help 
alleviate the physical, mental, or emotional problems of children having 
exceptional or special needs.



Sec. 1208.1-2  Definitions.

    Terms used in this part are defined as follows:
    Act is the Domestic Volunteer Service Act of 1973, as amended (Pub. 
L. 93-113, 87 Stat. 394, 42 U.S.C. 4951).
    Advisory Council is a group of persons formally organized by the 
project sponsor for the purpose of advising and supporting the sponsor 
in operating the project effectively.
    Agency is the federal ACTION agency.
    Allowable medical expenses are annual out-of-pocket expenses for 
health insurance premiums, health care services, and medications 
provided to the applicant, enrollee, or spouse and were not and will not 
be paid for by Medicare, Medicaid, other insurance, or other third party 
and, shall not exceed 15 percent of the applicable ACTION income 
guideline.
    Annual Income is counted for the past 12 months and includes: The 
applicant or enrollee's income and, the applicant or enrollee's spouse's 
income, if the spouse lives in the same residence. Project directors may 
count the value of shelter, food, and clothing, if provided at no cost 
by persons related to the applicant, enrollee, or spouse.
    Child is any individual under 21 years of age.
    Children having exceptional needs are those who are developmentally 
disabled such as those who are mentally retarded, autistic, have 
cerebral palsy or epilepsy or are visually handicapped, speech impaired, 
hearing impaired, orthopedically impaired, multi-handicapped, 
emotionally disturbed or have a language disorder, specific learning 
disability or other significant health impairment. Existence of a 
child's exceptional need shall be verified by an appropriate 
professional, such as a physician, psychiatrist, psychologist, 
registered nurse or licensed practical nurse, speech therapist or 
educator before a Foster Grandparent is assigned to the child.
    Children with special needs includes those who are: Abused or 
neglected; in need of foster care; status offenders; juvenile 
delinquents; runaway youths; certain teen-age parents; and children in 
need of protective intervention in their homes. Existence of a child's 
special need shall be verified by an appropriate professional before a 
Foster Grandparent is assigned to the child.
    Direct Benefits are stipends, meals, transportation, annual physical 
examinations, volunteer insurance, recognition and uniforms included in 
the budget as Volunteer Expenses.
    Director is the Director of ACTION.
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement Act, 85 
Stat. 688) certified by the Secretary of the Interior as eligible for 
the special programs and services provided through the Bureau of Indian 
Affairs.
    Handbook is the FGP Handbook No. 4405.90 which contains policies for 
implementing these regulations.

[[Page 52]]

    Handicapped is a person or persons having physical or mental 
impairments that substantially limit one or more major life activities.
    Hard-to-reach individuals are those who are physically or socially 
isolated because of factors such as language, disability, or inadequate 
transportation.
    Individual Care or Treatment Plan is a written description of a 
Foster Grandparent's assignment with a child. The plan defines the goals 
for the child to be attained through the relationship with a Foster 
Grandparent and the specific activities to be performed by the Foster 
Grandparent in the assignment.
    In-home refers to non-institutional assignment of a Foster 
Grandparent in a private residence, a foster home, or a group home.
    Letter of Agreement is a written agreement between a volunteer 
station, the project sponsor, and the person or persons legally 
responsible for the child served. It authorizes the assignment of a 
Foster Grandparent in the child's home, defines the Foster Grandparent's 
activities and delineates specific arrangements for supervision.
    Memorandum of Understanding is a written statement prepared and 
signed by the Foster Grandparent project sponsor and the volunteer 
station which identifies project requirements, working relationships and 
mutual responsibilities.
    OAVP refers to the Older American Volunteer Programs, which include: 
the Foster Grandparent Program, the Retired Senior Volunteer Program, 
and the Senior Companion Program.
    Parent is a natural parent or a person acting in place of a natural 
parent, such as a child's natural grandparent, or a step-parent with 
whom the child lives. The term also includes otherwise unrelated 
individuals who are legally responsible for a child's welfare.
    Project is the locally planned and implemented Foster Grandparent 
Program activity as agreed upon between ACTION and the sponsor.
    Service Area is a geographically defined area in which Foster 
Grandparents are recruited, enrolled, and placed on assignments.
    Service Schedule is the 20 hours per week that a Foster Grandparent 
serves.
    Sponsor is a public agency or private nonprofit organization which 
is responsible for the operation of the Foster Grandparent project.
    Stipend is a payment to Foster Grandparents to enable them to serve 
without cost to themselves.
    United States and States mean the several states, the District of 
Columbia, the Virgin Islands, Puerto Rico, Guam, American Samoa and the 
Trust Territory of the Pacific Islands.
    Volunteer Station means a public agency, private nonprofit 
organization or proprietary health care agency or organization that 
accepts the responsibility for assignment and supervision of Foster 
Grandparents in health, education, welfare or related settings such as 
private homes, hospitals, homes for dependent and neglected children, or 
similiar establishments.
    Each volunteer station must be licensed or otherwise certified, when 
required, by the appropriate state or local government.
    Private homes are not volunteer stations.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983, as amended at 
59 FR 15122, Mar. 31, 1994]



Sec. 1208.1-3  Coordination.

    The sponsor shall coordinate activities with project-related groups 
and individuals, including those representing government, industry, 
labor, volunteer organizations, programs for children, programs for the 
aging, including State and Area Agencies on Aging, and other ACTION 
programs, to facilitate cooperation with existing or planned community 
services and to develop community support.



               Subpart B--Project Development and Funding



Sec. 1208.2-1  Inquiries.

    Inquiries regarding the Foster Grandparent Program application 
process, program criteria, or the availability of funds, should be 
directed to the ACTION State Office serving the inquirer's own state. 
ACTION headquarters office in Washington, DC will assist in directing 
inquiries to the appropriate state office.

[[Page 53]]



Sec. 1208.2-2  Local support.

    An ACTION grant may be awarded to fund up to 90% of the cost of 
development and operation of a Foster Grandparent project. The sponsor 
is required to contribute at least 10% of the total project cost. 
Stipend payments in excess of the amount established by ACTION may not 
be included as part of the local support commitment. In exceptional 
circumstances the Director may approve assistance for more than 90% of 
the total project cost if:
    (a) The project is located in an area where local resources are too 
limited to provide 10%; or
    (b) A test project is determined to be of exceptional value, 
sufficient to warrant Federal support in excess of 90% of the total 
project cost.



Sec. 1208.2-3  Sponsor eligibility and solicitation of proposals.

    (a) Sponsor eligibility. ACTION will award grants only to public 
agencies and private non-profit organizations in the United States which 
have the authority to accept and the capability to administer such 
grants.
    (b) Solicitation of Proposals. (1) Any eligible organization may 
file an application for a grant. Applicants may also be solicited by 
ACTION pursuant to its objective of achieving equitable program resource 
distribution. Solicited applications are not assured of selection or 
approval and may have to compete with other solicited or unsolicited 
applications.
    (2) Grants for projects to be carried out over an area in a state 
more comprehensive than one community shall be awarded to the State 
Agency on Aging unless:
    (i) The state has not established or designated such an agency, or
    (ii) Such agency has been afforded at least 45 days to review and 
make recommendations on a prospective sponsor's application.
    (3) Grants for projects to be carried out entirely in a community 
served by a Community Action Agency shall be awarded to that agency 
unless that agency and the State Agency on Aging have been afforded at 
least 45 days to review and make recommendations on a new grant 
application.
    (4) In the event that the State Agency on Aging or the Community 
Action Agency is not awarded the applicable grant, any application that 
is approved will contain or be supported by satisfactory assurances that 
the project has been developed and will, to the extent feasible, be 
conducted in consultation with, or with the participation of, such 
agencies.



Sec. 1208.2-4  Project proposals.

    (a) Applicants shall use standard forms prescribed by ACTION. ACTION 
State Offices will provide applicants with guidance and any additional 
instruction necessary to plan and budget proposed program activities.
    (b) Agencies and organizations submitting grant applications must 
comply with the provisions of Executive Order 12372, the 
``Intergovernmental Review of Federal Programs and Activities,'' as set 
forth in 45 CFR part 1233.
    (c) A potential sponsor must submit one copy of an application for a 
new FGP project to the State Agency on Aging, which has 45 days to 
review the application and make recommendations. The State Agency on 
Aging shall state in writing to ACTION its recommendations and reasons 
within this time period or will be considered to have waived its rights 
under this part.



Sec. 1208.2-5  Review of project proposals.

    (a) The ACTION State Office for the applicant's state will review 
the grant application to ensure that program requirements are complied 
with and that required documentation has been attached.
    (b) If not approved, the application will be returned to the 
applicant with explanation of ACTION's decision. The unsuccessful 
applicant may reapply when the inadequacy, if any, found in the 
application is resolved.



Sec. 1208.2-6  Awards.

    (a) ACTION will, within funds available, award a grant in writing to 
those applicants whose grant proposals provide the best potential for 
serving the purpose of the program. The award will be documented by 
Notice of Grant Award [NGA].

[[Page 54]]

    (b) The parties to the NGA are ACTION and the sponsoring 
organization. The NGA will document the sponsor's commitment to fulfill 
specific programmatic objectives and financial obligations. It will 
document the extent of ACTION's obligation to provide financial support 
to the sponsor.
    (c) A sponsor may receive a grant award for more than one OAVP 
project.



Sec. 1208.2-7  Grant management.

    (a) Sponsors shall manage grants awarded to them in accordance with 
these regulations. ACTION Handbook 2650.2 entitled, Grants Management 
Handbook for Grantees, and the FGP Handbook No. 4405.90. A copy of each 
document will be furnished to the sponsor at the time the initial grant 
is awarded.
    (b) Project support provided under an ACTION grant shall be 
furnished at the lowest possible cost consistent with the effective 
operation of the project.
    (c) Project costs for which ACTION funds are budgeted must be 
justified as being essential to project operation.



Sec. 1208.2-8  Suspension, termination and denial of refunding.

    Grant suspension, termination and denial of refunding procedures are 
set forth in 45 CFR part 1206, chapter XII, and in ACTION Handbook 
2650.2.



                      Subpart C--Project Operations



Sec. 1208.3-1  Sponsor responsibility.

    The sponsor is responsible for all programmatic and fiscal aspects 
of the project and may not delegate or contract this responsibility to 
another entity. The sponsor has the responsibility to:
    (a) Employ, supervise and support a Project Director, who will be 
directly responsible to the sponsor for the management of the project, 
including selection, training and supervision of project staff:
    (b) Provide for the recruitment, assignment, supervision and support 
of Foster Grandparents. Special efforts are to be made to recruit and 
assign persons from minority groups, handicapped and hard-to-reach 
individuals, and groups in the community which are underrepresented in 
the project. The sponsor will stress the recruitment and enrollment of 
persons not already volunteering;
    (c) Provide financial and in-kind support to fulfill the project's 
local share commitment;
    (d) Establish, orient and support an independent FGP Advisory 
Council;
    (e) Provide Foster Grandparents with not less than the minimum 
accident, personal liability, and excess auto liability insurance 
required by ACTION:
    (f) Provide for appropriate recognition of the Foster Grandparents 
and their activities;
    (g) Establish personnel practices, including provision of position 
descriptions for project staff, and service policies for Foster 
Grandparents, including grievance and appeal procedures for both 
volunteers and project staff;
    (h) Ensure compliance with ACTION requirements relating to 
nondiscrimination, religious activity, political activity, lobbying, 
patronage toward persons related by blood or marriage, labor or anti-
labor organization or related activities, nondisplacement of employed 
workers, nonimpairment of contracts, and noncompensation for services;
    (i) Maintain project records in accordance with generally accepted 
accounting practice and provide for the accurate and timely preparation 
and submission of reports required by ACTION;
    (j) Develop Foster Grandparent service opportunities through 
volunteer stations;
    (k) Obtain ACTION concurrence in the selection of volunteer stations 
prior to the placement of Foster Grandparents.
    (l) Negotiate, prior to placement of Foster Grandparents, a written 
Memorandum of Understanding with each volunteer station, identifying 
sponsor responsibilities, volunteer station responsibilities and joint 
responsibilities;
    (m) Orient volunteer station staff to the Program and its 
activities;
    (n) Provide not less than 40 hours of pre-service orientation to 
Foster Grandparents;
    (o) Arrange group in-service training for Foster Grandparents for a 
minimum of four hours each month;

[[Page 55]]

    (p) Provide or arrange for direct benefits (insurance, meals, 
physical examinations, recognition, stipends, transportation and 
uniforms, if needed) for the Foster Grandparents in a timely manner;
    (q) Ensure provision for volunteer safety;
    (r) Comply with program regulations, policies and procedures 
prescribed by ACTION;
    (s) Ensure that appropriate liability insurance is maintained for 
owned, nonowned, or hired vehicles used in the project;
    (t) Develop a realistic transportation plan for the project based on 
the lowest cost transportation modes; and
    (u) Conduct an annual appraisal of volunteers' performance and an 
annual review of volunteers' income eligibility.
    (v) Assure that individuals whose income is at or below 100 percent 
of the poverty level receive special consideration for participation in 
the Program.

[48 FR 26809, June 10, 1983, as amended at 59 FR 15122, Mar. 31, 1994]



Sec. 1208.3-2  Project staff.

    (a) Project staff are employees of the sponsor and are subject to 
its personnel policies and practices.
    (b) ACTION must concur in writing with the sponsor's selection of a 
project director before such person is employed or earns pay from grant 
funds.
    (c) The FGP Project Director shall serve full time and may not be 
employed or serve concurrently in another capacity, paid or unpaid, 
during established working hours, without prior approval from ACTION. 
This does not preclude participation of the project director in 
activities of related local agencies, boards or organizations for the 
purposes of coordination and facilitating achievement of project goals 
and objectives.
    (d) Compensation levels for project staff, including wages, salaries 
and fringe benefits, should be comparable to like or similar positions 
in the sponsor organization and in the community.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983]



Sec. 1208.3-3  Advisory Council.

    An Advisory Council shall be established to advise and assist the 
project sponsor and staff. There shall be a separate Advisory Council 
for each Older American Volunteer project administered by the sponsor. 
When a small number of volunteers is enrolled or other special 
conditions prevail, this requirement may be waived by the Director of 
OAVP. The Advisory Council shall;
    (a) Advise the project director in the formulation of local policy, 
planning, and the development of operational procedures and practices 
consistent with program policies;
    (b) Assist the sponsor by promoting community support for the 
project, advise on personnel actions affecting volunteers and project 
staff, and assist in developing local financial and in-kind resources;
    (c) Include in its membership, when available: community, business 
and labor leaders, representatives from volunteer stations, public and 
private agencies, and persons specializing in the fields of aging, child 
development and voluntarism. In addition, at least one-fourth of the 
Advisory Council shall be low-income persons aged 60 or over. This group 
must include Foster Grandparents as voting members. The sponsor's chief 
executive or designee, one member of its governing board, and the 
project director should be members of the Advisory Council but may not 
be officers of the Advisory Council. The sponsor's chief executive and 
the project director may not be voting members. The member representing 
the sponsor's governing board may be a voting member. The provisions of 
Sec. 1208.5-1(d), Nondiscrimination, apply to the Advisory Council;
    (d) Meet on a regular schedule and establish its own procedures, 
including election of officers and terms of office;
    (e) Conduct an annual appraisal of project operation and submit a 
report to the sponsor, which shall be attached to the continuation grant 
application;
    (f) Have an opportunity to advise the sponsor in advance on the 
selection or termination of the project director; and

[[Page 56]]

    (g) Ensure procedures are in effect to hear an appeal to actions 
affecting a Foster Grandparent adversely.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983]



Sec. 1208.3-4  Volunteer station responsibility.

    (a) Normally the volunteer station is an organization other than the 
sponsoring organization. The sponsor may function as a Foster 
Grandparent volunteer station only if the sponsor is:
    (1) A state organization administering a statewide Foster 
Grandparent project where the volunteer station is part of the state 
organization, (2) a Federally recognized Indian tribal government, or 
(3) in a sparsely populated area. In such sparsely populated areas, up 
to 10% of the enrolled volunteers may be placed directly by the sponsor.
    (b) Volunteer Station responsibilites include:
    (1) Assisting with or arranging for volunteer transportation on or 
between assignments;
    (2) Assisting in the provision of appropriate volunteer recognition;
    (3) Developing and monitoring volunteer assignments, selecting 
children to be served, supervising the volunteers, assisting the sponsor 
in matching volunteers to assignments and in providing pre-service 
orientation and in-service training for the Foster Grandparents;
    (4) Providing for volunteer safety;
    (5) Keeping records and preparing reports required by the sponsor; 
and
    (6) Signing, prior to the placement of Foster Grandparents, a 
Memorandum of Understanding with the sponsor establishing working 
relationships and mutual responsibilities, and detailing the 
responsibilities outlined above, as well as other agreed upon 
responsibilities, including the particulars of the volunteers' 
supervision.
    (i) When Foster Grandparents are to serve in private homes, the 
Memorandum of Understanding shall also require that the volunteer 
station obtain a Letter of Agreement from the child's parent(s) 
authorizing or requesting volunteer service in the home and indicating 
what specific activities are to be performed. This agreement will 
constitute an individual care plan and will be followed for the child 
served by a Foster Grandparent in an in-home placement.
    (ii) The Memorandum of Understanding is to be reviewed and, as 
appropriate, changed annually. It may be amended at any time by mutual 
agreement and must be signed and dated annually to indicate that review 
and update, if needed, have been accomplished.



Sec. 1208.3-5  Foster grandparents.

    (a) Eligibility. (1) Foster Grandparents shall be 60 years of age or 
older, no longer in the regular work force, determined by a physical 
examination to be capable of serving children with exceptional or 
special needs without detriment to either themselves or the children 
served, and willing to accept supervision as required.
    (2) Eligibility to be a Foster Grandparent may not be restricted on 
the basis of education, experience, citizenship, race, color, creed, 
belief, sex, national origin, handicap, or political affiliation.
    (3) To be enrolled, a Foster Grandparent cannot have an annual 
income from all sources, after deducting allowable medical expenses, 
which exceeds ACTION's income eligibility guidelines for the state in 
which he or she resides. The ACTION income eligibility guidelines for 
each state is 125 percent of the poverty line as set forth in section 
625 of the Economic Opportunity Act of 1964, as amended by Pub. L. 92-
424 (42 U.S.C. 2971d), except: (i) In those primary metropolitan 
statistical areas (PMSA), metropolitan statistical areas (MSA) and 
nonmetropolitan counties identified by the Director as being higher in 
cost of living, as determined by application of the VISTA subsistence 
rates, in which case the guideline shall be 10 percent above that 
amount; and (ii) in Alaska, where the guideline may be waived by the 
ACTION State Director for individual locations if a project demonstrates 
that low-income individuals in that location are participating in the 
project. No Foster Grandparent currently participating in the Program, 
shall become ineligible as a result of this change in guidelines.
    (4) Once enrolled, a Foster Grandparent shall remain eligible to 
serve

[[Page 57]]

and to receive a stipend as long as his or her annual income, after 
deducting allowable medical expenses, does not exceed the prescribed 
ACTION income eligibility guideline by 20 percent. Income eligibility 
shall be reviewed annually by the sponsor.
    (5) Recruitment and selection of a Foster Grandparent may not be 
based on any requirement of employment experience or formal education.
    (b) Terms of service. (1) Foster Grandparents serve a total of 
twenty hours a week, usually five days a week. Travel time between the 
volunteer's home and place of assignment may not be considered part of 
the service schedule and is not stipended. Travel time between 
individual assignments is a part of the service schedule. Meal time may 
be part of the service schedule only if meals are taken with the 
individual served, and the taking of meals together is deemed by the 
sponsor and the volunteer station to be beneficial to the person served.
    (2) Foster Grandparents are volunteers, not employees, of the 
sponsor.
    (c) Direct benefits. The total of direct benefits for Foster 
Grandparents, including stipends, insurance, transportation, meals, 
physical examinations, recognition, and uniforms if appropriate, shall 
be a sum equal to at least 90 percent of the amount of the ACTION 
federal share of the grant award. In exceptional circumstances, the 
Director may waive this requirement. Federal and non-federal resources 
can be used to make up this sum. Direct benefits may not be subject to 
any tax or charge or be treated as wages or compensation for the 
purposes of unemployment insurance, temporary disability, retirement, 
public assistance, or similar benefit payments or minimum wage laws. 
Direct Benefits include:
    (1) Insurance. Foster Grandparents shall be provided with the 
ACTION-specified minimum levels of accident insurance, personal 
liability insurance and, when appropriate, excess automobile liability 
insurance.
    (i) Accident insurance. Accident insurance shall cover Foster 
Grandparents for personal injury during travel between their homes and 
places of assignment, during their volunteer service, during meal 
periods while serving as a volunteer, and while attending project-
sponsored activities, such as recognition activities, orientation and 
Advisory Council meetings. Protection shall be provided against claims 
in excess of any benefits or services for medical care or treatment 
available to the volunteer from other sources, including:
    (A) Health insurance coverage;
    (B) Other hospital or medical service plans;
    (C) Any coverage under labor-management trusteed plans, union 
welfare plans, employer organization plans, or employee benefit 
organization plans; and
    (D) Coverage under any governmental programs, or coverage provided 
by any statute.

When benefits are provided in the form of services rather than by cash 
payments, the reasonable cash value of each service rendered shall be 
considered in determining the applicability of this provision. The 
benefits payable under a plan shall include the benefits that would have 
been payable had a claim been duly made therefor. The benefits payable 
shall be reduced to the extent necessary so that the sum of such reduced 
benefits and all the benefits provided for by any other plan shall not 
exceed the total expenses incurred by the volunteer.
    (ii) Personal Liability Insurance. Protection shall be provided 
against claims in excess of protection provided by other insurance.
    (iii) Excess Automobile Liability Insurance. Protection shall be 
provided against claims in excess of the greater of either:
    (A) Liability insurance volunteers carry on their own automobiles, 
or
    (B) The limits of applicable state financial responsibility law, or
    (C) In the absence of a state financial responsibility law, levels 
of protection to be determined by ACTION for each person, each accident, 
and for property damage.
    Foster Grandparents who drive their personal vehicles to or on 
assignments or project-related activities must maintain personal 
automobile liability insurance equal to or exceeding the

[[Page 58]]

levels established by paragraph (c)(1)(iii) (B) or (C) of this section.
    (2) Meals. Within the limits of available resources and project 
policy, Foster Grandparents will be provided or will receive assistance 
with the cost of meals taken during their service schedule.
    (3) Physical Examinations. Foster Grandparents are required to have 
a physical examination prior to assignment and annually thereafter.
    (4) Appropriate Recognition will be provided for Foster 
Grandparents.
    (5) Stipends. A Foster Grandparent will receive a stipend in an 
amount determined by ACTION and payable in regular installments. The 
minimum amount of the stipend is set by law and may be adjusted by the 
Director from time to time. When both the eligible husband and wife 
serve as a Foster Grandparent or Senior Companion, only one spouse shall 
be entitled to receive a stipend. Both spouses in such cases shall be 
entitled to other direct benefits. Only in cases where enrolled Foster 
Grandparents or Senior Companions marry, may each continue to receive a 
stipend.
    (6) Transportation. Foster Grandparents shall be provided 
transportation or receive assistance with the cost of transportation to 
and from volunteer assignments and official project activities, 
including orientation, training, advisory council meetings and 
recognition events. Reimbursement will be within the limits of available 
resources and project policy. Project funds may not be utilized to 
reimburse Foster Grandparents for transportation provided for or on 
behalf of children.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983, as amended at 
59 FR 15122, Mar. 31, 1994]



Sec. 1208.3-6  Foster grandparent assignments.

    (a) Foster Grandparents shall serve children with special or 
exceptional needs.
    (b) Priority consideration shall be given to placing Foster 
Grandparents in assignments where: those assignments constitute early 
intervention; there is a possibility for significant improvement in the 
quality of life for the children served, and there is a probability of a 
long-term relationship between the Foster Grandparent and the child.
    (c) Priority consideration shall also be given to preventing or 
minimizing institutionalization by placing Foster Grandparents with 
children in-home, in special education classes, in special training 
centers, in developmental centers, in day care centers for children with 
exceptional or special needs, in hospitals, and in the juvenile justice 
system.
    (d) The individualized care plan for a Foster Grandparent to follow 
in each in-home assignment he or she receives, should include the 
projected role and functions of the Foster Grandparent, be updated on a 
regular basis, and be used as a guide for evaluating the child's 
development and the Foster Grandparent's role.
    (e) Where state, county or local sponsor's definition(s) of children 
having exceptional needs and children with special needs vary from the 
definitions in Sec. 1208.1-2 of these regulations, ACTION will determine 
the suitability of non-ACTION definition(s) in regard to placement of 
Foster Grandparents with children.
    (f) Foster Grandparent activities develop person-to-person, 
supportive relationships with children and do not provide service to 
volunteer stations or any other agency or organization where volunteers 
serve. Activities of Foster Grandparents should serve the dual purpose 
of being personally meaningful to the volunteers themselves and 
providing support and companionship to the children served.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983]



Sec. 1208.3-7  Children served.

    (a) Identification of individual children to receive supportive 
person-to-person services from a Foster Grandparent is a responsibility 
of volunteer station professional staff and will be made in accordance 
with criteria specified in Sec. 1208.3-6. Actual Foster Grandparent 
assignments to individual children and a determination of the length of 
time each child should receive such services will be made with 
concurrence of the sponsor or his or her designee,

[[Page 59]]

usually the project director, in accordance with the Memorandum of 
Understanding described in Sec. 1208.3-1(l).
    (b) Foster Grandparent concurrence with assignments to individual 
children is required.
    (c) Preference will be given to assigning Foster Grandparents to 
young children. Each Foster Grandparent shall preferably, but not 
exclusively, be assigned to two children.
    (d) When a Foster Grandparent is assigned to a mentally retarded 
child, that assignment may continue beyond the child's 21st birthday, 
provided:
    (1) That such child was receiving such services prior to attaining 
the chronological age of 21;
    (2) That the public or private nonprofit agency (volunteer station) 
responsible for providing services to the child determines that it is in 
the best interest of both the Foster Grandparent and the child; and
    (3) There is mutual agreement by all parties with respect to 
provision of services to the child involved.

[48 FR 26809, June 10, 1983; 48 FR 44797, 44798, Sept. 30, 1983]



Sec. 1208.3-8  Non-stipended volunteers.

    (a) Purpose: Projects are encouraged to enroll persons aged 60 and 
over, who are not low-income, as non-stipended volunteers in order to:
    (1) Open opportunities for and tap the unused resources of older 
Americans, and
    (2) Expand needed services to unserved and underserved populations.
    (b) Conditions of Service: (1) Over-income persons, age 60 or over, 
may not be enrolled in FGP projects as non-stipended volunteers in 
communities where a Retired Senior Volunteer Program (RSVP) project is 
available and the RSVP project is willing and able to assume the 
management role of placing the volunteer at an FGP volunteer station. 
When a Foster Grandparent project is contacted by an individual 
expressing an interest in serving as a non-stipended volunteer, the 
project shall contact the ACTION State Office for its determintion as to 
whether:
    (i) Enrollment in the project is appropriate,
    (ii) The volunteer should be referred to an RSVP project that has 
agreed, in writing, to serve in the prescribed management role.
    (2) Non-stipended volunteers serve under the following conditions:
    (i) Their service must not supplant, replace, or displace any 
stipended volunteers.
    (ii) No special privilege or status is granted or created among 
volunteers, stipended or non-stipended, and equal treatment is required.
    (iii) Training, supervision, and other support services and direct 
benefits, other than the stipend, are available equally to all 
volunteers.
    (iv) All regulations and requirements applicable to the program, 
with the exception listed in paragraph (b)(2)(vi) of this section, apply 
to all volunteers.
    (v) Non-stipended volunteers may be placed in separate volunteer 
stations where warranted.
    (vi) Non-stipended volunteers serving in FGP volunteer stations will 
be encouraged but not required to serve 20 hours per week and 50 weeks 
per year. Volunteers will maintain a close one-to-one relationship with 
clients, and will serve a minimum of two clients on a regular basis.
    (vii) Non-stipended volunteers may contribute the cost of direct 
benefits.
    (3) There are no requirements on either FGP or RSVP projects to 
enroll non-stipended volunteers. Implementation of these regulations by 
a local project may not be a factor in awarding new or renewal grants.
    (c) Funding: No appropriated funds for FGP may be used to pay any 
cost, including any administrative cost, incurred in implementing these 
regulations. Such costs may be paid with:
    (1) Funds received by the Director as unrestricted gifts.
    (2) Funds received by the Director as gifts to pay such costs.
    (3) Funds contributed by non-stipended volunteers.
    (4) Locally-generated contributions in excess of the amount required 
by law.

[52 FR 32134, Aug. 26, 1987]

[[Page 60]]



                  Subpart D--Non-ACTION Funded Projects



Sec. 1208.4-1  Memorandum of agreement.

    (a) If an eligible agency or organization wishes to sponsor a 
project without ACTION funding, and wishes to receive technical 
assistance and materials from ACTION, it must sign a Memorandum of 
Agreement with ACTION identifying mutual responsibilities and certifying 
its intent to comply with ACTION regulations.
    (b) A non-ACTION funded project sponsor's noncompliance with the 
Memorandum of Agreement may result in suspension or termination of 
ACTION's technical assistance to the project.
    (c) Termination of the agreement by either the project sponsor or 
ACTION will result in loss of the tax exempt status of volunteer direct 
benefits allowable to Foster Grandparents and loss of coverage by the 
statutory provision that receipt of the stipend will not affect the 
volunteers' eligibility for any governmental assistance.
    (d) Entry into a Memorandum of Agreement with a sponsoring agency 
which does not receive ACTION funds will not, under any circumstances, 
create a financial obligation on the part of ACTION for costs associated 
with the project including increases in required payments to volunteers 
which may result from changes in the Act or in ACTION regulations.



              Subpart E--Sanctions and Legal Representation



Sec. 1208.5-1  Special limitations.

    (a) Political activities. (1) No part of any grant shall be used to 
finance, directly or indirectly, any activity to influence the outcome 
of any election to public office, or any voter registration activity.
    (2) No project shall be conducted in a manner involving the use of 
funds, the provision of services or the employment or assignment of 
personnel in a matter supporting or resulting in the identification of 
such project with (i) any partisan or nonpartisan political activity 
associated with a candidate, or contending faction or group, in an 
election, or (ii) any activity to provide voters or prospective voters 
with transportation to the polls or similar assistance in connection 
with any such election, or (iii) any voter registration activity.
    (3) No Foster Grandparent or employee of a sponsor or volunteer 
station may take any action, when serving in such capacity, with respect 
to a partisan or nonpartisan political activity that would result in the 
identification or apparent identification of the Foster Grandparent 
Program with such activity.
    (4) No grant funds may be used by the sponsor in any activity for 
the purpose of influencing the passage or defeat of legislation or 
proposals by initiative petition, except
    (i) In any case in which a legislative body, a committee of a 
legislative body, or a member of a legislative body requests a Foster 
Grandparent, a sponsor chief executive, his or her designee, or project 
staff to draft, review or testify regarding measures or to make 
representation to such legislative body, committee or member; or
    (ii) In connection with an authorization or appropriations measure 
directly affecting the operation of the Foster Grandparent Program. 
Prohibitions on Electoral and Lobbying-Activities are fully set forth in 
45 CFR part 1226.
    (b) Restrictions on State or local Government Employees. If the 
sponsor is a State or local government agency which receives a grant 
from ACTION, certain restrictions contained in chapter 15 of title 5 of 
the United States Code are applicable. They are related to persons who 
are principally employed in activities associated with the project. The 
restrictions are not applicable to employees of educational or research 
institutions. An employee subject to these restrictions may not:
    (1) Use his/her official authority or influence for the purpose of 
interfering with or affecting the result of an election or nomination 
for office;
    (2) Directly or indirectly coerce, attempt to coerce, command or 
advise a State or local officer or employee to pay, lend, or contribute 
anything of value to a party, committee, organization agency, or person 
for political purposes; or

[[Page 61]]

    (3) Be a candidate for elective office, except in a nonpartisan 
election.

Nonpartisan election means an election at which none of the candidates 
is to be nominated or elected as representing a political party any of 
whose candidates for Presidential elector received votes in the last 
preceding election at which Presidential electors were selected.
    (c) Religious activities. Foster Grandparents and project staff 
funded by ACTION shall not give religious instruction, conduct worship 
services or engage in any form of proselytization as part of their 
duties.
    (d) Nondiscrimination. For purposes of this subpart, and for 
purposes of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000 d 
et seq.). Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), 
and the Age Discrimination Act of 1975 (Pub. L. 94-135, title III; 42 
U.S.C. 6101 et seq.), any program, project, or activity to which 
volunteers are assigned under this Act shall be deemed to be receiving 
Federal financial assistance.
    (1) No person with responsibility in the operation of a project 
shall discriminate with respect to any activity or program because of 
race, creed, belief, color, national origin, sex, age, handicap, or 
political affiliation.
    (2) Sponsors are required to take affirmative action to overcome the 
effects of prior discrimination. Even in the absence of prior 
discrimination, a sponsor may take affirmative action to overcome 
conditions which resulted in limiting participation.
    (3) No person in the United States shall on the ground of sex be 
excluded from participation in, be denied the benefits of, be subjected 
to discrimination under, or be denied employment in connection with a 
Foster Grandparent project.
    (e) Labor and Anti-Labor Activity. No grant funds shall be directly 
or indirectly utilized to finance labor or anti-labor organization or 
related activity.
    (f) Nondisplacement of Employed Workers. A Foster Grandparent may 
not perform any service or duty or engage in any activity which would 
otherwise be performed by an employed worker or which would supplant the 
hiring of employed workers.
    (g) Nonimpairment of Contracts. A Foster Grandparent may not perform 
any service or duty or engage in any activity which impairs an existing 
contract for service. The term ``contract for service'' includes but is 
not limited to contracts, understandings, and arrangements, either 
written or oral, to provide professional, managerial, technical, or 
administrative service.
    (h) Noncompensation for Services. No person, organization, or agency 
shall request or receive any compensation for services of Foster 
Grandparents.
    (i) Nepotism. Persons selected for project staff positions may not 
be related by blood or marriage to other project staff, sponsor staff or 
officers, or members of the sponsor Board of Directors, unless there is 
concurrence by the Advisory Council, with notification to ACTION.
    (j) Volunteer Separation. A sponsor may separate a volunteer for 
cause, including, but not limited to, extensive or unauthorized 
absences, misconduct, inability to perform assignments or having income 
in excess of the eligibility level established by ACTION.

[48 FR 26809, June 10, 1983; 48 FR 44797, Sept. 30, 1983]



Sec. 1208.5-2  Legal representation.

    Counsel may be employed and counsel fees, court costs, bail and 
other expenses incidental to the defense of a Foster Grandparent may be 
paid in a criminal, civil or administrative proceeding, when such a 
proceeding arises directly out of performance of the Foster 
Grandparent's activities. 45 CFR part 1220 establishes the circumstances 
under which ACTION may pay such expenses.



PART 1209--RETIRED SENIOR VOLUNTEER PROGRAM--Table of Contents




                           Subpart A--General

Sec.
1209.1-1  Purpose of the program.
1209.1-2  Definitions.
1209.1-3  Coordination.

               Subpart B--Project Development and Funding

1209.2-1  Inquiries.
1209.2-2  Budget support.

[[Page 62]]

1209.2-3  Sponsor eligibility and solicitation of proposals.
1209.2-4  Project proposals.
1209.2-5  Review of project proposals.
1209.2-6  Awards.
1209.2-7  Grant management.
1209.2-8  Suspension, termination, denial of refunding.

                      Subpart C--Project Operations

1209.3-1  Sponsors responsibility.
1209.3-2  Project staff.
1209.3-3  RSVP Advisory Council.
1209.3-4  Volunteer station responsibility.
1209.3-5  RSVP volunteers.
1209.3-6  Volunteer assignments.
1209.3-7  Service area.

               Subpart D--Non-ACTION Funded RSVP Projects

1209.4-1  Memorandum of agreement.

                          Subpart E--Sanctions

1209.5-1  Special limitations.
1209.5-2  Legal representation.

    Authority: Secs. 201, 212, 221, 222, 223, 402(14), 418 and 420 of 
Pub. L. 93-113, 83 Stat. 108, 87 Stat. 403, 404 and 414, 42 U.S.C. 5001, 
5012, 5021, 5022, 5023, 5042(14), 5058 and 5060.

    Source: 48 FR 26815, June 10, 1983, unless otherwise noted.



                           Subpart A--General



Sec. 1209.1-1  Purpose of the program.

    The Retired Senior Volunteer program (RSVP) is authorized under 
title II, part A, of the Domestic Volunteer Service Act of 1973, as 
amended (Pub. L. 93-113). The purpose of the program is to provide a 
variety of opportunities for retired persons aged 60 or over to 
participate more fully in the life of their community through 
significant volunteer service.



Sec. 1209.1-2  Definitions.

    Terms used in this part are defined as follows:
    Act is the Domestic Volunteer Service Act of 1973, as amended (Pub. 
L. 93-113, 87 Stat. 394, 42 U.S.C. 4951).
    Advisory Council is a group of persons formally organized by the 
project sponsor for the purpose of advising and supporting the sponsor 
in operating the project effectively.
    Agency is the federal ACTION Agency.
    Director is the Director of ACTION.
    Handbook is the RSVP Operations Handbook No. 4405.92 which contains 
policies for implementing this regulation.
    Handicapped is a person or persons having physical or mental 
impairments that substantially limit one or more major life activities.
    Hard-to-reach individuals are those who are physically or socially 
isolated because of factors such as language, disability, or inadequate 
transportation.
    Letter of Agreement is a written agreement between a volunteer 
station, the project sponsor, and the person served or the person 
legally responsible for the person served. The agreement authorizes 
assignment of an RSVP volunteer in the home of the person served, 
defines volunteer activities and specific arrangements for supervision.
    Memorandum of Understanding is a statement prepared and signed by 
the administrator of a volunteer station and the RSVP director which 
identifies mutual responsibilities and working relationships.
    OAVP refers to the Older American Volunteer Programs, which include: 
the Retired Senior Volunteer Program, the Foster Grandparent Program, 
and the Senior Companion Program.
    Project is the locally planned and implemented Retired Senior 
Volunteer Program activity as agreed upon between ACTION and the 
sponsor.
    Service Area is a geographically defined area in which volunteers 
are recruited, enrolled, and placed on assignments.
    Sponsor is a public agency or private nonprofit organization which 
is responsible for the operation of the local RSVP project.
    United States and States means the several states, the District of 
Columbia, the Virgin Islands, Puerto Rico, Guam, American Samoa, and the 
Trust Territories of the Pacific Islands.
    Volunteer Station is a public or private non-profit organization, or 
a proprietary health care agency or organization that accepts 
responsibility for assignment and supervison of volunteers. Each 
volunteer station must be licensed or otherwise certified, when 
required, by appropriate state or local

[[Page 63]]

government. Private homes are not volunteer stations.

[48 FR 26815, June 10, 1983; 48 FR 44797, 44798, Sept. 30, 1983]



Sec. 1209.1-3  Coordination.

    The sponsor shall coordinate activities with project-related groups 
and individuals, including those representing government, industry, 
labor, volunteer organizations, programs for the aging, including State 
and Area Agencies on Aging, and other ACTION programs, to facilitate 
cooperation with existing or planned community services and to develop 
community support.



               Subpart B--Project Development and Funding



Sec. 1209.2-1  Inquiries.

    Inquiries regarding the Retired Senior Volunteer Program application 
process, program criteria, or the availability of funds, should be 
directed to the ACTION State Office serving the inquirer's own state. 
ACTION headquarters office in Washington, DC, will assist in directing 
inquiries to the appropriate state office.



Sec. 1209.2-2  Budget support.

    (a) An RSVP sponsor is responsible for generating needed financial 
support for the RSVP project from all sources, federal and non-federal, 
including grants, cash and in-kind contributions, to meet budgeted costs 
of the project. The sponsor will supplement an ACTION grant with other 
support to the fullest extent possible and at least equal in amount to 
that negotiated between ACTION and the sponsor. The following 
percentages will be used as a guide by ACTION in negotiating the level 
of local support a sponsor will be required to contribute to the total 
project budget. In no event shall the required proportion of local 
support (including in-kind contributions) be more than 10% in the first 
year, 20% in the second year, 30% in the third year, 40% in the fourth 
year, and 50% in the fifth and succeeding years. The level of local 
support negotiated may be higher or lower than these percentages, as 
mutually agreed to by ACTION and the sponsor, and as justified by local 
conditions. Sponsors proposing to contribute local support of less than 
30% of the total project budget for the third or succeeding years must 
provide ACTION with an acceptable written justification for the lower 
level of support.
    (b) The total of Volunteer Expenses for Senior Volunteers, including 
insurance, transportation, meals, and recognition activities, shall be 
an amount equal to at least 25% of the amount of the ACTION grant award. 
Federal and non-Federal resources may be used to make up this sum.
    Exceptions to this requirement may be requested of the Director, 
Older American Volunteer Programs, through the ACTION State Director by 
an RSVP Sponsor who can clearly demonstrate that (1) this requirement 
will result in undue hardship in the conduct of project operation, and 
(2) a lesser amount will meet the volunteer expense needs of the number 
of volunteers budgeted.



Sec. 1209.2-3  Sponsor eligibility and solicitation of proposals.

    (a) Sponsor eligibility. ACTION will award grants only to public 
agencies and private non-profit organizations in the United States which 
have the authority to accept and the capability to administer such 
grants.
    (b) Solicitation of proposals. (1) Any eligible organization may 
file an application for a grant. Applicants may also be solicited by 
ACTION pursuant to its objective of achieving equitable program resource 
distribution. Solicited applications are not assured of selection or 
approval and may have to compete with other solicited or unsolicited 
applications.
    (2) The Director may not award any grant or contract for a project 
in any state to any agency or organization unless, if such state has a 
state agency established or designated pursuant to Section 305(a)(1) of 
the Older Americans Act of 1965, as amended (42 U.S.C. 3025(a)(1)), such 
agency itself is the recipient of the award, or such agency has been 
afforded at least 45 days in which to review and make recommendations on 
new grant applications.

[[Page 64]]



Sec. 1209.2-4  Project proposals.

    (a) Applicants shall use standard forms prescribed by ACTION. ACTION 
State Offices will provide applicants with guidance and any additional 
instructions necessary to plan and budget proposed program activities.
    (b) Agencies and organizations submitting grant applications must 
comply with the provisions of Executive Order 12372, the 
``Intergovernmental Review of Federal Programs and Activities,'' as set 
forth in 45 CFR part 1232.
    (c) A potential sponsor must submit one copy of an application for a 
new RSVP project to the State Agency on Aging, which has 45 days to 
review the application and make recommendations. The State Agency on 
Aging shall state in writing to ACTION its recommendations and reasons 
within this time period or will be considered to have waived its rights 
under this part.



Sec. 1209.2-5  Review of project proposals.

    (a) The ACTION State Office for the applicant's state will review 
the grant application to ensure that program requirements are complied 
with and that required documentation has been attached.
    (b) If not approved, the application will be returned to the 
applicant with an explanation of ACTION's decision. The unsuccessful 
applicant may reapply when the inadequacy, if any, found in the 
application is resolved.



Sec. 1209.2-6  Awards.

    (a) ACTION will, within funds available, award a grant in writing to 
those applicants whose grant proposals provide the best potential for 
serving the purpose of the program. The award will be documented by 
Notice of Grant Award (NGA).
    (b) The parties to the NGA are ACTION and the sponsoring 
organization. The NGA will document the sponsor's commitment to fulfill 
specific programmatic objectives and financial obligations. It will 
document the extent of ACTION's obligation to provide financial support 
to the sponsor.
    (c) A sponsor may receive a grant award for more than one OAVP 
project.



Sec. 1209.2-7  Grant management.

    (a) Sponsors shall manage grants awarded to them in accordance with 
provisions of these regulations; ACTION Handbook No. 2650.2, Grants 
Management Handbook for Grantees, and ACTION Handbook No. 4405.92, RSVP 
Operations Handbook. A copy of each document will be furnished to the 
sponsor at the time the initial grant is awarded.
    (b) Project support provided under an ACTION grant shall be 
furnished at the lowest possible cost consistent with the effective 
operation of the project.
    (c) Project costs for which ACTION funds are budgeted must be 
justified as being essential to project operation.



Sec. 1209.2-8  Suspension, termination and denial of refunding.

    Grant suspension, termination and denial of refunding procedures are 
set forth in 45 CFR part 1206, chapter XII, and in ACTION Handbook 
2650.2.



                      Subpart C--Project Operations



Sec. 1209.3-1  Sponsor responsibility.

    The sponsor is responsible for all programmatic and fiscal aspects 
of the project and may not delegate or contract this responsibility to 
another entity. The sponsor has the responsibility to:
    (a) Employ, supervise, and support a project director, who will be 
directly responsible to the sponsor for the management of the project, 
including selection, training and supervision of project staff;
    (b) Provide for the recruitment, assignment, supervision and support 
of volunteers. Special efforts are to be made toward recruitment and 
assignment of older persons from minority groups, handicapped and hard-
to-reach individuals, and groups in the community which are under-
represented in the project. The sponsor will stress the recruitment and 
enrollment of persons not already volunteering:
    (c) Provide financial and in-kind support to fulfill the project's 
local support commitment;
    (d) Establish, orient and support an independent RSVP Advisory 
Council;

[[Page 65]]

    (e) Provide the volunteers with not less than the minimum accident, 
personal liability, and excess auto liability insurance required by 
ACTION;
    (f) Provide for appropriate recognition of the volunteers and their 
activities;
    (g) Establish personnel practices, including provision of position 
descriptions for project staff and grievance and appeal procedures for 
both volunteers and project staff;
    (h) Ensure compliance with ACTION requirements relating to 
nondiscrimination, religious activity, political activity, lobbying, 
patronage toward persons related by blood or marriage, labor and anti-
labor organization or related activities, nondisplacement of employed 
workers, nonimpairment of contracts, and noncompensation for services;
    (i) Maintain project records in accordance with generally accepted 
accounting practices and provide for accurate and timely preparation and 
submission of reports required by ACTION;
    (j) Develop volunteer service opportunities through volunteer 
stations;
    (k) Negotiate, prior to placement of volunteers, a written 
Memorandum of Understanding with each volunteer station, identifying 
sponsor responsibilities, volunteer station responsibilities, and joint 
responsibilities;
    (l) Orient volunteer station staff to RSVP and its activities;
    (m) Provide pre-service orientation to the volunteers on RSVP goals 
and activities;
    (n) Arrange for in-service training of the volunteers by volunteer 
stations or other sources of training as needed;
    (o) Provide or arrange for volunteer benefits in a timely manner;
    (p) Ensure provision for volunteer safety;
    (q) Comply with program regulations, policies and procedures 
prescribed by ACTION;
    (r) Ensure that appropriate liability insurance is maintained for 
owned, non-owned, or hired vehicles used in the project; and
    (s) Develop a realistic transportation plan for the project based on 
the lowest cost transportation modes.

[48 FR 26815, June 10, 1983; 48 FR 44798, Sept. 30, 1983]



Sec. 1209.3-2  Project staff.

    (a) Project staff are employees of the sponsor and subject to its 
personnel policies and practices.
    (b) ACTION must concur in writing with the sponsor's selection of a 
project director before such person is employed or earns pay from grant 
funds.
    (c) A project director shall serve full-time and may not be employed 
or serve concurrently in another capacity, paid or unpaid, during 
established working hours, without prior approval from ACTION. This does 
not preclude participation of the project director in activities of 
related local agencies, boards or organizations for the purposes of 
coordination and facilitating achievement of project goals and 
objectives.
    (d) Compensation levels of the project staff, including wages, 
salaries and fringe benefits, should be comparable to like or similar 
positions in the sponsor organization and in the community.



Sec. 1209.3-3  RSVP Advisory Council.

    An Advisory Council shall be established to advise and assist the 
project sponsor and staff. There shall be a separate Advisory Council 
for each Older American Volunteer Program administered by the sponsor. 
When a small number of volunteers is enrolled or other special 
conditions prevail, this requirement may be waived by the Director of 
OAVP. The Advisory Council shall:
    (a) Advise the project director in the formulation of local policy, 
planning, and the development of operational procedures and practices 
consistent with program policies;
    (b) Assist the sponsor by promoting community support for the 
project, advise on personnel actions affecting volunteers and project 
staff, and assist in developing local financial and in-kind resources;
    (c) Include in its membership, when available; community business 
and labor leaders, representatives from volunteer stations, public and 
private agencies, and persons specializing in the fields of aging or 
voluntarism. In addition at least one-fourth of the Advisory Council 
shall be persons aged 60 or over. This group must include RSVP

[[Page 66]]

volunteers as voting members. The sponsor's chief executive or designee, 
one member of its governing board, and the project director should be 
members of the Advisory Council but may not be officers of the Advisory 
Council. The sponsor's chief executive and the project director may not 
be voting members. The member representing the sponsor's governing board 
may be a voting member. The provisions of Sec. 1209.5-1(c). 
Nondiscrimination, apply to the Advisory Council;
    (d) Meet on a regular schedule and establish its own procedures, 
including election of officers and terms of office;
    (e) Conduct an annual appraisal of project operation and submit a 
report to the sponsor, which shall be attached to the continuation grant 
application;
    (f) Have an opportunity to advise the sponsor in advance on the 
selection or termination of the project director; and
    (g) Ensure procedures are in effect to hear an appeal to actions 
affecting a volunteer adversely.



Sec. 1209.3-4  Volunteer station responsibility.

    (a) Normally the volunteer station is an organization other than the 
sponsoring organization. The sponsor may function as a volunteer 
station, provided that not more than 5% of the total number of 
volunteers budgeted for the project are assigned to it. This limitation 
does not apply to the assignment of volunteers to other programs 
administered by the sponsor. Also, the RSVP project itself may function 
as a volunteer station or may initiate special volunteer activities 
which temporarily function at that location, provided ACTION agrees that 
these activities are in accord with program objectives and will not 
hinder overall project operation.
    (b) Volunteer stations at which volunteers serve will be in the 
community where such persons live or in nearby communities. Volunteer 
services will be performed either on publicly owned and operated 
facilities or projects, or on local projects sponsored by private 
nonprofit organizations (other than political parties), other than 
projects involving construction, operation, or so much of any facility 
used or to be used for sectarian instruction or as a place of religious 
worship.
    (c) Volunteer station responsibilities include: (1) Assisting with 
or arranging for volunteer transportation and meals, and assisting in 
the provision of appropriate volunteer recognition:
    (2) Developing and monitoring volunteer assignments, assigning, 
supervising and training volunteers and providing them with preservice 
orientation and in-service training;
    (3) Providing for volunteer safety;
    (4) Keeping records and preparing reports required by sponsor;
    (5) Signing, prior to placement of volunteers, a Memorandum of 
Understanding with the sponsor establishing working relationships and 
mutual responsibilities, and detailing responsibilities outlined above 
as well as other agreed-upon responsibilities. The Memorandum of 
Understanding is to be reviewed and, as appropriate, changed annually. 
The Memorandum may be amended at any time by mutual agreement and must 
be signed and dated annually to indicate that review and update, if 
needed, have been accomplished.



Sec. 1209.3-5  RSVP volunteers.

    (a) Eligibility. (1) To be eligible for enrollment as an RSVP 
volunteer, a person must be 60 years of age or over, retired, willing to 
serve on a regular basis, and willing to accept instruction and 
supervision as required.
    (2) Eligibility to be an RSVP volunteer may not be restricted on the 
basis of education, income, experience, citizenship, race, color, creed, 
belief, sex, national origin, political affiliation, or handicap.
    (b) Volunteer expenses. (1) Within the limits of a project's 
approved budget and in accordance with provisions of the RSVP Operations 
Handbook, volunteers will be provided transportation or will receive 
assistance with costs of transportation, recognition activities, and, 
when possible, meals. Project funds may not be used to reimburse 
volunteers for volunteer expenses, including transportation costs, 
incurred while performing their volunteer assignments. Provision shall 
be made by the sponsor to obtain ACTION specified minimum levels of 
accident insurance, personal liability insurance and, when

[[Page 67]]

appropriate, excess automobile liability insurance.
    (i) Accident insurance: Accident insurance shall cover RSVP 
volunteers for personal injury during travel between their homes and 
places of assignment, during their volunteer service, during meal 
periods while serving as a volunteer, and while attending project-
sponsored activities, such as recognition activities, orientation and 
Advisory Council meetings. Protection shall be provided against claims 
in excess of any benefits or services for medical care or treatment 
available to the volunteer from other sources, including:
    (A) Health insurance coverage;
    (B) Other hospital or medical service plans;
    (C) Any coverage under labor-management trusteed plans, union 
welfare plans, employer organization plans, or employee benefit 
organization plans; and
    (D) Coverage under any governmental programs, or provided by any 
statute. When benefits are approved in the form of services rather than 
by cash payments, the reasonable cash value of each service rendered 
shall be considered in determining the applicability of this provision. 
The benefits payable under a plan shall include the benefits that would 
have been payable had a claim been duly made therefor. The benefits 
payable shall be reduced to the extent necessary so that the sum of such 
reduced benefits and all the benefits provided for by any other plan 
shall not exceed the total expenses incurred by the volunteer.
    (ii) Personal Liability Insurance: Protection shall be provided 
against claims in excess of protection provided by other insurance.
    (iii) Excess Automobile Liability Insurance: Protection shall be 
provided against claims in excess of the greater of either:
    (A) Liability insurance volunteers carry on their own automobiles, 
or
    (B) The limits of applicable state financial responsibility law, or
    (C) In the absence of a state financial responsibility law, levels 
of protection to be determined by ACTION for each person, each accident, 
and for property damage.
    Volunteers who drive their personal vehicles to or on assignments or 
project-related activities, must maintain personal automobile liability 
insurance equal to or exceeding the levels established by paragraphs 
(b)(1)(iii) (B) and (C) of this section.



Sec. 1209.3-6  Volunteer assignments.

    (a) A variety of assignnments shall be developed prior to the 
recruitment of RSVP volunteers. Assignments shall include opportunities 
to respond to significant community needs.
    (b) Assignments shall be matched to the interests, abilities, 
preferences and availability of volunteers. Special consideration shall 
be given to developing assignments that allow for the limited physical 
strength and mobility of the handicapped older volunteer.



Sec. 1209.3-7  Service area.

    The service area of a project identified in the approved grant 
application may not be redefined without prior written approval from 
ACTION.



               Subpart D--Non-ACTION Funded RSVP Projects



Sec. 1209.4-1  Memorandum of agreement.

    (a) If an eligible agency or organization wishes to sponsor an RSVP 
project without ACTION funding, and wishes to receive technical 
assistance and materials from ACTION, it must sign a Memorandum of 
Agreement with ACTION identifying mutual responsibilities and certifying 
its intent to comply with ACTION regulations.
    (b) A non-ACTION funded project sponsor's noncompliance with the 
Memorandum of Agreement may result in suspension or termination of 
ACTION's technical assistance to the project.
    (c) Entry into a Memorandum of Agreement with a sponsoring agency 
which does not receive ACTION funds will not, under any circumstances, 
create a financial obligation on the part of ACTION for costs associated 
with the project.

[[Page 68]]



                          Subpart E--Sanctions



Sec. 1209.5-1  Special limitations.

    (a) Political activities. (1) No part of any grant shall be used to 
finance, directly or indirectly, any activity to influence the outcome 
of any election to public office, or any voter registration activity.
    (2) No project shall be conducted in a manner involving the use of 
funds, the provision of services, or the employment or assignment of 
personnel in a manner supporting or resulting in the identification of 
such project with (i) any partisan or nonpartisan political activity 
associated with a candidate, or contending faction or group, in an 
election, or (ii) any activity to provide voters or prospective voters 
with transportation to the polls or similar assistance in connection 
with any such election, or (iii) any voter registration activity.
    (3) No RSVP volunteer or employee of a sponsor or volunteer station 
may take any action, when serving in such capacity, with respect to a 
partisan or nonpartisan political activity that would result in the 
identification or apparent identification of the Retired Senior 
Volunteer Program with such activity.
    (4) No grant funds may be used by the sponsor in any activity for 
the purpose of influencing the passage or defeat of legislation or 
proposals by initiative petition, except:
    (i) In any case in which a legislative body, a committee of a 
legislative body, or a member of a legislative body requests an RSVP 
volunteer, a sponsor chief executive, his or her designee, or project 
staff to draft, review or testify regarding measures or to make 
representation to such legislative body, committee or member, or
    (ii) In connection with an authorization or appropriation measure 
directly affecting the operation of the Retired Senior Volunteer 
Program.
    (5) Prohibitions on Electoral and Lobbying Activities are fully set 
forth in 45 CFR part 1226.
    (b) Restrictions on State or Local Government Employees. If the 
sponsor is a State or local government agency which received a grant 
from ACTION, certain restrictions contained in Chapter 15 of Title 5 of 
the United States Code are applicable to persons who are principally 
employed in activities associated with the project. The restrictions are 
not applicable to employees of educational or research institutions. An 
employee subject to these restrictions may not:
    (1) Use his or her official authority or influence for the purpose 
of interfering with or affecting the result of an election or nomination 
for office; or
    (2) Directly or indirectly coerce, attempt to coerce, command or 
advise a State or local officer or employee to pay, lend, or contribute 
anything of value to a party, committee, organization, agency, or person 
for political purposes; or
    (3) Be a candidate for elective office, except in a nonpartisan 
election. ``Nonpartisan election'' means an election at which none of 
the candidates is to be nominated or elected as representing a political 
party any of whose candidates for Presidential elector received votes in 
the last preceding election at which Presidential electors were 
selected.
    (c) Religious activities. RSVP volunteers and project staff funded 
by ACTION shall not give religious instruction, conduct worship services 
or engage in any form of proselytization as part of their duties.
    (d) Nondiscrimination. For purposes of this subpart, and for 
purposes of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), 
and the Age Discrimination Act of 1975 (Pub. L. 94-135, Title III; 42 
U.S.C. 6101 et seq.), any project or activity to which volunteers are 
assigned shall be deemed to be receiving federal financial assistance.
    (1) No person with responsibility in the operation of a project 
shall discriminate with respect to any activity or program because of 
race, creed. belief, color, national origin, sex, age, handicap, or 
political affiliation.
    (2) Sponsors are required to take affirmative action to overcome the 
effects of prior discrimination. Even in the absence of prior 
discrimination, a sponsor may take affirmative action to overcome 
conditions which resulted in limiting participation.
    (3) No person in the United States shall, on the ground of sex, be 
excluded

[[Page 69]]

from participation in, be denied the benefits of, be subjected to 
discrimination under, or be denied employment in connection with any 
project.
    (e) Labor or Anti-Labor Activity. No grant funds shall be directly 
or indirectly utilized to finance labor or anti-labor organization or 
related activity.
    (f) Nondisplacement of Employed Workers. An RSVP volunteer may not 
perform any service or duty or engage in any activity which would 
otherwise be performed by an employed worker or which would supplant the 
hiring of employed workers.
    (g) Nonimpairment of Contracts. An RSVP volunteer may not perform 
any service or duty, or engage in any activity which impairs an existing 
contract for service. The term ``contract for service'' includes but is 
not limited to contracts, understandings and arrangements, either 
written or oral, to provide professional, managerial, technical, or 
administrative service.
    (h) Noncompensation for Services. No person, organization, or agency 
shall request or receive any compensation for services of RSVP 
voluneers.
    (i) Volunteer Status. RSVP volunteer service shall not be deemed 
employment for any purpose.
    (j) Nepotism. Persons selected for project staff positions may not 
be related by blood or marriage to other project staff, sponsor staff or 
officers, or members of the sponsor Board of Directors, unless there is 
concurrence by the Advisory Council, with notification to ACTION.
    (k) Volunteer Separation. A volunteer may be separated from the 
program for cause, including, but not limited to, extensive absences, 
misconduct, or inability to perform assignments.



Sec. 1209.5-2  Legal representation.

    Counsel may be employed and counsel fees, court costs, bail, and 
other expenses incidental to the defense of a Senior Volunteer may be 
paid in a criminal, civil or administrative proceeding, when such a 
proceeding arises directly out of performance of the RSVP volunteer's 
activities. 45 CFR part 1220 establishes the circumstances under which 
ACTION may pay such expenses.



PART 1210--VISTA TRAINEE DESELECTION AND VOLUNTEER EARLY TERMINATION PROCEDURES--Table of Contents




                           Subpart A--General

Sec.
1210.1-1  Purpose.
1210.1-2  Scope.
1210.1-3  Definitions.

                  Subpart B--VISTA Trainee Deselection

1210.2-1  Grounds for deselection.
1210.2-2  Procedure for deselection.

              Subpart C--VISTA Volunteer Early Termination

1210.3-1  Grounds for termination.
1210.3-2  Removal from project.
1210.3-3  Suspension.
1210.3-4  Initiation of termination.
1210.3-5  Preparation for appeal.
1210.3-6  Appeal of termination.
1210.3-7  Inquiry by Hearing Examiner.
1210.3-8  Termination file and Examiner's report.
1210.3-9  Decision by Director of VISTA.
1210.3-10  Reinstatement of Volunteer.
1210.3-11  Disposition of termination and appeal files.

            Subpart D--National Grant Trainees and Volunteers

1210.4  Early termination procedures for National Grant Trainees and 
          Volunteers.

Appendix A to Part 1210--Standard for Examiners

    Authority: Secs. 103(c), 402(14), Pub. L. 93-113, 87 Stat. 397 and 
407.

    Source: 46 FR 35512, July 9, 1981, unless otherwise noted.



                           Subpart A--General



Sec. 1210.1-1  Purpose.

    This part establishes procedures under which certain Trainees and 
Volunteers serving in ACTION programs under Pub. L. 93-113 will be 
deselected from training or termininated from service and how they may 
appeal their deselection or termination.



Sec. 1210.1-2  Scope.

    (a) This part applies to all Trainees and Volunteers enrolled under 
part A of Title I of the Domestic Volunteer Service Act of 1973, Pub. L. 
93-113, as

[[Page 70]]

amended, (42 U.S.C. 4951 et seq.,) (hereinafter the ``Act'') and full-
time Volunteers serving under part C of title I of the Act.
    (b) This part does not apply to the medical separation of any 
Trainee or Volunteer. Separate procedures, as detailed in the VISTA 
Handbook, are applicable for such separations.



Sec. 1210.1-3  Definitions.

    (a) Trainee means a person enrolled in a program under part A of 
Title I of the Act or for full-time volunteer service under part C of 
Title I of the Act who has reported to training but has not yet 
completed training and been assigned to a project.
    (b) Volunteer means a person enrolled and currently assigned to a 
project as a full-time Volunteer under part A of title I of the Act, or 
under part C of title I of the Act.
    (c) Sponsor means a public or private nonprofit agency to which 
ACTION has assigned Volunteers.
    (d) Hearing Examiner or Examiner means a person having the 
qualifications described in Appendix A who has been appointed to conduct 
an inquiry with respect to a termination.
    (e) National Grant Program means a program operated under part A, 
title I of the Act in which ACTION has awarded a grant to provide the 
direct costs of supporting VISTA Volunteers on a national or multi-
regional basis. VISTA Volunteers may be assigned to local offices or 
project affiliates. The national grantee provides overall training, 
technical assistance and management support for project operations.
    (f) Local component means a local office or project affiliate of a 
national grantee to which VISTA Volunteers are assigned under the VISTA 
National Grants Program.
    (g) Termination means the removal of a Volunteer from VISTA service 
by ACTION, and does not refer to removal of a Volunteer from a 
particular project which has been requested by a sponsor or Governor 
under Sec. 1210.3-2.
    (h) Deselection means the removal of a Trainee from VISTA service by 
ACTION.



                  Subpart B--VISTA Trainee Deselection



Sec. 1210.2-1  Grounds for deselection.

    ACTION may deselect a Trainee out of a training program for any of 
the following reasons:
    (a) Failure to meet training selection standards which includes, but 
is not limited to, the following conduct:
    (1) Inability or refusal to perform training assignments;
    (2) Disruptive conduct during training sessions;
    (b) Conviction of any criminal offense under Federal, State or local 
statute or ordinance;
    (c) Violation of any provision of the Domestic Volunteer Service Act 
of 1973, as amended, or any ACTION policy, regulation, or instruction;
    (d) Intentional false statement, omission, fraud, or deception in 
obtaining selection as a Volunteer; or
    (e) Refusal to accept Volunteer Placement.



Sec. 1210.2-2  Procedure for deselection.

    (a) The Regional Director or designee shall notify the Trainee in 
writing that ACTION intends to deselect the Trainee. The notice must 
contain the reasons for the deselection and indicate that the Trainee 
has 5 days to appeal.
    (b) The Trainee is placed on Administrative Hold at the time of the 
notice of deselection.
    (c) The Trainee has 5 days after receipt of the notice to appeal in 
writing to the Regional Director, or designee specified in the notice, 
furnishing any supportive documentation. In the appeal letter, the 
Trainee may request an opportunity to present his or her case in person.
    (d) If the Trainee does not respond to the notice, deselection 
becomes effective at the expiration of the Trainee's time to appeal.
    (e) Within 5 days after receiving the Trainee's appeal, if no 
personal presentation is requested, the Regional Director or designee 
must issue a decision. If a personal presentation is requested, the 
Regional Director or designee must schedule it within 5 days, and must 
issue a decision 5 days after such presentation. In either case, the 
decision of

[[Page 71]]

the Regional Director or designee is final.



              Subpart C--VISTA Volunteer Early Termination



Sec. 1210.3-1  Grounds for termination.

    ACTION may terminate or suspend a Volunteer based on the Volunteer's 
conduct for the following reasons:
    (a) Conviction of any criminal offense under Federal, State, or 
local statute or ordinance;
    (b) Violation of any provision of the Domestic Volunteer Service Act 
of 1973, as amended, or any ACTION policy, regulation, or instruction;
    (c) Failure refusal or inability to perform prescribed project 
duties as outlined in the Project Narrative and/or volunteer assignment 
description and as directed by the sponsoring organization to which the 
Volunteer is assigned;
    (d) Involvement in activities which substantially interfere with the 
Volunteer's performance of project duties;
    (e) Intentional false statement, omission, fraud, or deception in 
obtaining selection as a Volunteer;
    (f) Any conduct on the part of the Volunteer which substantially 
diminishes his or her effectiveness as a VISTA Volunteer; or
    (g) Unsatisfactory performance of Volunteer assignment.



Sec. 1210.3-2  Removal from project.

    (a) Removal of a Volunteer from the project assignment may be 
requested and obtained by a written request supported by a statement of 
reason by:
    (1) The Governor or chief executive officer of the State or similar 
jurisdiction in which the Volunteer is assigned or,
    (2) The sponsoring organization. The sole responsibility for 
terminating or transferring a Volunteer rests with the ACTION Agency.
    (b) A request for removal of a Volunteer must be submitted to the 
ACTION State Director, who will in turn notify the Volunteer of the 
request. The State Director, after discussions with the Volunteer and in 
consultation with the Regional Director, if necessary, has 15 days to 
attempt to resolve the situation with the sponsor or the Governor's 
office. If the situation is not resolved at the end of the 15 day 
period, the Volunteer will be removed from the project and placed on 
Administrative Hold, pending a decision as set forth in paragraph (c) of 
this section.
    (c) The State office will take one of the following actions 
concerning a Volunteer who has been removed from a project assignment:
    (1) Accept the Volunteer's resignation;
    (2) If removal was requested for reasons other than those listed in 
Sec. 1210.3-1, ACTION will attempt to place the Volunteer on another 
project. If reassignment is not possible, the Volunteer will be 
terminated for lack of suitable assignment, and he or she will be given 
special consideration for reinstatement; or
    (3) If removal from the project is approved based on any of the 
grounds for early termination as set forth in Sec. 1210.3-1, the 
Volunteer may appeal the termination grounds as detailed in subpart C of 
this part to establish whether such termination is supported by 
sufficient evidence. If ACTION determines that the removal based on 
grounds detailed in Sec. 1210.3-1 is not established by adequate 
evidence, then the procedures outlined in Sec. 1210.3-2(c)(2) will be 
followed.
    (d) A Volunteer's removal during a term of service may also occur as 
a result of either the termination of, or refusal to renew, the 
Memorandum of Agreement between ACTION and the sponsoring organization, 
or the termination or completion of the initial Volunteer assignment. In 
such cases, the Volunteer will be placed in Administrative Hold status 
while the Regional Office attempts to reassign the Volunteer to another 
project. If no appropriate reassignment within the Region is found 
within the Administrative Hold period, the Volunteer will be terminated 
but will receive special consideration for reinstatement as soon as an 
appropriate assignment becomes available. If appropriate reassignment is 
offered the Volunteer and declined, ACTION has no obligation to offer 
additional or alternative assignments.

[[Page 72]]



Sec. 1210.3-3  Suspension.

    (a) The ACTION State Director may suspend a Volunteer for up to 30 
days in order to determine whether sufficient evidence exists to start 
termination proceedings against the Volunteer. Suspension is not 
warranted if the State Director determines that sufficient grounds 
already exist for the initiation of termination. In that event, the 
termination procedures contained in Sec. 1210.3-4 will be followed.
    (b) Notice of suspension may be written or verbal and is effective 
upon delivery to the Volunteer. Within 3 days after initiation of the 
suspension, the Volunteer will receive a written notice of suspension 
setting forth in specific detail the reason for the suspension. During 
the suspension period the Volunteer may not engage in project 
activities, but will continue to receive all allowances, including 
stipend.
    (c) At the end of the suspension period, the Volunteer must either 
be reassigned to a project, or termination proceedings must be 
initiated.



Sec. 1210.3-4  Initiation of termination.

    (a) Opportunity for Resignation. In instances where ACTION has 
reason to believe that a Volunteer is subject to termination for any of 
the grounds cited in Sec. 1210.3-1, an ACTION staff member will discuss 
the matter with the Volunteer. If, after the discussion, the staff 
member believes that grounds for termination exist, the Volunteer will 
be given an opportunity to resign. If the Volunteer chooses not to 
resign, the administrative procedures outlined below will be followed.
    (b) Notification of Proposed Termination. The Volunteer will be 
notified, in writing by certified mail, of ACTION's intent to terminate 
him or her by the ACTION State Director at least 15 days in advance of 
the proposed termination date. The letter must give the reasons for 
termination, and notify the Volunteer that he or she has 10 days within 
which to answer in writing and to furnish any affidavits or written 
material. This answer must be submitted to the ACTION State Director or 
a designee identified in the notice of proposed termination.
    (c) Review and Notice of Decision. (1) Within 5 working days after 
the date of receipt of the Volunteer's answer, the State Director or 
designee will send a written Notice of Decision to the Volunteer by 
certified mail. (If no answer is received from the Volunteer within the 
time specified, the State Director or designee will send such notice 
within 5 days after the expiration of the Volunteer's time to answer.)
    (2) If the decision is to terminate the Volunteer, the Notice will 
set forth the reasons for the decision, the effective date of 
termination (which, if the Volunteer has filed an answer, may not be 
earlier than 10 days after the date of the Notice of Decision), and the 
fact that the Volunteer has 10 days in which to submit a written appeal 
to the Regional Director.
    (3) A Volunteer who has not filed an answer pursuant to the 
procedures outlined above is not entitled to appeal the decision or 
request a hearing and may be terminated on the date of the Notice.
    (d) Allowances and Project Activities. (1) A Volunteer who files an 
answer within the 10 days allowed by Sec. 1210.3-4(b) with the State 
Director or designee following receipt of the notice of proposed 
termination, will be placed in Administrative Hold status, and may 
continue to receive regular allowances, but no stipend, in accordance 
with ACTION policy, until the appeal is finally decided. The Volunteer 
may not engage in any project related activities during this time.
    (2) If the proposed termination is reversed, the Volunteer's stipend 
and any other allowances lost during the period of review will be 
reinstated retroactively.



Sec. 1210.3-5  Preparation for appeal.

    (a) Entitlement to Representation. A Volunteer may be accompanied, 
represented and advised by a representative of the Volunteer's own 
choice at any stage of the appeal. A person chosen by the Volunteer must 
be willing to act as representative and not be disqualified because of 
conflict of position.
    (b) Time for Preparation and Presentation. (1) A Volunteer's 
representative, if a Volunteer or an employee of ACTION, must be given a 
reasonable

[[Page 73]]

amount of time off from assignment to present the appeal.
    (2) ACTION will not pay travel expenses or per diem travel 
allowances for either a Volunteer or the Volunteer's representative in 
connection with the preparation of the appeal, except to attend the 
hearing as provided in Sec. 1210.3-7(c)(5).
    (c) Access to Agency Records. (1) A Volunteer is entitled to review 
any material in his or her official Volunteer folder and any relevant 
Agency documents to the extent permitted by the Privacy Act and the 
Freedom of Information Act, (5 U.S.C. 552a; 5 U.S.C. 552). Examples of 
documents which may be withheld from Volunteers include references 
obtained under a pledge of confidentiality, official Volunteer folders 
of other Volunteers and privileged intra-Agency memoranda.
    (2) A Volunteer may review relevant documents in the possession of a 
sponsor to the same extent ACTION would be entitled to review them.



Sec. 1210.3-6  Appeal of termination.

    (a) Appeal to Regional Director. A Volunteer has 10 days from the 
Notice of Decision issued by the State Director or designee in which to 
appeal to the Regional Director. The appeal must be in writing and 
specify the reasons for the Volunteer's disagreement with the decision. 
The Regional Director has 10 days in which to render a written decision 
on the Volunteer's appeal, indicating the reason for the decision. In 
notifying the Volunteer of the decision, the Regional Director must also 
inform the Volunteer of his or her opportunity to request the 
appointment of a Hearing Examiner and the procedure to be followed.
    (b) Referral to Hearing Examiner. If the Volunteer is dissatisfied 
with the decision of the Regional Director, the Volunteer has 5 days in 
which to request the appointment of a Hearing Examiner. The Regional 
Director must act on that request within 5 days. The Hearing Examiner 
must possess the qualifications specified in Appendix A to this part, 
and may not be an employee of ACTION unless his or her principal duties 
are those of Hearing Examiner.



Sec. 1210.3-7  Inquiry by Hearing Examiner.

    (a) Scope of Inquiry. (1) The Examiner shall conduct an inquiry of a 
nature and scope appropriate to the issues involved in the termination. 
If the Examiner determines that the termination involves relevant 
disputed issues of fact, the Examiner must hold a hearing unless it is 
waived by the Volunteer. If the Examiner determines that the termination 
does not involve relevant disputed issues of facts, the Examiner need 
not hold a hearing, but must provide the parties an opportunity for oral 
presentation of their respective positions. At the Examiner's 
discretion, the inquiry may include:
    (i) The securing of documentary evidence;
    (ii) Personal interviews, including telephone interviews;
    (iii) Group meetings; or
    (iv) Affidavits, written interrogatories or depositions.
    (2) The Examiner's inquiry shall commence within 7 days after 
referral by the Regional Director. The Examiner shall issue a report as 
soon as possible, but within 30 days after referral, except when a 
hearing is held. If hearing is held, the Examiner shall issue a report 
within 45 days after the referral.
    (b) Conduct of Hearing. If a hearing is held, the conduct of the 
hearing and production of witnesses shall conform with the following 
requirements:
    (1) The hearing shall be held at a time and place determined by the 
Examiner who shall consider the convenience of parties and witnesses and 
expense to the Government in making the decision.
    (2) Ordinarily, attendance at the hearing will be limited to persons 
determined by the Examiner to have a direct connection with it. If 
requested by the Volunteer, the Examiner must open the hearing to the 
public.
    (3) The hearing shall be conducted so as to bring out pertinent 
facts, including the production of pertinent records.
    (4) Rules of evidence shall not be applied strictly, but the 
Examiner may exclude irrelevant or unduly repetitious testimony or 
evidence.
    (5) Decisions on the admissibility of evidence or testimony shall be 
made by the Examiner.

[[Page 74]]

    (6) Testimony shall be under oath or affirmation, administered by 
the Examiner.
    (7) The Examiner shall give the parties an opportunity to present 
oral and written testimony that is relevant and material, and to cross-
examine witnesses who appear to testify.
    (8) The Examiner may exclude any person from the hearing for conduct 
that obstructs the hearing.
    (c) Witnesses. (1) All parties are entitled to produce witnesses.
    (2) Volunteers, employees of a sponsor, and employees of ACTION 
shall be made available as witnesses when requested by the Examiner. The 
Examiner may request witnesses on his or her own initiative. Parties 
shall furnish to the Examiner and to opposing parties a list of proposed 
witnesses, and an explanation of what the testimony of each is expected 
to show, at least 10 days before the date of the hearing. The Examiner 
may waive the time limit in appropriate circumstances.
    (3) Employees of ACTION shall remain in a duty status during the 
time they are made available as witnesses.
    (4) Volunteers, employees and any other persons who serve as 
witnesses shall be free from coercion, discrimination, or reprisal for 
presenting their testimony.
    (5) The Examiner must authorize payment of travel expense and per 
diem at standard Government rates for the Volunteer and a representative 
to attend the hearing.
    (6) The Examiner may authorize payment of travel expense and per 
diem at standard Government rates for other necessary witnesses to 
attend the hearing if he or she determines that the required testimony 
cannot be satisfactorily obtained by affidavit, written interrogatories 
or deposition at less cost.
    (d) Report of Hearing. (1) The Examiner shall determine how any 
hearing shall be reported and shall have either a verbatim transcript or 
written summary of the hearing prepared, which shall include all 
pertinent documents and exhibits submitted and accepted. If the hearing 
is reported verbatim, the Examiner shall make the transcript a part of 
the record of the proceedings.
    (2) If the hearing is not reported verbatim, a suitable summary of 
pertinent portions of the testimony shall be made part of the record of 
proceedings. When agreed to in writing, the summary constitutes the 
report of the hearing. If the Examiner and the parties fail to agree on 
the hearing summary, the parties are entitled to submit written 
exceptions to any part of the summary, and these written exceptions and 
the summary will constitute the report of the hearing and shall be made 
part of the record of proceedings.
    (3) The Volunteer may make a recording of the hearing at the 
Volunteer's own expense if no verbatim transcript is made.



Sec. 1210.3-8  Termination file and Examiner's report.

    (a) Preparation and Content. The Examiner shall establish a 
termination file containing documents related to the termination, 
including statements of witnesses, records or copies thereof, and the 
report of the hearing when a hearing was held. The Examiner shall also 
prepare a report of findings and recommendations which shall be made 
part of the termination file.
    (b) Review by Volunteer. On completion of the termination file, the 
Examiner shall make it available to the Volunteer and representative for 
review and comment before submission to the Director of VISTA. Any 
comments by the Volunteer or representative should be submitted to the 
Hearing Examiner for inclusion in the termination file not later than 5 
days after the file is made available to them. The comments should 
identify those parts of the Examiner's report which support the appeal.
    (c) Submission of termination file. Immediately upon receiving the 
comments from the Volunteer the Hearing Examiner shall submit the 
termination file to the Director of VISTA.



Sec. 1210.3-9  Decision by Director of VISTA.

    The Director of VISTA shall issue a written decision, including a 
statement of the basis for the decision, within 10 days after receipt of 
the termination file. The decision of the Director of VISTA is the final 
Agency decision.

[[Page 75]]



Sec. 1210.3-10  Reinstatement of Volunteer.

    (a) If the Regional Director or Director of VISTA reinstates the 
Volunteer, the Regional Director may at his or her discretion reassign 
the Volunteer to the Volunteer's previous project or to another project. 
The Regional Director, in making such a decision, must request the 
Volunteer's views, but has the final decision on the Volunteer's 
placement.
    (b) If the Volunteer's termination is reversed, stipend and other 
allowances lost during the appeal period will be paid retroactively.



Sec. 1210.3-11  Disposition of termination and appeal files.

    All termination and appeal files shall be forwarded to the Director 
of VISTA after a final decision has been made and are subject to the 
provisions of the Privacy Act and Freedom of Information Act. No part of 
any successful termination appeal may be made part of, or included in, a 
Volunteer's official folder.



            Subpart D--National Grant Trainees and Volunteers



Sec. 1210.4  Early termination procedures for National Grant Trainees and Volunteers.

    Trainees and Volunteers serving in the National Grant Program as 
defined in Sec. 1210.1-3(e) will be subject to the same termination 
procedure as standard VISTA Trainees and Volunteers with the following 
exceptions:
    (a) For Trainees, the deselection procedure, [See Sec. 1210.2-2] 
will be handled by the Project Manager in ACTION/Headquarters.
    (b) The Initiation of termination, [See Sec. 1210.3-4 (a) and (b)] 
will be handled by the VISTA Project Manager in ACTION/Headquarters, 
with the concurrence of the appropriate State Director. The Review and 
Notice of Decision, [See Sec. 1210.3-4(c)] will be handled by the VISTA 
Project Manager in ACTION/Headquarters.
    (c) The Appeal of termination, [See Sec. 1210.3-6(a)] will be 
handled by the Chief of VISTA Branch and not the Regional Director.
    (d) The final decision on a Volunteer appeal will be made by the 
Director of VISTA as provided in Sec. 1210.3.

             Appendix A to Part 1210--Standard for Examiners

    (a) An Examiner must meet the requirements specified in either 
paragraph (1), (2), (3), or (4) of this appendix:
    (1)(a) Current employment in Grades GS-12 or equivalent, or above;
    (b) Satisfactory completion of a specialized course of training 
prescribed by the Office of Personnel Management for Examiners;
    (c) At least four years of progressively responsible experience in 
administrative, managerial, professional, investigative, or technical 
work which has demonstrated the possession of:
    (i) The personal attributes essential to the effective performance 
of the duties of an Examiner, including integrity, discretion, 
reliability, objectivity, impartiality, resourcefulness, and emotional 
stability.
    (ii) A high degree of ability to:
    --Identify and select appropriate sources of information; collect, 
organize, analyze and evaluate information; and arrive at sound 
conclusions on the basis of that information;
    --Analyze situations; make an objective and logical determination of 
the pertinent facts; evaluate the facts; and develop practical 
recommendations or decisions on the basis of facts;
    --Recognize the causes of complex problems and apply mature judgment 
in assessing the practical implications of alternative solutions to 
those problems;
    --Interpret and apply regulations and other complex written 
material;
    --Communicate effectively orally and in writing, including the 
ability to prepare clear and concise written reports; and
    --Deal effectively with individuals and groups, including the 
ability to gain the cooperation and confidence of others.
    (iii) A good working knowledge of:
    --The relationship between Volunteer administration and overall 
management concerns; and
    --The principles, systems, methods and administrative machinery for 
accomplishing the work of an organization.
    (2) Designation as an arbitrator on a panel of arbitrators 
maintained by either the Federal Mediation and Conciliation Service or 
the American Arbitration Association.
    (3) Current or former employment as, or current eligibility on the 
Office of Personnel Management's register for Hearing Examiner, GS-935-
0.
    (4) Membership in good standing in the National Academy of 
Arbitrators.
    (b) A former Federal employee who, at the time of leaving the 
Federal service, was in Grade GS-12 or equivalent, or above, and

[[Page 76]]

who meets all the requirements specified for an Examiner except 
completion of the prescribed training course, may be used as an Examiner 
upon satisfactory completion of the training course.



PART 1211--VOLUNTEER GRIEVANCE PROCEDURES--Table of Contents




Sec.
1211.1-1  Purpose.
1211.1-2  Applicability.
1211.1-3  Definitions.
1211.1-4  Policy.
1211.1-5  Matters not covered.
1211.1-6  Freedom to initiate grievances.
1211.1-7  Entitlement to representation.
1211.1-8  Time for preparation and presentation.
1211.1-9  Access to agency records.
1211.1-10  Informal grievance procedure.
1211.1-11  Initiation of formal grievance procedure.
1211.1-12  Investigation by grievance examiner.
1211.1-13  Grievance file and examiner's report.
1211.1-14  Final determination by Director of VISTA.
1211.1-15  Disposition of grievance appeal files.
1211.1-16  Grievance procedure for National VISTA Grant Volunteers.

Appendix A to Part 1211--Standards for Examiners

    Authority: Secs. 104(d), 402(14), 420, Pub. L. 93-113, 87 Stat. 398, 
407, and 414.

    Source: 45 FR 39271, June 10, 1980, unless otherwise noted.



Sec. 1211.1-1  Purpose.

    This part establishes procedures under which certain volunteers 
enrolled under Pub. L. 93-113 may present and obtain resolution of 
grievances.



Sec. 1211.1-2  Applicability.

    This part applies to all volunteers enrolled under part A of title I 
of the Domestic Volunteer Service Act of 1973, as amended, Pub. L. 93-
113, (42 U.S.C. 4951 et seq.).



Sec. 1211.1-3  Definitions.

    (a) Volunteer means a person enrolled and currently serving as a 
full-time volunteer under part A of title I of the Domestic Volunteer 
Service Act of 1973. For the purpose of this part, a volunteer whose 
service has terminated shall be deemed to be a volunteer for a period of 
90 days thereafter.
    (b) Grievance means a matter arising out of, and directly affecting, 
the volunteer's work situation, or a violation of those regulations 
governing the terms and conditions of service resulting in the denial or 
infringement of a right or benefit to the grieving volunteer. Terms and 
conditions of service refer to those rights and privileges accorded the 
volunteer either through statute, Agency regulation, or Agency policy.
    (1) The relief requested must be directed toward the correction of 
the matter involving the affected individual volunteer or the affected 
group of volunteers and may request the revision of existing policies 
and procedures to ensure against similar occurrences in the future. 
Requests for relief by more than one volunteer arising from a common 
cause within one region may be treated as a single grievance. The 
following are examples of grievable matters:
    (i) A volunteer is assigned to an area of harsh climate where 
special clothing is necessary and not already possessed by the 
volunteer. A request for a special allowance for such clothing is 
arbitrarily refused.
    (ii) A volunteer submits a request for reimbursement for 
transportation costs incurred while on authorized emergency leave which 
is denied.
    (iii) The project sponsor fails to provide adequate support to the 
volunteer necessary for that volunteer to perform the assigned work, 
such as the sponsor's failure to provide materials to the volunteer 
which is necessary for the performance of the volunteer's work.
    (c) State Program Officer means that ACTION official who is directly 
responsible at the first level for the project in which the volunteer is 
serving.
    (d) Sponsor means a public or private nonprofit agency to which 
ACTION has assigned volunteers.
    (e) Grievance Examiner or Examiner means a person having the 
qualifications described in Appendix A who is appointed to conduct an 
inquiry or hearing with respect to a grievance.
    (f) National VISTA Grants Program means a program operated under 
part A, title I of the Domestic Volunteer

[[Page 77]]

Service Act in which ACTION awards a grant to a national grantee to 
operate a VISTA Volunteer program on a national or multi-regional basis.
    (g) Local component means a local office or project affiliate of a 
national grantee which has VISTA Volunteers assigned to it under the 
National VISTA Grants Program.
    (h) The Act means the Domestic Volunteer Service Act of 1973, Pub. 
L. 93-113, (42 U.S.C. 4951 et seq.), as amended.



Sec. 1211.1-4  Policy.

    It is ACTION's policy to provide volunteers the widest latitude to 
present their grievances and concerns to appropriate officials of ACTION 
and of sponsoring organizations. This regulation is designed to assure 
that the rights of individual volunteers are recognized and to provide 
formal ways for them to seek redress with confidence that they will 
obtain just treatment.



Sec. 1211.1-5  Matters not covered.

    Matters not within the definition of a grievance as defined in 
Sec. 1211.1-3(b) are not eligible for processing under this procedure. 
The following are specific examples of excluded areas and are not 
intended as a complete listing of the matters excluded by this part:
    (a) The establishment of a volunteer project, its continuance or 
discontinuance, the number of volunteers assigned to it, increases or 
decreases in the level of support provided to a project, suspension or 
termination of a project, or selection and retention of project staff.
    (b) Matters for which a separate administrative procedure is 
provided.
    (c) The content of any law, published rule, regulation, policy or 
procedure.
    (d) Matters which are, by law, subject to final administrative 
review outside ACTION.
    (e) Actions taken in compliance with the terms of a contract, grant, 
or other agreement.
    (f) The internal management of the ACTION Agency unless such 
management is specifically shown to individually and directly affect the 
volunteer's work situation or the terms and conditions of service as 
defined in Sec. 1211.1-3(b).



Sec. 1211.1-6  Freedom to initiate grievances.

    The initiation of a grievance shall not be construed as reflecting 
on a volunteer's standing, performance or desirability as a volunteer. 
ACTION intends that each supervisor and sponsor, as well as ACTION and 
its employees, maintain a healthy atmosphere in which a volunteer can 
speak freely and have frank discussions of problems. A volunteer who 
initiates a grievance shall not as a result of such an action be 
subjected to restraint, interference, coercion, discrimination or 
reprisal.



Sec. 1211.1-7  Entitlement to representation.

    A volunteer may be accompanied, represented, and advised by a 
representative of the volunteer's own choice at any stage of the 
proceeding. The volunteer shall designate his or her representative in 
writing. A person chosen by the volunteer must be willing to act as 
representative and have no conflict between his or her position and the 
subject matter of the grievance.



Sec. 1211.1-8  Time for preparation and presentation.

    (a) Both a volunteer and a volunteer's representative, if another 
volunteer or an employee of ACTION, must be given a reasonable amount of 
administrative leave from their assignments to present a grievance or 
appeal.
    (b) ACTION will not pay travel expense or per diem travel allowances 
for either a volunteer or his or her representative in connection with 
the preparation of a grievance or appeal, except in connection with a 
hearing and the examination of the grievant file as provided in 
Sec. 1211.1-12(c).



Sec. 1211.1-9  Access to agency records.

    (a) A volunteer is entitled to review any material in his or her 
official volunteer folder and any relevant Agency documents to the 
extent permitted by the Freedom of Information Act and the Privacy Act, 
as amended, 5 U.S.C. 552, U.S.C. 552a. Examples of documents which may 
be withheld from volunteers include references obtained

[[Page 78]]

under a pledge of confidentiality, official volunteer folders of other 
volunteers, and privileged intra-agency documents.
    (b) A volunteer may review relevant documents in the possession of a 
sponsor to the extent such documents are disclosable under the Freedom 
of Information Act and Privacy Act.



Sec. 1211.1-10  Informal grievance procedure.

    (a) Initiation of grievance. A volunteer may initiate a grievance 
within 15 calendar days after the event giving rise to the grievance 
occurs, or within 15 calendar days after becoming aware of the event. A 
grievance arising out of a continuing condition or practice that 
individually affects the volunteer may be brought at any time. A 
volunteer initiates a grievance by presenting it in writing to the chief 
executive officer of the sponsor, or the representative designated to 
receive grievances from volunteers. The designated representative may 
not be the immediate supervisor of volunteers assigned to the sponsor. 
The chief executive officer of the sponsor or the designated 
representative shall respond in writing to the grievance within five (5) 
working days after receipt. The chief executive officer or designee may 
not refuse to respond to a complaint on the basis that it is not a 
grievance as defined in Sec. 1211.1-3(b), or that it is excluded from 
coverage under Sec. 1211.1-5, but may, in the written response, refuse 
to grant the relief requested on either of these grounds.
    If the grievance involves a matter over which the sponsor has no 
control, or if the chief executive officer is the immediate supervisor 
of the volunteer, the procedures described in this section may be 
omitted, and the volunteer may present the grievance in writing directly 
to the State Director or designee as described in paragraph (b) of this 
section within the time limits specified in this paragraph (a).
    (b) Consideration by ACTION State Director or designee. If the 
matter is not resolved to the volunteer's satisfaction by the sponsor's 
chief executive officer, the volunteer may submit the grievance in 
writing to the ACTION State Director or designee within five (5) working 
days after receipt of the decision of the sponsor's chief executive 
officer. The State Director or designee may not refuse to receive a 
complaint, even if he or she believes it does not constitute a 
grievance, and shall respond to it in writing within five (5) working 
days after receipt. The response may indicate that the matter is not 
grievable. If the State Director or designee fails to meet the time 
limit for response, the volunteer may initiate a formal grievance.
    (c) Discussion. All parties to the informal grievance procedure must 
be prepared to participate in full discussion of the grievance, and to 
permit the participation of others who may have knowledge of the 
circumstances of the grievance in the discussion. State Program Officers 
and other ACTION employees may participate in discussions and provide 
guidance with respect to ACTION policies and procedures, at the request 
of any party, even prior to submission of a grievance to them.
    (d) Sponsor grievance procedure. A sponsor may substitute its own 
grievance procedure for the procedure described in paragraph (a) of this 
section. Any such procedure must provide the volunteer with an 
opportunity to present a grievance at least as comprehensive as that 
contained in this section, must meet the time limits of this section, 
and must be provided in writing to all volunteers. In order to utilize 
its own grievance procedures, the sponsor must obtain approval of the 
procedure from the ACTION State Director and file a copy of this 
approved procedure with the State Office.



Sec. 1211.1-11  Initiation of formal grievance procedure.

    (a) Submission of grievance to Regional Director. If a volunteer is 
dissatisfied with the response of the State Director or designee 
required by Sec. 1211.1-10(b), he or she may present the grievance in 
writing to the Regional Director. To be eligible for the formal 
grievance procedure, the volunteer must have completed action under the 
informal procedure contained in Sec. 1211.1-10 or have alleged that the 
State Director or designee exceeded the time specified for response.

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    (b)  Contents of grievance. The volunteer's grievance must be in 
writing, contain sufficient detail to identify the subject matter of the 
grievance, specify the relief requested, and be signed by the volunteer 
or a person designated in writing by the volunteer to be the 
representative for the purpose of the grievance.
    (c) Time limit. The volunteer must submit the grievance to the 
Regional Director or designee no later than 15 calendar days after 
receipt of the informal response by the State Director or designee. If 
no response is received by the volunteer 15 calendar days after the 
grievance is received by the State Director or designee, the volunteer 
may submit the grievance directly to the Regional Director or designee 
for consideration.
    (d) Within ten (10) working days of the receipt of the grievance, 
the Regional Director or designee shall, in whole or in part, either 
decide it on its merits or reject the grievance. A grievance may be 
rejected, in whole or in part, for the following reasons:
    (1) It was not filed within the time limit specified in paragraph 
(c) of this section, or
    (2) The grievance consists of matters not contained within the 
definition of a grievance.
    (e) Rejection of a grievance by the Regional Director or designee 
may be appealed by the volunteer within ten (10) days of receipt of the 
notice to the Office of General Counsel. The Office shall immediately 
request the grievance file from the Regional Director and, within five 
(5) working days of receipt of it, determine the appropriateness of the 
rejection. If the grievance was properly rejected by the Regional 
Director, the Office shall so notify the volunteer of its opinion and 
the reasons supporting it, and that such rejection is the final Agency 
decision in the matter. If the Office determines that the grievance was 
improperly rejected, it shall return the grievance to the Regional 
Director for a determination on its merits by the Regional Director. 
Within ten (10) working days of such notification and receipt of the 
grievance file, the Regional Director or designee shall notify the 
volunteer in writing of the decision on the merits and specify the 
grounds for the decision and of the volunteer's right to appeal.
    (f) Time Limit. If a volunteer is dissatisfied with the decision of 
the Regional Director or designee on the merits of the grievance, he or 
she shall notify the Regional Director within five (5) calendar days 
from receipt of the decision and request the appointment of an Examiner. 
If the volunteer receives no response from the Regional Director or 
Office of General Counsel as required by paragraphs (d) and (e) of this 
section within five (5) calendar days after the prescribed time limits, 
the volunteer may request in writing that the Regional Director appoint 
a Grievance Examiner. Upon receipt of this request, the Regional 
Director or designee shall appoint within five (5) calendar days an 
Examiner who shall possess the qualifications specified in Appendix A to 
this part.



Sec. 1211.1-12  Investigation by Grievance Examiner.

    (a) Scope of investigation. The Examiner shall conduct an 
investigation of a nature and scope appropriate to the issues involved 
in the grievance.
    Unless waived by the volunteer, a hearing must be held if the 
Examiner finds that the grievance involves disputed questions of fact 
that go to the heart of the agency determination. Only those facts found 
necessary by the Examiner on which to base his or her findings go to the 
heart of the Agency determination.
    If the grievance does not involve such disputed questions of fact, 
or if the volunteer waives a hearing, the Examiner need not hold a 
hearing but must provide the parties an opportunity for presentation of 
their respective positions. At the Examiner's discretion, the 
investigation may include:
    (1) The securing of documentary evidence,
    (2) Personal interviews, including telephone interviews,
    (3) Group meetings,
    (4) Affidavits, written interrogatories or depositions.
    (b)  Conduct of Hearing. If a hearing is held, the conduct of the 
hearing and production of witnesses shall conform with the following 
requirements:

[[Page 80]]

    (1) The hearing shall be held at a time and place determined by the 
Examiner who shall consider the convenience of parties and witnesses and 
expense to the Government in making his or her decision.
    (2) Attendance at the hearing will be limited to persons determined 
by the Examiner to have a direct connection with the grievance. If 
requested by the volunteer, the Examiner must open the hearing to the 
public.
    (3) The hearing shall be conducted so as to bring out pertinent 
facts, including the production of pertinent records.
    (4) Formal rules of evidence shall not be applied strictly, but the 
Examiner may exclude irrelevant or unduly repetitious testimony or 
evidence.
    (5) Decisions on the admissibility of evidence or testimony shall be 
made by the Examiner.
    (6) Testimony shall be under oath or affirmation, administered by 
the Examiner.
    (7) The Examiner shall give the parties an opportunity to present 
oral and written testimony that is relevant and material, and to cross-
examine witnesses who testify.
    (8) The Examiner may exclude any person from the hearing for conduct 
that obstructs the hearing.
    (c) Witnesses. (1) All parties are entitled to produce witnesses.
    (2) Volunteers, employees of a sponsor, and employees of ACTION 
shall be made available as witnesses when requested by the Examiner. The 
Examiner may request witnesses on his or her initiative. Parties shall 
furnish to the Examiner and to opposing parties a list of proposed 
witnesses, and an explanation of what the testimony of each is expected 
to show, at least ten (10) calendar days before the date of the hearing. 
The Examiner may waive the time limit in appropriate circumstances.
    (3) Employees of ACTION shall remain in a duty status during the 
time they are made available as witnesses.
    (4) Volunteers, employees and any other persons who serve as 
witnesses shall be free from coercion, discrimination or reprisal for 
presenting their testimony.
    (5) The Examiner must authorize payment of travel expenses and per 
diem at standard Government rates for the volunteer and the 
representative to attend the hearing. Payment of travel expenses and per 
diem at standard Government rates for other witnesses to attend the 
hearing are authorized only after the Examiner determines that the 
required testimony cannot be satisfactorily obtained by affidavit, 
written interrogatories, or deposition, at a lesser cost.
    (d) Recording of Hearing. A grievant may make a recording of the 
hearing at his or her own expense if no verbatim transcript is made. 
Such a recording is in no way to be treated as the official transcript 
of the hearing.
    (e) Report of Hearing. The Examiner shall normally prepare a written 
summary of the hearing which shall include all documents and exhibits 
submitted to and accepted by the Examiner during the course of the 
grievance. An Examiner may require a verbatim transcript if he or she 
determines that the grievance is so complex as to require such a 
transcript. If the hearing is reported verbatim, the Examiner shall make 
the transcript a part of the record of the proceedings. If the hearing 
is not reported verbatim, a suitable summary of pertinent portions of 
the testimony shall be made part of the record of proceedings. In such 
cases, the summary together with exhibits shall constitute the report of 
the hearing. The parties are entitled to submit written exceptions to 
any part of the summary, and these written exceptions shall be made part 
of the record of proceedings.



Sec. 1211.1-13  Grievance file and examiner's report.

    (a) Preparation and content. The Examiner shall establish a 
grievance file containing all documents related to the grievance, 
including statements of witnesses, records or copies thereof, and the 
report of the hearing when a hearing was held. The file shall also 
contain the Examiner's report of findings and recommendations.
    (b) Review by volunteer. On completion of the inquiry, the Examiner 
shall make the grievance file available to the volunteer and the 
representative, if any, for review and comment. Their coments, if any, 
shall be submitted to

[[Page 81]]

the Examiner within five (5) calendar days after the file is made 
available and shall be included in the file.
    (c) Examiner's report. After the volunteer has been given an 
opportunity to review the grievance file, the Examiner shall submit the 
complete grievance file to the Director of VISTA.



Sec. 1211.1-14  Final determination by Director of VISTA.

    The Director of VISTA or designee shall issue a written decision on 
the appeal to the volunteer within ten (10) working days after receipt 
of the appeal file. The decision shall include a statement of the basis 
for the determination, and shall be the final Agency decision.



Sec. 1211.1-15  Disposition of grievance appeal files.

    All grievance appeal files shall be retained by the Director of 
VISTA after the grievance has been settled, or a final decision has been 
made and implemented. No part of a grievance or appeal file may be made 
part of, or included in, a volunteer's official folder.



Sec. 1211.1-16  Grievance procedure for National VISTA Grant Volunteers.

    The grievance procedure for National VISTA Grant Volunteers shall be 
the same as that provided in this part with the following substitutions 
of officials:
    (a) Informal grievance procedure:
    (1) The initiation of an informal grievance for a National Grant 
VISTA, see Sec. 1211.1-10, shall normally be to the sponsor of the local 
component. If the grievance involves a matter solely within the control 
of the ACTION State Office, the volunteer may present the grievance to 
the State Director or designee in lieu of the local component sponsor.
    (2) If the volunteer is not satisfied with the response of the 
appropriate official (sponsor of local component, or State Director or 
designee), the volunteer may submit the grievance to the chief executive 
of the national grantee.
    (b) Formal grievance procedure:
    The Chief, VISTA Program Development Branch or designee shall 
replace the Regional Director as the official in Sec. 1211.1-11.

            Appendix A to Part 1211--Standards for Examiners

    An examiner must meet the requirements specified in either paragraph 
(1), (2), (3), or (4) of this appendix:
    (1) Current or former federal employees now or formerly in grade GS-
12 or equivalent, or above who have:
    (a) At least four (4) years of progressively responsible experience 
in administrative, managerial, professional, investigative, or technical 
work which has demonstrated the possession of:
    (i) The personal attributes essential to the effective performance 
of the duties of an Examiner, including integrity, discretion, 
reliability, objectivity, impartiality, resourcefulness, and emotional 
stability.
    (ii) A high degree of ability to:
    Identify and select appropriate sources of information; collect, 
organize, analyze, and evaluate information; and arrive at sound 
conclusions on the basis of that information;
    Analyze situations; make an objective and logical determinationn of 
the pertinent facts; evaluate the facts; and develop practicable 
recommendations or decisions on the basis of facts;
    Recognize the causes of complex problems and apply mature judgment 
in assessing the practical implications of alternative solutions to 
those problems;
    Interpret and apply regulations and other complex written material;
    Communicate effectively, orally and in writing, including the 
ability to prepare clear and concise written reports; and
    Deal effectively with individuals and groups, including the ability 
to gain the cooperation and confidence of others.
    (iii) A good working knowledge of:
    The relationship between volunteer administration and overall 
management concerns; and
    The principles, systems, methods, and administrative machinery for 
accomplishing the work of an organization.
    (2) Designation as an arbitrator on a panel of arbitrators 
maintained by either the Federal Mediation and Conciliation Service or 
the American Arbitration Association.
    (3) Current or former employment as, or current eligibility on the 
Office of Personnel Management register for Examiners
GS-935-0.
    (4) Membership in good standing in the National Academy of 
Arbitrators.


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PART 1212--VOLUNTEER AGENCIES PROCEDURES FOR NATIONAL GRANT VOLUNTEERS--[RESERVED]






PART 1213--ACTION COOPERATIVE VOLUNTEER PROGRAM--Table of Contents




                           Subpart A--General

Sec.
1213.1-1  Introduction.

               Subpart B--Description of Volunteer Service

1213.2-1  Enrollment and duration of service.
1213.2-2  Provisional volunteers.
1213.2-3  Extension of service and reenrollment.
1213.2-4  Living conditions.
1213.2-5  Role of volunteer.

              Subpart C--ACTION Provided Volunteer Support

1213.3-1  Financial support.
1213.3-2  Transportation.
1213.3-3  Health support.
1213.3-4  Legal support.
1213.3-5  Insurance.
1213.3-6  Leave.
1213.3-7  Federal service.
1213.3-8  Lost property.

              Subpart D--Sponsor Provided Volunteer Support

1213.4-1  Training.
1213.4-2  Supervision.
1213.4-3  Job-related transportation.
1213.4-4  Supplies and equipment and office facilities.
1213.4-5  Emergencies.

   Subpart E--Administrative Hold--Grievances, Removal, Resignation, 
                       Suspension, and Termination

1213.5-1  Administrative hold.
1213.5-2  Volunteer grievances.
1213.5-3  Resignation.
1213.5-4  Sponsor request for removal of volunteer.
1213.5-5  Suspension and termination.

        Subpart F--Special Conditions Affecting Volunteer Service

1213.6-1  Sponsor's employment of volunteer.
1213.6-2  Nondisplacement of employees and impairment of contracts of 
          service.
1213.6-3  Nonappropriate assignments.
1213.6-4  Political activities and limitation of unlawful activities.
1213.6-5  Nondiscrimination.
1213.6-6  Religious activities.
1213.6-7  Evaluation.
1213.6-8  Limitation on labor and anti-labor activity.
1213.6-9  Loans and debts.

                        Subpart G--Miscellaneous

1213.7-1  Student loan deferrals.
1213.7-2  Death benefits.
1213.7-3  Firearms.

    Authority: Secs. 121, 122, 402 (12) and (14) and 420 of Pub. L. 93-
113, 87 Stat. 395, 400, 401, 407 and 414.

    Source: 40 FR 10670, Mar. 7, 1975, unless otherwise noted.



                           Subpart A--General



Sec. 1213.1-1   Introduction.

    (a) Section 122(a), part C, of the Domestic Volunteer Service Act of 
1973 (the Act), Pub. L. 93-113, 87 Stat. 401, authorizes the Director of 
ACTION to conduct and to make contracts for special volunteer programs 
to encourage wider volunteer participation on a full-time basis to 
strengthen and supplement efforts to meet a broad range of human, 
social, and environmental needs, particularly those related to poverty. 
The ACTION Cooperative Volunteer Program (ACV) is one of these special 
volunteer programs. It provides full-time volunteer service 
opportunities for individuals in assignments with nonprofit and public 
agency sponsors involving a broad range of human, social, and 
environmental needs, particularly those related to poverty. 
Organizations wishing to become sponsors enter into an agreement with 
ACTION to share expenses associated with ACV volunteer assignments. The 
sponsor's share consists of reimbursing ACTION for the direct costs of 
volunteer support, i.e. allowances, stipend and other direct benefits.
    (b) Section 122(b) requires that the assignment of ACV volunteers be 
on such terms and conditions as the Director shall determine.
    (c) Section 122(c) provides that the Director may provide to persons 
serving as full-time volunteers in a program of at least one year's 
duration such allowances and stipends as he determines are necessary. 
The kinds and

[[Page 83]]

amount of such allowances and stipends may not exceed those authorized 
to be provided to VISTA volunteers (part A, title I, Pub. L. 93-113).



               Subpart B--Description of Volunteer Service



Sec. 1213.2-1   Enrollment and duration of service.

    ACTION enrolls an individual in ACV during the preservice processing 
it provides. Such enrollment is for a period comprising the time of such 
processing, ACTION preservice orientation, and a one-year assignment to 
a project.



Sec. 1213.2-2   Provisional volunteers.

    Individuals are considered to be provisional volunteers during the 
period of pre-service processing and ACTION preservice orientation. They 
have all the rights and benefits and are subject to all the duties of 
volunteers, except as expressly provided in these regulations or where 
it would appear from the language of a section of the regulations to be 
inappropriate.



Sec. 1213.2-3   Extension of service and reenrollment.

    In certain situations, a volunteer may have his period of volunteer 
service extended for not more than one year, at the request of a sponsor 
and the concurrence of the appropriate ACTION Regional Director.
    A volunteer may only be reenrolled for a period of at least one 
year. A sponsor must request the reenrollment and it must be approved by 
the appropriate ACTION Regional Director. No volunteer may serve for 
more than a total of five years in full-time volunteer programs under 
Title I of Pub. L. 93-113.
    Such extensions and reenrollments may be for the same or different 
projects and may include interregional and intraregional transfers.



Sec. 1213.2-4   Living conditions.

    To the extent practicable volunteers are expected to make a personal 
commitment to live among and at the economic level of the people served 
by the project in which the volunteer works. The sponsor will insure 
that this commitment is observed.



Sec. 1213.2-5   Role of the volunteer.

    The volunteer's assignments are carried out under the auspices of 
the sponsor. The volunteer assumes a ``live-in'' obligation carrying his 
work into all facets of community life and social activity. He is 
available for service without regard to regular working hours seven days 
a week, except for periods of approved leave.



              Subpart C--ACTION Provided Volunteer Support



Sec. 1213.3-1   Financial support.

    (a) Food and lodging. Each ACV volunteer receives from ACTION a food 
and lodging allowance approximately commensurate with the actual 
standard of living of the residents of the community to which he is 
assigned. The amount of this allowance is determined by the Regional 
Office after consultation with the sponsor.
    (b) Personal living allowance. ACTION also provides each volunteer a 
personal living allowance of $75 per month. It is intended to cover 
incidental expenses and local travel.
    (c) Adjustment allowance. At the beginning of service, a volunteer 
may receive from ACTION an adjustment allowance when necessary to cover 
the initial cost of securing and setting up living quarters. Such an 
allowance is usually provided only to volunteers who serve outside their 
home area. It is not usually available to volunteers recruited locally 
for an assignment in their home or nearby communities.
    (d) Stipend. At the conclusion of the term of service, each 
volunteer receives a stipend of $50 for each month of service on an ACV 
project. Volunteers may be authorized to make bi-weekly allotments from 
the stipend, not in excess of $12.50, in extraordinary circumstances. 
These may include allotments for obligations incurred prior to service 
for family support, insurance or loan payments and income taxes.
    (e) Provisional volunteers. Provisional volunteers do not receive 
any allowances nor do they accrue stipends. During the period they are 
provisional volunteers their food and lodging is provided by ACTION and 
they receive a

[[Page 84]]

nominal amount of money for living expenses.
    (f) Emergencies. In case of emergencies, ACTION may provide the 
volunteer with assistance and support to prevent injury or hardship to 
him, including a $500 advance against allowances and stipends due the 
volunteer or to be paid subsequently to him during his volunteer 
service.
    (g) No dependent support. ACTION assumes no financial responsibility 
for a non-volunteer spouse, a volunteer's children or other dependents.



Sec. 1213.3-2   Transportation.

    ACTION will be responsible for providing the volunteer with needed 
transportation for the following purposes:
    (a) To, and when appropriate, from volunteer/sponsor staging;
    (b) To the pre-service processing site, whether it is the ACTION 
Regional Office or any other designated facility;
    (c) To the project site following completion of pre-service 
processing, and at the beginning of the volunteer's terms of service;
    (d) For the return trip from the projects site to the volunteer's 
home of record following completion of service;
    (e) Whenever necessary to enable the volunteer to travel outside the 
geographic area to which he has been assigned when he does so at the 
request of the Government;
    (f) When approved in cases of emergency.
    For the purpose of paragraph (d) of this section, the term ``home of 
record'' shall be either:
    (1) The legal residence of the volunteer's parent or legal guardian 
if the volunteer had been residing with the parent or legal guardian 
immediately prior to entering ACTION service, or if the volunteer was a 
full-time student whose permanent residency was with the parent or legal 
guardian.
    (2) The residence established by the volunteer while attending 
college immediately prior to entering ACTION.
    (3) The residence established by the volunteer while employed 
immediately prior to entering ACTION.
    (4) The legal residence established by the volunteer for purposes of 
voting and/or payment of state tax.
    Each volunteer must specify a home of record at the time he is 
enrolled. Subsequent modification of the home of record may be 
authorized in certain circumstances at the discretion of the Regional 
Director.



Sec. 1213.3-3   Health support.

    ACTION provides ACV volunteers with a health benefits program at no 
cost to the volunteers.
    Coverage includes most medical and surgical costs, hospitalization, 
prescription drugs, and emergency dental care. ACTION reserves the right 
to alter the extent, or the method of providing health care for 
volunteers. In nonemergency situations, the Regional Office must clear 
hospitalization or other serious (in excess of $150) treatments.



Sec. 1213.3-4   Legal support.

    ACTION will pay certain legal expenses where volunteers are involved 
in criminal or civil judicial or administrative proceedings to the 
extent provided in part 1220.



Sec. 1213.3-5   Insurance.

    (a) ACV volunteers are covered by the Federal Employees Compensation 
Act. This provides a broad-based workmen's compensation-type coverage 
for volunteer job-related accidents and occupational sickness.
    (b) ACV volunteers are also Federal employees for the purpose of the 
Federal Tort Claims Act. Any third-party claims for injury or damage to 
property arising out of the volunteer's job-related activities will be 
treated as claims against the United States.



Sec. 1213.3-6   Leave.

    (a) Vacation leave. Once on the job for four months, an ACV 
volunteer earns one day of leave for each full month of service up to a 
maximum of seven days, including one weekend. No leave is to be granted 
during the last month of service, except for emergencies. During leave, 
the volunteer's regular support allowances are continued. No leave may 
be taken without the approval of the sponsor.
    (b) Emergency leave. Should a member of a volunteer's immediate 
family--spouse, mother, father, sister, brother,

[[Page 85]]

child or guardian--become critically ill or die, emergency leave may be 
granted by the sponsor for a period of up to one week. Any additional 
time requires the approval of the ACTION Regional Office. It does not 
count against vacation leave. The volunteer will be paid for 
transportation by the fastest scheduled carrier to and from the 
emergency site and for actual travel expenses incurred, but not in 
excess of those authorized in standard government travel regulations.



Sec. 1213.3-7   Federal service.

    Section 415(c) of the Act provides that should an ACV volunteer 
subsequently enter Federal service, his period of volunteer service 
counts as a like period of Federal service for certain purposes, 
including job security and retirement benefits.



Sec. 1213.3-8   Lost property.

    (a) The Regional Director may at his discretion reimburse volunteers 
or trainees for or replace lost, damaged, or stolen property; cash 
representing certain allowances; and equipment and supplies if:
    (1) Reimbursement is essential to the volunteer's capacity to serve 
effectively in his particular assignment for the duration of his 
service, and
    (2) The loss, damage, or theft did not result from the volunteer's 
negligence.
    (b) Lost or stolen cash may be reimbursed only if it represents the 
volunteer's food and lodging or living allowance or other payments 
essential to the volunteer's service. Lost or stolen cash representing 
payment of stipend or vacation allowances will not be reimbursed.
    (c) No reimbursement will be made for luxury items, such as 
photographic or phonographic equipment or jewelry.



              Subpart D--Sponsor Provided Volunteer Support



Sec. 1213.4-1   Training.

    (a) The sponsor is fully responsible for designing and implementing 
a program of in-service training which will completely equip the 
volunteer to perform the tasks to which he has been assigned.
    (b) In-service training will be conducted by the sponsor in 
accordance with plans agreed upon during the program development 
process, and submitted to ACTION as part of the agreement. Those plans 
must be tailored to the volunteer's needs for additional skills and 
information in the performance of assigned tasks.



Sec. 1213.4-2   Supervision.

    The sponsor has the sole responsibility for providing appropriate 
supervision, leadership, and direction to the volunteers in conformance 
with the plan prepared in cooperation with ACTION and submitted with the 
project proposal. The plan is to be executed in such a manner that the 
volunteers can attain project goals within the proposed time frame.



Sec. 1213.4-3   Job-related transportation.

    The sponsor is responsible for determining the job-related 
transportation needs of the volunteer. The volunteers are expected to 
use public transportation in connection with their work whenever it is 
available and adequate. When it is not, the sponsor shall provide 
suitable private transportation, including obtaining and maintaining 
motor vehicles for the job-related use of the volunteers as appropriate. 
Whether the sponsor purchases vehicles or obtains them through a leasing 
arrangement, he is responsible for monitoring the use of those vehicles 
and restricting the use of transportation provided to volunteers to work 
on the project. The volunteer and the sponsor are jointly responsible 
for compliance with all state and local laws concerning vehicle 
registration, operator licensing, and financial responsibility on any 
private vehicles used by the volunteer, either as part of his work 
assignment or for personal convenience.



Sec. 1213.4-4   Supplies and equipment and office facilities.

    The sponsor is responsible for providing most job-related support 
involving facilities, equipment, and consumable supplies needed by the 
volunteer, including telephone and secretarial support.

[[Page 86]]



Sec. 1213.4-5   Emergencies.

    In case of emergencies in which it is not possible for ACTION to 
provide a volunteer with the necessary assistance and support in time to 
prevent injury or hardship to him, the sponsor may furnish the needed 
assistance, including an advance of up to $500 from its own funds to the 
volunteer. Such advances, however, should be cleared in advance by 
telephone with the ACTION Regional Director or designee.



   Subpart E--Administrative Hold--Grievances, Removal, Resignation, 
                       Suspension and Termination



Sec. 1213.5-1   Administrative hold.

    (a) Volunteers will be placed in Administrative Hold Status under 
the following circumstances:
    (1) No placement after training.
    (2) Pending transfer to a new project.
    (3) Leave taken for personal reasons in excess of the seven days for 
vacation leave, seven days for emergency leave, seven days for extension 
beyond three months, and fourteen days for reenrollment.
    (4) Absence from project site without authority of the sponsoring 
organization.
    (5) During termination action.
    (6) Arrest and placement in jail without bail, depending on nature 
of charges.
    (7) Removal from site at request of sponsoring organization, pending 
decision on transfer to new assignment.
    (b) Exceptions to these guidelines must be authorized by the 
Regional Director. Volunteers may be placed in Administrative Hold 
status for up to 30 days. In exceptional circumstances, the Regional 
Director may extend this period of time as appropriate. The Regional 
Director may modify any and all allowances, including stipend, when a 
volunteer is placed in Administrative Hold status.



Sec. 1213.5-2   Volunteer grievances.

    (a) At times, a volunteer will consider that he has been adversely 
affected in some matter arising out of his work situation or the terms 
and conditions of his service. The Volunteer Grievance Procedure, part 
1211, furnished to each volunteer, applies to certain of these matters. 
This procedure is applicable to situations in which the volunteer 
believes there has been a deviation from, misinterpretation or 
misapplication of laws, regulations, policies or procedures governing 
his service.
    (b) The Grievance Procedure establishes a formal and informal 
mechanism to resolve such problems. The informal mechanism aims to 
resolve disputes at the level of the sponsor and the state program 
officer. The formal part of the Grievance Procedure provides a hearing 
in certain cases and includes appeals to ACTION's national office in 
Washington.
    (c) The procedure that the sponsor employs at the informal stage of 
the ACTION Grievance Procedure will also be used for any disputes 
between the sponsor and a volunteer not involving a law or regulation or 
an ACTION policy and procedure.



Sec. 1213.5-3   Resignation.

    A volunteer may resign at any time, by notifying the sponsoring 
organization and the Regional Office. When practicable, thirty days 
advance notice should be given to insure that the departure will be only 
minimally disruptive to the project. In case of resignation, all 
outstanding advances, including unearned vacation allowances, are 
deducted from the volunteer's stipend. The volunteer receives his final 
stipend check three to five weeks after regional submission of the 
termination papers to ACTION/Washington.



Sec. 1213.5-4   Sponsor request for removal of volunteer.

    The sponsoring organization may request ACTION to remove a volunteer 
whose performance in its view is unsatisfactory at any time. Before 
resorting to a formal request for removal the sponsor should contact the 
appropriate ACTION state official to seek help in trying to resolve any 
problem with a volunteer. The sponsor may then prepare a written request 
for removal and submit it to the Regional Office. ACTION may, depending 
on the circumstances, follow one of three courses of action: (a) Suspend 
the volunteer, (b)

[[Page 87]]

terminate him, or (c) transfer him to another project.



Sec. 1213.5-5   Suspension and termination.

    (a) Causes. ACTION may suspend or terminate a volunteer for any of 
the following reasons:
    (1) Conviction of any criminal offense under Federal, state, or 
local statute or ordinance;
    (2) Violation of any provision of the Domestic Volunteer Service Act 
of 1973, or any ACTION policy, regulation or instruction;
    (3) Failure, refusal or inability to perform prescribed project 
duties as outlined in the project proposal and directed by the 
sponsoring organization to which the volunteer is assigned;
    (4) Involvement in activities which substantially interfere with the 
volunteer's performance of his/her duties on the project;
    (5) Intentional false statement, omission, fraud, or deception in 
obtaining selection as a volunteer;
    (6) Any conduct on the part of the volunteer which substantially 
diminishes his/her effectiveness as a volunteer;
    (7) Inability to perform the project duties because of serious 
illness, medical disability, or pregnancy, as determined by the 
attending physician, in accordance with ACTION policy;
    (8) Lack of a viable job for which the volunteer is qualified if the 
initial job assignment ends or is terminated prior to completion of a 
period of service;
    (9) Unsatisfactory job performance. Procedures for the suspension 
and termination of volunteers are contained in part 1210.
    (b) Suspension. Volunteers may be suspended for up to 30 days to 
enable ACTION to determine whether termination proceedings should be 
started against the volunteer. Suspension is not warranted if sufficient 
evidence exists to start termination proceedings.
    (c) Termination of or refusal to renew ACTION/sponsoring 
organization agreement. If the Memorandum of Agreement between ACTION 
and a sponsoring organization is terminated or not renewed, a volunteer 
who is removed from the project and whose removal was not caused by 
conduct which would otherwise be grounds for termination is entitled to 
the following administrative considerations:
    (1) Reassignment to another project where possible.
    (2) If reassignment is not possible at the time of project close-
out, and if the volunteer wishes to resume service (provided that his/
her job performance has been satisfactory), he/she may, at the 
discretion of the Regional Director, receive special consideration for 
reinstatement as soon as an appropriate slot is open.

If a volunteer wishes, he/she may terminate without prejudice in the 
event that a Memorandum of Agreement between ACTION and the sponsor is 
terminated.
    (d) Deselection of a provisional volunteer. The Regional Director 
may deselect a provisional volunteer on the grounds listed in paragraph 
(a) of this section or for a failure to meet training or selection 
standards during pre-service orientation. Procedures for such 
deselection are contained in part 1210.

[40 FR 10670, Mar. 7, 1975; 46 FR 6951, Jan. 22, 1981]



        Subpart F--Special Conditions Affecting Volunteer Service



Sec. 1213.6-1   Sponsor's employment of volunteer.

    ACV volunteers make a commitment to one full year of ACTION service. 
Similarly, ACTION asks that the sponsor on his part must honor the 
spirit of that commitment and refrain from offering fully paid 
employment to volunteers during their first year of service. Volunteers 
may not perform services or duties or engage in activities for which the 
sponsor receives or requests any compensation. Volunteers may not 
receive any other compensation, directly or indirectly, from a sponsor 
while serving as a volunteer.



Sec. 1213.6-2   Nondisplacement of employees and impairment of contracts of service.

    An ACV volunteer's assignment is limited to activities that would 
not otherwise be performed by employed workers and which will not 
supplant the hiring of or result in the displacement of employed 
workers, or impair

[[Page 88]]

existing contracts for service. (part 1216 implements this provision.)



Sec. 1213.6-3   Nonappropriate assignments.

    (a) An assignment is not appropriate for a volunteer if:
    (1) The service, duty, or activity is principally administrative or 
clerical, or
    (2) The volunteer is not directly in contact with groups or 
individuals who are to be served by the project or is not performing 
services, duties, or engaged in activities which are authorized under 
section 122(a) of the Act.



Sec. 1213.6-4   Political activities and limitation of unlawful activities.

    (a) ACV volunteers are covered by the Hatch Act to the same extent 
as Federal employees. This Act prohibits volunteers from engaging in 
partisan political activities of any sort at any and all times during 
their terms of service, including periods of official leave.
    (b) Section 403 of Pub. L. 93-113 requires that a sponsor's project 
be operated in such a manner as to avoid involvement of ACV volunteers 
in any partisan or nonpartisan political activity in an election for 
public or party office, voter transportation during elections, and voter 
registration drives.
    (c) While engaged in carrying out their duties volunteers may, as a 
part of the project, participate in lawful and nonpolitical 
demonstrations and protest activities which are approved by the sponsor 
as a part of its project activity and which are not in violation of any 
ACTION policies.



Sec. 1213.6-5   Nondiscrimination.

    Part 1203 provides regulations concerning nondiscrimination in 
ACTION programs and activities.
    (a) No person with responsibilities in the operation of an ACV 
project shall discriminate with respect to such program because of race, 
creed, belief, color, national origin, sex, age, or political 
affiliation.



Sec. 1213.6-6   Religious activities.

    Volunteers will not give religious instruction, conduct worship 
services, or engage in any other religious activity as part of their 
duties. Volunteers who serve in an institution that gives religious 
instruction or engages in other religious activities will not be used as 
replacements for regular personnel of the institution. For example, 
volunteers assigned to serve in a program conducted under the auspices 
of a church-related school may not be used as substitutes for regular 
teachers in the school. They may, however, work in new programs which 
are carried on in addition to the school's regular programs and which 
are conducted in conformance with the above restrictions.



Sec. 1213.6-7   Evaluation.

    (a) On a quarterly basis and two months prior to the termination of 
a volunteer's year of service, and at any other time which circumstances 
may dictate, ACTION may inspect that portion of a project with which the 
volunteer is involved. The purpose of the inspection will be to 
independently observe and judge the extent to which the volunteer's work 
has contributed to the objectives of the program described in the 
project proposal.
    (b) The sponsor is expected to cooperate fully with ACTION 
representatives, and ACTION will in turn review results of the 
evaluation with the sponsor.



Sec. 1213.6-8   Limitation on labor and anti-labor activities.

    Volunteers may not engage in any activities, services, or duties 
which assist any labor or anti-labor organizing activity, or related 
activity.



Sec. 1213.6-9   Loans and debts.

    (a) ACVs have the same legal and financial responsibilities as do 
all other persons. Volunteers are encouraged to pay all legal debts 
promptly to avoid creating a situation which would impair the 
volunteer's ability to function. In cases of continued financial 
irresponsibility by a volunteer to the extent of embarrassment or 
adverse reflection upon the sponsor organization's project or ACTION, 
administrative or disciplinary action may be taken by the Regional 
Office, up to and including termination, where appropriate.

[[Page 89]]

    (b) Volunteers are not authorized to obtain extension of credit by 
representing themselves as a Federal Government employee.



                        Subpart G--Miscellaneous



Sec. 1213.7-1   Student loan deferrals.

    (a) The Higher Education Act of 1965, as amended, exempts full-time 
domestic volunteers from repayment of National Defense Education Act 
loans for a period of service not to exceed three years. Volunteers 
wishing to defer repayment of NDEA loans must obtain the necessary forms 
from their universities. Regional Offices are authorized to certify 
these forms, but if the university or volunteer should submit the form 
to Headquarters for certification, it will be sent to the appropriate 
Regional Office for completion.
    (b) If the volunteer is still in service at the time of ACTION's 
certification, his anticipated termination date will be furnished to the 
lender.
    (c) Repayment of other college loans may also be deferred. These 
repayments, however, are deferred at the discretion of the lender. If 
the lender is willing to defer payment, volunteers must obtain the 
necessary forms from the lender and forward them to the Regional Office 
for certification. If forms are not available from the lender, a letter 
to the university or lender may be prepared certifying the dates of the 
volunteer's service.



Sec. 1213.7-2   Death benefits.

    In case of the death of a volunteer away from his home of record, 
certain costs associated with transportation of the body are 
reimbursable either under the Federal Employees Compensation Act or 
ACTION policy. Volunteers whose death results from personal injury or 
illness sustained in the performance of his project duties are eligible 
for reimbursement of certain funeral expenses. Monthly benefits for 
eligible dependents of deceased volunteers may be available under the 
Federal Employees Compensation Act. In certain other unusual 
circumstances, payment of certain funeral expenses for volunteers not 
meeting the above requirements may be authorized.



Sec. 1213.7-3   Firearms.

    ACTION volunteers may not normally possess, use, or carry firearms. 
If a volunteer wishes to keep firearms for hunting, approval must be 
obtained from the sponsor, State Program Director and the ACTION 
Regional Director in the region where the volunteer is assigned. The 
volunteer must request approval for possession or use of firearms from 
his sponsor and his State Program Director. If he receives their 
approval, his request may then be considered by his ACTION Regional 
Director. If approval is granted by the ACTION Regional Director, the 
volunteer must adhere to all state and local regulations relating to the 
possession and use of firearms.



PART 1214--ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY ACTION--Table of Contents




Sec.
1214.101  Purpose.
1214.102  Application.
1214.103  Definitions.
1214.104--1214.109  [Reserved]
1214.110  Self-evaluation.
1214.111  Notice.
1214.112--1214.129  [Reserved]
1214.130  General prohibitions against discrimination.
1214.131--1214.139  [Reserved]
1214.140  Employment.
1214.141--1214.148  [Reserved]
1214.149  Program accessibility: Discrimination prohibited.
1214.150  Program accessibility: Existing facilities.
1214.151  Program accessibility: New construction and alterations.
1214.152--1214.159  [Reserved]
1214.160  Communications.
1214.161--1214.169  [Reserved]
1214.170  Compliance procedures.

    Authority: 29 U.S.C. 794; 42 U.S.C. 5057.

    Source: 55 FR 47761, Nov. 15, 1990, unless otherwise noted.



Sec. 1214.101  Purpose.

    The purpose of this part is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit

[[Page 90]]

discrimination on the basis of handicap in programs or activities 
conducted by Executive agencies or the United States Postal Service.



Sec. 1214.102  Application.

    This part applies to all programs or activities conducted by the 
agency, except for programs or activities conducted outside the United 
States that do not involve individuals with handicaps in the United 
States.



Sec. 1214.103  Definitions.

    For purposes of this part, the term--
    Agency means ACTION.
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDD's), interpreters, notetakers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504 of the Act. It 
shall be signed by the complainant or by someone authorized to do so on 
his or her behalf. Complaints filed on behalf of classes or third 
parties shall describe or identify (by name, if possible) the alleged 
victims of discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Individuals with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment. As used in this definition, the phrase:
    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term ``physical or mental 
impairment'' includes, but is not limited to, such diseases and 
conditions as orthopedic, visual, speech, and hearing impairments, 
cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, 
cancer, heart disease, diabetes, mental retardation, emotional illness, 
and drug addiction and alcoholism.
    (2) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limit 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Qualified individual with handicaps means--

[[Page 91]]

    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, an individual with handicaps who is a 
member of a class of persons otherwise entitled by statute, regulation, 
or agency policy to receive educational services from the agency;
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (3) With respect to any other program or activity, an individual 
with handicaps who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person as that term is defined for 
purposes of employment in 29 CFR 1613.702(f), which is made applicable 
to this part by Sec. 1214.140.
    Section 504 of the Act means section 504 of the Rehabilitation Act 
of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by 
the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 
1617); the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810), 
and the Civil Rights Restoration Act of 1987 (Pub. L. 100-259, 102 Stat. 
28). As used in this part, section 504 of the Act applies only to 
programs or activities conducted by Executive agencies and not to 
federally assisted programs.
Secs. 1214.104--1214.109  [Reserved]



Sec. 1214.110  Self-evaluation.

    (a) The agency shall, within one year of the effective date of this 
part, evaluate its current policies and practices, and the effects 
thereof, that do not or may not meet the requirements of this part and, 
to the extent modification of any such policies and practices is 
required, the agency shall proceed to make the necessary modifications.
    (b) The agency shall provide an opportunity to interested persons, 
including individuals with handicaps or organizations representing 
individuals with handicaps, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following completion 
of the self-evaluation, required under paragraph (a) of this section, 
maintain on file and make available for public inspection--
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 1214.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this part and its applicability 
to the programs or activities conducted by the agency, and make such 
information available to them in such manner as the head of the agency 
finds necessary to apprise such persons of the protections against 
discrimination assured them by section 504 of the Act and this part.
Secs. 1214.112--1214.129  [Reserved]



Sec. 1214.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit,

[[Page 92]]

or service that is not equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with aid, 
benefit, or service that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aid, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards; or
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified individual with handicaps 
the opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would be to--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this part.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with handicaps.
Secs. 1214.131--1214.139  [Reserved]



Sec. 1214.140  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subjected to discrimination in employment under any program 
or activity conducted by the agency. The definitions, requirements, and 
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791), as established by the Equal Employment Opportunity Commission in 
29 CFR part 1613, shall apply to employment in federally conducted 
programs or activities.
Secs. 1214.141--1214.148  [Reserved]



Sec. 1214.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 1214.150, no qualified 
individual with handicaps shall, because the agency's facilities are 
inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the agency.



Sec. 1214.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--

[[Page 93]]

    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with handicaps; or
    (2) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 1214.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity and must be 
accompanied by a written statement of the reasons for that conclusion. 
If an action would result in such an alteration or such burdens, the 
agency shall take any other action that would not result in such an 
alteration or such burdens but would nevertheless ensure that 
individuals with handicaps receive the benefits and services of the 
program or activity.
    (b) Methods. The agency may comply with the requirements of this 
section through such means as redesign of equipment, reassignment of 
services to accessible buildings, assignment of aides to beneficiaries, 
home visits, delivery of services at alternate accessible sites, 
alteration of existing facilities and construction of new facilities, 
use of accessible rolling stock, or any other methods that result in 
making its programs or activities readily accessible to and usable by 
individuals with handicaps. The agency is not required to make 
structural changes in existing facilities where other methods are 
effective in achieving compliance with this section. The agency, in 
making alterations to existing buildings, shall meet accessibility 
requirements to the extent compelled by the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), and any regulations 
implementing it. In choosing among available methods for meeting the 
requirements of this section, the agency shall give priority to those 
methods that offer programs and activities to qualified individuals with 
handicaps in the most integrated setting appropriate.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section within sixty days of the 
effective date of this part except that where structural changes in 
facilities are undertaken, such changes shall be made within three years 
of the effective date of this part, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
agency shall develop, within six months of the effective date of this 
part, a transition plan setting forth the steps necessary to complete 
such changes. The agency shall provide an opportunity to interested 
persons, including individuals with handicaps or organizations 
representing individuals with handicaps, to participate in the 
development of the transition plan by submitting comments (both oral and 
written). A copy of the transition plan shall be made available for 
public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the agency official responsible for implementation of 
the plan.



Sec. 1214.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to

[[Page 94]]

and usable by individuals with handicaps. The definitions, requirements, 
and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), 
as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings 
covered by this section.
Secs. 1214.152--1214.159  [Reserved]



Sec. 1214.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid will be provided, the 
agency shall give primary consideration to the requests of the 
individual with handicaps.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf persons (TDD's) or 
equally effective telecommunication systems shall be used to communicate 
with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide a sign at a primary entrance to each of 
its inaccessible facilities, directing users to a location at which they 
can obtain information about accessible facilities. The international 
symbol for accessibility shall be displayed at each primary entrance to 
each accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 1214.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such alteration or such burdens, the agency 
shall take any other action that would not result in such an alteration 
or such burdens but would nevertheless ensure that, to the maximum 
extent possible, individuals with handicaps receive the benefits and 
services of the program or activity.
Secs. 1214.161--1214.169  [Reserved]



Sec. 1214.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) Responsibility for implementation and operation of this section 
shall be vested in the Director, Equal Opportunity Staff.



PART 1215--PROCEDURES FOR DISCLOSURE OF RECORDS UNDER THE FREEDOM OF INFORMATION ACT--Table of Contents




Sec.
1215.1  Purpose.
1215.2  Definitions.
1215.3  Availability of records.
1215.4  Location of records.

[[Page 95]]

1215.5  Record request and response procedures.
1215.6  Time limits and extensions.
1215.7  Schedule of fees.
1215.8  Business information.
1215.9  Appeal procedures.
1215.10  Records which may be exempt from disclosure.

Appendix 1(A) to Part 1215--Freedom of Information Act Request Letter 
          (Sample)
Appendix 1(B) to Part 1215--Freedom of Information Act Appeal Letter 
          (Sample)

    Authority: Pub. L. 93-113, 87 Stat. 411 (42 U.S.C. 4951, et seq.); 
42 U.S.C. 5042 (13); and 5 U.S.C. 552.

    Source: 55 FR 20153, May 15, 1990.



Sec. 1215.1  Purpose.

    The purpose of this part is to prescribe rules for the inspection 
and copying of opinions, policy statements, manuals, instructions, and 
other records of ACTION pursuant to the Freedom of Information Act (5 
U.S.C. 552). Information customarily furnished to the public in the 
regular course of ACTION's official business may continue to be 
furnished to the public without complying with this part, provided that 
the furnishing of such information would not violate the Privacy Act of 
1974 (5 U.S.C. 552a). Rules for the disclosure by ACTION of records 
protected by the Privacy Act are set forth at 45 CFR part 1224.



Sec. 1215.2  Definitions.

    As used in the part, the following definitions shall apply:
    (a) The Act means the Freedom of Information Act (5 U.S.C. 552).
    (b) The Agency means ACTION.
    (c) Records include all books, papers, maps, photographs or other 
documentary material, or copies thereof, regardless of physical form or 
characteristics, made or received by ACTION and preserved as evidence of 
its organization, functions, policies, decisions, procedures, operations 
or other activities; but do not include books, magazines, or other 
materials not produced by ACTION and acquired solely for reference 
purposes.
    (d) Search means time spent locating records responsive to a 
request, including page-by-page or line-by-line identification of 
responsive material within a record.
    (e) Review means the process of examining records located in 
response to a request to determine whether any record or portion of a 
record is permitted to be withheld. It also includes processing records 
for disclosure (i.e., excising portions not subject to disclosure under 
the Act and otherwise preparing them for release). Review does not 
include time spent resolving legal or policy issues regarding the 
application of exemptions under the Act.
    (f) Commercial use request means a request from, or on behalf of, a 
person who seeks information for a use or purpose that furthers the 
commercial, trade, or profit interests of the requester or the person on 
whose behalf the request is made. The use to which a requester will put 
the records sought will be considered in determining whether the request 
is a commercial use request.
    (g) Educational institution means a preschool, a public or private 
elementary or secondary school, an institution of undergraduate or 
graduate higher education, an institution of professional education, or 
an institution of professional education, or an institution of 
vocational education, which operates a program or programs of scholarly 
research.
    (h) Non-commercial scientific institution means an institution that 
is not operated on a for-profit basis and which is operated solely for 
the purpose of conducting scientific research the results of which are 
not intended to promote any particular product or industry.
    (i) Representative of the news media means any person actively 
gathering news for an entity that is organized and operated to publish 
or broadcast information that is about current events or that would be 
of current interest to the public. Examples of news media entities 
include television and radio stations broadcasting to the public at 
large, and publishers of periodicals (but only those publishers who 
qualify as disseminators of ``news'') who make their products available 
for purchase or subscription by the general public. These examples are 
not intended to be all-inclusive. Moreover, as new methods of news 
dissemination evolve (e.g., electronic dissemination

[[Page 96]]

of newspapers through telecommunications services), such alternative 
media would be included in this category. ``Freelance'' journalists may 
be regarded as working for a news organization if they can demonstrate a 
solid basis for expecting publication through that organization, even 
though not actually employed by it. A publication contract would be the 
clearest proof, but the Agency may also look to the past publication 
record of a requester in making this determination.
    (j) Business information means trade secrets or other commercial or 
financial information.
    (k) Business submitter means any commercial entity which provides 
business information to ACTION and which has a proprietary interest in 
such information.
    (l) Appeal means the appeal by a requester of an adverse Agency 
determination on his/her request, or on his/her application for a waiver 
of fees, as described in 5 U.S.C. 552(a)(6)(A)(ii).



Sec. 1215.3  Availability of records.

    (a) All publications and other documents heretofore provided by 
ACTION to the public in the normal course of Agency business will 
continue to be made available upon request to the Agency.
    (b) The Agency will promptly make available to any member of the 
public who requests them, the following Agency records:
    (1) Final opinions and orders made in the adjudication of cases;
    (2) Statements of policy and interpretation adopted by an office 
which have not been published in the Federal Register; and
    (3) Administrative staff manuals and instructions to the staff which 
affect the public.
    (c) A current index, which shall be updated at least quarterly, of 
the foregoing materials, is maintained by the Agency, and copies of same 
or any portion thereof will be furnished upon request. The Agency deems 
further publication of such index in the Federal Register unnecessary 
and impractical.
    (d) To the extent necessary to prevent a clearly unwarranted 
invasion of personal privacy, the Agency may delete identifying details 
from materials furnished under this section.
    (e) Brochures, leaflets, and other similar published materials shall 
be furnished to the public on request to the extent they are available. 
Copies of any such materials which are out of print shall be furnished 
at the cost of duplication, provided, however, that, in the event no 
copy exists, the Agency shall not be responsible for reprinting the 
document.
    (f) All records of ACTION which are requested by a member of the 
public in accordance with the procedures established in this part shall 
be timely made available for inspection or copying, at the Agency's 
option, except to the extent that the Agency determines such records are 
exempt from disclosure under the Act.
    (g) The Agency will not be required to create new records, compile 
lists of selected items from its files, or provide a requester with 
statistical or other data (unless such data have been compiled 
previously and are available in the form of a record, in which event 
such data shall be made available as provided in this part).



Sec. 1215.4  Location of records.

    (a) The Agency maintains a central records room at its headquarters, 
located at 1100 Vermont Avenue NW., Washington, DC 20525. The specific 
location of the central records room may change from time to time, but 
may be ascertained by inquiry to the receptionist in the Office of the 
Director, ACTION.
    (b) The Agency maintains regional offices in the following 
locations:

Region I--Boston, Massachusetts (Connecticut, Maine, Massachusetts, New 
    Hampshire, Vermont and Rhode Island)
Region II--New York, New York (New Jersey, New York, Puerto Rico and 
    Virgin Islands)
Region III--Philadelphia, Pennsylvania (Delaware, District of Columbia, 
    Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia)
Region IV--Atlanta, Georgia (Alabama, Florida, Georgia, Mississippi, 
    North Carolina, South Carolina and Tennessee)

[[Page 97]]

Region V--Chicago, Illinois (Illinois, Indiana, Iowa, Michigan, 
    Minnesota and Wisconsin)
Region VI--Dallas, Texas (Arkansas, Kansas, Louisiana, Missouri, New 
    Mexico, Oklahoma and Texas)
Region VIII--Denver, Colorado (Colorado, Montana, Nebraska, North 
    Dakota, South Dakota, Utah and Wyoming)
Region IX--San Francisco, California (American Samoa, Arizona, 
    California, Guam, Hawaii and Nevada
Region X--Seattle, Washington (Alaska, Idaho, Oregon and Washington)

ACTION also maintains offices in most States, usually in the State 
capital.
    These field offices are not responsible for maintaining indexes, 
reading rooms, or records or documents other than those created and 
maintained in the normal course of the official business of such 
offices.



Sec. 1215.5  Record request and response procedures.

    (a) How made and addressed. Requests under the Act for access to 
ACTION records must be in writing, and must either be mailed or hand-
delivered to the FOIA Officer, 1100 Vermont Avenue NW., Washington, DC 
20525. All such requests, and the envelopes in which they are sent, must 
be plainly marked ``FOIA Request''. Hand-delivered requests will be 
received between 8:30 a.m. and 5 p.m., Monday through Friday, except on 
official holidays.
    (b) Agreement to pay fees. The filing of a request under this 
subpart shall be deemed to constitute an agreement by the requester to 
pay all applicable fees under Sec. 1215.7 of this part, up to $25, 
unless a waiver of fees is sought in the request letter. When filing a 
request, a requester may agree to pay a greater amount, if applicable.
    (c) Request must adequately describe the records sought. A request 
must describe the records sought in sufficient detail to enable Agency 
personnel to locate the records with reasonable effort. A request shall 
be regarded as fulfilling this requirement if it enables the Agency to 
identify responsive documents without unreasonable burden to or 
disruption of Agency operations. Persons wishing to inspect or secure 
copies of records should describe and identify such records as fully and 
as accurately as possible. Among the kinds of identifying information 
which a requester may provide are the following:
    (1) The unit or program of the Agency which may have produced or may 
otherwise have custody of the record, e.g., VISTA (Volunteers In Service 
To America), RSVP (Retired Senior Volunteer Program), FGP (Foster 
Grandparent Program);
    (2) The specific event or action, if any, to which the record 
pertains;
    (3) The date of the record, or the time period to which it refers or 
relates;
    (4) The type of record (e.g., application, contract, grant or 
report);
    (5) The name(s) of Agency personnel who may have prepared or been 
referenced in the record; and
    (6) Citation to newspapers or other publications which refer to the 
record.
    (d) Initial processing. Upon receipt of a request for Agency 
records, the FOIA Officer will make an initial determination as to 
whether the request describes requested records with sufficient 
specificity to determine the office of the Agency having custody of any 
responsive records. If so, upon making such initial determination, he/
she shall refer such request to the head of the custodial office. The 
office head shall promptly ascertain whether the description of 
record(s) requested is sufficient to permit a determination as to 
existence, identification, and location. The FOIA Officer will provide 
FOIA guidance and assistance to the ACTION staff.
    (e) Insufficiently identified records. On making a determination 
that the description contained in the request does not sufficiently 
describe a requested record, the FOIA Officer shall promptly so advise 
the requester in writing and by telephone if possible. The FOIA Officer 
shall provide the requester with appropriate assistance to help the 
requester provide any additional information which would better identify 
the record.
    The requester may submit an amended request providing the necessary 
additional identifying information. Such a request shall be deemed to 
have been received by the Agency on the date it receives the amended 
request.

[[Page 98]]

    (f) Release, of record; denial and right to appeal. Upon receipt of 
a request specifically identifying existing Agency records, the Agency 
shall, within ten working days, either grant or deny the request in 
whole or in part, as provided in this subpart. Any notice of denial in 
whole or in part shall also inform the requester of his/her right to 
appeal the denial, in accordance with the procedures set forth at 
Sec. 1215.9 below.
    If the FOIA Officer determines that a request describes a requested 
record sufficiently to permit its identification, he/she shall make it 
available unless he/she determines, after consultation with the General 
Counsel, as appropriate, to withhold the record as exempt from mandatory 
disclosure under the Act.
    (g) Form and content of notice granting a request. The Agency shall 
provide written notice of a determination to grant a request. Such 
notice shall describe the manner in which the record will be disclosed, 
whether by providing a copy of the record to the requester or by making 
the record available to the requester for inspection at a reasonable 
time and place. The procedure for inspection shall not unreasonably 
disrupt the operations of the Agency. The Agency shall inform the 
requester in the notice of any fees charged in accordance with the 
provisions of Sec. 1215.7 of this part.
    (h) Form and content of notice denying a request. The Agency shall 
notify a requester in writing of the denial of a request in whole or in 
part. Such notice shall include:
    (1) The name and title or position of the person responsible for the 
denial;
    (2) A brief statement of the reason or reasons for the denial, 
including the exemption or exemptions under the Act on which the Agency 
has relied in denying the request, and a specific explanation of the 
manner in which the exemption or exemptions apply to each record 
withheld; and
    (3) A statement that the denial may be appealed under Sec. 1215.9 of 
this part, and a copy of that section.



Sec. 1215.6   Time limits and extensions.

    (a) The time limits specified for the Agency's initial response in 
Sec. 1215.5, and for its determination on an appeal in Sec. 1215.9, are 
mandatory, and a person requesting records shall be deemed to have 
exhausted his/her administrative remedies with respect to such request 
in the event the Agency fails to comply with the applicable time limits 
in accordance with this section.
    (b) The time limits specified for the Agency's initial response in 
Sec. 1215.5, and for its determination on an appeal in Sec. 1215.9, may 
be extended by the Agency upon written notice to the requester which 
sets forth the reasons for such extension and the date upon which the 
Agency will respond to the request. Such extension may be applied at 
either the initial response stage or the appeal stage, or both, provided 
the aggregate of such extensions shall not exceed ten working days. 
Circumstances justifying an extension under this subpart may include the 
following:
    (1) Time necessary to search for and collect requested records from 
field offices of the Agency;
    (2) Time necessary to locate, collect and review voluminous records 
responsive to a single request; or
    (3) Time necessary for consultation with another agency having an 
interest in the request; or among two or more offices of ACTION which 
have an interest in the request; or with a submitter of business 
information having an interest in the request.



Sec. 1215.7   Schedule of fees.

    (a) It is the policy of ACTION to encourage the widest possible 
dissemination of information concerning the programs under its 
jurisdiction. To the extent practicable, its policy will be applied 
under this part so as to permit requests for inspection of copies of 
records to be met without substantial cost to requesters.
    (b) Request processing charges will be determined by category of 
request, as follows:
    (1) Commercial use requests. When a request for records is made for 
commercial use, charges will be assessed to cover the costs of searching 
for, reviewing for release, and reproducing the records sought.
    (2) Requests for educational and non-commercial scientific 
institutions. When a

[[Page 99]]

request for records is made by an educational or a non-commercial 
scientific institution in furtherance of scholarly or scientific 
research, respectively, charges will be assessed to cover the cost of 
reproduction alone, excluding charges for reproduction of the first 100 
pages.
    (3) Requests from representatives of the news media. When a request 
for records in made by a representative of the news media for the 
purpose of news dissemination, charges will be assessed to cover the 
cost of reproduction alone, excluding charges for reproduction of the 
first 100 pages.
    (4) All other requests. When a request for records is made by a 
requester who does not fit into any of the preceding categories, charges 
will be assessed to cover the costs of searching for and reproducing the 
records sought, excluding charges for the first two hours of search time 
and for reproduction of the first 100 pages. (However, requests from 
individuals for records about themselves contained in the Agency's 
systems of records will be treated under the fee provisions of the 
Privacy Act of 1974 which permit the assessment of fees for reproduction 
costs only, regardless of the requester's characterization of the 
request).
    (c) Fees assessed shall provide only for recovery of the Agency's 
direct costs of search, review, and reproduction. Review costs shall 
include only the direct costs incurred during the initial examination of 
a record for the purposes of determining whether a record must be 
disclosed under this part and whether any portion of a record is exempt 
from disclosure under this part. Review costs shall not include any 
costs incurred in resolving legal or policy issues raised in the course 
of processing a request or an appeal under this part.
    (d) When the Agency believes that a requester or group of requesters 
has divided one request into series of requests for the purpose of 
evading the assessment of fees, the Agency may treat such requests as a 
single request.
    (e) The following charges may be assessed for copies of records 
provided to a requester:
    (1) Copies made by photostat shall be charged at the rate of $0.10 
per page.
    (2) Searches for requested records performed by clerical/
administrative personnel shall be charged at the rate of $3.00 per 
quarter hour.
    (3) Where a search for requested records cannot be performed by 
clerical/administrative personnel (for example, where the tasks of 
identifying and compiling records responsive to a request must be 
performed by a skilled technician or professional), such search shall be 
charged at the rate of $5.50 per quarter hour.
    (4) Computer searches for requested records shall be charged at a 
rate commensurate with the combined cost of computer operation and 
operator's salary attributable to the search.
    (f) In the event a request for records does not state that the 
requester will pay all reasonable costs, or costs up to a specified 
dollar amount, and the FOIA Officer determines that the anticipated 
assessable costs for search, review and reproduction of requested 
records will exceed $25.00, or will exceed the limit specified in the 
request, the requester shall be promptly notified in writing and by 
telephone. Such notification shall state the anticipated assessable 
costs of search, review and reproduction of records requested. The 
requester shall be afforded an opportunity to amend the request to 
narrow the scope of the request, or, alternatively, may agree to be 
responsible to pay the anticipated costs. Such a request shall be deemed 
to have been received by the Agency upon the date of receipt of the 
amended request.
    (g) Advance payment of assessable fees are not required from a 
requester unless:
    (1) The Agency estimates or determines that assessable charges are 
likely to exceed $250.00, and the requester has no history of payment of 
FOIA fees. (Where the requester has a history of prompt payment of fees, 
the Agency shall notify the requester of the likely cost and obtain 
satisfactory assurance of full payment.)
    (2) A requester has previously failed to pay a FOIA fee charged in a 
timely fashion (i.e., within 30 days of the date of the billing).
    When the Agency acts under paragraph (g) (1) or (2) of this section, 
the administrative time limits prescribed

[[Page 100]]

in subsection (a)(6) of the Act will begin to run only after the Agency 
has received fee payments or assurances.
    (h) Interest charges on an unpaid bill may be assessed starting on 
the 31st day following the day on which the billing was sent. Interest 
will be assessed at the rate prescribed in section 3717 of title 31 
U.S.C., and will accrue from the date of billing.
    (i) Payment of fees shall be forwarded to the FOIA Officer by check 
or money order payable to ``ACTION.'' A receipt for any fees paid will 
be provided upon written request.
    (j) Charges may be assessed for search and review time, even if the 
Agency fails to locate records responsive to a request of if records 
located are determined to be exempt from disclosure.
    (k) No fee shall be charged if the costs of routine collection and 
processing of the fee will equal or exceed the amount of the fee.
    (1) A requester may, in the original request, or subsequently, apply 
for a waiver or reduction of document search, review and reproduction 
fees. Such application shall be in writing, and shall set forth in 
detail the reason(s) a fee waiver or reduction should be granted. The 
amount of any reduction requested shall be specified in the request. 
(See appendix A--Sample Request Letter.) Upon receipt of such a request, 
the FOIA Officer shall refer the request to the Deputy Director or to 
such official as the Deputy Director may designate, who shall promptly 
determine whether such fee waiver or reduction shall be granted.
    (2) A waiver or reduction of fees shall be granted only if release 
of the requested information to the requester is in the public interest 
because it is likely to contribute significantly to public understanding 
of the operations or activities of the Agency, and is not primarily in 
the commercial interest of the requester. The Agency shall consider the 
following factors in determining whether an application for a fee waiver 
or reduction will be granted:
    (i) Does the requested information concern the operations or 
activities of the Agency?
    (ii) If so, will disclosure of the information be likely to 
contribute to public understanding of the Agency's operations and 
activities?
    (iii) If so, would such a contribution be significant?
    (iv) Does the requester have a commercial interest that would be 
furthered by disclosure of the information?
    (v) If so, is the magnitude of the identified commercial interest of 
the requester sufficiently large, in comparison with the public interest 
in disclosure, that disclosure is primarily in the commercial interest 
of the requester? In applying this criterion, the Agency will weigh the 
requester's commercial interest against any public interest in 
disclosure. Where there is a public interest in disclosure, and the 
public interest can fairly be regarded as being of greater magnitude 
than the requester's commercial interest, a fee waiver or reduction will 
be granted. In those instances where a news media requester, scholar, or 
public interest group has satisfied the ``public interest'' standard 
necessary for waiver, that, and not the requester's commercial interest, 
is the interest primarily served by disclosure to that requester and a 
waiver or reduction of fees will be granted.
    (3) When a fee waiver application involving cost has been included 
in a request for records, the request shall not be deemed to have been 
received until an Agency determination is made regarding the fee waiver 
application. Such determination shall be made within five working days 
from the date any such request is received by the Agency.
    (l) The Agency may use the authorities of the Debt Collection Act of 
1982 (Pub. L. 97-365), including disclosure to consumer reporting 
agencies and the use of collection agencies, to encourage payment of 
delinquent fees.



Sec. 1215.8  Business Information.

    (a) Business information provided to ACTION by a business submitter 
shall be disclosed pursuant to a request under the Act in accordance 
with this section.
    (b) The Agency shall promptly notify a business submitter in writing 
of any request for Agency records containing business information. Such 
written notice shall either specifically describe

[[Page 101]]

the nature of the business information requested or provide copies of 
the records, or portions thereof containing the business information.
    (c) Through the notice required in paragraph (b) of this section, 
the Agency shall afford a business submitter a reasonable opportunity to 
object to disclosure of the information in question, and to provide the 
Agency with a written statement of grounds for such objection.
    Such statement shall specify all grounds for withholding any 
information under any exemption of the Act and, in cases where it argues 
information should be withheld under Exemption (b)(4) of the Act, a 
business submitter shall state specifically why the information is a 
trade secret or is otherwise protected as proprietary commercial or 
financial information. Information provided by a business submitter 
pursuant to this paragraph may itself be subject to disclosure under the 
Act.
    (d) The Agency shall consider carefully a business submitter's 
objections and specific grounds for nondisclosure prior to determining 
whether to release requested business information. Whenever the Agency 
decides to disclose business information over the objection of a 
business submitter, the Agency shall forward to the business submitter a 
written notice of such decision, which shall include:
    (1) The name, and title or position, of the person responsible for 
denying the submitter's objection;
    (2) A statement of the reasons for which the business submitter's 
objection was not sustained;
    (3) A description of the business information to be disclosed; and
    (4) A specific disclosure date.
    Such notice of intent to disclose business information shall be 
mailed by the Agency not less than six working days prior to the date 
upon which disclosure will occur, with a copy of such notice to the 
requester.
    (e) Whenever a requester brings suit to compel disclosure of 
business information, the Agency shall promptly notify the business 
submitter.
    (f) The notice to submitter requirements of this section shall not 
apply if:
    (1) The Agency determines that the information shall not be 
disclosed;
    (2) The information has previously been published or otherwise 
lawfully been made available to the public; or
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552).



Sec. 1215.9  Appeal procedures.

    Upon receipt of a notice of denial, a requester may, within 15 
calendar days from the date of receipt of such notice, appeal such 
adverse determination to the Deputy Director. Such appeal shall be in 
writing and shall specify the date upon which the notice of denial was 
received by the person making such appeal. (See appendix 1 (A & B)--
Sample Request and Appeal Letters.) The Deputy Director shall make a 
determination with respect to any appeal within 20 working days after 
receipt of such appeal, and shall give written notice of such 
determination to the person making the appeal. To the extent the Deputy 
Director's determination on appeal upholds the original denial, the 
notice of such determination shall inform the person making the appeal 
of his/her right to seek judicial review of the Agency's denial and 
ruling on appeal as provided in 5 U.S.C. 552(a)(4).



Sec. 1215.10  Records which may be exempt from disclosure.

    The following categories are examples of records maintained by 
ACTION which, under the provision of 5 U.S.C. 552(b), may be exempted 
from disclosure:
    (a) Records required to be withheld under criteria established by an 
Executive Order in the interest of national defense or foreign policy 
and which are in fact properly classified pursuant to any such Executive 
Order. Included in this category are records required by Executive Order 
No. 11652, as amended, to be classified in the interest of national 
defense or foreign policy.
    (b) Records related solely to internal personnel rules and 
practices. Included in this category are internal rules and regulations 
relating to personnel management and operations which cannot

[[Page 102]]

be disclosed to the public without substantial prejudice to the 
effective performance of significant function of the Agency.
    (c) Records specifically exempted from disclosure by statute.
    (d) Information of a commercial or financial nature including trade 
secrets given in confidence. Included in this category are records 
containing commercial or financial information obtained from any person 
and customarily regarded as privileged and confidential by the person 
from whom they were obtained.
    (e) Interagency or intra-agency memoranda or letters which would not 
be available by law to a party other than a party in litigation with the 
Agency. Included in this category are memoranda, letters, interagency 
and intra-agency communications and internal drafts, opinions and 
interpretations prepared by staff or consultants and records of 
deliberations of staff, ordinarily used in arriving at policy 
determinations and decisions.
    (f) Personnel, medical and similar files. Included in this category 
are personnel and medical information files of staff, volunteer 
applicants, former volunteers, and volunteers, lists of names and home 
addresses, and other files or material containing private or personal 
information, the public disclosure of which would violate a pledge of 
confidentiality and amount to a clearly unwarranted invasion of the 
privacy of any person to whom the information pertains.
    (g) Investigatory files. Included in this category are files 
compiled for the enforcement of all laws, or prepared in connection with 
government litigation and adjudicative proceedings, provided however, 
that such records shall be made available to the extent that their 
production will not:
    (1) Interfere with enforcement proceedings;
    (2) Deprive a person of a right to a fair trial or an impartial 
adjudication;
    (3) Constitute an unwarranted invasion of personal privacy;
    (4) Disclose the identity of a confidential source, and in the case 
of a record compiled by a criminal law enforcement authority in the 
course of a criminal investigation, or by an agency conducting a lawful 
security intelligence investigation, confidential information furnished 
by confidential source;
    (5) Disclose investigative techniques and procedures; or
    (6) Endanger the life or physical safety of law enforcement 
personnel.

Any reasonably segregable portion of a record shall be provided to any 
person requesting such record after deletion of portions which are 
exempt under this section.

[55 FR 50330, Dec. 6, 1990]

 Appendix 1(A) to Part 1215--Freedom of Information Act Request Letter 
                                (Sample)

Freedom of Information Act Officer
Name of Agency
Address of Agency
City, State, Zip Code

Re: Freedom of Information Act Request.

    Dear ____________:

    This is a request under the Freedom of Information Act.
    I request that a copy of the following documents [or documents 
containing the following information] be provided to me: [identify the 
documents or information as specifically as possible].
    In order to help to determine my status to assess fees, you should 
know that I am (insert a suitable description of the requester and the 
purpose of the request).

[Sample requester descriptions:
    --a representative of the news media affiliated with the 
____________ newspaper (magazine, television station, etc.), and this 
request is made as part of news gathering and not for a commercial use.
    --affiliated with an educational or noncommercial scientific 
institution, and this request is made for a scholarly or scientific 
purpose and not for a commercial use.
    --an individual seeking information for personal use and not for a 
commercial use.
    --affiliated with a private corporation and am seeking information 
for use in the company's business.]

    [Optional] I am willing to pay fees for this request up to a maximum 
of $____________. If you estimate that the fees will exceed this limit, 
please inform me first.
    [Optional] I request a waiver of all fees for this request. 
Disclosure of the requested information to me is in the public interest 
because it is likely to contribute significantly to public understanding 
of the operations or activities of the government and is not primarily 
in my commercial interest. [Include a specific explanation.]


[[Page 103]]


    Thank you for your consideration of this request.
          Sincerely,
              Name
              Address
              City, State, Zip Code
              Telephone Number [Optional]

  Appendix 1(B) to Part 1215--Freedom of Information Act Appeal Letter 
                                (Sample)

Appeal Officer
Name of Agency
Address of Agency
City, State, Zip Code

Re: Freedom of Information Act Appeal.

    Dear____________:

    This is an appeal under the Freedom of Information Act.
    On (date), I requested documents under the Freedom of Information 
Act. My request was assigned the following identification number 
____________. On (date), I received a response to my request in a letter 
signed by (name of official). I appeal the denial of my request.
    [Optional] The documents that were withheld must be disclosed under 
the FOIA because . . . .
    [Optional] I appeal the decision to deny my request for a waiver of 
fees. I believe that I am entitled to a waiver of fees. Disclosure of 
the documents I requested is in the public interest because the 
information is likely to contribute significantly to public 
understanding of the operation or activities of government and is not 
primarily in my commercial interest. (Provide details)
    [Optional] I appeal the decision to require me to pay review costs 
for this request. I am not seeking the documents for a commercial use. 
(Provide details)
    [Optional] I appeal the decision to require me to pay search charges 
for this request. I am a reporter seeking information as part of news 
gathering and not for commercial use.

    Thank you for your consideration of this appeal.
            Sincerely,
                Name
                Address
                City, State, Zip Code
                Telephone Number [Optional]

(42 U.S.C. 5042(13); 5 U.S.C. 552)



PART 1216--NONDISPLACEMENT OF EMPLOYED WORKERS AND NONIMPAIRMENT OF CONTRACTS FOR SERVICE--Table of Contents




Sec.
1216.1-1  Purpose.
1216.1-2  Applicability of this part.
1216.1-3  Policy.
1216.1-4  Exceptions.

    Authority: Secs. 402(12), 404(a), 420 of Pub. L. 93-113, 87 Stat. 
394, 408, 414.

    Source: 40 FR 16209, Apr. 10, 1975, unless otherwise noted.



Sec. 1216.1-1   Purpose.

    This part establishes rules to assure that the services of 
volunteers are limited to activities which would not otherwise be 
performed by employed workers and which will not supplant the hiring of, 
or result in the displacement of, employed workers or impair existing 
contracts for service. It implements section 404(a) of the Domestic 
Volunteer Service Act of 1973, Pub. L. 93-113 (the ``Act'').



Sec. 1216.1-2   Applicability of this part.

    (a) All full-time and part-time volunteers assigned, referred or 
serving pursuant to grants, contracts, or agreements made pursuant to 
the Act.
    (b) All agencies and organizations to which the volunteers in 
paragraph (a) of this section are assigned, referred or provide 
services.



Sec. 1216.1-3   Policy.

    (a) Volunteers enrolled or participating in programs referred to in 
paragraphs (a) and (b) of Sec. 1216.1-2 may not perform any services or 
duties or engage in activities which would otherwise be performed by an 
employed worker as part of his assigned duties as an employee.
    (b) Volunteer referred to in paragraph (a) of this section may not 
perform any services or duties or engage in activities which will 
supplant the hiring of employed workers. This prohibition is violated 
if, prior to engaging a volunteer, an agency or organization referred to 
in Sec. 1216.1-2(c) had intended to hire a person to undertake all or a 
substantial part of the services, duties, or other activities to be 
provided by the volunteer.
    (c) Volunteers referred to in paragraph (a) of this section may not 
perform any services or duties or engage in activities which result in 
the displacement of employed workers. Such volunteers may not perform 
services or duties which have been performed by or were assigned to, any 
of the following:

[[Page 104]]

    (1) Presently employed workers,
    (2) Employees who recently resigned or were discharged,
    (3) Employees who are on leave (terminal, temporary, vacation, 
emergency, or sick), or
    (4) Employees who are on strike or who are being locked out.
    (d) Volunteers referred to in paragraph (a) of this section may not 
perform any services or duties or engage in activities which impair 
existing contracts for service. This prohibition is violated if a 
contract for services is modified or cancelled because an agency or 
organization referred to in Sec. 1216.1-2(b) engages a volunteer to 
provide or perform all or a substantial part of any services, duties, or 
other activities set forth in such contract. The term ``contract for 
services'' includes but is not limited to contracts, understandings and 
arrangements, either written or oral, to provide professional, 
managerial, technical, or administrative services.
    (e) Agencies and organizations referred to in Sec. 1216.1-2(b) are 
prohibited from assigning or permitting volunteers referred to in 
Sec. 1216.1-2(a) to perform any services or duties or engage in any 
activities prohibited by paragraphs (a) through (d) of this section.



Sec. 1216.1-4   Exceptions.

    (a) The requirements of Sec. 1216.1-3 are not applicable to the 
following, or similar, situations:
    (1) Funds are unavailable for the employment of sufficient staff to 
accomplish a program authorized or of a character eligible for 
assistance under the Act and the activity, service, or duty is otherwise 
appropriate for the assignment of a volunteer.
    (2) Volunteer services are required in order to avoid or relieve 
suffering threatened by or resulting from major natural disasters or 
civil disturbances.
    (3) Reasonable efforts to obtain employed workers have been 
unsuccessful due to the unavailability of persons within the community 
who are able, willing, and qualified to perform the needed activities.
    (4) The assignment of volunteers will significantly expand services 
to a target community over those which could be performed by existing 
paid staff, and the activity, service or duty is otherwise appropriate 
for the assignment of a volunteer and no actual displacement of paid 
staff will occur as a result of the assignment.
    (b) For the purposes of paragraphs (a)(1) and (4) of this section, 
the assignment is not appropriate for the assignment of a volunteer if:
    (1) The service, duty, or activity is principally a routine 
administrative or clerical task. This definition applies only to any 
service, duty, or activity performed by a volunteer receiving financial 
support apart from reimbursement for expenses.
    (2) The volunteer is not directly in contact with groups or 
individuals whom the Act is designed to serve or is not performing 
services, duties, or engaged in activities authorized or of a character 
eligible for assistance under the Act.



PART 1217--VISTA VOLUNTEER LEADER--Table of Contents




Sec.
1217.1  Introduction.
1217.2  Establishment of position.
1217.3  Qualifications.
1217.4  Selection procedure.
1217.5  Allowances and benefits.
1217.6  Roles of volunteers.

    Authority: Secs. 104(b) and 420 of Pub. L. 93-113, 87 Stat. 398 and 
414.

    Source: 39 FR 44203, Dec. 23, 1974, unless otherwise noted.



Sec. 1217.1   Introduction.

    Section 105(a)(1), Part A, of the Domestic Volunteer Service Act of 
1973, Pub. L. 93-113, 87 Stat. 398, authorizes the Director of ACTION to 
pay VISTA volunteers a stipend not to exceed $50 per month and a stipend 
not to exceed $75 a month in the case of VISTA volunteers who have 
served for at least a year and have been designated volunteer leaders. 
Section 105(a)(1) further provides that the selection of volunteer 
leaders shall be pursuant to standards, established in regulations which 
the Director shall prescribe, which shall be based upon the experience 
and special skills and the demonstrated leadership of such persons among 
volunteers.

[[Page 105]]



Sec. 1217.2   Establishment of position.

    A request for the proposed establishment of VISTA volunteer leader 
position for a specific project shall be submitted by a sponsor in 
writing in advance to the appropriate ACTION Regional Director. Specific 
tasks, responsibilities, qualifications, and the proposed supervisory 
structure are to be detailed in the request.



Sec. 1217.3   Qualifications.

    A volunteer recommended for a VISTA volunteer leader position must 
have:
    (a) Completed a one-year term as a VISTA volunteer.
    (b) Demonstrated ability to work constructively and communicate with 
volunteers, supervisor/sponsor, and the target population.
    (c) Demonstrated ability to work well with and gain acceptance of 
other volunteers.
    (d) Demonstrated ability to provide self-motivation and self-
direction, and maturity to accept supervision and direction from 
supervisor/sponsor.
    (e) Sensitivity to the needs and attitudes of others, and exhibit a 
sincere commitment to the mission of VISTA.



Sec. 1217.4   Selection procedure.

    (a) Nomination. Candidates may be nominated in writing to the 
Regional Director by the Program Officer or the State Program Director 
in whose area the volunteer serves. The nomination shall include a copy 
of the completed ACTION Form V-95a, for the Regional Director's review.
    (b) Selection. VISTA volunteer leaders will be selected by the 
Regional Director (or his designee). The criteria for selection shall 
include:
    (1) The recommendation of the volunteer by the State Program 
Director or Program Officer.
    (2) An overall rating by the supervisor/sponsor of above average on 
the ACTION Form V-95a.
    (3) A description of specific tasks, responsibilities, 
qualifications, and the proposed supervisory structure, which justifies 
the establishment of the VISTA volunteer leader position. A selection 
decision is final.
    (c) Reenrollment. VISTA volunteer leaders may be reenrolled in 
accordance with the VISTA reenrollment and extension policy.



Sec. 1217.5   Allowances and benefits.

    The VISTA volunteer leader shall be entitled to all allowances and 
benefits of a VISTA volunteer at the level which is consistent with the 
level for all volunteers on his/her project, except that:
    (a) The stipend will be increased from $50 to $75 per month 
effective on the date of selection of the VISTA volunteer leader.
    (b) Support for on-the-job transportation may be increased, 
consistent with ACTION policy.



Sec. 1217.6   Roles of volunteers.

    VISTA volunteer leaders may have the following roles:
    (a) Primary contact with VISTA volunteers on personal and 
administrative matters.
    (b) Aid in communication of VISTA policies to VISTA volunteers.
    (c) Encourage and develop VISTA volunteer leadership and initiative 
on projects.
    (d) Aid as a resource in development and conduct of training 
programs.
    (e) Assist sponsor in preparation for arrival of VISTA volunteers, 
and assist new volunteers in settling-in, housing, orientation, etc.
    (f) Aid in the development of meaningful relationship and 
understanding of individual program concepts with VISTA volunteers and 
supervisor/sponsor.
    (g) Advise supervisor on potential problem areas, and needs of VISTA 
volunteers.
    (h) Aid supervisor/sponsor in the redevelopment of projects to best 
meet goals and objectives addressing the community's problem(s).



PART 1218--VISTA VOLUNTEERS--HEARING OPPORTUNITY--Table of Contents




Sec.
1218.1  Introduction.
1218.2  Applicability.
1218.3  Policy.
1218.4  Standards for regional plan.
1218.5  Procedures for approval of plan.
1218.6  Freedom to present views.


[[Page 106]]


    Authority: Secs. 104(d), 402(14) and 420 of Pub. L. 93-113, 87 Stat. 
398, 407 and 414.

    Source: 39 FR 43725, Dec. 18, 1974, unless otherwise noted.



Sec. 1218.1   Introduction.

    Section 104(d) of the Domestic Volunteer Service Act of 1973, Pub. 
L. 93-113, 87 Stat. 398 requires that the Director of ACTION establish a 
procedure, including notice and an opportunity to be heard, for VISTA 
volunteers to present views in connection with the terms and conditions 
of their service.



Sec. 1218.2   Applicability.

    This part applies to all volunteers enrolled under part A of title I 
of the Domestic Volunteer Service Act of 1973, Pub. L. 93-113, 87 Stat. 
396.



Sec. 1218.3   Policy.

    It is ACTION's policy to encourage the free exchange of views 
between volunteers and staff members with respect to the terms and 
conditions of the volunteers' service. Ordinarily these exchanges occur 
in the day-to-day contact between volunteers and staff. However, there 
are occasions when it is desirable to provide volunteers with an 
opportunity to present their views with respect to the terms and 
conditions of their service in a more formal way. The differences 
between ACTION regions require that the means selected in each region to 
accomplish this result be appropriate to its particular needs. This 
regulation provides standards within which regions must establish a 
procedure to enable volunteers to present their views to be heard with 
respect to the terms and conditions of their service on a regular basis 
by appropriate ACTION officials and receive a timely response to their 
concerns.



Sec. 1218.4   Standards for regional plan.

    Each ACTION Domestic Regional Director shall recommend, after 
consultation with representative volunteers, sponsors, and other 
interested persons, the specific procedures to be established for VISTA 
volunteers to present their views concerning the terms and conditions of 
their service. Each proposed plan must incorporate the following 
features:
    (a) A free and open opportunity for volunteers to communicate their 
views to appropriate ACTION regional office officials.
    (b) An opportunity for all volunteers to be heard with respect to 
their views in connection with the terms and conditions of their service 
by a responsible ACTION regional office official, either personally, or 
through democratically selected representatives, on a regular basis. The 
plan must provide such an opportunity to the volunteer at least twice in 
each year, and provide for notice to volunteers of the time and place of 
the meeting at which they may be heard.
    (c) Appropriate provisions with respect to volunteers' or 
volunteers' representatives travel expense and per diem which enable the 
volunteers or their representatives to attend and present their views to 
the regional office officials at scheduled meetings.
    (d) Response to volunteer's views by appropriate ACTION officials in 
a prescribed period of time.
    (e) Summary reports by each Regional Director to the Deputy 
Associate Director for VISTA and ACTION Education Programs of problems 
and concerns expressed by volunteers concerning terms and conditions of 
their service and action taken in response to such problems and 
concerns.
    (f) An opportunity for any volunteer who feels that his/her concerns 
have not been properly addressed to communicate the same to the Regional 
Director. Such communication shall be included in the Regional 
Director's report to the Deputy Associate Director and shall be reviewed 
by him.



Sec. 1218.5   Procedures for approval of plan.

    Each Regional Director shall submit the plan for his region to the 
Deputy Associate Director, VISTA and ACTION Education Programs for 
approval.
    Approval by the Deputy Associate Director for VISTA and ACTION 
Education Programs of the proposed regional plan shall be based upon:

[[Page 107]]

    (a) The adequacy of the procedures to provide for systematic and 
open communication of volunteers' views regarding terms and conditions 
of their service; and
    (b) The adequacy of the procedures to provide for effective and 
efficient resolution of volunteers' problems or concerns regarding terms 
and conditions of their service.



Sec. 1218.6   Freedom to present views.

    The expression by a volunteer of his views with respect to the terms 
and conditions of his service shall not be construed as reflecting on a 
volunteer's standing, performance or desirability as a volunteer. ACTION 
intends that its programs be conducted in an atmosphere in which 
volunteers can speak freely, and frankly discuss problems. Nor shall a 
volunteer who represents such views be subjected to restraint, 
interference, coercion, discrimination or reprisal because of 
presentation of his views.



PART 1219--COMPETITIVE SERVICE ELIGIBILITY--Table of Contents




Sec.
1219.1  Introduction.
1219.2  Policy.
1219.3  Procedure.

    Authority: Secs. 415(d) and 420 of Pub. L. 93-113, 87 Stat. 412 and 
414.

    Source: 39 FR 42915, Dec. 9, 1974, unless otherwise noted.



Sec. 1219.1   Introduction.

    Section 415(d), Title IV, of the Domestic Volunteer Service Act of 
1973, Pub. L. 93-113, 87 Stat. 412, provides that VISTA Volunteers who 
have successfully completed their period of service shall be eligible 
for appointment in the Federal competitive service in the same manner as 
Peace Corps Volunteers as prescribed in Executive Order No. 11103 (April 
10, 1963). This section further provides that the Director of ACTION 
shall determine who has successfully completed his period of service in 
accordance with regulations he shall prescribe.



Sec. 1219.2   Policy.

    Certificates of satisfactory service for the purpose of this order 
shall be issued only to persons who have completed at least one full 
year of service as a full-time Volunteer under part A of title I of the 
Domestic Volunteer Service Act of 1973 (or title VIII of the Economic 
Opportunity Act of 1964, as amended, 42 U.S.C. 2991-2994d), and who have 
not been terminated for cause.



Sec. 1219.3   Procedure.

    (a) The Deputy Associate Director for VISTA and Anti-Poverty 
Programs will ensure that each eligible VISTA Volunteer is promptly 
notified of his eligibility for competitive service, prior to the 
completion of his service.
    (b) The Deputy Associate Director for VISTA and Anti-Poverty 
Programs (or his designee) shall, upon the request of a duly recognized 
representative of any agency in the Executive Branch, certify the VISTA 
Volunteer's service on ACTION Form A-507.



PART 1220--PAYMENT OF VOLUNTEER LEGAL EXPENSES--Table of Contents




                           Subpart A--General

Sec.
1220.1-1  Introduction.

                     Subpart B--Criminal Proceedings

1220.2-1  Full-time volunteers.
1220.2-2  Part-time volunteers.
1220.2-3  Procedure.

             Subpart C--Civil and Administrative Proceedings

1220.3-1  Full-time volunteers.
1220.3-2  Part-time volunteers.
1220.3-3  Procedure.

    Authority: Secs. 419 and 420 of Pub. L. 93-113, 87 Stat. 413 and 
414.

    Source: 40 FR 28800, July 9, 1975, unless otherwise noted.



                           Subpart A--General



Sec. 1220.1-1   Introduction.

    Section 419 of the Domestic Volunteer Service Act of 1973 (the Act), 
Pub. L. 93-113, 87 Stat. 413, authorizes the Director of ACTION to pay 
expenses incurred in judicial and administrative

[[Page 108]]

proceedings for the defense of full-time or part-time volunteers serving 
under the Act. These include counsel fees, court costs, bail or other 
expenses incidental to the volunteer's defense. For part-time 
volunteers, section 419 provides that the proceeding must arise directly 
out of the performance of activities pursuant to the Act.



                     Subpart B--Criminal Proceedings



Sec. 1220.2-1   Full-time volunteers.

    (a)(1) ACTION will pay all reasonable expenses for defense of full-
time volunteers up to and including arraignment in Federal, state, and 
local criminal proceedings, except in cases where it is clear that the 
charged offense results from conduct which is not related to his service 
as a volunteer.
    (2) Situations where conduct is clearly unrelated to a volunteer's 
service are those that arise either:
    (i) In a period prior to volunteer service,
    (ii) Under circumstances where the volunteer is not at his assigned 
volunteer project location, such as during periods of administrative, 
vacation, or emergency leave, or
    (iii) When he is at his volunteer station, but the activity or 
action giving rise to the charged offense is clearly not part of, or 
required by, such assignment.
    (b) Reasonable expenses in criminal proceedings beyond arraignment 
may be paid in cases where:
    (1) The charge against the volunteer relates to his assignment or 
status as a volunteer, and not his personal status or personal matters. 
A charge relating to a volunteer's assignment arises out of any activity 
or action which is a part of, or required by, such assignment. A charge 
relating to a volunteer's status is motivated exclusively by the fact 
that a defendant is a volunteer.
    (2) The volunteer has not admitted a willful or knowing violation of 
law, and
    (3) The charge(s) is not a minor misdemeanor, such as a minor 
vehicle violation for which a fine or bail forfeiture will not exceed 
$100.
    (c) Notwithstanding the foregoing, there may be situations in which 
the criminal proceeding results from a situation which could give rise 
to a civil claim under the Federal Tort Claims Act. In such situations, 
the Justice Department may agree to defend the volunteer. In those 
cases, unless there is a conflict between the volunteer's interest and 
that of the government, ACTION will not pay for additional private 
representation for the volunteer.



Sec. 1220.2-2   Part-time volunteers.

    (a) With respect to a part-time volunteer, ACTION will reimburse a 
sponsor for the reasonable expenses it incurs for the defense of the 
volunteer in Federal, state and local criminal proceedings, including 
arraignment, only under the following circumstances:
    (1) The proceeding arises directly out of the volunteer's 
performance of activities pursuant to the Act;
    (2) The volunteer receives, or is eligible to receive, compensation, 
including allowances, stipend, or reimbursement for out-of-pocket 
expenses, under an ACTION grant project; and
    (3) The conditions specified in paragraphs (b) (2) and (3) in 
Sec. 1220.2-1 are met.
    (b) In certain circumstances volunteers who are ineligible for 
reimbursement of legal expenses by ACTION may be eligible for 
representation under the Criminal Justice Act (18 U.S.C. 3006A).



Sec. 1220.2-3   Procedure.

    (a) Immediately upon the arrest of any volunteer under circumstances 
in which the payment of bail to prevent incarceration or other serious 
consequences to the volunteer or the retention of an attorney prior to 
arraignment is necessary and is covered under Sec. 1220.2-1 or 
Sec. 1220.2-2, sponsors shall immediately notify the appropriate ACTION 
state office or if the state office cannot be reached, the appropriate 
regional office. The regional office shall provide each sponsor with a 
24-hour telephone number.
    (b) Immediately after notification of the appropriate office, and 
with the approval thereof, the sponsor shall advance up to $500 for the 
payment of bail or such other legal expenses as are necessary prior to 
arraignment to prevent the volunteer from being incarcerated. In the 
event it is subsequently determined that ACTION or a sponsor is not

[[Page 109]]

responsible under this policy for the volunteer's defense, any such 
advance may be recovered directly from the volunteer or from allowances, 
stipends, or out-of-pocket expenses which are payable or become payable 
to the volunteer. In the case of a grassroots sponsor of full-time 
volunteers which is not able to provide the $500 the ACTION state or 
regional office shall immediately make such sum available to the 
sponsor.
    (c) Immediately upon receipt of notification from the sponsor, the 
state or regional office shall notify the General Counsel, giving all 
facts and circumstances at that time known to such office. Thereafter 
the office shall cooperate with the General Counsel in making an 
investigation of all surrounding facts and circumstances and shall 
provide such information immediately to the General Counsel.
    (d) The General Counsel shall, upon notification by the state or 
regional office, determine the extent to which ACTION will provide funds 
for the volunteer's defense or reimburse a sponsor for funds it spends 
on the volunteer's behalf. Included in this responsibility shall be the 
negotiation of fees and approval of other costs and expenses. State and 
regional offices are not authorized to commit ACTION to the payment of 
volunteers' legal expenses or to reimburse a sponsor except as provided 
above, without the express consent of the General Counsel. Additionally, 
the General Counsel shall, in cases arising directly out of the 
performance of authorized project activities, ascertain whether the 
services of the United States Attorney can be made available to the 
volunteer.
    (e) The sponsor and the state and regional office shall have a 
continuing responsibility for cooperation and coordination with the 
Office of General Counsel during the pendency of any such litigation, 
and of notifying the General Counsel of any facts and circumstances 
which come to the attention of such office or the sponsor which affects 
such litigation.



             Subpart C--Civil and Administrative Proceedings



Sec. 1220.3-1   Full-time volunteers.

    ACTION will pay reasonable expenses incurred in the defense of full-
time volunteers in Federal, state, and local civil judicial and 
administrative proceedings where:
    (a) The complaint or charge against the volunteer is directly 
related to his volunteer service and not to his personal activities or 
obligations.
    (b) The volunteer has not admitted willfully or knowingly pursuing a 
course of conduct which would result in the plaintiff or complainant 
initiating such a proceeding, and
    (c) If the judgment sought involves a monetary award, the amount 
sought exceeds $100.



Sec. 1220.3-2   Part-time volunteers.

    ACTION will reimburse sponsors for the reasonable expenses 
incidental to the defense of part-time volunteers in Federal, state and 
local civil judicial and administrative proceedings where:
    (a) The proceeding arises directly out of the volunteer's 
performance of activities pursuant to the Act;
    (b) The volunteer receives or is eligible to receive compensation, 
including allowances, stipend, or reimbursement for out-of-pocket 
expenses under an ACTION grant; and
    (c) The conditions specified in paragraphs (b) and (c) in 
Sec. 1220.3-1 are met.


Sec. 1220.3-3   Procedure.

    Immediately upon the receipt by a volunteer of any court papers or 
administrative orders making him a part to any proceeding covered under 
Sec. 1220.3-1 or Sec. 1220.3-2, the volunteer shall immediately notify 
his sponsor who in turn shall notify the appropriate ACTION state 
office. The procedures referred to in Sec. 1220.2-3, paragraphs (c) 
through (e), shall thereafter be followed as appropriate.


PART 1222--PARTICIPATION OF PROJECT BENEFICIARIES--Table of Contents



Sec.
1222.1  Purpose.

[[Page 110]]

1222.2  Applicability.
1222.3  Policy.
1222.4  Advisory group responsibilities.
1222.5  Advisory group expenses.
1222.6  Sponsor's responsibilities.

    Authority: Secs. 106 and 420 of Pub. L. 93-113, 87 Stat. 398 and 
414.

    Source: 40 FR 57217, Dec. 8, 1975, unless otherwise noted.



Sec. 1222.1   Purpose.

    The purpose of these regulations is to prescribe requirements for 
the establishment of a continuing mechanism for the meaningful 
participation of project beneficiaries in the planning, development, and 
implementation of project activities utilizing full-time volunteers 
authorized under Title I of the Domestic Volunteer Service Act of 1973, 
Pub. L. 93-113. This policy specifically implements Section 106, Title 
I, Pub. L. 93-113.



Sec. 1222.2   Applicability.

    These regulations apply to all full-time volunteer programs and 
projects under title I, Pub. L. 93-113, including grant programs. 
Included in these programs are VISTA (part A), University Year for 
ACTION (UYA) (part B), ACTION Cooperative Volunteers (ACV) and Program 
for Local Services (PLS) (part C).



Sec. 1222.3   Policy.

    (a) Each potential project sponsor shall establish an advisory group 
for the project, to include substantial membership of potential project 
beneficiaries or, to the extent feasible, their democratically chosen 
representatives, prior to the submission of an application to ACTION for 
volunteers.
    (b) The term ``substantial'' means, in this case, a sufficient 
number of appropriate persons to assure that the concerns and points of 
view of the potential project beneficiaries are adequately presented and 
considered in the deliberations of the group. The phrase ``project 
beneficiaries'' means, in this case, recipients of benefits accruing 
directly from project activities as conducted by ACTION Volunteers.
    (c) Potential sponsoring organizations that have an established 
governing, policy, or advisory group whose membership is composed of at 
least 50% of members of the beneficiary population are not required to 
establish a separate project advisory group for the purposes of these 
regulations.



Sec. 1222.4   Advisory group responsibilities.

    The advisory group shall have the following responsibilities for the 
intent and purposes of these requirements:
    (a) To the extent practical, assist the sponsor in the initial 
planning of a new project proposal and in the planning of a continuation 
project application.
    (b) To review and provide written comments concerning any project 
application prior to the submission of the application to ACTION. A copy 
of such comments shall accompany each application to ACTION.
    (c) To meet with the sponsoring organization's staff at periodic 
intervals, but no less than twice per project year, for the purpose of 
reviewing and commenting on the development and implementation of the 
project. Such project review and commentary should be directed toward 
the adequacy of the project to meet the identified needs of the project 
beneficiaries.
    (d) To submit, if it so chooses, written reports and/or copies of 
minutes of its meetings to the sponsor to accompany the Sponsor's 
Quarterly Program Report (A-568) submitted to the appropriate ACTION 
regional office.



Sec. 1222.5   Advisory group expenses.

    As permitted by law, ACTION regional staff may pay for certain 
incidental out-of-pocket expenses incurred by the advisory group in 
connection with its responsibilities under Sec. 1222.4.



Sec. 1222.6   Sponsor's responsibilities.

    The sponsor or potential sponsor shall furnish the following 
evidence of the advisory group's participation in the planning, 
development, and implementation of the project:
    (a) Each new application to ACTION for volunteers shall contain a 
statement describing how the advisory group has participated in the 
planning of the project proposal. This statement shall be signed by an 
authorized representative of the Advisory group (see 

[[Page 111]]

Sec. 1222.4-2). For continuation project applications, a written 
statement shall be included which specifies how the advisory group 
complied with its responsibilities under Sec. 1222.4 of these 
regulations. This statement shall be signed by an authorized 
representative of the advisory group (see Sec. 1222.4-2 and 3).
    (b) In each Sponsor's Quarterly Program Report (A-568), the sponsor 
shall include a brief statement describing the extent to which the 
advisory group was involved in the continuing development and 
implementation of the project.



PART 1224--IMPLEMENTATION OF THE PRIVACY ACT OF 1974--Table of Contents




Sec.
1224.1-1  Purpose.
1224.1-2  Policy.
1224.1-3  Definitions.
1224.1-4  Disclosure of records.
1224.1-5  Annual notices.
1224.1-5a  New uses of information.
1224.1-6  Reports regarding changes in systems.
1224.1-7  Use of social security account number in records systems. 
          [Reserved]
1224.1-8  Rules of conduct.
1224.1-9  Records systems--Management and control.
1224.1-10  Security of records systems--Manual and automated systems.
1224.1-11  Accounting for disclosure of records.
1224.1-12  Contents of records systems.
1224.1-13  Access to records.
1224.1-14  Specific exemptions.
1224.1-15  Identification of requestors.
1224.1-16  Amendment of records and appeals with respect thereto.
1224.1-17  Denial of access and appeals with respect thereto.
1224.1-18  Fees.
1224.1-19  Inspector General exemptions.

    Authority: Pub. L. 93-579, 5 U.S.C. 552a.

    Source: 42 FR 54286, Oct. 5, 1977, unless otherwise noted.



Sec. 1224.1-1  Purpose.

    The purpose of this part is to set forth the basic policies of 
ACTION governing the maintenance of systems of records containing 
personal information as defined in the Privacy Act (5 U.S.C. 552a). 
Records included in this part are those described in aforesaid Act and 
maintained by ACTION and/or any component thereof.



Sec. 1224.1-2  Policy.

    It is the policy of ACTION to protect, preserve and defend the right 
of privacy of any individual as to whom the agency maintains personal 
information in any system records and to provide appropriate and 
complete access to such records including adequate opportunity to 
correct any errors in said records. It is further the policy of the 
agency to maintain its records in such a fashion that the information 
contained therein is and remains material and relevant to the purposes 
for which it is received in order to maintain its records with fairness 
to the individuals who are the subject of such records.



Sec. 1224.1-3  Definitions.

    (a) Record means any document or other information about an 
individual maintained by the agency whether collected or grouped and 
including but not limited to information regarding education, financial 
transactions, medical history, criminal or employment history, or any 
other personal information which contains the name or other personal 
identification number, symbol, etc. assigned to such individual.
    (b) System of Records means a group of any records under the control 
of the agency from which information is retrieved by use of the name of 
an individual or by some identifying number, symbol, or other 
identifying particular of whatsoever kind or nature.
    (c) Routine Use means, with respect to the disclosure of a record, 
the use of such record for a purpose which is compatible with the 
purpose for which it was collected.
    (d) The term agency means ACTION and/or any component thereof.
    (e) The term individual means any citizen of the United States or an 
alien lawfully admitted to permanent residence.
    (f) The term maintain includes the maintenance, collection, use or 
dissemination of any record.



Sec. 1224.1-4  Disclosure of records.

    The agency will not disclose any personal information from systems 
of records it maintains to any individual other than the individual to 
whom the record pertains, or to another agency, without the express 
written consent of

[[Page 112]]

the individual to whom the record pertains, or his agent or attorney, 
except in the following instances:
    (a) To officers or employees of ACTION having a need for such record 
in the official performance of their duties.
    (b) With respect to records which should follow an employee in 
transfer situations, to the personnel office of a different agency as a 
result of a transfer or a potential transfer of the individual to whom 
the record pertains.
    (c) When required under the provisions of the Freedom of Information 
Act (5 U.S.C. 552).
    (d) For routine uses as appropriately published in the annual notice 
of the Federal Register.
    (e) To the Bureau of the Census for uses pursuant to Title 13.
    (f) To an individual or agency having a proper need for such record 
for statistical research provided that such record is transmitted in a 
form which is not individually identifiable and that an appropriate 
written statement is obtained from the person to whom the record is 
transmitted stating the purpose for the request and a certification 
under oath that the records will be used only for statistical purposes.
    (g) To the National Archives of the United States as a record of 
historical value under rules and regulations of the Archives as may be 
established by the Administrator of General Services or his designee.
    (h) To an agency or instrumentality of any governmental jurisdiction 
within the control of the United States for civil or criminal law 
enforcement purposes provided however that the head of any such agency 
instrumentality has made a written request for such records specifying 
the particular portion desired and the law enforcement activity for 
which the record is sought. Such a record may also be disclosed by the 
agency to the law enforcement agency on its own initiative in situations 
in which criminal conduct is suspected provided that such disclosure has 
been established as a routine use or in situations in which the 
misconduct is directly related to the purpose for which the record is 
maintained.
    (i) In emergency situations upon a showing of compelling 
circumstances affecting the health or safety of any individual provided 
that after such disclosure notification of such disclosure must be 
promptly sent to the last known address of the individual to whom the 
record pertains.
    (j) To either House of Congress or to a subcommittee or committee 
(joint or of either house) to the extent the subject matter falls within 
their jurisdiction.
    (k) To the comptroller general or any of his authorized 
representatives in the course of the performance of his duties of that 
of the General Accounting Office.
    (l) Pursuant to an order of a court of competent jurisdiction 
provided that if any such record is disclosed under such compulsory 
legal process and subsequently made public by the court which issued it, 
the agency must make a reasonable effort to notify the individual to 
whom the record pertains of such disclosure.



Sec. 1224.1-5  Annual notices.

    The agency shall publish annually a notice of all systems of records 
maintained by it as defined herein in the format prescribed by the 
General Services Administration in the Federal Register, Provided, 
however, That such publication shall not be made for those systems of 
records maintained by other agencies though in the temporary custody of 
this agency.



Sec. 1224.1-5a  New uses of information.

    At least 30 days prior to publication of information under the 
preceding section, the agency shall publish in the Federal Register a 
notice of its intention to establish any new routine use of any system 
of records maintained by it with an opportunity for public comments on 
such use. Such notice shall contain the following:
    (a) The name of the system of records for which the routine use is 
to be established.
    (b) The authority for the system.
    (c) The purpose for which the record is to be maintained.
    (d) The proposed routine use(s).
    (e) The purpose of the routine use(s).
    (f) The categories of recipients of such use. In the event of any 
request for an addition to the routine uses of

[[Page 113]]

the systems which the agency maintains, such request may be sent to the 
following officer: Director, A&F/AS, ACTION, 806 Connecticut Avenue NW., 
Washington, DC 20525.



Sec. 1224.1-6  Reports regarding changes in systems.

    The agency shall provide to Congress, the Office of Management and 
Budget, and the Privacy Protection Commission advance notice of any 
proposal to establish or alter any system of records as defined herein. 
This report will be submitted in accord with guidelines to be provided 
by the Office of Management and Budget.



Sec. 1224.1-7  Use of social security account number in records systems. [Reserved]



Sec. 1224.1-8  Rules of conduct.

    (a) The Head of the agency shall assure that all persons involved in 
the design, development operation or maintenance of any systems of 
records as defined herein are informed of all requirements necessary to 
protect the privacy of individuals who are the subject of such records. 
All employees shall be informed of all implications of the Act in this 
area including the criminal penalties provided under 5 U.S.C. 552a and 
the fact that agency may be subject to civil suit for failure to comply 
with the provisions of the Privacy Act and these regulations.
    (b) The Head of the agency shall also ensure that all personnel 
having access to records receive adequate training in the protection of 
the security of personal records and that adequate and proper storage is 
provided for all such records with sufficient security to assure the 
privacy of such records.



Sec. 1224.1-9  Records systems--Management and control.

    (a) The Director of Administrative Services (A&F) shall have overall 
control and supervision of the security of all records keeping systems 
and shall be responsible for monitoring the security standards set forth 
in these regulations.
    (b) A designated official (System Manager) shall be named who shall 
have management responsibility for each record system maintained by the 
agency and who shall be responsible for providing protection and 
accountability for such records at all times and for insuring that such 
records are secured in appropriate containers whenever not in use or in 
the direct control of authorized personnel.



Sec. 1224.1-10  Security of records systems--Manual and automated systems.

    The Head of the agency has the responsibility of maintaining 
adequate technical, physical, and security safeguards to prevent 
unauthorized disclosure or destruction of manual and automatic record 
systems. These security safeguards shall apply to all systems in which 
identifiable personal data are processed or maintained including all 
reports and outputs from such systems which contain identifiable 
personal information. Such safeguards must be sufficient to prevent 
negligent, accidental, or unintentional disclosure, modification or 
destruction of any personal records or data and must furthermore 
minimize to the extent practicable the risk that skilled technicians or 
knowledgeable persons could improperly obtain access to modify or 
destroy such records or data and shall further insure against such 
casual entry by unskilled persons without official reasons for access to 
such records or data.
    (a) Manual systems. (1) Records contained in records systems as 
defined herein may be used, held or stored only where facilities are 
adequate to prevent unauthorized access by persons within or without the 
agency.
    (2) All records systems when not under the personal control of the 
employees authorized to use same must be stored in an appropriate metal 
filing cabinet. Where appropriate, such cabinet shall have three 
position dial-type combination lock, and/or be equipped with a steel 
lock bar secured by a GSA approved changeable combination padlock or in 
some such other securely locked cabinet as may be approved by GSA for 
the storage of such records. Certain systems are not of such 
confidential nature that their disclosure would harm an individual who 
is the subject of such record. Records in this category shall be 
maintained in steel

[[Page 114]]

cabinets without the necessity of combination locks.
    (3) Access to and use of systems of records shall be permitted only 
to persons whose official duties require such access within the agency, 
for routine uses as defined in subpart B herein as to any given system, 
or for such other uses as may be provided herein.
    (4) Other than for access within the agency to persons needing such 
records in the performance of their official duties or routine users as 
defined in subpart B herein or such other uses as provided herein, 
access to records within systems of records shall be permitted only to 
the individual to whom the record pertains or upon his or her written 
request to a designated personal representative.
    (5) Access to areas where records systems are stored will be limited 
to those persons whose official duties require work in such areas and 
proper accountings of removal of any records in storage areas in the 
form directed by the Director, A&F/AS, shall be maintained at all times.
    (6) The agency shall assure that all persons whose official duties 
who require access to and use of records contained in records systems 
are adequately trained to protect the security and privacy of such 
records.
    (7) The disposal and destruction of records within records systems 
shall be in accord with rules promulgated by the General Services 
Administration.
    (b) Automated systems. (1) Identifiable personal information may be 
processed, stored or maintained by automatic data systems only where 
facilities or conditions are adequate to prevent unauthorized access to 
such system in any form. Whenever such data whether contained in punch 
cards, magnetic tapes or discs are not under the personal control of an 
authorized person such information must be stored in a metal filing 
cabinet having a built-in three postion combination lock, a metal filing 
cabinet equipped with a steel lock bar secured with a GSA approved 
combination padlock, or in adequate containers or in a secured room or 
in such other facility having greater safeguards than those provided for 
herein.
    (2) Access to and use of identifiable personal data associated with 
automated data systems shall be limited to those persons whose official 
duties require such access. Proper control of personal data in any form 
associated with automated data systems shall be maintained at all times 
including maintenance of accountability records showing disposition of 
input and output documents.
    (3) All persons whose official duties require access to processing 
and maintenance of identifiable personal data and automated systems 
shall be adequately trained in the security and privacy of personal 
data.
    (4) The disposal and disposition of identifiable personal data and 
automated systems shall be carried on by shredding, burning or in the 
case of tapes or discs, degaussing, in accord with any regulations now 
or hereafter proposed by the GSA or other appropriate authority.



Sec. 1224.1-11  Accounting for disclosure of records.

    Each office maintaining a system of records shall account for all 
records within such system by keeping a written log in the form 
prescribed by the Director, A&F/AS, containing the following 
information:
    (a) The date, nature, and purpose of each disclosure of a record to 
any person or to another agency. Disclosures made to employees of the 
agency in the normal course of their official duties, or pursuant to the 
provisions of the Freedom of Information Act need not be accounted for.
    (b) Such accounting shall contain the name and address of the person 
or agency to whom the disclosure was made.
    (c) The accounting shall be maintained in accord with a system 
approved by the Director, A&F/AS, as sufficient for the purpose but in 
any event sufficient to permit the construction of a listing for all 
disclosures at appropriate periodic intervals.
    (d) The accounting shall reference any justification or basis upon 
which any release was made including any written documentation required 
when records are released for statistical or law enforcement purposes 
under the

[[Page 115]]

provisions of subsection (b) of the Privacy Act of 1974 (5 U.S.C. 552a).
    (e) For the purpose of this part, the system of accounting for 
disclosures is not a system of records under the definitions hereof and 
no accounting need be maintained for the disclosure of accounting of 
disclosures.



Sec. 1224.1-12  Contents of records systems.

    The agency shall maintain in any records contained in any records 
system hereunder only such information about an individual as is 
accurate, relevant, and necessary to accomplish the purpose for which 
the agency acquired the information as authorized by statute or 
Executive Order.
    (a) In situations in which the information may result in adverse 
determinations about such individuals' rights, benefits and privileges 
under any Federal program, all information placed in records systems 
shall, to the greatest extent practicable, be collected from the 
individual to whom the record pertains.
    (b) Each form or other document which an individual is expected to 
complete in order to provide information for any records system shall 
have appended thereto, or in the body of the document:
    (1) An indication of the authority authorizing the solicitation of 
the information and whether the provision of the information is 
mandatory or voluntary.
    (2) The purpose or purposes for which the information is intended to 
be used.
    (3) Routine uses which may be made of the information and published 
pursuant to Sec. 1224.1-6 of this regulation.
    (4) The effect on the individual if any of not providing all or part 
of the required or requested information.
    (c) Records maintained in any system of record used by the agency to 
make any determination about any individual shall be maintained with 
such accuracy, relevancy, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the making of any 
determination about such individual, provided however, that the agency 
shall not be required to update or keep current retired records.
    (d) Before disseminating any record about any individual to any 
person other than an agency, unless the dissemination is made pursuant 
to the provisions of the Freedom of Information Act (5 U.S.C. 552) the 
agency shall make reasonable efforts to assure that such records are, or 
were at the time they were collected, accurate, complete, timely and 
relevant for agency purposes.
    (e) Under no circumstances shall the agency maintain any record 
about any individual with respect to or describing how such individual 
exercises rights guaranteed by the first amendment of the Constitution 
of the United States unless expressly authorized by statute or by the 
individual about whom the record is maintained, or unless pertinent to 
and within the scope of an authorized law enforcement activity.
    (f) In the event any record is disclosed as a result of the order of 
a court of appropriate jurisdiction, the agency shall make reasonable 
efforts to notify the individual whose record was so disclosed after the 
process becomes a matter of public record.



Sec. 1224.1-13  Access to records.

    (a) Upon request of any individual about whom a record is maintained 
addressed to the Director of Administrative Services, 806 Connecticut 
Avenue NW., Washington, DC 20525, in person during regular business 
hours, or by mail, access to his record or to any information contained 
therein shall be provided.
    (b) If the request is made in person, such individual may, upon his 
request, be accompanied by a person of his choosing to review the record 
and shall be provided an opportunity to have a copy made of all or any 
record about such individual.
    (c) A record may be disclosed to a representative chosen by the 
individual as to whom a record is maintained upon proper written consent 
of such individual.
    (d) Request made in person will be promptly complied with if the 
records sought are in the immediate custody of ACTION. Mailed requests 
or personal requests for documents in storage or otherwise not 
immediately available,

[[Page 116]]

will be acknowledged within ten working days, and the information 
requested will be promptly provided thereafter.
    (e) With regard to any request for disclosure of record the 
following procedure shall apply:
    (1) Medical or psychological records shall be disclosed to an 
individual unless in the judgment of the agency, access to such records 
might have an adverse effect upon such individual. When such 
determinaion has been made, the agency may require that the information 
be disclosed only to a physician chosen by the requesting individual. 
Such physician shall have full authority to disclose all or any portion 
of such record to the requesting individual in the exercise of his 
professional judgment.
    (2) Test material and copies of certificates or other lists of 
eligibles or any other listing, the disclosure of which would violate 
the privacy of any other individual, or be otherwise proscribed by the 
provision of the Privacy Act of 1974, shall be removed from the record 
before disclosure to any individual to whom the record pertains.



Sec. 1224.1-14  Specific exemptions.

    Records or portions of records specified below shall be exempt from 
disclosure provided however that no such exemption shall apply to the 
provisions of Sec. 1224.1-16(d)(3) hereof (informing prior recipient of 
corrected or disputed records), Sec. 1224.1-12(a) (collecting 
information directly from the individual to whom it pertains); 
Sec. 1224.1-12(b) (informing individuals asked to supply information of 
the purposes for which it is collected and whether it is mandatory); 
Sec. 1224.1-12(c) (maintaining records with accuracy, completeness, etc. 
as reasonably necessary for agency purposes); Sec. 1224.1-12(f) 
(notifying the subjects of records disclosed under compulsory court 
process); Sec. 1224.1-16(g) (civil remedies). With the above exceptions 
the following material shall be exempt from disclosure to the extent 
indicated:
    (a) Material considered classified and exempt from disclosure under 
the provisions of section 552(b)(1) of the Freedom of Information Act (5 
U.S.C. 552).
    (b) Investigatory material compiled for the purposes of law 
enforcement provided, however, that if such information is to be used 
for the basis for denial of any right, privilege or benefit to which 
such individual would be entitled by Federal law or otherwise, such 
material shall be provided to the such individual except to the extent 
necessary to protect the identity of a source who furnished information 
to the government under an express promise that his or her identity 
would be held in confidence, or prior to the effective date of the 
Privacy Act of 1974, under an implied promise of such source.
    (c) Required by statute to be maintained and used solely as 
statistical records.
    (d) Investigatory material compiled solely for the purpose of 
determining suitability, eligibility or qualification for service as an 
employee or volunteer or for the obtaining of a Federal contract or for 
access to classified information; Provided, however, that such material 
shall be disclosed to the extent possible without revealing the identity 
of a source who furnished information to the government under an express 
promise of the confidentiality of his identity or, prior to the 
effective date of the Privacy Act of 1974, under an implied promise of 
such confidentiality of identity.
    (e) Testing or examination material used solely to determine 
individual qualifications for appointment or promotion in the Federal 
service, disclosure of which would compromise the objectivity or 
fairness of the testing or examination process.
    (f) An individual shall not have a right of access to any 
information compiled by the agency in reasonable anticipation of a civil 
action or proceeding.
    The above specific exemptions from disclosure are made for the 
purpose of protecting the confidentiality of classified information, 
sources who furnish information for law enforcement purposes or 
selection purposes for volunteer service or employment, and to protect 
the integrity of any system of tests or examinations for Federal service 
or advancement therein.

[[Page 117]]



Sec. 1224.1-15  Identification of requestors.

    The agency shall require reasonable identification of all 
individuals who request access to records to assure that records are 
disclosed to the proper person.
    (a) In the event an individual requests disclosure in person, such 
individual shall be required to show an identification card such as a 
drivers license etc., containing a photo and a sample signature of such 
individual. Such individual may also be required to sign a statement 
under oath as to his or her identity acknowledging that he or she is 
aware of the penalties for improper disclosure under the provisions of 
the Privacy Act of 1974.
    (b) In the event that disclosure is requested by mail, the agency 
may request such information as may be necessary to reasonably assure 
that the individual making such request is properly identified. In 
certain cases, the agency may require that a mail request be notarized 
with an indication that the notary received an acknowledgment of 
identity from the individual making such request.
    (c) In the event an individual is unable to provide suitable 
documentation or identification, the agency may require a signed 
notarized statement asserting the identity of the individual and 
stipulating that the individual inderstands that knowingly or willfully 
seeking or obtaining access to records about another person under false 
pretenses is punishable by a fine of up to $5,000.
    (d) In the event a requestor wishes to be accompanied by another 
person while reviewing his or her records, the agency may require a 
written statement authorizing discussion of his or her records in the 
presence of the accompanying representative or other persons.



Sec. 1224.1-16  Amendment of records and appeals with respect thereto.

    A request for inspection of any record shall be made to the 
Director, A&F/Administrative Services, 806 Connecticut Avenue NW., 
Washington, DC 20525. Such request may be made by mail or in person 
provided however that requests made in person may be required to be made 
upon a form to be provided by the Director of Administrative Services. 
The Director of Administrative Services shall keep a current list of 
systems of records maintained by the agency and published in accordance 
with the provisions of these regulations. Requests as to record systems 
maintained in Regional Offices may be addressed to the appropriate 
Regional Office, Attention the Regional Records Officer, in person or by 
mail. A requesting individual may request that the agency compile all 
records pertaining to such individual at any named Regional Office or at 
the Central Office in Washington, DC, for such individual's inspection 
and/or copying. In the event an individual makes such request for a 
compilation of all records pertaining to him in various locations, 
appropriate time for such compilation shall be provided as may be 
necessary to promptly comply with such requests.
    Any such requests should contain, at a minimum, identifying 
information needed to locate any given record and a brief description of 
the item or items of information required in the event the individual 
wishes to see less than all records maintained about him.
    (a) In the event an individual after examination of his record 
desires to request an amendment of such records, he may do so by 
addressing such request to the Director of Administrative Services. The 
Director of Administrative Services shall provide assistance in 
preparing any such amendment upon request and a written acknowledgement 
of receipt of such request within 10 working days from the receipt 
thereof from the individual who requested the amendment. Such 
acknowledgment may, if necessary, request any additional information 
needed to make a determination with respect to such request. If the 
agency makes a determination to comply with such request within such 10-
day period, no written acknowledgement is necessary, provided however 
that a certification of such change shall be provided to such individual 
within such period.
    (b) Promptly after acknowledgment of the receipt of a request for an 
amendment the agency shall take one of the following actions:

[[Page 118]]

    (1) Make any corrections of any portion of the record which the 
individual believes is not accurate, relevant, timely or complete.
    (2) Inform the individual of its refusal to amend the record in 
accord with the request together with the reason for such refusal and 
the procedures established for requesting review of such refusal by the 
head of the agency or his designee. Such notice shall include the name 
and business address of such official.
    (3) Refer the request to the agency that has control of and 
maintains the record in those instances where the record requested 
remains the property of the controlling agency and not of ACTION.
    (c) In reviewing a request to amend the record the agency shall 
assess the accuracy, relevance, timeliness and completeness of the 
record with due and appropriate regard for fairness to the individual 
about whom the record is maintained. In making such determination, the 
agency shall consult criteria for determining record quality published 
in pertinent chapters of the Federal Personnel Manual and to the extent 
possible shall accord therewith.
    (d) In the event the agency agrees with the individual's request to 
amend such record, it shall:
    (1) Advise the individual in writing;
    (2) Correct the record accordingly; and
    (3) Advise all previous recipients of a record which was corrected 
of the correction and its substance.
    (e) In the event the agency, after an initial review of the request 
to amend a record, disagrees with all or a portion of it, the agency 
shall:
    (1) Advise the individual of its refusal and the reasons therefore;
    (2) Inform the individual that he or she may request further review 
in accord with the provisions of these regulations; and
    (3) The name and address to whom the request should be directed.
    (f) In the event an individual requestor disagrees with the initial 
agency determination, he or she may appeal such determination to the 
Deputy Director of the Agency or his designee. Such request for review 
must be made within 30 days after receipt by the requestor of the 
initial refusal to amend.
    (g) If after review the Deputy Director or his designee refuses to 
amend the record as requested he shall advise the individual requester 
of such refusal and the reasons for same; of his or her right to file a 
concise statement of the reasons for disagreeing with the decision of 
the agency in the record; of the procedures for filing a statement of 
disagreement and of the fact that such statement so filed will be made 
available to anyone to whom the record is subsequently disclosed 
together with a brief statement of the agency summarizing its reasons 
for refusal, if the agency decides to place such brief statement in the 
record. The agency shall have the authority to limit the length of any 
statement to be filed, such limit to depend upon the record involved. 
The agency shall also inform such individual that prior recipients of 
the disputed record will be provided a copy of both statements of 
dispute to the extent that the accounting of disclosures has been 
maintained and of the individual's right to seek judicial review of the 
agency's refusal to amend the record.
    (h) If after review the official determines that the record should 
be amended in accordance with the individual's request the agency shall 
proceed as provided above in the event a request is granted upon initial 
demand.
    (i) Final agency determination of an individual's request for a 
review shall be concluded within 30 working days from the initial 
request excluding the period of time between receipt by such individual 
of the initial denial and his or her filing of a request for review 
provided however that the Deputy Director or his designee may determine 
that fair and equitable review cannot be made within that time. If such 
circumstances occurs, the individual shall be notified of the additional 
time required in writing and of the approximate date on which 
determination of the review is expected to be completed.



Sec. 1224.1-17  Denial of access and appeals with respect thereto.

    In the event that the agency finds it necessary to deny any 
individual access to a record about such individual

[[Page 119]]

pursuant to provisions of the Privacy Act or of these regulations, a 
response to the original request shall be made in writing within ten 
working days from the date of such initial request. The denial shall 
specify the reasons for such refusal or denial and advise the individual 
of the reasons therefore, and of his or her right to an appeal within 
the agency and/or judicial review under the provisions of the Privacy 
Act.
    (a) In the event an individual desires to appeal any denial of 
access, he may do so in writing by addressing such appeal to the 
attention of the Deputy Director, ACTION, c/o the Director, AF/
Administrative Services, 806 Connecticut Avenue NW., Washington, DC 
20525. Although there is no time limit for such appeals, ACTION shall be 
under no obligation to maintain copies of original requests or responses 
thereto beyond 180 days from the date of the original request.
    (b) The Deputy Director, or his designee, shall review a request 
from a denial of access and shall make a determination with respect to 
such appeal within 20 days after receipt thereof. Notice of such 
determination shall be provided to the individual making the request in 
writing. If such appeal is denied in whole or in part, such notice shall 
include notification of the right of the person making such requests to 
have judicial review of the denial as provided in the Privacy Act (5 
U.S.C. 552a).



Sec. 1224.1-18  Fees.

    No fees shall be charged for search time or for any other time 
expended by the agency to produce a record. Copies of records may be 
charged for at the rate of 10 cents per page provided that one copy of 
any record shall be provided free of charge.



Sec. 1224.1-19  Inspector General exemptions.

    Pursuant to sections (j) and (k) of the Privacy Act of 1974, ACTION 
has promulgated the following exemptions to specified provisions of the 
Privacy Act:
    (a) Pursuant to, and limited by, 5 U.S.C. 552a(j)(2), the system of 
records maintained by the Office of the Inspector General of ACTION that 
contains the Investigative Files shall be exempted from the provisions 
of 5 U.S.C. 552a, except subsections (b), (c) (1) and (2), (e)(4) (A) 
through (F), (e) (6), (7), (9), (10), and (11), and (i), and 45 CFR 
1224.1-12, 1224.1-13, 1224.1-15, 1224.1-16, 1224.1-17, and 1224.1-18, 
insofar as the system contains information pertaining to criminal law 
enforcement investigations.
    (b) Pursuant to, and limited by, 5 U.S.C. 552a(k)(2), the system of 
records maintained by the Office of the Inspector General of ACTION that 
contains the Investigative Files shall be exempted from 5 U.S.C. 552a 
(c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and (f), and 45 CFR 
1224.1-12, 1224.1-13, 1224.1-15, 1224.1-16, 1224.1-17, and 1224.1-18, 
insofar as it contains investigatory materials compiled for law 
enforcement purposes.

[57 FR 45326, Oct. 1, 1992]



PART 1225--VOLUNTEER DISCRIMINATION COMPLAINT PROCEDURE--Table of Contents




                      Subpart A--General Provisions

Sec.
1225.1  Purpose.
1225.2  Policy.
1225.3  Definitions.
1225.4  Coverage.
1225.5  Representation.
1225.6  Freedom from reprisal.
1225.7  Review of allegations of reprisal.

      Subpart B--Processing Individual Complaints of Discrimination

1225.8  Precomplaint procedure.
1225.9  Complaint procedure.
1225.10  Corrective action.
1225.11  Amount of attorney fees.

        Subpart C--Processing Class Complaints of Discrimination

1225.12  Precomplaint procedure.
1225.13  Acceptance, rejection, or cancellation of complaint.
1225.14  Consolidation of complaints.
1225.15  Notification and opting out.
1225.16  Investigation and adjustment of complaint.
1225.17  Agency decision.
1225.18  Notification of class members of decision.
1225.19  Corrective action.
1225.20  Claim appeals.
1225.21  Statutory rights.

    Authority: Secs. 417, 402(14), 420, Pub. L. 93-113, 87 Stat. 398, 
407, and 414; Sec. 5(a),

[[Page 120]]

Pub. L. 87-293, 75 Stat. 613; Executive Order 12137, issued May 16, 
1979.

    Source: 46 FR 1609, Jan. 6, 1981, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 1225.1  Purpose.

    The purpose of this part is to establish a procedure for the filing, 
investigation, and administrative determination of allegations of 
discrimination based on race, color, national origin, religion, age, 
sex, handicap or political affiliation, which arise in connection with 
the recruitment, selection, placement, service, or termination of Peace 
Corps and ACTION applicants, trainees, and Volunteers for full-time 
service.



Sec. 1225.2  Policy.

    It is the policy of Peace Corps and ACTION to provide equal 
opportunity in all its programs for all persons and to prohibit 
discrimination based on race, color, national origin, religion, age, 
sex, handicap or political affiliation, in the recruitment, selection, 
placement, service, and termination of Peace Corps and ACTION 
Volunteers. It is the policy of Peace Corps and ACTION upon determining 
that such prohibited discrimination has occurred, to take all necessary 
corrective action to remedy the discrimination, and to prevent its 
recurrence.



Sec. 1225.3  Definitions.

    Unless the context requires otherwise, in this Part:
    (a) Director means the Director of Peace Corps for all Peace Corps 
applicant, trainee, or Volunteer complaints processed under this part, 
or the Director of ACTION for all domestic applicant, trainee, or 
Volunteer complaints processed under this part. The term shall also 
refer to any designee of the respective Director.
    (b) EO Director means the Director of the Equal Opportunity Division 
of the Office of Compliance, ACTION. The term shall also refer to any 
designee of the EO Director.
    (c) Illegal discrimination means discrimination on the basis of 
race, color, national origin, religion, age, sex, handicap or political 
affiliation as defined in section 5(a) of the Peace Corps Act (22 U.S.C. 
2504); section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000-16); 
Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791, et seq.); and 
the Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.). Further 
clarification of the scope of matters covered by this definition may be 
obtained by referring to the following regulations: Sex Discrimination: 
29 CFR part 1604; Religious Discrimination: 29 CFR part 1605; National 
Origin Discrimination: 29 CFR part 1606; Age Discrimination: 45 CFR part 
90; Handicap Discrimination: 29 CFR 1613.701 through 1613.707.
    (d) Applicant means a person who has submitted to the appropriate 
agency personnel a completed application required for consideration of 
eligibility for Peace Corps or ACTION volunteer service. ``Applicant'' 
may also mean a person who alleges that the actions of agency personnel 
precluded him or her from submitting such an application or any other 
information reasonably required by the appropriate personnel as 
necessary for a determination of the individual's eligibility for 
volunteer service.
    (e) Trainee means a person who has accepted an invitation issued by 
Peace Corps or ACTION and has registered for Peace Corps or ACTION 
training.
    (f) Volunteer means a person who has completed successfully all 
necessary training; met all clearance standards; has taken, if required, 
the oath prescribed in either section 5(j) of the Peace Corps Act (22 
U.S.C. 2504), or section 104(c) of the Volunteer Service Act of 1973, as 
amended (42 U.S.C. 104(c)) and has been enrolled as a full-time 
Volunteer by the appropriate agency.
    (g) Complaint means a written statement signed by the complainant 
and submitted to the EO Director. A complaint shall set forth 
specifically and in detail:
    (1) A description of the Peace Corps or ACTION management policy or 
practice, if any, giving rise to the complaint;
    (2) A detailed description including names and dates, if possible, 
of the actions of the Peace Corps or ACTION officials which resulted in 
the alleged illegal discrimination;

[[Page 121]]

    (3) The manner in which the Peace Corps or ACTION action directly 
affected the complainant; and
    (4) The relief sought.
A complaint shall be deemed filed on the date it is received by the 
appropriate agency official. When a complaint does not conform with the 
above definition, it shall nevertheless be accepted. The complainant 
shall be notified of the steps necessary to correct the deficiencies of 
the complaint. The complainant shall have 30 days from his or her 
receipt of notification of the complaint defects to resubmit an amended 
complaint.
    (h) Counselor means an official designated by the EO Director to 
perform the functions of conciliation as detailed in this part.
    (i) Agent means a class member who acts for the class during the 
processing of a class complaint. In order to be accepted as the agent 
for a class complaint, in addition to those requirements of a complaint 
found in Sec. 1225.3(g) of this part, the complaint must meet the 
requirements for a class complaint as found in subpart C of these 
regulations.



Sec. 1225.4  Coverage.

    (a) These procedures apply to all Peace Corps or ACTION applicants, 
trainees, and Volunteers throughout their term of service with the Peace 
Corps or ACTION. When an applicant, trainee, or Volunteer makes a 
complaint which contains an allegation of illegal discrimination in 
connection with an action that would otherwise be processed under a 
grievance, early termination, or other administrative system of the 
agency, the allegation of illegal discrimination shall be processed 
under this part. At the discretion of the appropriate Director, any 
other issues raised may be consolidated with the discrimination 
complaint for processing under these regulations. Any issues which are 
not so consolidated shall continue to be processed under those 
procedures in which they were originally raised.
    (b) The submission of class complaints alleging illegal 
discrimination as defined above will be handled in accordance with the 
procedure outlined in subpart C.



Sec. 1225.5  Representation.

    Any aggrieved party may be represented and assisted in all stages of 
these procedures by an attorney or representative of his or her own 
choosing. An aggrieved party must immediately inform the agency if 
counsel is retained. Attorney fees or other appropriate relief may be 
awarded in the following circumstances:
    (a) Informal adjustment of a complaint. An informal adjustment of a 
complaint may include an award of attorney fees or other relief deemed 
appropriate by the EO Director. Where the parties agree on an adjustment 
of the complaint, but cannot agree on whether attorney fees or costs 
should be awarded, or on their amount, this issue may be appealed to the 
appropriate Director to be determined in the manner detailed in 
Sec. 1225.11 of this part.
    (b) Final Agency Decision. When discrimination is found, the 
appropriate Director shall advise the complainant that any request for 
attorney fees or costs must be documented and submitted for review 
within 20 calendar days after his or her receipt of the final agency 
decision. The amount of such awards shall be determined under 
Sec. 1225.11. In the unusual situation in which it is determined not to 
award attorney fees or other costs to a prevailing complainant, the 
appropriate Director in his or her final decision shall set forth the 
specific reasons thereof.



Sec. 1225.6  Freedom from reprisal.

    Aggrieved parties, their representatives, and witnesses will be free 
from restraint, interference, coercion, discrimination, or reprisal at 
any stage in the presentation and processing of a complaint, including 
the counseling stage described in Sec. 1225.8 of this part, or any time 
thereafter.



Sec. 1225.7  Review of allegations of reprisal.

    An aggrieved party, his or her representative, or a witness who 
alleges restraint, interference, coercion, discrimination, or reprisal 
in connection with the presentation of a complaint under this part, may, 
if covered by this part, request in writing that the allegation be 
reviewed as an individual complaint of discrimination subject to

[[Page 122]]

the procedures described in Subpart B or that the allegation be 
considered as an issue in the complaint at hand.



      Subpart B--Processing Individual Complaints of Discrimination



Sec. 1225.8  Precomplaint procedure.

    (a) An aggrieved person who believes that he or she has been subject 
to illegal dicrimination shall bring such allegations to the attention 
of the appropriate Counselor within 30 days of the alleged 
discrimination to attempt to resolve them. The process for notifying the 
appropriate Counselor is the following:
    (1) Aggrieved applicants, trainees or Volunteers who have not 
departed for overseas assignments, or who have returned to Washington 
for any administrative reason shall direct their allegations to the EO 
Director for assignment to an appropriate Counselor.
    (2) Aggrieved trainees or Volunteers overseas shall direct their 
allegations to the designated Counselor for that post.
    (3) Aggrieved applicants, trainees, and Volunteers applying for, or 
enrolled in ACTION domestic programs shall direct their allegations to 
the designated Counselor for that Region.
    (b) Upon receipt of the allegation, the Counselor or designee shall 
make whatever inquiry is deemed necessary into the facts alleged by the 
aggrieved party and shall counsel the aggrieved party for the purpose of 
attempting an informal resolution agreeable to all parties. The 
Counselor will keep a written record of his or her activities which will 
be submitted to the EO Director if a formal complaint concerning the 
matter is filed.
    (c) If after such inquiry and counseling an informal resolution to 
the allegation is not reached, the Counselor shall notify the aggrieved 
party in writing of the right to file a complaint of discrimination with 
the EO Director within 15 calendar days of the aggrieved party's receipt 
of the notice.
    (d) The Counselor shall not reveal the identity of the aggrieved 
party who has come to him or her for consultation, except when 
authorized to do so by the aggrieved party. However, the identity of the 
aggrieved party may be revealed once the agency has accepted a complaint 
of discrimination from the aggrieved party.



Sec. 1225.9  Complaint procedure.

    (a) EO Director. (1) The EO Director must accept a complaint if the 
process set forth above has followed, and the complaint states a charge 
of illegal discrimination. The agency will extend the time limits set 
herein (a) when the complainant shows that he or she was not notified of 
the time limits and was not otherwise aware of them, or (b) the 
complainant shows that he or she was prevented by circumstances beyond 
his or her control from submitting the matter in a timely fashion, or 
(c) for other reasons considered sufficiently by the agency. At any time 
during the complaint procedure, the EO Director may cancel a complaint 
because of failure of the aggrieved party to prosecute the complaint. If 
the complaint is rejected for failure to meet one or more of the 
requirements set out in the procedure outlined in Sec. 1225.8 or is 
cancelled, the EO Director shall inform the aggrieved party in writing 
of this Final Agency Decision; that the Peace Corps or ACTION will take 
no further action; and of the right, to file a civil action as described 
in Sec. 1225.21 of this part.
    (2) Upon acceptance of the complaint and receipt of the Counselor's 
report, the EO Director shall provide for the prompt investigation of 
the complaint. Whenever possible, the person assigned to investigate the 
complaint shall occupy a position in the agency which is not, directly 
or indirectly, under the jurisdiction of the head of that part of the 
agency in which the complaint arose. The investigation shall include a 
thorough review of the circumstances under which the alleged 
discrimination occurred, and any other circumstances which may 
constitute, or appear to constitute discrimination against the 
complainant. The investigator shall compile an investigative file, which 
includes a summary of the investigation, recommended findings of fact 
and a recommended resolution of the complaint. The investigator shall 
forward the investigative file to the EO Director and shall provide the 
complainant with a copy.

[[Page 123]]

    (3) The EO Director shall review the complaint file including any 
additional statements provided by the complainant, make findings of 
fact, and shall offer an adjustment of the complaint if the facts 
support the complaint. If the proposed adjustment is agreeable to all 
parties, the terms of the adjustment shall be reduced to writing, signed 
by both parties, and made part of the complaint file. A copy of the 
terms of the adjustment shall be provided the complainant. If the 
proposed adjustment of the complaint is not acceptable to the 
complainant, or the EO Director determines that such an offer is 
inappropriate, the EO Director shall forward the complaint file with a 
written notification of the findings of facts, and his or her 
recommendation of the proposed disposition of the complaint to the 
appropriate Director. The aggrieved party shall receive a copy of the 
notification and recommendation and shall be advised of the right to 
appeal the recommended disposition to the appropriate Director. Within 
ten (10) calendar days of receipt of such notice, the complainant may 
submit his or her appeal of the recommended disposition to the 
appropriate Director.
    (b) Appeal to Director. If no timely notice of appeal is received 
from the aggrieved party, the appropriate Director or designee may adopt 
the proposed disposition as the Final Agency Decision. If the aggrieved 
party appeals, the appropriate Director or designee, after review of the 
total complaint file, shall issue a decision to the aggrieved party. The 
decision of the appropriate Director shall be in writing, state the 
reasons underlying the decision, shall be the Final Agency Decision, 
shall inform the aggrieved party of the right to file a civil action as 
described in Sec. 1225.21 of this part, and, if appropriate, designate 
the procedure to be followed for the award of attorney fees or costs.



Sec. 1225.10  Corrective action.

    When it has been determined by Final Agency Decision that the 
aggrieved party has been subjected to illegal discrimination, the 
following corrective actions may be taken:
    (a) Selection as a Trainee for aggrieved parties found to have been 
denied selection based on prohibited discrimination.
    (b) Reappointment to Volunteer service for aggrieved parties found 
to have been early-terminated as a result of prohibited discrimination. 
To the extent possible, a Volunteer will be placed in the same position 
previously held. However, reassignment to the specific country of prior 
service, or to the specific position previously held, is contingent on 
several programmatic considerations such as the continued availability 
of the position, or program in that country, and acceptance by the host 
country of such placement. If the same position is deemed to be no 
longer available, the aggrieved party will be offered a reassignment to 
a position in as similar circumstances to the position previously held, 
or to resign from service for reasons beyond his or her control. Such a 
reassignment may require both additional training and an additional two 
year commitment to volunteer service.
    (c) Provision for reasonable attorney fees and other costs incurred 
by the aggrieved party.
    (d) Such other relief as may be deemed appropriate by the Director 
of Peace Corps or ACTION.



Sec. 1225.11  Amount of attorney fees.

    (a) When a decision of the agency provides for an award of 
attorney's fees or costs, the complainant's attorney shall submit a 
verified statement of costs and attorney's fees as appropriate, to the 
agency within 20 days of receipt of the decision. A statement of 
attorney's fees shall be accompanied by an affidavit executed by the 
attorney of record itemizing the attorney's charges for legal services. 
Both the verified statement and the accompanying affidavit shall be made 
a part of the complaint file. The amount of attorney's fees or costs to 
be awarded the complainant shall be determined by agreement between the 
complainant, the complainant's representative and the appropriate 
Director. Such agreement shall immediately be reduced to writing. If the 
complainant, the representative and the agency cannot reach an agreement 
on the amount of attorney's fees or costs within 20 calendar days of 
receipt of the verified

[[Page 124]]

statement and accompanying affidavit, the appropriate Director shall 
issue a decision determining the amount of attorney fees or costs within 
30 calendar days of receipt of the statement and affidavit. Such 
decision shall include the specific reasons for determining the amount 
of the award.
    (b) The amount of attorney's fees shall be made in accordance with 
the following standards: The time and labor required, the novelty and 
difficulty of the questions, the skills requisite to perform the legal 
service properly, the preclusion of other employment by the attorney due 
to acceptance of the case, the customary fee, whether the fee is fixed 
or contingent, time limitation imposed by the client or the 
circumstances, the amount involved and the results obtained, the 
experience, reputation, and ability of the attorney, the undesirability 
of the case, the nature and length of the professional relationship with 
the client, and the awards in similar cases.



        Subpart C--Processing Class Complaints of Discrimination



Sec. 1225.12  Precomplaint procedure.

    An applicant, trainee or Volunteer who believes that he or she is 
among a group of present or former Peace Corps or ACTION Volunteers, 
trainees, or applicants for volunteer service who have been illegally 
discriminated against and who wants to be an agent for the class shall 
follow those precomplaint procedures outlined in Sec. 1225.8 of this 
part.



Sec. 1225.13  Acceptance, rejection or cancellation of complaint.

    (a) Upon receipt of a class complaint, the Counselor's report, and 
any other information pertaining to timeliness or other relevant 
circumstances related to the complaint, the EO Director shall review the 
file to determine whether to accept or reject the complaint, or a 
portion thereof, for any of the following reasons:
    (1) It was not timely filed;
    (2) It consists of an allegation which is identical to an allegation 
contained in a previous complaint filed on behalf of the same class 
which is pending in the agency or which has been resolved or decided by 
the agency;
    (3) It is not within the purview of this subpart;
    (4) The agent failed to consult a Counselor in a timely manner;
    (5) It lacks specificity and detail;
    (6) It was not submitted in writing or was not signed by the agent;
    (7) It does not meet the following prerequisites.
    (i) The class is so numerous that a consolidated complaint of the 
members of the class is impractical;
    (ii) There are questions of fact common to the class;
    (iii) The claims of the agent of the class are representative of the 
claims of the class;
    (iv) The agent of the class, or his or her representative will 
fairly and adequately protect the interest of the class.
    (b) If an allegation is not included in the Counselor's report, the 
EO Director shall afford the agent 15 calendar days to explain whether 
the matter was discussed and if not, why he or she did not discuss the 
allegation with the Counselor. If the explanation is not satisfactory, 
the EO Director may decide to reject the allegation. If the explanation 
is satisfactory, the EO Director may require further counseling of the 
agent.
    (c) If an allegation lacks specificity and detail, or if it was not 
submitted in writing or not signed by the agent, the EO Director shall 
afford the agent 30 days from his or her receipt of notification of the 
complaint defects to resubmit an amended complaint. The EO Director may 
decide that the agency reject the complaint if the agent fails to 
provide such information within the specified time period. If the 
information provided contains new allegations outside the scope of the 
complaint, the EO Director must advise the agent how to proceed on an 
individual or class basis concerning these allegations.
    (d) The EO Director may extend the time limits for filing a 
complaint and for consulting with a Counselor when the agent, or his or 
her representative, shows that he or she was not notified of the 
prescribed time limits and was not otherwise aware of them or that he or

[[Page 125]]

she was prevented by circumstances beyond his or her control from acting 
within the time limit.
    (e) When appropriate, the EO Director may determine that a class be 
divided into subclasses and that each subclass be treated as a class, 
and the provisions of this section then shall be construed and applied 
accordingly.
    (f) The EO Director may cancel a complaint after it has been 
accepted because of failure of the agent to prosecute the complaint. 
This action may be taken only after:
    (1) The EO Director has provided the agent a written request, 
including notice of proposed cancellation, that he or she provide 
certain information or otherwise proceed with the complaint; and
    (2) Within 30 days of his or her receipt of the request.
    (g) An agent must be informed by the EO Director in a request under 
paragraph (b) or (c) of this section that his or her complaint may be 
rejected if the information is not provided.



Sec. 1225.14  Consolidation of complaints.

    The EO Director may consolidate the complaint if it involves the 
same or sufficiently similar allegations as those contained in a 
previous complaint filed on behalf of the same class which is pending in 
the agency or which has been resolved or decided by the agency.



Sec. 1225.15  Notification and opting out.

    (a) Upon acceptance of a class complaint, the agency, within 30 
calendar days, shall use reasonable means, such as delivery, mailing, 
distribution, or posting, to notify all class members of the existence 
of the class complaint.
    (b) A notice shall contain:
    (1) The name of the agency or organizational segment thereof, its 
location and the date of acceptance of the complaint;
    (2) A description of the issues accepted as part of the class 
complaint;
    (3) An explanation that class members may remove themselves from the 
class by notifying the agency within 30 calendar days after issuance of 
the notice; and
    (4) An explanation of the binding nature of the final decision or 
resolution of the complaint.



Sec. 1225.16  Investigation and adjustment of complaint.

    The complaint shall be processed promptly after it has been 
accepted. Once a class complaint has been accepted, the procedure 
outlined in Sec. 1225.9 of this part shall apply.



Sec. 1225.17  Agency decision.

    (a) If an adjustment of the complaint cannot be made the procedures 
outlined in Sec. 1225.9 shall be followed by the EO Director except that 
any notice required to be sent to the aggrieved party shall be sent to 
the agent of the class or his or her representative.
    (b) The Final Agency Decision on a class complaint shall be binding 
on all members of the class.



Sec. 1225.18  Notification of class members of decision.

    Class members shall be notified by the agency of the final agency 
decision and corrective action, if any, using at the minimum, the same 
media employed to give notice of the existence of the class complaint. 
The notice, where appropriate, shall include information concerning the 
rights of class members to seek individual relief and of the procedures 
to be followed. Notice shall be given by the agency within ten (10) 
calendar days of the transmittal of its decision to the agent.



Sec. 1225.19  Corrective action.

    (a) When discrimination is found, Peace Corps or ACTION must take 
appropriate action to eliminate or modify the policy or practice out of 
which such discrimination arose, and provide individual corrective 
action to the agent and other class members in accordance with 
Sec. 1225.10 of this part.
    (b) When discrimination is found and a class member believes that 
but for that discrimination he or she would have been accepted as a 
Volunteer or received some other volunteer service benefit, the class 
member may file a written claim with the EO Director within thirty (30) 
calendar days of notification by the agency of its decision.

[[Page 126]]

    (c) The claim must include a specific, detailed statement showing 
that the claimant is a class member who was affected by an action or 
matter resulting from the discriminatory policy or practice which arose 
not more than 30 days preceding the filing of the class complaint.
    (d) The agency shall attempt to resolve the claim within sixty (60) 
calendar days after the date the claim was postmarked, or, in the 
absence of a postmark, within sixty (60) calendar days after the date it 
was received by the EO Director.



Sec. 1225.20  Claim appeals.

    (a) If the EO Director and claimant do not agree that the claimant 
is a member of the class, or upon the relief to which the claimant is 
entitled, the EO Director shall refer the claim, with recommendations 
concerning it to the appropriate Director for Final Agency Decision and 
shall so notify the claimant. The class member may submit written 
evidence to the appropriate Director concerning his or her status as a 
member of the class. Such evidence must be submitted no later than ten 
(10) calendar days after receipt of referral.
    (b) The appropriate Director shall decide the issue within thirty 
(30) days of the date of referral by the EO Director. The claimant shall 
be informed in writing of the decision and its basis and that it will be 
the Final Agency Decision on the issue.



Sec. 1225.21  Statutory rights.

    (a) A Volunteer, trainee, or applicant is authorized to file a civil 
action in an appropriate U.S. District Court:
    (1) Within thirty (30) calendar days of his or her receipt of notice 
of final action taken by the agency.
    (2) After one hundred eighty (180) calendar days from the date of 
filing a complaint with the agency if there has been no final agency 
action.
    (b) For those complaints alleging discrimination that occur outside 
the United States, the U.S. District Court for the District of Columbia 
shall be deemed the appropriate forum.



PART 1226--PROHIBITIONS ON ELECTORAL AND LOBBYING ACTIVITIES--Table of Contents




                      Subpart A--General Provisions

Sec.
1226.1  Purpose.
1226.2  Scope.
1226.3  Definitions.

                   Subpart B--Sponsoring Organization

1226.4  General.
1226.5  Electoral, voter registration, and other activities.

                     Subpart C--Volunteer Activities

1226.6  General.
1226.7  Scope.
1226.8  Prohibited activities.
1226.9  Exceptions.
1226.10  Hatch Act restrictions.
1226.11  Part time volunteers.

                 Subpart D--Sponsor Employee Activities

1226.12  Sponsor employees.
1226.13  Obligation of sponsors.

    Authority: Secs. 403, 415(b), Pub. L. 93-113, 87 Stat. 408, 411-412.

    Source: 46 FR 8522, Jan. 27, 1981, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 1226.1  Purpose.

    This part implements provisions of the Domestic Volunteer Service 
Act, 1973, 87 Stat. 394, Pub. L. 93-113, as amended, hereinafter 
referred to as the Act, pertaining to the prohibited use of Federal 
funds or the involvement of agency programs and volunteers in electoral 
and lobbying activities. These regulations are designed to define and 
clarify the nature and scope of prohibited activities to ensure that 
programs under the Act and volunteer activities are conducted within the 
statutory bounds established by the Act. The penalties for violation of 
the regulations are also prescribed. The statutory source of the 
prohibitions upon electoral and lobbying activities is section 403 (a) 
and (b) of the Act. Rules applying to the Hatch Act (Title III of 
chapter 73, title 5, United States Code) to full time and certain part 
time volunteers, as required by section 415(b) of the Act, are also set 
forth herein.

[[Page 127]]



Sec. 1226.2  Scope.

    This part applies, except where otherwise noted, to all full time 
and part time volunteers serving in a program authorized by the Act, 
including VISTA, Service Learning and the Older American Volunteer 
Programs. It also applies to employees of sponsoring organizations, 
whose salaries, or other compensation, are paid, in whole or in part, 
with agency funds.



Sec. 1226.3  Definitions.

    (a) The Act means the Domestic Volunteer Service Act of 1973, as 
amended, Pub. L. 93-113 (42 U.S.C. 4951 et seq.).
    (b) Assistance means funds, volunteers or volunteer training, which 
is paid for from funds appropriated for the purpose of supporting 
activities under the Act, and includes locally provided funds required 
by law, regulation or policy as a local contribution to activities 
authorized by the Act.
    (c) Full time when used in the context of volunteer service, means 
service of not less than 35 hours per week.
    (d) Part time when used in the context of volunteer service, means 
service that is less than full time.
    (e) Recipient or sponsor organization means any organization that 
receives assistance under the Act.
    (f) Volunteer means an individual enrolled for service in a program 
or project that is authorized by or which receives assistance under the 
Act.
    (g) Legislative body includes the United States Congress, State and 
Territorial Legislatures and locally elected or appointed bodies with 
the authority to enact laws.
    (h) Public office includes any Federal, State, local elective, or 
party office.
    (i) Party office means an elective position in a national, state or 
local organization or committees or convention of such organization, 
which has, as a principal purpose, support or opposition to candidates 
for public office.
    (j) Legislation means bills, resolutions, amendments, nominations 
and other matters pending or proposed in a legislative body and includes 
any other matter which may be the subject of action by the legislative 
body.



                   Subpart B--Sponsoring Organization



Sec. 1226.4  General.

    Under section 403 of the Act, volunteer programs may not be 
conducted in a manner which supports or results in the identification of 
such programs with prohibited activities. This section prescribes the 
nature and extent of involvement in such activity by an organization 
which would preclude the assignment of volunteers to the organization.



Sec. 1226.5  Electoral, voter registration, and other activities.

    Volunteers or other assistance, in any program under the Act shall 
not be assigned or provided to an organization if a principal purpose or 
activity of the organization includes any of the following activities:
    (a) Electoral Activities. Any activity designed to influence the 
outcome of elections to any public office, such as:
    (1) Actively campaigning for or against or supporting candidates for 
public office;
    (2) Raising, soliciting or collecting funds for candidates for 
public office;
    (3) Preparing, distributing or providing funds for campaign 
literature for candidates, including leaflets pamphlets, and material 
designed for the print or electronic media;
    (b) Voter Registration Activities. Any voter registration activity, 
such as
    (1) Providing transportation of individuals to voter registration 
sites;
    (2) Providing assistance to individuals in the process of 
registering to vote, including determinations of eligibility;
    (3) Disseminating official voter registration material.
    (c) Transportation to the Polls. Providing voters or prospective 
voters with transportation to the polls or raising, soliciting or 
collecting funds for such activity.
    (d) Any program sponsor which, subsequent to the receipt of any 
federal assistance under the Act, makes as one of its principal purposes 
or activities any of the activities described in Sec. 1226.5 hereof 
shall be subject to the

[[Page 128]]

suspension or termination of such assistance, as provided in 45 CFR part 
1206.



                     Subpart C--Volunteer Activities



Sec. 1226.6  General.

    (a) All volunteers, full and part time, are subject to the 
prohibitions on expenditure of federal funds for partisan and 
nonpartisan electoral activities, voter registration activities and 
transportation of voters to the polls, and efforts to influence the 
passage or defeat of legislation, as contained in section 403 of the 
Act.
    (b) Full time volunteers, and certain part time volunteers as 
specified herein, are also subject to the restrictions in subchapter 
III, chapter 73 of title 5, United States Code, commonly referred to as 
the Hatch Act, as provided in section 415(b) of the Act.



Sec. 1226.7  Scope.

    The provisions in this subpart are applicable to full time 
volunteers as defined in Sec. 1226.3(c), and to such part time 
volunteers as may be otherwise specified herein. Full time volunteers 
are deemed to be acting in their capacity as volunteers:
    (a) When they are actually engaged in their volunteer assignments. 
VISTA volunteers and other full time volunteers who are required to 
serve without regard to regular working hours are presumed to be 
actually engaged in their volunteer assignments at all times, except 
during periods of authorized leave; or
    (b) Whenever they represent themselves, or may reasonably be 
perceived by others, to be performing as a volunteer.



Sec. 1226.8  Prohibited activities.

    (a) Electoral Activity. Volunteers shall not engage in any activity 
which may, directly or indirectly, affect or influence the outcome of 
any election to public office. Volunteers are prohibited from engaging 
in activities such as:
    (1) Any activity in support of, or in opposition to a candidate for 
election to public office in a partisan or nonpartisan election;
    (2) Participating in the circulation of petitions, or the gathering 
of signatures on nominating petitions or similar documents for 
candidates for public office.
    (3) Raising, soliciting, or collecting funds for a candidate for 
public office;
    (4) Preparing, distributing or providing funds for campaign material 
for candidates, including leaflets, pamphlets, brochures and material 
designed for the print or electronic media;
    (5) Organizing political meetings or forums;
    (6) Canvassing voters on behalf of a candidate for public office;
    (7) Raising, soliciting or collecting funds for groups that engage 
in any of the activities described in paragraphs (a) (1) through (6) of 
this section.
    (b) Voter Registration. Volunteers shall not engage in any voter 
registration activity, including:
    (1) Providing transportation of individuals to voter registration 
sites;
    (2) Providing assistance to individuals in the process of 
registering to vote, including determinations of eligibility;
    (3) The dissemination of official voter registration materials; or
    (4) Raising, soliciting or collecting funds to support activities 
described in paragraphs (b) (1) through (3) of this section.
    (c) Transportation to the Polls. Volunteers shall not engage in any 
activity to provide voters or prospective voters with transportation to 
the polls, nor shall they collect, raise, or solicit funds to support 
such activity, including securing vehicles for such activity.
    (d) Efforts to Influence Legislation. Except as provided in 
Sec. 1226.9, volunteers shall not engage in any activity for the purpose 
of influencing the passage or defeat of legislation or any measures on 
the ballot at a general or special election. For example, volunteers 
shall not:
    (1) Testify or appear before legislative bodies in regard to 
proposed or pending legislation;
    (2) Make telephone calls, write letters, or otherwise contact 
legislators or legislative staff, concerning proposed or pending 
legislation for the purpose of influencing the passage or defeat of such 
legislation;
    (3) Draft legislation;

[[Page 129]]

    (4) Prepare legislative testimony;
    (5) Prepare letters to be mailed by third parties to members of 
legislative bodies concerning proposed or pending legislation;
    (6) Prepare or distribute any form of material, including pamphlets, 
newspaper columns, and material designed for either the print or 
electronic media, which urges recipients to contact their legislator or 
otherwise seek passage or defeat of legislation;
    (7) Raise, collect or solicit funds to support efforts to affect the 
passage or defeat of legislation;
    (8) Engage in any of the activities set forth in paragraphs (d) (1) 
through (7) of this section for the purpose of influencing executive 
action in approving or vetoing legislation.
    (9) Circulate petitions, gather signatures on petitions, or urge or 
organize others to do so, which seek to have measures placed on the 
ballot at a general or special election.
    (10) Engage in any of the activities enumerated in paragraphs (d) 
(1) through (9) of this section in regard to the passage or defeat of 
any measure on the ballot in a general or special election.



Sec. 1226.9  Exceptions.

    (a) A volunteer may draft, review, testify or make representations 
to a legislative body regarding a legislative measure upon request of 
the legislative body, a committee, or a member thereof, provided that:
    (1) The request to draft, review, testify or make representations is 
in writing, addressed to the volunteer or the organization to which the 
volunteer is assigned or placed, and signed by a member or members of 
the legislative body.
    (2) The request states the type of representation or assistance 
requested and the issue to be addressed.
    (3) The volunteer or the program sponsor provides a copy of such 
request to the State Director.
    (b) The volunteer may draft, review, testify, or make a written 
representation to a legislative body regarding an authorization or 
appropriation measure directly affecting the operation of the project or 
program to which he or she is assigned: Provided:
    (1) The sponsor organization provides notification to the State 
Director on a quarterly basis of all activity occurring pursuant to this 
exception.
    (2) The legislative measure relates to the funding of the project or 
program or affects the existence or basic structure of the project or 
program.
    (c) Notwithstanding the foregoing exceptions, any activity by a 
volunteer pursuant to paragraph (b) (1) or (2) of this section shall be 
incidental to his or her regular work assignment.



Sec. 1226.10  Hatch Act restrictions.

    (a) In addition to the prohibitions described above, full time 
volunteers are subject to the Hatch Act, subchapter III, of chapter 73, 
title 5, United States Code. Full time volunteers shall not, directly or 
indirectly, actively participate in political management or in political 
campaigns. All volunteers retain the right to vote as they choose and to 
express their personal opinions on political issues or candidates. 
Examples of prohibited activities, include, but are not limited to,
    (1) Candidacy for or service as a delegate or alternate to any 
political convention or service as an officer or employee thereof.
    (2) Acting as an officer of a primary meeting or caucus, addressing, 
making motions, preparing or presenting resolutions, representing 
others, or otherwise taking part in such meetings or caucuses.
    (3) Organizing or conducting a political meeting or rally on any 
political matter.
    (4) Holding office as a precinct or ward leader or representative, 
or service on any committee of a political party. It is not necessary 
that the service of the volunteer itself be political in nature to fall 
within the prohibition.
    (5) Organizing a political club, being an officer of such a club, 
being a member of any of its committees, or representing the members of 
a political club in meetings or conventions.
    (6) Soliciting, collecting, receiving, disbursing or otherwise 
handling contributions made for political purposes.
    (7) Selling or soliciting pledges for dinner tickets or other 
activities of political organizations or candidates, or for their 
benefit.

[[Page 130]]

    (8) Distributing campaign literature, badges, buttons, 
bumperstickers or posters.
    (9) Publishing or being editorially connected with a newspaper or 
other publication generally known as partisan from a political 
standpoint.
    (10) Writing for publication or publishing any letter or article, 
signed or unsigned, soliciting votes in favor of or in opposition to any 
political party, candidate or faction.
    (11) Soliciting votes, helping get out the vote, acting as a 
checker, watcher or challenger for any party or faction, transporting 
voters to or from the polls, or transporting candidates on canvassing or 
speaking tours.
    (12) Participation in or organizing a political parade.
    (13) Initiating nominating petitions or acting as a canvasser or 
witness on such petitions.
    (14) Being a candidate for nomination or election to a National, 
State, or local office.
    (b) Hatch Act restrictions apply to full time volunteers at all 
times during their service, including off-duty hours, leave, holidays 
and vacations.



Sec. 1226.11  Part time volunteers.

    (a) The provisions in this section are applicable to part time 
volunteers, as defined in Sec. 1226.3(d). There are two categories of 
part time volunteers:
    (1) Those enrolled for periods of service of at least twenty (20) 
hours per week for not less than twenty-six (26) consecutive weeks, as 
authorized under title I, part C of the Act, and
    (2) All other part time volunteers, including Senior Companions, 
Foster Grandparents and Retired Senior Volunteers.
    (b) All part time volunteers are subject to the restrictions 
described in Sec. 1226.8 (a), (b), (c) and (d) and the exceptions in 
Sec. 1226.9:
    (1) When they are engaged in their volunteer assignments, in 
training activities, or other related activities supported by ACTION 
funds, or
    (2) Whenever they represent themselves as ACTION volunteers, or may 
reasonably be perceived by others to be performing as volunteers.
    (c) The restrictions described in Sec. 1226.10, pertaining to the 
Hatch Act, are applicable to volunteers enrolled for periods of service 
of at least 20 hours per week for not less than 26 consecutive weeks, as 
authorized under title I, part C of the Act:
    (1) At all times in any day on which they serve as volunteers, or 
when engaged in activities related to their volunteer assignments, such 
as training; or
    (2) Whenever they represent themselves as volunteers or may 
reasonably be perceived by others to be performing as volunteers.



                 Subpart D--Sponsor Employee Activities



Sec. 1226.12  Sponsor employees.

    Sponsor employees whose salaries or other compensation are paid, in 
whole or in part, with agency funds are subject to the restrictions 
described in Sec. 1226.8 (a), (b), (c) and (d) and the exceptions in 
Sec. 1226.9:
    (a) Whenever they are engaged in an activity which is supported by 
ACTION funds; or
    (b) Whenever they identify themselves as acting in their capacity as 
an official of a project which receives ACTION funds, or could 
reasonably be perceived by others as acting in such capacity.



Sec. 1226.13  Obligations of sponsors.

    (a) It shall be the obligation of program sponsors to ensure that 
they:
    (1) Fully understand the restrictions on volunteer activity set 
forth herein;
    (2) Provide training to volunteers on the restrictions and ensure 
that all other training materials used in training volunteers are fully 
consistent with these restrictions;
    (3) Monitor on a continuing basis the activity of volunteers for 
compliance with this provision;
    (4) Report all violations, or questionable situations, immediately 
to the State Director.
    (b) Failure of a sponsor to meet the requirements set forth in 
paragraph (a) of this section, or a violation of the rules contained 
herein by either the sponsor, the sponsor's employees subject to 
Sec. 1226.12 or the volunteers assigned to the sponsor, at any time 
during the course of the grant may be

[[Page 131]]

deemed to be a material failure to comply with the terms and conditions 
of the grant as that term is used in 45 CFR 1206.1 regarding suspension 
and termination of assistance or a violation of the Project Memorandum 
of Agreement, as applicable. The sponsor shall be subject to the 
procedures and penalties contained in 45 CFR 1206.1.
    (c) Violation by a volunteer of any of the rules and regulations set 
forth herein may be cause for suspension or termination as set forth in 
45 CFR 1213.5-5(2) or other disciplinary action.



PART 1229--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)--Table of Contents




                           Subpart A--General

Sec.
1229.100  Purpose.
1229.105  Definitions.
1229.110  Coverage.
1229.115  Policy.

                       Subpart B--Effect of Action

1229.200  Debarment or suspension.
1229.205  Ineligible persons.
1229.210  Voluntary exclusion.
1229.215  Exception provision.
1229.220  Continuation of covered transactions.
1229.225  Failure to adhere to restrictions.

                          Subpart C--Debarment

1229.300  General.
1229.305  Causes for debarment.
1229.310  Procedures.
1229.311  Investigation and referral.
1229.312  Notice of proposed debarment.
1229.313  Opportunity to contest proposed debarment.
1229.314  Debarring official's decision.
1229.315  Settlement and voluntary exclusion.
1229.320  Period of debarment.
1229.325  Scope of debarment.

                          Subpart D--Suspension

1229.400  General.
1229.405  Causes for suspension.
1229.410  Procedures.
1229.411  Notice of suspension.
1229.412  Opportunity to contest suspension.
1229.413  Suspending official's decision.
1229.415  Period of suspension.
1229.420  Scope of suspension.

       Subpart E--Responsibilities of GSA, Agency and Participants

1229.500  GSA responsibilities.
1229.505  ACTION responsibilities.
1229.510  Participants' responsibilities.

          Subpart F--Drug-Free Workplace Requirements (Grants)

1229.600  Purpose.
1229.605  Definitions.
1229.610  Coverage.
1229.615  Grounds for suspension of payments, suspension or termination 
          of grants, or suspension or debarment.
1229.620  Effect of violation.
1229.625  Exception provision.
1229.630  Certification requirements and procedures.
1229.635  Reporting of and employee sanctions for convictions of 
          criminal drug offenses.

Appendix A to Part 1229--Certification Regarding Debarment, Suspension, 
          and Other Responsibility Matters--Primary Covered Transactions
Appendix B to Part 1229--Certification Regarding Debarment, Suspension, 
          Ineligibility and Voluntary Exclusion--Lower Tier Covered 
          Transactions
Appendix C to Part 1229--Certification Regarding Drug-Free Workplace 
          Requirements

    Authority: E.O. 12549: Sec. 5151-5160 of the Drug-Free Workplace Act 
of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et seq); 
Pub. L. 93-113; 42 U.S.C. 4951, et seq; 42 U.S.C. 5060.

    Source: 53 FR 19202 and 19204, May 26, 1988, unless otherwise noted.

    Cross Reference: See also Office of Management and Budget notice 
published at 55 FR 21679, May 25, 1990.



                           Subpart A--General



Sec. 1229.100  Purpose.

    (a) Executive Order 12549 provides that, to the extent permitted by 
law, Executive departments and agencies shall participate in a 
governmentwide system for nonprocurement debarment and suspension. A 
person who is debarred or suspended shall be excluded from Federal 
financial and nonfinancial assistance and benefits under Federal 
programs and activities. Debarment or suspension of a participant in a 
program by one agency shall have governmentwide effect.

[[Page 132]]

    (b) These regulations implement section 3 of Executive Order 12549 
and the guidelines promulgated by the Office of Management and Budget 
under section 6 of the Executive Order by:
    (1) Prescribing the programs and activities that are covered by the 
governmentwide system;
    (2) Prescribing the governmentwide criteria and governmentwide 
minimum due process procedures that each agency shall use;
    (3) Providing for the listing of debarred and suspended 
participants, participants declared ineligible (see definition of 
``ineligible'' in Sec. 1229.105(i)), and participants who have 
voluntarily excluded themselves from participation in covered 
transactions
    (4) Setting forth the consequences of a debarment, suspension, 
determination of ineligibility, or voluntary exclusion; and
    (5) Offering such other guidance as necessary for the effective 
implementation and administration of the governmentwide system.
    (c) Although these regulations cover the listing of ineligible 
participants and the effect of such listing, they do not prescribe 
policies and procedures governing declarations of ineligibility.



Sec. 1229.105  Definitions.

    (a) Adequate evidence. Information sufficient to support the 
reasonable belief that a particular act or omission has occurred.
    (b) Affiliate. Persons are affiliates of each another if, directly 
or indirectly, either one controls or has the power to control the 
other, or, a third person controls or has the power to control both. 
Indicia of control include, but are not limited to: Interlocking 
management or ownership, identity of interests among family members, 
shared facilities and equipment, common use of employees, or a business 
entity organized following the suspension or debarment of a person which 
has the same or similar management, ownership, or principal employees as 
the suspended, debarred, ineligible, or voluntarily excluded person.
    (c) Agency. Any executive department, military department or defense 
agency or other agency of the executive branch, excluding the 
independent regulatory agencies.
    (d) Civil judgment. The disposition of a civil action by any court 
of competent jurisdiction, whether entered by verdict, decision, 
settlement, stipulation, or otherwise creating a civil liability for the 
wrongful acts complained of; or a final determination of liability under 
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12).
    (e) Conviction. A judgment of conviction of a criminal offense by 
any court of competent jurisdiction, whether entered upon a verdict or a 
plea, including a plea of nolo contendere.
    (f) Debarment. An action taken by a debarring official in accordance 
with these regulations to exclude a person from participating in covered 
transactions. A person so excluded is ``debarred.''
    (g) Debarring official. An official authorized to impose debarment. 
The debarring official is either:
    (1) The agency head, or
    (2) An official designated by the agency head.
    (h) Indictment. Indictment for a criminal offense. An information or 
other filing by competent authority charging a criminal offense shall be 
given the same effect as an indictment.
    (i) Ineligible. Excluded from participation in Federal 
nonprocurement programs pursuant to a determination of ineligibility 
under statutory, executive order, or regulatory authority, other than 
Executive Order 12549 and its agency implementing regulations; for 
exemple, excluded pursuant to the Davis-Bacon Act and its implementing 
regulations, the equal employment opportunity acts and executive orders, 
or the environmental protection acts and executive orders. A person is 
ineligible where the determination of ineligibility affects such 
person's eligibility to participate in more than one covered 
transaction.
    (j) Legal proceedings. Any criminal proceeding or any civil judicial 
proceeding to which the Federal Government or a State of local 
government or quasi-governmental authority is a party. The term includes 
appeals from such proceedings.

[[Page 133]]

    (k) Nonprocurement list. The portion of the List of Parties Excluded 
from Federal Procurement or Nonprocurement Programs complied, maintained 
and distributed by the General Services Administration (GSA) containing 
the names and other information about persons who have been debarred, 
suspended, or voluntarily excluded under Executive Order 12549 and these 
regulations, and those who have been determined to be ineligible.
    (l) Notice. A written communication served in person or sent by 
certified mail, return receipt requested, or its equivalent, to the last 
known address of a party, its identified counsel, its agent for service 
of process, or any partner, officer, director, owner, or joint venturer 
of the party. Notice, if undeliverable, shall be considered to have been 
received by the addressee five days after being properly sent to the 
last address known by the agency.
    (m) Participant. Any person who submits a proposal for, enters into, 
or reasonably may be expected to enter into a covered transaction. This 
term also includes any person who acts on behalf of or is authorized to 
commit a participant in a covered transaction as an agent or 
representative of another participant.
    (n) Person. Any individual, corporation, partnership, association, 
unit of government or legal entity, however organized, except: Foreign 
governments or foreign governmental entities, public international 
organizations, foreign government owned (in whole or in part) or 
controlled entities, and entities consisting wholly or partially of 
foreign governments or foreign governmental entities.
    (o) Preponderance of the evidence. Proof by information that, 
compared with that opposing it, leads to the conclusion that the fact at 
issue is more probably true than not.
    (p) Principal. Officer, director, owner, partner, key employee, or 
other person within a participant with primary management or supervisory 
responsibilities; or a person who has a critical influence on or 
substantive control over a covered transaction, whether or not employed 
by the participant. Persons who have a critical influence on or 
substantive control over a covered transaction are:
    (1) Principal investigators.
    (q) Proposal. A solicited or unsolicited bid, application, request, 
invitation to consider or similar communication by or on behalf of a 
person seeking to participate or to receive a benefit, directly or 
indirectly, in or under a covered transaction.
    (r) Respondent. A person against whom a debarment or suspension 
action has been initiated.
    (s) State. Any of the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, any territory or possession 
of the United States, or any agency of a State, exclusive of 
institutions of higher education, hospitals, and units of local 
government. A State instrumentality will be considered part of the State 
government if it has a written determination from a State government 
that such State considers that instrumentality to be an agency of the 
State government.
    (t) Suspending official. An official authorized to impose 
suspension. The suspending official is either:
    (1) The agency head, or
    (2) An official designated by the agency head.
    (u) Suspension. An action taken by a suspending official in 
accordance with these regulations that immediately excludes a person 
from participating in covered transactions for a temporary period, 
pending completion of an investigation and such legal, debarment, or 
Program Fraud Civil Remedies Act proceedings as may ensue. A person so 
excluded is ``suspended.''
    (v) Voluntary exclusion or voluntarily excluded. A status of 
nonparticipation or limited participation in covered transactions 
assumed by a person pursuant to the terms of a settlement.



Sec. 1229.110  Coverage.

    (a) These regulations apply to all persons who have participated, 
are currently participating or may reasonably be expected to participate 
in transactions under Federal nonprocurement programs. For purposes of 
these regulations such transactions will be referred to as ``covered 
transactions.''

[[Page 134]]

    (1) Covered transaction. For purposes of these regulations, a 
covered transaction is a primary covered transaction or a lower tier 
covered transaction. Covered transactions at any tier need not involve 
the transfer of Federal funds.
    (i) Primary covered transaction. Except as noted in paragraph (a)(2) 
of this section, a primary covered transaction is any nonprocurement 
transaction between an agency and a person, regardless of type, 
including: Grants, cooperative agreements, scholarships, fellowships, 
contracts of assistance, loans, loan guarantees, subsidies, insurance, 
payments for specified use, donation agreements and any other 
nonprocurement transactions between a Federal agency and a person. 
Primary covered transactions also include those transactions specially 
designated by the U.S. Department of Housing and Urban Development in 
such agency's regulations governing debarment and suspension.
    (ii) Lower tier covered transaction. A lower tier covered 
transaction is:
    (A) Any transaction between a participant and a person other than a 
procurement contract for goods or services, regardless of type, under a 
primary covered transaction.
    (B) Any procurement contract for goods or services between a 
participant and a person, regardless of type, expected to equal or 
exceed the Federal procurement small purchase threshold fixed at 10 
U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary 
covered transaction.
    (C) Any procurement contract for goods or services between a 
participant and a person under a covered transaction, regardless of 
amount, under which that person will have a critical influence on or 
substantive control over that covered transaction. Such persons are:
    (1) Principal investigators.
    (2) Providers of federally-required audit services.
    (2) Exceptions. The following transactions are not covered:
    (i) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (ii) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, entities 
consisting wholly or partially of foreign governments or foreign 
governmental entities;
    (iii) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted);
    (iv) Federal employment;
    (v) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (vi) Incidental benefits derived from ordinary governmental 
operations; and
    (vii) Other transactions where the application of these regulations 
would be prohibited by law.
    (b) Relationship to other sections. This section describes the types 
of transactions to which a debarment or suspension under the regulations 
will apply. Subpart B, ``Effect of Action,'' Sec. 1229.200, ``Debarment 
or suspension,'' sets forth the consequences of a debarment or 
suspension. Those consequences would obtain only with respect to 
participants and principals in the covered transactions and activities 
described in Sec. 1229.110(a). Sections 1229.325, ``Scope of 
debarment,'' and 1229.420, ``Scope of suspension,'' govern the extent to 
which a specific participant or organizational elements of a participant 
would be automatically included within a debarment or suspension action, 
and the conditions under which affiliates or persons associated with a 
participant may also be brought within the scope of the action.
    (c) Relationship to Federal procurement activities. Debarment and 
suspension of Federal procurement contractors and subcontractors under 
Federal procurement contracts are covered by the Federal Acquisition 
Regulation (FAR), 48 CFR subpart 9.4.



Sec. 1229.115  Policy.

    (a) In order to protect the public interest, it is the policy of the 
Federal Government to conduct business only with responsible persons. 
Debarment

[[Page 135]]

and suspension are discretionary actions that, taken in accordance with 
Executive Order 12549 and these regulations, are appropriate means to 
implement this policy.
    (b) Debarment and suspension are serious actions which shall be used 
only in the public interest and for the Federal Government's protection 
and not for purposes of punishment. Agencies may impose debarment or 
suspension for the causes and in accordance with the procedures set 
forth in these regulations.
    (c) When more than one agency has an interest in the proposed 
debarment or suspension of a person, consideration shall be given to 
designating one agency as the lead agency for making the decision. 
Agencies are encouraged to establish methods and procedures for 
coordinating their debarment or suspension actions.



                       Subpart B--Effect of Action



Sec. 1229.200  Debarment or suspension.

    (a) Primary covered transactions. Except to the extent prohibited by 
law, persons who are debarred or suspended shall be excluded from 
primary covered transactions as either participants or principals 
throughout the executive branch of the Federal Government for the period 
of their debarment or suspension. Accordingly, no agency shall enter 
into primary covered transactions with such debarred or suspended 
persons during such period, except as permitted pursuant to 
Sec. 1229.215.
    (b) Loser tier covered transactions. Except to the extent prohibited 
by law, persons who have been debarred or suspended shall be excluded 
from participating as either participants or principals in all lower 
tier covered transactions (see Sec. 1229.110(a)(1)(ii)) for the period 
of their debarment or suspension.
    (c) Exceptions. Debarment or suspension does not affect a person's 
eligibility for:
    (1) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (2) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, and 
entities consisting wholly or partially of foreign governments or 
foreign governmental entities;
    (3) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits received 
in an individual's business capacity are not excepted);
    (4) Federal employment;
    (5) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (6) Incidental benefits derived from ordinary governmental 
operations; and
    (7) Other transactions where the application of these regulations 
would be prohibited by law.



Sec. 1229.205  Ineligible persons.

    Persons who are ineligible, as defined in Sec. 1229.105(i), are 
excluded in accordance with the applicable statutory, executive order, 
or regulatory authority.



Sec. 1229.210  Voluntary exclusion.

    Persons who accept voluntary exclusions under Sec. 1229.315 are 
excluded in accordance with the terms of their settlements. ACTION 
shall, and participants may, contact the original action agency to 
ascertain the extent of the exclusion.



Sec. 1229.215  Exception provision.

    ACTION may grant an exception permitting a debarred, suspended, or 
voluntarily excluded person to participate in a particular covered 
transaction upon a written determination by the agency head or an 
authorized designee stating the reason(s) for deviating from the 
Presidential policy established by Executive Order 12549 and 
Sec. 1229.200 of this rule. However, in accordance with the President's 
stated intention in the Executive Order, exceptions shall be granted 
only infrequently. Exceptions shall be reported in accordance with 
Sec. 1229.505(a).

[[Page 136]]



Sec. 1229.220  Continuation of covered transactions.

    (a) Notwithstanding the debarment, suspension, determination of 
ineligibility, or voluntary exclusion of any person by an agency, 
agencies and participants may continue covered transactions in existence 
at the time the person was debarred, suspended, declared ineligible, or 
voluntarily excluded. A decision as to the type of termination action, 
if any, to be taken should be made only after thorough review to ensure 
the propriety of the proposed action.
    (b) Agencies and participants shall not renew or extend covered 
transactions (other than no-cost time extensions) with any person who is 
debarred, suspended, ineligible, or voluntarily excluded, except as 
provided in Sec. 1229.215.



Sec. 1229.225  Failure to adhere to restrictions.

    Except as permitted under Sec. 1229.215 or Sec. 1229.220 of these 
regulations, a participant shall not knowingly do business under a 
covered transaction with a person who is debarred or suspended, or with 
a person who is ineligible for or voluntarily excluded from that covered 
transaction. Violation of this restriction may result in disallowance of 
costs, annulment or termination of award, issuance of a stop work order, 
debarment or suspension, or other remedies, as appropriate. A 
participant may rely upon the certification of a prospective participant 
in a lower tier covered transaction that it and its principals are not 
debarred, suspended, ineligible, or voluntarily excluded from the 
covered transaction (see Appendix B), unless it knows that the 
certification is erroneous. An agency has the burden of proof that such 
participant did knowingly do business with such a person.



                          Subpart C--Debarment



Sec. 1229.300  General.

    The debarring official may debar a person for any of the causes in 
Sec. 1229.305, using procedures established in Secs. 1229.310 through 
1229.314. The existence of a cause for debarment, however, does not 
necessarily require that the person be debarred; the seriousness of the 
person's acts or omissions and any mitigating factors shall be 
considered in making any debarment decision.



Sec. 1229.305  Causes for debarment.

    Debarment may be imposed in accordance with the provisions of 
Secs. 1229.300 through 1229.314 for:
    (a) Conviction of or civil judgment for:
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, 
receiving stolen property, making false claims, or obstruction of 
justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects the 
present responsibility of a person.
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of an agency program, such as:
    (1) A willful failure to perform in accordance with the terms of one 
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance 
of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction.
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
October 1, 1988, the effective date of these regulations, or a 
procurement debarment by any Federal agency taken pursuant to 48 CFR 
subpart 9.4;
    (2) Knowingly doing business with a debarred, suspended, ineligible, 
or voluntarily excluded person, in connection

[[Page 137]]

with a covered transaction, except as permitted in Sec. 1229.215 or 
Sec. 1229.220;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec. 1229.315 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of any requirement of subpart F of this part, relating 
to providing a drug-free workplace, as set forth in Sec. 1229.615 of 
this part.
    (d) Any other cause of so serious or compelling a nature that it 
affects the present responsibility of a person.

[53 FR 19202 and 19204, May 26, 1988, as amended at 54 FR 4950 and 4965, 
Jan. 31, 1989; 55 FR 21704, May 25, 1990]



Sec. 1229.310  Procedures.

    ACTION shall process debarment actions as informally as practicable, 
consistent with the principles of fundamental fairness, using the 
procedures in Secs. 1229.311 through 1229.314.



Sec. 1229.311  Investigation and referral.

    Information concerning the existence of a cause for debarment from 
any source shall be promptly reported, investigated, and referred, when 
appropriate, to the debarring official for consideration. After 
consideration, the debarring official may issue a notice of proposed 
debarment.



Sec. 1229.312  Notice of proposed debarment.

    A debarment proceeding shall be initiated by notice to the 
respondent advising:
    (a) That debarment is being considered;
    (b) Of the reasons for the proposed debarment in terms sufficient to 
put the respondent on notice of the conduct or transaction(s) upon which 
it is based;
    (c) Of the cause(s) relied upon under Sec. 1229.305 for proposing 
debarment;
    (d) Of the provisions of Sec. 1229.311 through Sec. 1229.314, and 
any other ACTION procedures, if applicable, governing debarment 
decisionmaking; and
    (e) Of the potential effect of a debarment.



Sec. 1229.313  Opportunity to contest proposed debarment.

    (a) Submission in opposition. Within 30 days after receipt of the 
notice of proposed debarment, the respondent may submit, in person, in 
writing, or through a representative, information and argument in 
opposition to the proposed debarment.
    (b) Additional proceedings as to disputed material facts. (1) In 
actions not based upon a conviction or civil judgment, if the debarring 
official finds that the respondent's submission in opposition raises a 
genuine dispute over facts material to the proposed debarment, 
respondent(s) shall be afforded an opportunity to appear with a 
representative, submit documentary evidence, present witnesses, and 
confront any witness the agency presents.
    (2) A transcribed record of any additional proceedings shall be made 
available at cost to the respondent, upon request, unless the respondent 
and the agency, by mutual agreement, waive the requirement for a 
transcript.



Sec. 1229.314  Debarring official's decision.

    (a) No additional proceedings necessary. In actions based upon a 
conviction or civil judgment, or in which there is no genuine dispute 
over material facts, the debarring official shall make a decision on the 
basis of all the information in the administrative record, including any 
submission made by the respondent. The decision shall be made within 45 
days after receipt of any information and argument submitted by the 
respondent, unless the debarring official extends this period for good 
cause.
    (b) Additional proceedings necessary. (1) In actions in which 
additional proceedings are necessary to determine disputed material 
facts, written findings of fact shall be prepared. The debarring 
official shall base the decision on the facts as found, together with

[[Page 138]]

any information and argument submitted by the respondent and any other 
information in the administrative record.
    (2) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring official may reject 
any such findings, in whole or in part, only after specifically 
determining them to be arbitrary and capricious or clearly erroneous.
    (3) The debarring official's decision shall be made after the 
conclusion of the proceedings with respect to disputed facts.
    (c) (1) Standard of proof. In any debarment action, the cause for 
debarment must be established by a preponderance of the evidence. Where 
the proposed debarment is based upon a conviction or civil judgment, the 
standard shall be deemed to have been met.
    (2) Burden of proof. The burden of proof is on the agency proposing 
debarment.
    (d) Notice of debarring official's decision. (1) If the debarring 
official decides to impose debarment, the respondent shall be given 
prompt notice:
    (i) Referring to the notice of proposed debarment;
    (ii) Specifying the reasons for debarment;
    (iii) Stating the period of debarment, including effective dates; 
and
    (iv) Advising that the debarment is effective for covered 
transactions throughout the executive branch of the Federal Government 
unless an agency head or an authorized designee makes the determination 
referred to in Sec. 1229.215.
    (2) If the debarring official decides not to impose debarment, the 
respondent shall be given prompt notice of that decision. A decision not 
to impose debarment shall be without prejudice to a subsequent 
imposition of debarment by any other agency.



Sec. 1229.315  Settlement and voluntary exclusion.

    (a) When in the best interest of the Government, ACTION may, at any 
time, settle a debarment or suspension action.
    (b) If a participant and the agency agree to a voluntary exclusion 
of the participant, such voluntary exclusion shall be entered on the 
Nonprocurement List (see subpart E).



Sec. 1229.320  Period of debarment.

    (a) Debarment shall be for a period commensurate with the 
seriousness of the cause(s). If a suspension precedes a debarment, the 
suspension period shall be considered in determining the debarment 
period.
    (1) Debarment for causes other than those related to a violation of 
the requirements of subpart F of this part generally should not exceed 
three years. Where circumstances warrant, a longer period of debarment 
may be imposed.
    (2) In the case of a debarment for a violation of the requirements 
of subpart F of this part (see 1229.305(c)(5)), the period of debarment 
shall not exceed five years.
    (b) The debarring official may extend an existing debarment for an 
additional period, if that official determines that an extension is 
necessary to protect the public interest. However, a debarment may not 
be extended solely on the basis of the facts and circumstances upon 
which the initial debarment action was based. If debarment for an 
additional period is determined to be necessary, the procedures of 
Secs. 1229.311 through 1229.314 shall be followed to extend the 
debarment.
    (c) The respondent may request the debarring official to reverse the 
debarment decision or to reduce the period or scope of debarment. Such a 
request shall be in writing and supported by documentation. The 
debarring official may grant such a request for reasons including, but 
not limited to:
    (1) Newly discovered material evidence;
    (2) Reversal of the conviction or civil judgment upon which the 
debarment was based;
    (3) Bona fide change in ownership or management;
    (4) Elimination of other causes for which the debarment was imposed; 
or
    (5) Other reasons the debarring official deems appropriate.

[53 FR 19202 and 19204, May 26, 1988, as amended at 54 FR 4950 and 4965, 
Jan. 31, 1989; 55 FR 21704, May 25, 1990]

[[Page 139]]



Sec. 1229.325  Scope of debarment.

    (a) Scope in general. (1) Debarment of a person under these 
regulations constitutes debarment of all its divisions and other 
organizational elements from all covered transactions, unless the 
debarment decision is limited by its terms to one or more specifically 
identified individuals, divisions or other organizational elements or to 
specific types of transactions.
    (2) The debarment action may include any affiliate of the 
participant that is specifically named and given notice of the proposed 
debarment and an opportunity to respond (see Secs. 1229.311 through 
1229.314).
    (b) Imputing conduct. For purposes of determining the scope of 
debarment, conduct may be imputed as follows:
    (1) Conduct imputed to participant. The fraudulent, criminal or 
other seriously improper conduct of any officer, director, shareholder, 
partner, employee, or other individual associated with a participant may 
be imputed to the participant when the conduct occurred in connection 
with the individual's performance of duties for or on behalf of the 
participant, or with the participant's knowledge, approval, or 
acquiescence. The participant's acceptance of the benefits derived from 
the conduct shall be evidence of such knowledge, approval, or 
acquiescence.
    (2) Conduct imputed to individuals associated with participant. The 
fraudulent, criminal, or other seriously improper conduct of a 
participant may be imputed to any officer, director, shareholder, 
partner, employee, or other individual associated with the participant 
who participated in, knew of, or had reason to know of the participant's 
conduct.
    (3) Conduct of one participant imputed to other participants in a 
joint venture. The fraudulent, criminal, or other seriously improper 
conduct of one participant in a joint venture, grant pursuant to a joint 
application, or similar arrangement may be imputed to other participants 
if the conduct occurred for or on behalf of the joint venture, grant 
pursuant to a joint application, or similar arrangement may be imputed 
to other participants if the conduct occurred for or on behalf of the 
joint venture, grant pursuant to a joint application, or similar 
arrangement or with the knowledge, approval, or acquiescence of these 
participants. Acceptance of the benefits derived from the conduct shall 
be evidence of such knowledge, approval, or acquiescence.



                          Subpart D--Suspension



Sec. 1229.400  General.

    (a) The suspending official may suspend a person for any of the 
causes in Sec. 1229.405 using procedures established in Secs. 1229.410 
through 1229.413.
    (b) Suspension is a serious action to be imposed only when:
    (1) There exists adequate evidence of one or more of the causes set 
out in Sec. 1229.405, and
    (2) Immediate action is necessary to protect the public interest.
    (c) In assessing the adequacy of the evidence, the agency should 
consider how much information is available, how credible it is given the 
circumstances, whether or not important allegations are corroborated, 
and what inferences can reasonably be drawn as a result. This assessment 
should include an examination of basic documents such as grants, 
cooperative agreements, loan authorizations, and contracts.



Sec. 1229.405  Causes for suspension.

    (a) Suspension may be imposed in accordance with the provisions of 
Secs. 1229.400 through 1229.413 upon adequate evidence:
    (1) To suspect the commission of an offense listed in 
Sec. 1229.305(a); or
    (2) That a cause for debarment under Sec. 1229.305 may exist.
    (b) Indictment shall constitute adequate evidence for purposes of 
suspension actions.



Sec. 1229.410  Procedures.

    (a) Investigation and referral. Information concerning the existence 
of a cause for suspension from any source shall be promptly reported, 
investigated, and referred, when appropriate, to the suspending official 
for consideration. After consideration, the suspending official may 
issue a notice of suspension.

[[Page 140]]

    (b) Decisionmaking process. ACTION shall process suspension actions 
as informally as practicable, consistent with principles of fundamental 
fairness, using the procedures in Sec. 1229.411 through Sec. 1229.413.  



Sec. 1229.411  Notice of suspension.

    When a respondent is suspended, notice shall immediately be given:
    (a) That suspension has been imposed;
    (b) That the suspension is based on an indictment, conviction, or 
other adequate evidence that the respondent has committed irregularities 
seriously reflecting on the propriety of further Federal Government 
dealings with the respondent;
    (c) Describing any such irregularities in terms sufficient to put 
the respondent on notice without disclosing the Federal Government's 
evidence;
    (d) Of the cause(s) relied upon under Sec. 1229.405 for imposing 
suspension;
    (e) That the suspension is for a temporary period pending the 
completion of an investigation or ensuing legal, debarment, or Program 
Fraud Civil Remedies Act proceedings;
    (f) Of the provisions of Sec. 1229.411 through Sec. 1229.413 and any 
other ACTION procedures, if applicable, governing suspension 
decisionmaking; and
    (g) Of the effect of the suspension.



Sec. 1229.412  Opportunity to contest suspension.

    (a) Submission in opposition. Within 30 days after receipt of the 
notice of suspension, the respondent may submit, in person, in writing, 
or through a representative, information and argument in opposition to 
the suspension.
    (b) Additional proceedings as to disputed material facts. (1) If the 
suspending official finds that the respondent's submission in opposition 
raises a genuine dispute over facts material to the suspension, 
respondent(s) shall be afforded an opportunity to appear with a 
representative, submit documentary evidence, present witnesses, and 
confront any witness the agency presents, unless:
    (i) The action is based on an indictment, conviction or civil 
judgment, or
    (ii) A determination is made, on the basis of Department of Justice 
advice, that the substantial interests of the Federal Government in 
pending or contemplated legal proceedings based on the same facts as the 
suspension would be prejudiced.
    (2) A transcribed record of any additional proceedings shall be 
prepared and made available at cost to the respondent, upon request, 
unless the respondent and the agency, by mutual agreement, waive the 
requirement for a transcript.



Sec. 1229.413  Suspending official's decision.

    The suspending official may modify or terminate the suspension (for 
example, see Sec. 1229.320(c) for reasons for reducing the period or 
scope of debarment) or may leave it in force. However, a decision to 
modify or terminate the suspension shall be without prejudice to the 
subsequent imposition of suspension by any other agency or debarment by 
any agency. The decision shall be rendered in accordance with the 
following provisions:
    (a) No additional proceedings necessary. In actions: Based on an 
indictment, conviction, or civil judgment; in which there is no genuine 
dispute over material facts; or in which additional proceedings to 
determine disputed material facts have been denied on the basis of 
Department of Justice advice, the suspending official shall make a 
decision on the basis of all the information in the administrative 
record, including any submission made by the respondent. The decision 
shall be made within 45 days after receipt of any information and 
argument submitted by the respondent, unless the suspending official 
extends this period for good cause.
    (b) Additional proceedings necessary. (1) In actions in which 
additional proceedings are necessary to determine disputed material 
facts, written findings of fact shall be prepared. The suspending 
official shall base the decision on the facts as found, together with 
any information and argument submitted by the respondent and any other 
information in the administrative record.
    (2) The suspending official may refer matters involving disputed 
material facts to another official for findings of fact. The suspending 
official may reject any such findings, in whole or in

[[Page 141]]

part, only after specifically determining them to be arbitrary or 
capricious or clearly erroneous.
    (c) Notice of suspending official's decision. Prompt written notice 
of the suspending official's decision shall be sent to the respondent.



Sec. 1229.415  Period of suspension.

    (a) Suspension shall be for a temporary period pending the 
completion of an investigation or ensuing legal, debarment, or Program 
Fraud Civil Remedies Act proceedings, unless terminated sooner by the 
suspending official or as provided in paragraph (b) of this section.
    (b) If legal or administrative proceedings are not initiated within 
12 months after the date of the suspension notice, the suspension shall 
be terminated unless an Assistant Attorney General or United States 
Attorney requests its extension in writing, in which case it may be 
extended for an additional six months. In no event may a suspension 
extend beyond 18 months, unless such proceedings have been initiated 
within that period.
    (c) The suspending official shall notify the Department of Justice 
of an impending termination of a suspension, at least 30 days before the 
12-month period expires, to give that Department an opportunity to 
request an extension.



Sec. 1229.420  Scope of suspension.

    The scope of a suspension is the same as the scope of a debarment 
(see Sec. 1229.325), except that the procedures of Secs. 1229.410 
through 1229.413 shall be used in imposing a suspension.



       Subpart E--Responsibilities of GSA, Agency and Participants



Sec. 1229.500  GSA responsibilities.

    (a) In accordance with the OMB guidelines, GSA shall compile, 
maintain, and distribute a list of all persons who have been debarred, 
suspended, or voluntarily excluded by agencies under Executive Order 
12549 and these regulations, and those who have been determined to be 
ineligible.
    (b) At a minimum, this list shall indicate:
    (1) The names and addresses of all debarred, suspended, ineligible, 
and voluntarily excluded persons, in alphabetical order, with cross-
references when more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for each listing; and
    (6) The agency and name and telephone number of the agency point of 
contact for the action.



Sec. 1229.505  ACTION responsibilities.

    (a) The agency shall provide GSA with current information concerning 
debarments, suspension, determinations of ineligibility, and voluntary 
exclusions it has taken. Until February 18, 1989, the agency shall also 
provide GSA and OMB with information concerning all transactions in 
which ACTION has granted exceptions under Sec. 1229.215 permitting 
participation by debarred, suspended, or voluntarily excluded persons.
    (b) Unless an alternative schedule is agreed to by GSA, the agency 
shall advise GSA of the information set forth in Sec. 1229.500(b) and of 
the exceptions granted under Sec. 1229.215 within five working days 
after taking such actions.
    (c) The agency shall direct inquiries concerning listed persons to 
the agency that took the action.
    (d) Agency officials shall check the Nonprocurement List before 
entering covered transactions to determine whether a participant in a 
primary transaction is debarred, suspended, ineligible, or voluntarily 
excluded (Tel. ).
    (e) Agency officials shall check the Nonprocurement List before 
approving principals or lower tier participants where agency approval of 
the principal or lower tier participant is required under the terms of 
the transaction, to determine whether such principals or participants 
are debarred, suspended, ineligible, or voluntarily excluded.

[[Page 142]]



Sec. 1229.510  Participants' responsibilities.

    (a) Certification by participants in primary covered transactions. 
Each participant shall submit the certification in Appendix A to this 
part for it and its principals at the time the participant submits its 
proposal in connection with a primary covered transaction, except that 
States need only complete such certification as to their principals. 
Participants may decide the method and frequency by which they determine 
the eligibility of their principals. In addition, each participant may, 
but is not required to, check the Nonprocurement List for its principals 
(Tel. ). Adverse information on the certification will not necessarily 
result in denial of participation. However, the certification, and any 
additional information pertaining to the certification submitted by the 
participant, shall be considered in the administration of covered 
transactions.
    (b) Certification by participants in lower tier covered 
transactions. (1) Each participant shall require participants in lower 
tier covered transactions to include the certification in Appendix B to 
this part for it and its principals in any proposal submitted in 
connection with such lower tier covered transactions.
    (2) A participant may rely upon the certification of a prospective 
participant in a lower tier covered transaction that it and its 
principals are not debarred, suspended, ineligible, or voluntarily 
excluded from the covered transaction by any Federal agency, unless it 
knows that the certification is erroneous. Participants may decide the 
method and frequency by which they determine the eligiblity of their 
principals. In addition, a participant may, but is not required to, 
check the Nonprocurement List for its principals and for participants 
(Tel. ).
    (c) Changed circumstances regarding certification. A participant 
shall provide immediate written notice to ACTION if at any time the 
participant learns that its certification was erroneous when submitted 
or has become erroneous by reason of changed circumstances. Participants 
in lower tier covered transactions shall provide the same updated notice 
to the participant to which it submitted its proposals.



          Subpart F--Drug-Free Workplace Requirements (Grants)

    Source: 55 FR 21688, 21704, May 25, 1990, unless otherwise noted.



Sec. 1229.600  Purpose.

    (a) The purpose of this subpart is to carry out the Drug-Free 
Workplace Act of 1988 by requiring that--
    (1) A grantee, other than an individual, shall certify to the agency 
that it will provide a drug-free workplace;
    (2) A grantee who is an individual shall certify to the agency that, 
as a condition of the grant, he or she will not engage in the unlawful 
manufacture, distribution, dispensing, possession or use of a controlled 
substance in conducting any activity with the grant.
    (b) Requirements implementing the Drug-Free Workplace Act of 1988 
for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, 
and 52.2.



Sec. 1229.605  Definitions.

    (a) Except as amended in this section, the definitions of 
Sec. 1229.105 apply to this subpart.
    (b) For purposes of this subpart--
    (1) Controlled substance means a controlled substance in schedules I 
through V of the Controlled Substances Act (21 U.S.C. 812), and as 
further defined by regulation at 21 CFR 1308.11 through 1308.15;
    (2) Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes;
    (3) Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance;
    (4) Drug-free workplace means a site for the performance of work 
done in connection with a specific grant at which employees of the 
grantee are

[[Page 143]]

prohibited from engaging in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance;
    (5) Employee means the employee of a grantee directly engaged in the 
performance of work under the grant, including:
    (i) All direct charge employees;
    (ii) All indirect charge employees, unless their impact or 
involvement is insignificant to the performance of the grant; and,
    (iii) Temporary personnel and consultants who are directly engaged 
in the performance of work under the grant and who are on the grantee's 
payroll.

This definition does not include workers not on the payroll of the 
grantee (e.g., volunteers, even if used to meet a matching requirement; 
consultants or independent contractors not on the payroll; or employees 
of subrecipients or subcontractors in covered workplaces);
    (6) Federal agency or agency means any United States executive 
department, military department, government corporation, government 
controlled corporation, any other establishment in the executive branch 
(including the Executive Office of the President), or any independent 
regulatory agency;
    (7) Grant means an award of financial assistance, including a 
cooperative agreement, in the form of money, or property in lieu of 
money, by a Federal agency directly to a grantee. The term grant 
includes block grant and entitlement grant programs, whether or not 
exempted from coverage under the grants management government-wide 
common rule on uniform administrative requirements for grants and 
cooperative agreements. The term does not include technical assistance 
that provides services instead of money, or other assistance in the form 
of loans, loan guarantees, interest subsidies, insurance, or direct 
appropriations; or any veterans' benefits to individuals, i.e., any 
benefit to veterans, their families, or survivors by virtue of the 
service of a veteran in the Armed Forces of the United States;
    (8) Grantee means a person who applies for or receives a grant 
directly from a Federal agency (except another Federal agency);
    (9) Individual means a natural person;
    (10) State means any of the States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency of a State, exclusive of 
institutions of higher education, hospitals, and units of local 
government. A State instrumentality will be considered part of the State 
government if it has a written determination from a State government 
that such State considers the instrumentality to be an agency of the 
State government.



Sec. 1229.610  Coverage.

    (a) This subpart applies to any grantee of the agency.
    (b) This subpart applies to any grant, except where application of 
this subpart would be inconsistent with the international obligations of 
the United States or the laws or regulations of a foreign government. A 
determination of such inconsistency may be made only by the agency head 
or his/her designee.
    (c) The provisions of subparts A, B, C, D and E of this part apply 
to matters covered by this subpart, except where specifically modified 
by this subpart. In the event of any conflict between provisions of this 
subpart and other provisions of this part, the provisions of this 
subpart are deemed to control with respect to the implementation of 
drug-free workplace requirements concerning grants.



Sec. 1229.615  Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.

    A grantee shall be deemed in violation of the requirements of this 
subpart if the agency head or his or her official designee determines, 
in writing, that--
    (a) The grantee has made a false certification under Sec. 1229.630;
    (b) With respect to a grantee other than an individual--
    (1) The grantee has violated the certification by failing to carry 
out the requirements of paragraphs (A)(a)-(g)

[[Page 144]]

and/or (B) of the certification (Alternate I to Appendix C) or
    (2) Such a number of employees of the grantee have been convicted of 
violations of criminal drug statutes for violations occurring in the 
workplace as to indicate that the grantee has failed to make a good 
faith effort to provide a drug-free workplace.
    (c) With respect to a grantee who is an individual--
    (1) The grantee has violated the certification by failing to carry 
out its requirements (Alternate II to Appendix C); or
    (2) The grantee is convicted of a criminal drug offense resulting 
from a violation occurring during the conduct of any grant activity.



Sec. 1229.620  Effect of violation.

    (a) In the event of a violation of this subpart as provided in 
Sec. 1229.615, and in accordance with applicable law, the grantee shall 
be subject to one or more of the following actions:
    (1) Suspension of payments under the grant;
    (2) Suspension or termination of the grant; and
    (3) Suspension or debarment of the grantee under the provisions of 
this part.
    (b) Upon issuance of any final decision under this part requiring 
debarment of a grantee, the debarred grantee shall be ineligible for 
award of any grant from any Federal agency for a period specified in the 
decision, not to exceed five years (see Sec. 1229.320(a)(2) of this 
part).



Sec. 1229.625  Exception provision.

    The agency head may waive with respect to a particular grant, in 
writing, a suspension of payments under a grant, suspension or 
termination of a grant, or suspension or debarment of a grantee if the 
agency head determines that such a waiver would be in the public 
interest. This exception authority cannot be delegated to any other 
official.



Sec. 1229.630  Certification requirements and procedures.

    (a)(1) As a prior condition of being awarded a grant, each grantee 
shall make the appropriate certification to the Federal agency providing 
the grant, as provided in Appendix C to this part.
    (2) Grantees are not required to make a certification in order to 
continue receiving funds under a grant awarded before March 18, 1989, or 
under a no-cost time extension of such a grant. However, the grantee 
shall make a one-time drug-free workplace certification for a non-
automatic continuation of such a grant made on or after March 18, 1989.
    (b) Except as provided in this section, all grantees shall make the 
required certification for each grant. For mandatory formula grants and 
entitlements that have no application process, grantees shall submit a 
one-time certification in order to continue receiving awards.
    (c) A grantee that is a State may elect to make one certification in 
each Federal fiscal year. States that previously submitted an annual 
certification are not required to make a certification for Fiscal Year 
1990 until June 30, 1990. Except as provided in paragraph (d) of this 
section, this certification shall cover all grants to all State agencies 
from any Federal agency. The State shall retain the original of this 
statewide certification in its Governor's office and, prior to grant 
award, shall ensure that a copy is submitted individually with respect 
to each grant, unless the Federal agency has designated a central 
location for submission.
    (d)(1) The Governor of a State may exclude certain State agencies 
from the statewide certification and authorize these agencies to submit 
their own certifications to Federal agencies. The statewide 
certification shall name any State agencies so excluded.
    (2) A State agency to which the statewide certification does not 
apply, or a State agency in a State that does not have a statewide 
certification, may elect to make one certification in each Federal 
fiscal year. State agencies that previously submitted a State agency 
certification are not required to make a certification for Fiscal Year 
1990 until June 30, 1990. The State agency shall retain the original of 
this State agency-wide certification in its central office and, prior to 
grant award, shall

[[Page 145]]

ensure that a copy is submitted individually with respect to each grant, 
unless the Federal agency designates a central location for submission.
    (3) When the work of a grant is done by more than one State agency, 
the certification of the State agency directly receiving the grant shall 
be deemed to certify compliance for all workplaces, including those 
located in other State agencies.
    (e)(1) For a grant of less than 30 days performance duration, 
grantees shall have this policy statement and program in place as soon 
as possible, but in any case by a date prior to the date on which 
performance is expected to be completed.
    (2) For a grant of 30 days or more performance duration, grantees 
shall have this policy statement and program in place within 30 days 
after award.
    (3) Where extraordinary circumstances warrant for a specific grant, 
the grant officer may determine a different date on which the policy 
statement and program shall be in place.



Sec. 1229.635  Reporting of and employee sanctions for convictions of criminal drug offenses.

    (a) When a grantee other than an individual is notified that an 
employee has been convicted for a violation of a criminal drug statute 
occurring in the workplace, it shall take the following actions:
    (1) Within 10 calendar days of receiving notice of the conviction, 
the grantee shall provide written notice, including the convicted 
employee's position title, to every grant officer, or other designee on 
whose grant activity the convicted employee was working, unless a 
Federal agency has designated a central point for the receipt of such 
notifications. Notification shall include the identification number(s) 
for each of the Federal agency's affected grants.
    (2) Within 30 calendar days of receiving notice of the conviction, 
the grantee shall do the following with respect to the employee who was 
convicted.
    (i) Take appropriate personnel action against the employee, up to 
and including termination, consistent with requirements of the 
Rehabilitation Act of 1973, as amended; or
    (ii) Require the employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purposes by 
a Federal, State, or local health, law enforcement, or other appropriate 
agency.
    (b) A grantee who is an individual who is convicted for a violation 
of a criminal drug statute occurring during the conduct of any grant 
activity shall report the conviction, in writing, within 10 calendar 
days, to his or her Federal agency grant officer, or other designee, 
unless the Federal agency has designated a central point for the receipt 
of such notices. Notification shall include the identification number(s) 
for each of the Federal agency's affected grants.

(Approved by the Office of Management and Budget under control number 
0991-0002)

Appendix A to Part 1229--Certification Regarding Debarment, Suspension, 
     and Other Responsibility Matters--Primary Covered Transactions

                     Instructions for Certification

    1. By signing and submitting this proposal, the prospective primary 
participant is providing the certification set out below.
    2. The inability of a person to provide the certification required 
below will not necessarily result in denial of participation in this 
covered transaction. The prospective participant shall submit an 
explanation of why it cannot provide the certification set out below. 
The certification or explanation will be considered in connection with 
the department or agency's determination whether to enter into this 
transaction. However, failure of the prospective primary participant to 
furnish a certification or an explanation shall disqualify such person 
from participation in this transaction.
    3. The certification in this clause is a material representation of 
fact upon which reliance was placed when the department or agency 
determined to enter into this transaction. If it is later determined 
that the prospective primary participant knowingly rendered an erroneous 
certification, in addition to other remedies available to the Federal 
Government, the department or agency may terminate this transaction for 
cause or default.
    4. The prospective primary participant shall provide immediate 
written notice to the department or agency to whom this proposal is 
submitted if at any time the prospective primary participant learns that 
its certification was erroneous when submitted

[[Page 146]]

or has become erroneous by reason of changed circumstances.
    5. The terms ``covered transaction,'' ``debarred,'' ``suspended,'' 
``ineligible,'' ``lower tier covered transaction,'' ``participant,'' 
``person,'' ``primary covered transaction,'' ``principal,'' 
``proposal,'' and ``voluntarily excluded,'' as used in this clause, have 
the meanings set out in the Definitions and Coverage sections of the 
rules implemeting Executive Order 12549. You may contact the department 
or agency to which this proposal is being submitted for assistance in 
obtaining a copy of those regulations.
    6. The prospective primary participant agrees by submitting this 
proposal that, should the proposed covered transaction be entered into, 
it shall not knowingly enter into any lower tier covered transaction 
with a person who is debarred, suspended, declared ineligible, or 
voluntarily excluded from participation in this covered transaction, 
unless authorized by the department or agency entering into this 
transaction.
    7. The prospective primary participant further agrees by submitting 
this proposal that it will include the clause titled ``Certification 
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--
Lower Tier Covered Transaction,'' provided by the department or agency 
entering into this covered transaction, without modification, in all 
lower tier covered transactions and in all solicitations for lower tier 
covered transactions.
    8. A participant in a covered transaction may rely upon a 
certification of a prospective participant in a lower tier covered 
transaction that it is not debarred, suspended, ineligible, or 
voluntarily excluded from the covered transaction, unless it knows that 
the certification is erroneous. A participant may decide the method and 
frequency by which it determines the eligibility of its principals. Each 
participant may, but is not required to, check the Nonprocurement List 
(Tel. ).
    9. Nothing contained in the foregoing shall be construed to require 
establishment of a system of records in order to render in good faith 
the certification required by this clause. The knowledge and information 
of a participant is not required to exceed that which is normally 
possessed by a prudent person in the ordinary course of business 
dealings.
    10. Except for transactions authorized under paragraph 6 of these 
instructions, if a participant in a covered transaction knowingly enters 
into a lower tier covered transaction with a person who is suspended, 
debarred, ineligible, or voluntarily excluded from participation in this 
transaction, in addition to other remedies available to the Federal 
Government, the department or agency may terminate this transaction for 
cause or default.

Certification Regarding Debarment, Suspension, and Other Responsibility 
                  Matters--Primary Covered Transactions

    (1) The prospective primary participant certifies to the best of its 
knowledge and belief, that it and its principals:
    (a) Are not presently debarred, suspended, proposed for debarment, 
declared ineligible, or voluntarily excluded from covered transactions 
by any Federal department or agency;
    (b) Have not within a three-year period preceding this proposal been 
convicted of or had a civil judgment rendered against them for 
commission of fraud or a criminal offense in connection with obtaining, 
attempting to obtain, or performing a public (Federal, State or local) 
transaction or contract under a public transaction; violation of Federal 
or State antitrust statutes or commission of embezzlement, theft, 
forgery, bribery, falsification or destruction of records, making false 
statements, or receiving stolen property;
    (c) Are not presently indicted for or otherwise criminally or 
civilly charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses enumerated in paragraph (1)(b) of this 
certification; and
    (d) Have not within a three-year period preceding this application/ 
proposal has one or more public transactions (Federal, State or local) 
terminated for cause or default.
    (2) Where the prospective primary participant is unable to certify 
to any of the statements in this certification, such prospective 
participant shall attach an explanation to this proposal.

Appendix B to Part 1229--Certification Regarding Debarment, Suspension, 
 Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions

                     Instructions for Certification

    1. By signing and submitting this proposal, the prospective lower 
tier participant is providing the certification set out below.
    2. The certification in this clause is a material representation of 
fact upon which reliance was placed when this transaction was entered 
into. If it is later determined that the prospective lower tier 
participant knowingly rendered an erroneous certification, in addition 
to other remedies available to the Federal Government, the department or 
agency with which this transaction originated may pursue available 
remedies, including suspension and/or debarment.
    3. The prospective lower tier participant shall provide immediate 
written notice to

[[Page 147]]

the person to which this proposal is submitted if at any time the 
prospective lower tier participant learns that its certification was 
erroneous when submitted or has become erroneous by reason of changed 
circumstances.
    4. The terms ``covered transaction,'' ``debarred,'' ``suspended,'' 
``ineligible,'' ``lower tier covered transaction,'' ``participant,'' 
``person,'' ``primary covered transaction,'' ``principal,'' 
``proposal,'' and ``voluntarily excluded,'' as used in this clause, have 
the meanings set out in the Definitions and Coverage sections of rules 
implementing Executive Order 12549. You may contact the person to which 
this proposal is submitted for assistance in obtaining a copy of those 
regulations.
    5. The prospective lower tier participant agrees by submitting this 
proposal that, should the proposed covered transaction be entered into, 
it shall not knowingly enter into any lower tier covered transaction 
with a person who is debarred, suspended, declared ineligible, or 
voluntarily excluded from participation in this covered transaction, 
unless authorized by the department or agency with which this 
transaction originated.
    6. The prospective lower tier participant further agrees by 
submitting this proposal that it will include this clause titled 
``Certification Regarding Debarment, Suspension, Ineligibility and 
Voluntary Exclusion--Lower Tier Covered Transaction,'' without 
modification, in all lower tier covered transactions and in all 
solicitations for lower tier covered transactions.
    7. A participant in a covered transaction may rely upon a 
certification of a prospective participant in a lower tier covered 
transaction that it is not debarred, suspended, ineligible, or 
voluntarily excluded from the covered transaction, unless it knows that 
the certification is erroneous. A participant may decide the method and 
frequency by which it determines the eligibility of its principals. Each 
participant may, but is not required to, check the Nonprocurement List 
(Tel. ).
    8. Nothing contained in the foregoing shall be construed to require 
establishment of a system of records in order to render in good faith 
the certification required by this clause. The knowledge and information 
of a participant is not required to exceed that which is normally 
possessed by a prudent person in the ordinary course of business 
dealings.
    9. Except for transactions authorized under paragraph 5 of these 
instructions, if a participant in a covered transaction knowingly enters 
into a lower tier covered transaction with a person who is suspended, 
debarred, ineligible, or voluntarily excluded from participation in this 
transaction, in addition to other remedies available to the Federal 
Government, the department of agency with which this transaction 
originated may pursue available remedies, including suspension and/or 
debarment.

    Certification Regarding Debarment, Suspension, Ineligibility and 
          Voluntary Exclusion--Lower Tier Covered Transactions

    (1) The prospective lower tier participant certifies, by submission 
of this proposal, that neither it nor its principals is presently 
debarred, suspended, proposed for debarment, declared ineligible, or 
voluntarily excluded from participation in this transaction by any 
Federal department of agency.
    (2) Where the prospective lower tier participant is unable to 
certify to any of the statements in this certification, such prospective 
participant shall attach an explanation to this proposal.

  Appendix C to Part 1229--Certification Regarding Drug-Free Workplace 
                              Requirements

                     Instructions for Certification

    1. By signing and/or submitting this application or grant agreement, 
the grantee is providing the certification set out below.
    2. The certification set out below is a material representation of 
fact upon which reliance is placed when the agency awards the grant. If 
it is later determined that the grantee knowingly rendered a false 
certification, or otherwise violates the requirements of the Drug-Free 
Workplace Act, the agency, in addition to any other remedies available 
to the Federal Government, may take action authorized under the Drug-
Free Workplace Act.
    3. For grantees other than individuals, Alternate I applies.
    4. For grantees who are individuals, Alternate II applies.
    5. Workplaces under grants, for grantees other than individuals, 
need not be identified on the certification. If known, they may be 
identified in the grant application. If the grantee does not identify 
the workplaces at the time of application, or upon award, if there is no 
application, the grantee must keep the identity of the workplace(s) on 
file in its office and make the information available for Federal 
inspection. Failure to identify all known workplaces constitutes a 
violation of the grantee's drug-free workplace requirements.
    6. Workplace identifications must include the actual address of 
buildings (or parts of buildings) or other sites where work under the 
grant takes place. Categorical descriptions may be used (e.g., all 
vehicles of a mass transit authority or State highway department while 
in operation, State employees in each local unemployment office, 
performers in concert halls or radio studios).

[[Page 148]]

    7. If the workplace identified to the agency changes during the 
performance of the grant, the grantee shall inform the agency of the 
change(s), if it previously identified the workplaces in question (see 
paragraph five).
    8. Definitions of terms in the Nonprocurement Suspension and 
Debarment common rule and Drug-Free Workplace common rule apply to this 
certification. Grantees' attention is called, in particular, to the 
following definitions from these rules:
    Controlled substance means a controlled substance in Schedules I 
through V of the Controlled Substances Act (21 U.S.C. 812) and as 
further defined by regulation (21 CFR 1308.11 through 1308.15);
    Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes;
    Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance;
    Employee means the employee of a grantee directly engaged in the 
performance of work under a grant, including: (i) All direct charge 
employees; (ii) All indirect charge employees unless their impact or 
involvement is insignificant to the performance of the grant; and, (iii) 
Temporary personnel and consultants who are directly engaged in the 
performance of work under the grant and who are on the grantee's 
payroll. This definition does not include workers not on the payroll of 
the grantee (e.g., volunteers, even if used to meet a matching 
requirement; consultants or independent contractors not on the grantee's 
payroll; or employees of subrecipients or subcontractors in covered 
workplaces).

        Certification Regarding Drug-Free Workplace Requirements

             Alternate I. (Grantees Other Than Individuals)

    A. The grantee certifies that it will or will continue to provide a 
drug-free workplace by:
    (a) Publishing a statement notifying employees that the unlawful 
manufacture, distribution, dispensing, possession, or use of a 
controlled substance is prohibited in the grantee's workplace and 
specifying the actions that will be taken against employees for 
violation of such prohibition;
    (b) Establishing an ongoing drug-free awareness program to inform 
employees about--
    (1) The dangers of drug abuse in the workplace;
    (2) The grantee's policy of maintaining a drug-free workplace;
    (3) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (4) The penalties that may be imposed upon employees for drug abuse 
violations occurring in the workplace;
    (c) Making it a requirement that each employee to be engaged in the 
performance of the grant be given a copy of the statement required by 
paragraph (a);
    (d) Notifying the employee in the statement required by paragraph 
(a) that, as a condition of employment under the grant, the employee 
will--
    (1) Abide by the terms of the statement; and
    (2) Notify the employer in writing of his or her conviction for a 
violation of a criminal drug statute occurring in the workplace no later 
than five calendar days after such conviction;
    (e) Notifying the agency in writing, within ten calendar days after 
receiving notice under paragraph (d)(2) from an employee or otherwise 
receiving actual notice of such conviction. Employers of convicted 
employees must provide notice, including position title, to every grant 
officer or other designee on whose grant activity the convicted employee 
was working, unless the Federal agency has designated a central point 
for the receipt of such notices. Notice shall include the identification 
number(s) of each affected grant;
    (f) Taking one of the following actions, within 30 calendar days of 
receiving notice under paragraph (d)(2), with respect to any employee 
who is so convicted--
    (1) Taking appropriate personnel action against such an employee, up 
to and including termination, consistent with the requirements of the 
Rehabilitation Act of 1973, as amended; or
    (2) Requiring such employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purposes by 
a Federal, State, or local health, law enforcement, or other appropriate 
agency;
    (g) Making a good faith effort to continue to maintain a drug-free 
workplace through implementation of paragraphs (a), (b), (c), (d), (e) 
and (f).
    B. The grantee may insert in the space provided below the site(s) 
for the performance of work done in connection with the specific grant:

Place of Performance (Street address, city, county, state, zip code)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

Check {time}  if there are workplaces on file that are not identified 
here.

[[Page 149]]

              Alternate II. (Grantees Who Are Individuals)

    (a) The grantee certifies that, as a condition of the grant, he or 
she will not engage in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance in conducting 
any activity with the grant;
    (b) If convicted of a criminal drug offense resulting from a 
violation occurring during the conduct of any grant activity, he or she 
will report the conviction, in writing, within 10 calendar days of the 
conviction, to every grant officer or other designee, unless the Federal 
agency designates a central point for the receipt of such notices. When 
notice is made to such a central point, it shall include the 
identification number(s) of each affected grant.

[55 FR 21690, 21704, May 25, 1990]



PART 1230--NEW RESTRICTIONS ON LOBBYING--Table of Contents




                           Subpart A--General

Sec.
1230.100  Conditions on use of funds.
1230.105  Definitions.
1230.110  Certification and disclosure.

                 Subpart B--Activities by Own Employees

1230.200  Agency and legislative liaison.
1230.205  Professional and technical services.
1230.210  Reporting.

            Subpart C--Activities by Other Than Own Employees

1230.300  Professional and technical services.

                  Subpart D--Penalties and Enforcement

1230.400  Penalties.
1230.405  Penalty procedures.
1230.410  Enforcement.

                          Subpart E--Exemptions

1230.500  Secretary of Defense.

                        Subpart F--Agency Reports

1230.600  Semi-annual compilation.
1230.605  Inspector General report.

Appendix A to Part 1230--Certification Regarding Lobbying
Appendix B to Part 1230--Disclosure Form to Report Lobbying

    Authority: Section 319, Pub. L. 101-121 (31 U.S.C. 1352); Pub. L. 
93-113; 42 U.S.C. 4951, et seq; 42 U.S.C. 5060.

    Source: 55 FR 6737, 6755, Feb. 26, 1990, unless otherwise noted.

    Cross reference: See also Office of Management and Budget notice 
published at 54 FR 52306, December 20, 1989.



                           Subpart A--General



Sec. 1230.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative ageement to pay any person 
for influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or cooperative agreement shall file with that 
agency a certification, set forth in Appendix A, that the person has not 
made, and will not make, any payment prohibited by paragraph (a) of this 
section.
    (c) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or a cooperative agreement shall file with that 
agency a disclosure form, set forth in Appendix B, if such person has 
made or has agreed to make any payment using nonappropriated funds (to 
include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a statement, set forth in Appendix A, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.

[[Page 150]]

    (e) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a disclosure form, set forth in Appendix B, if that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec. 1230.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal 
executive departments and agencies as well as independent regulatory 
commissions and Government corporations, as defined in 31 U.S.C. 
9101(1).
    (b) Covered Federal action means any of the following Federal 
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a 
commitment providing for the United States to insure or guarantee a 
loan. Loan guarantees and loan insurance are addressed independently 
within this part.
    (c) Federal contract means an acquisition contract awarded by an 
agency, including those subject to the Federal Acquisition Regulation 
(FAR), and any other acquisition contract for real or personal property 
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement 
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form 
of money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not 
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided 
in section 4 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions 
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee or any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or 
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other instrumentality 
of a local government.
    (k) Officer or employee of an agency includes the following 
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    (l) Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated

[[Page 151]]

for profit or not for profit. This term excludes an Indian tribe, tribal 
organization, or any other Indian organization with respect to 
expenditures specifically permitted by other Federal law.
    (m) Reasonable compensation means, with respect to a regularly 
employed officer or employee of any person, compensation that is 
consistent with the normal compensation for such officer or employee for 
work that is not furnished to, not funded by, or not furnished in 
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier, 
and subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes an Indian tribe, tribal organization, or 
any other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee 
of a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for receipt of such contract, grant, loan, cooperative 
agreement, loan insurance commitment, or loan guarantee commitment. An 
officer or employee who is employed by such person for less than 130 
working days within one year immediately preceding the date of the 
submission that initiates agency consideration of such person shall be 
considered to be regularly employed as soon as he or she is employed by 
such person for 130 working days.
    (q) State means a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, a territory or possession of 
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.



Sec. 1230.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form, 
if required, with each submission that initiates agency consideration of 
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000,

unless such person previously filed a certification, and a disclosure 
form, if required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraph (a) or (b) of this section:

[[Page 152]]

    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement,

shall file a certification, and a disclosure form, if required, to the 
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded 
from tier to tier until received by the person referred to in paragraph 
(a) or (b) of this section. That person shall forward all disclosure 
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section shall be treated as a material representation of fact 
upon which all receiving tiers shall rely. All liability arising from an 
erroneous representation shall be borne solely by the tier filing that 
representation and shall not be shared by any tier to which the 
erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S. Code.
    (g) For awards and commitments in process prior to December 23, 
1989, but not made before that date, certifications shall be required at 
award or commitment, covering activities occurring between December 23, 
1989, and the date of award or commitment. However, for awards and 
commitments in process prior to the December 23, 1989 effective date of 
these provisions, but not made before December 23, 1989, disclosure 
forms shall not be required at time of award or commitment but shall be 
filed within 30 days.
    (h) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C.



                 Subpart B--Activities by Own Employees



Sec. 1230.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 1230.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by an agency or Congress is allowable 
at any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with an agency (including individual demonstrations) 
the qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for an 
agency's use.
    (d) For purposes of paragraph (a) of this section, the following 
agencies and legislative liaison activities are allowable only where 
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Pub. L. 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.

[[Page 153]]



Sec. 1230.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 1230.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal, amendment, or modification of a 
Federal contract, grant, loan, or cooperative agreement if payment is 
for professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal contract, grant, loan, or cooperative 
agreement or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal contract, grant, loan, or 
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting of a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.



Sec. 1230.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.



            Subpart C--Activities by Other Than Own Employees



Sec. 1230.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 1230.100 (a), does not apply in the case of any reasonable payment 
to a person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 1230.110 (a) and (b) 
regarding filing a disclosure form by each person, if required, shall 
not apply with respect to professional or technical services rendered 
directly in the preparation, submission, or negotiation of any 
commitment providing for the United States to insure or guarantee a 
loan.

[[Page 154]]

    (c) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting or a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.



                  Subpart D--Penalties and Enforcement



Sec. 1230.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
Appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $10,000 and not more than $100,000 
for each such failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is commenced 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action is commenced with 
respect to a failure when an investigating official determines in 
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, the agency 
shall consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of such person to continue in 
business, any prior violations by such person, the degree of culpability 
of such person, the ability of the person to pay the penalty, and such 
other matters as may be appropriate.
    (e) First offenders under paragraph (a) or (b) of this section shall 
be subject to a civil penalty of $10,000, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $10,000 and $100,000, as 
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of such civil 
penalty.

[[Page 155]]



Sec. 1230.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 
3812, insofar as these provisions are not inconsistent with the 
requirements herein.



Sec. 1230.410  Enforcement.

    The head of each agency shall take such actions as are necessary to 
ensure that the provisions herein are vigorously implemented and 
enforced in that agency.



                          Subpart E--Exemptions



Sec. 1230.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F--Agency Reports



Sec. 1230.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure 
reports (see Appendix B) and, on May 31 and November 30 of each year, 
submit to the Secretary of the Senate and the Clerk of the House of 
Representatives a report containing a compilation of the information 
contained in the disclosure reports received during the six-month period 
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters shall be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives, and the Committees on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information shall not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order shall be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives or the Committees on Armed Services of the 
Senate and the House of Representatives (whichever such committees have 
jurisdiction of matters involving such information) and to the 
Committees on Appropriations of the Senate and the House of 
Representatives in accordance with procedures agreed to by such 
committees. Such information shall not be available for public 
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31, 
1990, and shall contain a compilation of the disclosure reports received 
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and 
Budget (OMB), are required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives no later than with the compilations due on May 31, 1991. 
OMB shall provide detailed specifications in a memorandum to these 
agencies.
    (g) Non-major agencies are requested to provide machine-readable 
compilations to the Secretary of the Senate and the Clerk of the House 
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in 
the official files of the agency.



Sec. 1230.605  Inspector General report.

    (a) The Inspector General, or other official as specified in 
paragraph (b) of this section, of each agency shall prepare and submit 
to Congress each year, commencing with submission of the President's 
Budget in 1991, an evaluation of the compliance of that agency with, and 
the effectiveness of, the requirements herein. The evaluation may 
include any recommended changes that

[[Page 156]]

may be necessary to strengthen or improve the requirements.
    (b) In the case of an agency that does not have an Inspector 
General, the agency official comparable to an Inspector General shall 
prepare and submit the annual report, or, if there is no such comparable 
official, the head of the agency shall prepare and submit the annual 
report.
    (c) The annual report shall be submitted at the same time the agency 
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged 
violations relating to the agency's covered Federal actions during the 
year covered by the report, the actions taken by the head of the agency 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by the agency in the year covered by the report.

        Appendix A to Part 1230--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form-LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.

    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required certification shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form-LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required statement shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

[[Page 157]]

       Appendix B to Part 1230--Disclosure Form to Report Lobbying

[GRAPHIC] [TIFF OMITTED] TC03AP91.054


[[Page 158]]

[GRAPHIC] [TIFF OMITTED] TC03AP91.055



[[Page 159]]

[GRAPHIC] [TIFF OMITTED] TC03AP91.056



[[Page 160]]



PART 1232--NON-DISCRIMINATION ON BASIS OF HANDICAP IN PROGRAMS RECEIVING FEDERAL FINANCIAL ASSISTANCE FROM ACTION--Table of Contents




                      Subpart A--General Provisions

Sec.
1232.1  Purpose.
1232.2  Application.
1232.3  Definitions.
1232.4  General prohibitions against discrimination.
1232.5  Assurances required.
1232.6  Notice.
1232.7  Remedial action, voluntary action and self-evaluation.
1232.8  Effect of state or local law.

          Subpart B--Employment and Volunteer Service Practices

1232.9  General prohibitions against employment and volunteer service 
          discrimination.
1232.10  Reasonable accommodation.
1232.11  Employment and volunteer selection criteria.
1232.12  Preemployment or pre-selection inquires.

                    Subpart C--Program Accessibility

1232.13  General requirement concerning program accessibility.
1232.14  Existing facilities.
1232.15  New construction.

                          Subpart D--Procedures

1232.16  Procedures.

    Authority: 29 U.S.C. 794.

    Source: 44 FR 31018, May 30, 1979, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 1232.1  Purpose.

    The purpose of this part is to effectuate section 504 of the 
Rehabilitation Act of 1973, which is designed to eliminate 
discrimination on the basis of handicap in any program or activity 
receiving Federal financial assistance.



Sec. 1232.2  Application.

    This part applies to each recipient of Federal financial assistance 
from ACTION and to each program or activity that receives or benefits 
from such assistance, including volunteer programs such as VISTA, 
University Year for ACTION (UYA), Senior Companion Program (SCP), Foster 
Grandparent Program (FGP) and Retired Senior Volunteer Program (RSVP). 
This part does not apply to recipients outside the United States which 
receive financial assistance under the Peace Corps Act, 22 U.S.C. 2501, 
Pub. L. 87-293, as amended.



Sec. 1232.3  Definitions.

    As used in this part the term:
    (a) The Act means the Rehabilitation Act of 1973. Pub. L. 93-112, as 
amended by the Rehabilitation Act Amendments of 1974, Pub. L. 93-516, 
and the Rehabilitation Act Amendments of 1978, Pub. L. 95-602.
    (b) Section 504 means section 504 of the Act.
    (c) Director means the Director of ACTION.
    (d) Recipient means any state or its political subdivision, any 
instrumentality of a state or its political subdivision, any public or 
private agency, institution, organization, or other entity, or any 
person to which Federal financial assistance is extended directly or 
through another recipient, including any successor, assignee, or 
transferee of a recipient, but excluding the ultimate beneficiary of the 
assistance.
    (e) Applicant for assistance means one who submits an application, 
request, or plan required to be approved by an ACTION official or by a 
recipient as a condition to becoming a recipient.
    (f) Federal financial assistance means any grant, loan, contract 
(other than a procurement contract or a contract of insurance or 
guaranty), or any other arrangement which provides or otherwise makes 
available assistance in the form of:
    (1) Funds;
    (2) Services of Federal personnel;
    (3) Real and personal property or any interest in or use of such 
property, including:
    (i) Transfers or leases of such property for less than fair market 
value or for reduced consideration; and
    (ii) Proceeds from a subsequent transfer or lease of such property 
if the Federal share of its fair market value is not returned to the 
Federal Government.

[[Page 161]]

    (4) A Federal agreement, arrangement or other contract which has as 
one of its purposes the provision of assistance, including the provision 
of volunteers under the Domestic Volunteer Service Act of 1973, 42 
U.S.C. 4951, Pub. L. 93-113, as amended.
    (g) Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, or other real or personal 
property or interest in such property.
    (h) Handicapped person.
    (1) Handicapped person means any person who has a physical or mental 
impairment that substantially limits one or more major life activities, 
has a record of such an impairment, or is regarded as having such an 
impairment, except that as it relates to employment or volunteer service 
the term ``handicapped person'' does not include any individual who is 
an alcoholic or drug abuser whose current use of alcohol or drugs 
prevents such individual from performing the duties of the job in 
question or whose employment or volunteer service, by reason of such 
current alcohol or drug abuse, would constitute a direct threat to 
property or the safety of others.
    (2) As used in paragraph (h)(1) of this section, the phrase:
    (i) Physical or mental impairment means (A) any physiological 
disorder or condition, cosmetic disfigurement, or anatomical loss 
affecting one or more of the following body systems: Neurological; 
musculoskeletal; special sense organs; respiratory, including speech 
organs; cardiovascular; reproductive; digestive; genitourinary; hemic 
and lymphatic; skin; and endocrine; or (B) any mental or psychological 
disorder, such as mental retardation, organic brain syndrome, emotional 
or mental illness, and specific learning disabilities. The term 
``physical or mental impairment'' includes, but is not limited to, such 
diseases and conditions as orthopedic, visual, speech, and hearing 
impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple 
sclerosis, cancer, heart disease, diabetes, mental retardation, 
emotional illness, drug addiction and alcoholism.
    (ii) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (iii) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (iv) Is regarded as having an impairment means (A) has a physical or 
mental impairment that does not substantially limit major life 
activities but is treated by a recipient as constituting such a 
limitation; (B) has a physical or mental impairment that substantially 
limits major life activities only as a result of the attitudes of others 
toward such impairment; or (C) has none of the impairments defined in 
paragraph (h)(2)(i) of this section but is treated by a recipient as 
having such an impairment.
    (i) Qualified handicapped person means (1) with respect to 
employment or volunteer service, a handicapped person who, with 
reasonable accommodation, can perform the essential functions of the job 
or assignment in question; and (2) with respect to services, a 
handicapped person who meets the essential eligibility requirements for 
the receipt of such services.
    (j) Handicap means any condition or characteristic that renders a 
person a handicapped person as defined in paragraph (h) of this section.
    (k) Volunteer and ``Volunteer service'' refers to any person serving 
as a full time or part-time volunteer under any programs authorized 
under the Domestic Volunteer Service Act of 1973, Pub. L. 93-113, as 
amended.
    (l) Work station means any public or private agency, institution, 
organization or other entity to which volunteers are assigned by a 
recipient.

(Sec. 504, Rehabilitation Act of 1973, Pub. L. 93-112, 87 Stat. 394 (29 
U.S.C. 794), sec. 111(a), Rehabilitation Act Amendments of 1974, Pub. L. 
93-516, 88 Stat. 1619 (29 U.S.C. 706); Rehabilitation Act Amendments of 
1978, Pub. L. 95-602, 92 Stat. 2955; Sec. 402(14), Pub. L. 93-113, 87 
Stat. 398)

[44 FR 31018, May 30, 1979; 46 FR 6951, Jan. 22, 1981]

[[Page 162]]



Sec. 1232.4  General prohibitions against discrimination.

    (a) No qualified handicapped person, shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity to which this part applies.
    (b)(1) A recipient, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap:
    (i) Deny a qualified handicapped person the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified handicapped person an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified handicapped person with an aid, benefit, 
or service that is not as effective in affording equal opportunity to 
obtain the same result, to gain the same benefit, or to reach the same 
level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
handicapped persons or to any class of handicapped persons than is 
provided to others unless such action is necessary to provide qualified 
handicapped persons with aid, benefits, or services that are as 
effective as those provided to others;
    (v) Aid or perpetuate discrimination against a qualified handicapped 
person by providing significant assistance to an agency, organization, 
or person that discriminates on the basis of handicap in providing any 
aid, benefit, or service to beneficiaries of the recipient's program;
    (vi) Deny a qualified handicapped person the opportunity to 
participate as a member of planning or advisory boards; or
    (vii) Otherwise limit a qualified handicapped person in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) A recipient may not deny a qualified handicapped person the 
opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) A recipient may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration:
    (i) That have the effect of subjecting qualified handicapped persons 
to discrimination on the basis of handicap,
    (ii) That have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of the recipient's program 
with respect to handicapped persons, or
    (iii) That perpetuate the discrimination of another recipient if 
both recipients are subject to common administrative control or are 
agencies of the same state.
    (4) A recipient may not, in determining the site or location of a 
facility, make selections:
    (i) That have the effect of excluding handicapped persons from, 
denying them the benefits of, or otherwise subjecting them to 
discrimination under any program or activity that receives or benefits 
from federal financial assistance or
    (ii) That have the purpose or effect of defeating or substantially 
impairing the accomplishment of the objectives of the program or 
activity with respect to handicapped persons.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by federal statute or executive order to handicapped 
persons or the exclusion of a specific class of handicapped persons from 
a program limited by federal statute or executive order to a different 
class of handicapped persons is not prohibited by this part.
    (d) Recipients shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified handicapped 
persons.
    (e) Recipients shall take appropriate steps to ensure that 
communications with their applicants, employees, volunteers and 
beneficiaries are available to persons with impaired vision and hearing.
    (f) Recipients shall take appropriate steps to insure that no 
handicapped individual is denied the benefits of, excluded from 
participation in, or otherwise subjected to discrimination in any

[[Page 163]]

program receiving or benefiting from Federal financial assistance from 
ACTION because of the absence of auxiliary aids for individuals with 
impaired sensory, manual, or speaking skills.



Sec. 1232.5  Assurances required.

    (a) An applicant for Federal financial assistance for a program or 
activity to which this part applies shall submit an assurance, on a form 
specified by the Director, that the program will be operated in 
compliance with this part. An applicant may incorporate these assurances 
by reference in subsequent applications to ACTION. The assurance will 
obligate the recipient for the period during which Federal financial 
assistance is extended.
    (b) In the case of Federal financial assistance extended to provide 
personal property, the assurance will obligate the recipient for the 
period during which it retains ownership or possession of the property.
    (c) A recipient operating a volunteer program under which volunteers 
are assigned to a number of work stations shall obtain an assurance from 
each work station that neither volunteers nor the beneficiaries they 
serve will be discriminated against on the basis of handicap.



Sec. 1232.6  Notice.

    Recipients shall take appropriate initial and continuing steps to 
notify participants, beneficiaries, applicants, volunteers and 
employees, including those with impaired vision or hearing, that it does 
not discriminate on the basis of handicap in violation of section 504 
and this part.



Sec. 1232.7  Remedial action, voluntary action and self-evaluation.

    (a) Remedial action. (1) If the Director finds that a recipient has 
discriminated against persons on the basis of handicap in violation of 
section 504 or this part, the recipient shall take such remedial action 
as the Director deems necessary to overcome the effects of the 
discrimination.
    (2) Where a recipient is found to have discriminated against persons 
on the basis of handicap in violation of section 504 or this part and 
where another recipient exercises control over the recipient that has 
discriminated, the Director, where appropriate, may require either or 
both recipients to take remedial action.
    (3) The Director may, where necessary to overcome the effects of 
discrimination in violation of section 504 or this part, require a 
recipient to take remedial action:
    (i) With respect to handicapped persons who are no longer 
participants in the recipient's program but who were participants in the 
program when such discrimination occurred or
    (ii) With respect to handicapped persons who would have been 
participants in the program had the discrimination not occurred, or
    (iii) With respect to handicapped persons presently in the program, 
but not receiving full benefits or equal and integrated treatment within 
the program.
    (b) Voluntary action. Recipient may take steps, in addition to any 
action that is required by this part, to overcome the effects of 
conditions that resulted in limited participation in the recipient's 
program or activity by qualified handicapped persons.
    (c) Self-evaluation. (1) Each recipient shall, within one year of 
the effective date of this part, conduct a self-evaluation of its 
compliance with Section 504, with the assistance of interested persons, 
including handicapped persons or organizations representing handicapped 
persons. Each recipient shall with the assistance of and consultation 
with interested persons, including handicapped persons, evaluate its 
current policies, practices and effects thereof; modify any that do not 
meet the requirements of this part; and take appropriate remedial steps 
to eliminate the effects of any discrimination that resulted from 
adherence to these policies and practices.
    (2) A recipient that employs fifteen or more persons shall, for at 
least three years following completion of the evaluation required under 
paragraph (c)(1) of this section, maintain on file, make available for 
public inspection, and provide to the Director upon request: (i) A list 
of the interested persons consulted,
    (ii) A description of areas examined and any problems identified, 
and

[[Page 164]]

    (iii) A description of any modifications made and of any remedial 
steps taken.



Sec. 1232.8  Effect of state or local law.

    The obligation to comply with this part is not obviated or 
alleviated by the existence of any state or local law or other 
requirement that, on the basis of handicap, imposes prohibitions or 
limits upon the eligibility of qualified handicapped persons to receive 
services or to practice any occupation or profession.



          Subpart B--Employment and Volunteer Service Practices



Sec. 1232.9  General prohibitions against employment and volunteer service discrimination.

    (a) No qualified handicapped person shall, on the basis of handicap, 
be subjected to discrimination in employment or volunteer service under 
any program or activity that receives or benefits from federal financial 
assistance.
    (b) A recipient shall make all decisions concerning employment or 
volunteer service under any program or activity to which this part 
applies in a manner which ensures that discrimination on the basis of 
handicap does not occur and may not limit, segregate, or classify 
applicants or employees or volunteers in any way that adversely affects 
their opportunities or status because of handicap.
    (c) The prohibition against discrimination in employment and 
volunteer service applies to the following activities:
    (1) Recruitment, advertising, and the processing of applications for 
employment or volunteer service;
    (2) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff, and 
rehiring;
    (3) Rates of pay or any other form of compensation and changes in 
compensation;
    (4) Job assignments, job classifications, organizational structures, 
position descriptions, lines of progression, and seniority lists;
    (5) Leaves of absence, sick leave, or any other leave;
    (6) Fringe benefits available by virtue of employment or volunteer 
service, whether or not administered by the recipient;
    (7) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, and selection for leaves of absence to pursue training;
    (8) Employer sponsored activities, including social or recreational 
programs; and
    (9) Any other term, condition, or privilege of employment or 
volunteer service.
    (d) A recipient may not participate in a contractural or other 
relationship that has the effect of subjecting qualified handicapped 
applicants, volunteers or employees, to discrimination prohibited by 
this subpart. The relationships referred to in this paragraph include 
relationships with employment and referral agencies, with labor unions, 
with organizations providing or administering fringe benefits to 
employees of the recipient, and with organizations providing training 
and apprenticeship programs.
    (e) A recipient's obligation to comply with this subpart is not 
affected by any inconsistent term of any collective bargaining agreement 
to which it is a party.
    (f) Recipients operating a volunteer program under which volunteers 
are assigned to work in a number of work stations will assure that a 
representative sample of work stations are accessible to handicapped 
persons.



Sec. 1232.10  Reasonable accommodation.

    (a) A recipient shall make reasonable accommodation to the known 
physical or mental limitations of an otherwise qualified handicapped 
applicant, employee or volunteer unless the recipient can demonstrate 
that the accommodation would impose an undue hardship on the operation 
of its program.
    (b) Reasonable accommodation may include: (1) Making facilities used 
by employees or volunteers readily accessible to and usable by 
handicapped persons, and
    (2) Job restructuring, part-time or modified work schedules, 
acquisition

[[Page 165]]

or modification of equipment or devices, the provision of readers or 
interpreters, and other similar actions.
    (c) In determining pursuant to paragraph (a) of this section whether 
an accommodation would impose an undue hardship on the operation of a 
recipient's program, factors to be considered include:
    (1) The overall size of the recipient's program with respect to 
number of employees or volunteers, number and type of facilities, and 
size of budget;
    (2) The type of the recipient's operation, including the composition 
and structure of the recipient's workforce or volunteer force, and
    (3) The nature and cost of the accommodation needed.



Sec. 1232.11  Employment and volunteer selection criteria.

    A recipient may not use employment tests or criteria that 
discriminate against handicapped persons and shall ensure that 
employment tests are adapted for use by persons who have handicaps that 
impair sensory, manual, or speaking skills.



Sec. 1232.12  Preemployment or pre-selection inquiries.

    (a) Except as provided in paragraphs (b) and (c) of this section, a 
recipient may not conduct a preemployment medical examination or not 
make pre-employment inquiry of an applicant as to whether the applicant 
is a handicapped person or as to the nature of severity of a handicap. A 
recipient may, however, make preemployment inquiry into an applicant's 
ability to perform job-related functions. For the purpose of this 
paragraph, ``pre-employment'' as applied to applicants for volunteer 
positions means prior to selection as a volunteer.
    (b) When a recipient is taking remedial action to correct the 
effects of past discrimination pursuant to Sec. 1232.8(a), when a 
recipient is taking voluntary action to overcome the effects of 
conditions that resulted in limited participation in its federally 
assisted program or activity pursuant to Sec. 1232.8(b) or when a 
recipient is taking affirmative action pursuant to section 503 of the 
Act, the recipient may invite applicants for employment or volunteer 
service to indicate whether and to what extent they are handicapped: 
Provided, That:
    (1) The recipient states clearly on any written questionnaire used 
for this purpose or makes clear orally if no written questionnaire is 
used that the information requested is intended for use solely in 
connection with its remedial action obligations or its voluntary or 
affirmative action efforts; and
    (2) The recipient states clearly that the information is being 
requested on a voluntary basis, that it will be kept confidential as 
provided in paragraph (d) of this section, that refusal to provide it 
will not subject the applicant or employee to any adverse treatment, and 
that it will be used only in accordance with this part.
    (c) Nothing in this section shall prohibit a recipient from 
conditioning an offer of employment or volunteer service on the results 
of a medical examination conducted prior to the volunteer or employee's 
entrance on duty. Provided, That:
    (1) All entering volunteers or employees are subjected to such an 
examination regardless of handicap, and
    (2) The results of such an examination are used only in accordance 
with the requirements of this part.
    (d) Information obtained in accordance with this section as to the 
medical condition or history of the applicant shall be collected and 
maintained on separate forms that shall be accorded confidentiality as 
medical records, except that:
    (1) Supervisors and managers may be informed regarding restrictions 
on the work or duties of handicapped persons and regarding necessary 
accommodations;
    (2) First aid and safety personnel may be informed, where 
appropriate, if the condition might require emergency treatment; and
    (3) Government officers investigating compliance with the Act shall 
be provided relevant information upon request.

[[Page 166]]



                    Subpart C--Program Accessibility



Sec. 1232.13  General requirement concerning program accessibility.

    No qualified handicapped person shall, because a recipient's 
facilities are inaccessible to or unusable by handicapped persons, be 
denied the benefits of, be excluded from participation in, or otherwise 
be subjected to discrimination under any program or activity that 
receives or benefits from federal financial assistance.



Sec. 1232.14  Existing facilities.

    (a) A recipient shall operate each program or activity to which this 
part applies so that the program or activity, when viewed in its 
entirety, is readily accessible and usable by handicapped persons. This 
paragraph does not require a recipient to make each of its existing 
facilities or every part of a facility accessible to and usable by 
handicapped persons.
    (b) A recipient is not required to make structural changes in 
existing facilities where other methods are effective in achieving 
compliance with this section. Where structural changes are necessary to 
make programs or activities in existing facilities accessible, such 
changes shall be made as soon as practicable, but in no event later than 
three years after the effective date of the regulation.
    (c) In the event that structural changes to facilities are necessary 
to meet the requirement of paragraph (a) of this section, a recipient 
shall develop, within six months of the effective date of this part, a 
transition plan which sets forth in detail the steps necessary to 
complete the changes, and a schedule for taking those steps. The plan 
shall be developed with the assistance of interested persons, including 
handicapped persons or organizations representing handicapped persons. A 
copy of the plan shall be made available for public inspection.



Sec. 1232.15  New construction.

    (a) Design, construction, and alteration. New facilities shall be 
designed and constructed to be readily accessible to and usable by 
handicapped persons. construction shall be considered new if ground 
breaking takes place after the effective date of the regulation. 
Alterations to existing facilities shall, to the maximum extent 
feasible, be designed and constructed to be readily accessible to and 
usable by handicapped persons.
    (b) Conformance with Uniform Federal Accessibility Standards. (1) 
Effective as of January 18, 1991, design, construction, or alteration of 
buildings in conformance with sections 3-8 of the Uniform Federal 
Accessibility Standards (USAF) (appendix A to 41 CFR subpart 101-19.6) 
shall be deemed to comply with the requirements of this section with 
respect to those buildings. Departures from particular technical and 
scoping requirements of UFAS by the use of other methods are permitted 
where substantially equivalent or greater access to and usability of the 
building is provided.
    (2) For purposes of this section, section 4.1.6(1)(g) of UFAS shall 
be interpreted to exempt from the requirements of UFAS only mechanical 
rooms and other spaces that, because of their intended use, will not 
require accessibility to the public or beneficiaries or result in the 
employment or residence therein of persons with physical handicaps.
    (3) This section does not require recipients to make building 
alterations that have little likelihood of being accomplished without 
removing or altering a load-bearing structural member.

[44 FR 31018, May 30, 1979, as amended at 55 FR 52138, 52142, Dec. 19, 
1990]



                          Subpart D--Procedures



Sec. 1232.16  Procedures.

    The procedural provisions applicable to title VI of the Civil Rights 
Act of 1964 apply to this part. These procedures are found in 
Secs. 1203.6 through 1203.11 of this title.



PART 1233--INTERGOVERNMENTAL REVIEW OF ACTION PROGRAMS--Table of Contents




Sec.
1233.1  What is the purpose of these regulations?
1233.2  What definitions apply to these regulations?
1233.3  What programs of the Agency are subject to these regulations?

[[Page 167]]

1233.4  [Reserved]
1233.5  What is the Director's obligation with respect to federal 
          interagency coordination?
1233.6  What procedures apply to the selection of programs under these 
          regulations?
1233.7  How does the Director communicate with state and local officials 
          concerning the Agency's programs?
1233.8  How does the Director provide states an opportunity to comment 
          on proposed federal financial assistance?
1233.9  How does the Director receive and respond to comments?
1233.10  How does the Director make efforts to accommodate 
          intergovernmental concerns?
1233.11--1233.12  [Reserved]
1233.13  May the Director waive any provision of these regulations?

    Authority: E.O. 12372, July 14, 1982 (47 FR 30959), as amended April 
8, 1983 (48 FR 15887); sec. 401 of the Intergovernmental Cooperation Act 
of 1968, as amended (31 U.S.C. 6505).

    Source: 48 FR 29284, June 24, 1983, unless otherwise noted.

    Editorial Note: For additional information, see related documents 
published at 47 FR 57369, December 23, 1982, 48 FR 17101, April 21, 
1983, and 48 FR 29096, June 24, 1983.



Sec. 1233.1  What is the purpose of these regulations?

    (a) The regulations in this part implement Executive Order 12372, 
``Intergovernmental Review of Federal Programs,'' issued July 14, 1982, 
and amended on April 8, 1983. These regulations also implement 
applicable provisions of section 401 of the Intergovernmental 
Cooperation Act of 1968.
    (b) These regulations are intended to foster an intergovernmental 
partnership and a strengthened Federalism by relying on state processes 
and on state, areawide, regional and local coordination for review of 
proposed federal financial assistance.
    (c) These regulations are intended to aid the internal management of 
the Agency, and are not intended to create any right or benefit 
enforceable at law by a party against the Agency or its officers.



Sec. 1233.2  What definitions apply to these regulations?

    Agency means ACTION, the National Volunteer Agency.
    Order means Executive Order 12372, issued July 14, 1982, and amended 
April 8, 1983 and titled ``Intergovernmental Review of Federal 
Programs.''
    Director means the Director of ACTION, or an official or employee of 
the Agency acting for the Director under a delegation of authority.
    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust 
Territory of the Pacific Islands.



Sec. 1233.3  What programs of the Agency are subject to these regulations?

    The Director publishes in the Federal Register a list of the 
Agency's programs that are subject to these regulations.
Sec. 1233.4  [Reserved]



Sec. 1233.5  What is the Director's obligation with respect to federal interagency coordination?

    The Director, to the extent practicable, consults with and seeks 
advice from all other substantially affected federal departments and 
agencies in an effort to assure full coordination between such agencies 
and ACTION regarding programs covered under these regulations.



Sec. 1233.6  What procedures apply to the selection of programs under these regulations?

    (a) A state may select any ACTION program published in the Federal 
Register in accordance with Sec. 1233.3 of this part for 
intergovernmental review under these regulations. Each state, before 
selecting programs and activities, shall consult with local elected 
officials.
    (b) Each state that adopts a process shall notify the Director of 
the Agency's programs selected for that process.
    (c) A state may notify the Director of changes in its selections at 
any time. For each change, the state shall submit to the Director an 
assurance that the state has consulted with local elected officials 
regarding the change. The Agency may establish deadlines by which states 
are required to inform the Director of changes in their program 
selections.

[[Page 168]]

    (d) The Director uses a state's process as soon as feasible, 
depending on individual programs, after the Director is notified of its 
selections.



Sec. 1233.7  How does the Director communicate with state and local officials concerning the Agency's programs?

    (a) The Director provides opportunities for consultation by elected 
officials of those state and local governments that would provide the 
nonfederal funds for, or that would be directly affected by, proposed 
federal financial assistance from the Agency. For those programs covered 
by a state process under Sec. 1233.6, the Director, to the extent 
permitted by law:
    (1) Uses the official state process to determine views of state and 
local elected officials; and,
    (2) Communicates with state and local elected officials, through the 
official state process, as early in a program planning cycle as is 
reasonably feasible to explain specific plans and actions.
    (b) The Director provides notice to directly affected state, 
areawide, regional, and local entities in a state of proposed federal 
financial assistance if:
    (1) The state has not adopted a process under the Order; or
    (2) The assistance involves a program not selected for the state 
process.

This notice may be made by publication in the Federal Register, or other 
appropriate means, which the Agency in its discretion deems appropriate.



Sec. 1233.8  How does the Director provide states an opportunity to comment on proposed federal financial assistance?

    (a) Except in unusual circumstances, the Director gives state 
processes or directly affected state, areawide, regional and local 
officials and entities:
    (1) At least 30 days from the date established by the Director to 
comment on proposed federal financial assistance in the form of 
noncompeting continuation awards; and
    (2) At least 60 days from the date established by the Director to 
comment on proposed federal financial assistance other than noncompeting 
continuation awards.
    (b) This section also applies to comments in cases in which the 
review, coordination, and communication with the Agency have been 
delegated.



Sec. 1233.9  How does the Director receive and respond to comments?

    (a) The Director follows the procedures in Sec. 1233.10 if:
    (1) A state office or official is designated to act as a single 
point of contact between a state process and all federal agencies, and
    (2) That office or official transmits a state process recommendation 
for a program selected under Sec. 1233.6.
    (b)(1) The single point of contact is not obligated to transmit 
comments from state, areawide, regional or local officials and entities 
where there is no state process recommendation.
    (2) If a state process recommendation is transmitted by a single 
point of contact, all comments from state, areawide, regional, and local 
officials and entities that differ from it must also be transmitted.
    (c) If a state has not established a process, or is unable to submit 
a state process recommendation, state, areawide, regional and local 
officials and entities may submit comments either to the applicant or to 
the Agency, or both.
    (d) If a program is not selected for a state process, state, 
areawide, regional and local officials and entities may submit comments 
either to the applicant or to the Agency, or both. In addition, if a 
state process recommendation for a nonselected program is transmitted to 
the Agency by the single point of contact, the Director follows the 
prodecures of Sec. 1233.10 of this part.
    (e) The Director considers comments which do not constitute a state 
process recommendation submitted under these regulations and for which 
the Director is not required to apply the procedures of Sec. 1233.10 of 
this part, when such comments are provided by a single point of contact, 
by the applicant, or directly to the Agency by a commenting party.

[[Page 169]]



Sec. 1233.10  How does the Director make efforts to accommodate intergovernmental concerns?

    (a) If a state process provides a state process recommendation to 
the Agency through its single point of contact, the Director either:
    (1) Accepts the recommendation;
    (2) Reaches a mutually agreeable solution with the state process; or
    (3) Provides the single point of contact with a written explanation 
of the Agency's decision, in such form as the Director in his or her 
discretion deems appropriate. The Director may also supplement the 
written explanation by providing the explanation to the single point of 
contact by telephone, other telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the 
Director informs the single point of contact that:
    (1) The Agency will not implement its decision for at least ten days 
after the single point of contact receives the explanation; or
    (2) The Director has reviewed the decision and determined that, 
because of unusual circumstances, the waiting period of at least ten 
days is not feasible.
    (c) For purpose of computing the waiting period under paragraph 
(b)(1) of this section, a single point of contact is presumed to have 
received written notification 5 days after the date of mailing of such 
notification.
Secs. 1233.11--1233.12  [Reserved]



Sec. 1233.13  May the Director waive any provision of these regulations?

    In an emergency, the Director may waive any provision of these 
regulations.



PART 1234--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents




                           Subpart A--General

Sec.
1234.1  Purpose and scope of this part.
1234.2  Scope of subpart.
1234.3  Definitions.
1234.4  Applicability.
1234.5  Effect on other issuances.
1234.6  Additions and exceptions.

                    Subpart B--Pre-Award Requirements

1234.10  Forms for applying for grants.
1234.11  State plans.
1234.12  Special grant or subgrant conditions for ``high-risk'' 
          grantees.

                   Subpart C--Post-Award Requirements

                        Financial Administration

1234.20  Standards for financial management systems.
1234.21  Payment.
1234.22  Allowable costs.
1234.23  Period of availability of funds.
1234.24  Matching or cost sharing.
1234.25  Program income.
1234.26  Non-Federal audit.

                    Changes, Property, and Subawards

1234.30  Changes.
1234.31  Real property.
1234.32  Equipment.
1234.33  Supplies.
1234.34  Copyrights.
1234.35  Subawards to debarred and suspended parties.
1234.36  Procurement.
1234.37  Subgrants.

              Reports, Records, Retention, and Enforcement

1234.40  Monitoring and reporting program performance.
1234.41  Financial reporting.
1234.42  Retention and access requirements for records.
1234.43  Enforcement.
1234.44  Termination for convenience.

                 Subpart D--After-the-Grant Requirements

1234.50  Closeout.
1234.51  Later disallowances and adjustments.
1234.52  Collection of amounts due.

                   Subpart E--Entitlements [Reserved]

    Authority: Pub. L. 93-113; 42 U.S.C. 4951, et seq; 42 U.S.C. 5060.

    Source: 53 FR 8084 and 8087, Mar. 11, 1988, unless otherwise noted.

    Editorial Note: For additional information, see related documents 
published at 49 FR 24958, June 18, 1984, 52 FR 20178, May 29, 1987, and 
53 FR 8028, March 11, 1988.

[[Page 170]]



                           Subpart A--General



Sec. 1234.1  Purpose and scope of this part.

    This part establishes uniform administrative rules for Federal 
grants and cooperative agreements and subawards to State, local and 
Indian tribal governments.



Sec. 1234.2  Scope of subpart.

    This subpart contains general rules pertaining to this part and 
procedures for control of exceptions from this part.



Sec. 1234.3  Definitions.

    As used in this part:
    Accrued expenditures mean the charges incurred by the grantee during 
a given period requiring the provision of funds for: (1) Goods and other 
tangible property received; (2) services performed by employees, 
contractors, subgrantees, subcontractors, and other payees; and (3) 
other amounts becoming owed under programs for which no current services 
or performance is required, such as annuities, insurance claims, and 
other benefit payments.
    Accrued income means the sum of: (1) Earnings during a given period 
from services performed by the grantee and goods and other tangible 
property delivered to purchasers, and (2) amounts becoming owed to the 
grantee for which no current services or performance is required by the 
grantee.
    Acquisition cost of an item of purchased equipment means the net 
invoice unit price of the property including the cost of modifications, 
attachments, accessories, or auxiliary apparatus necessary to make the 
property usable for the purpose for which it was acquired. Other charges 
such as the cost of installation, transportation, taxes, duty or 
protective in-transit insurance, shall be included or excluded from the 
unit acquisition cost in accordance with the grantee's regular 
accounting practices.
    Administrative requirements mean those matters common to grants in 
general, such as financial management, kinds and frequency of reports, 
and retention of records. These are distinguished from ``programmatic'' 
requirements, which concern matters that can be treated only on a 
program-by-program or grant-by-grant basis, such as kinds of activities 
that can be supported by grants under a particular program.
    Awarding agency means (1) with respect to a grant, the Federal 
agency, and (2) with respect to a subgrant, the party that awarded the 
subgrant.
    Cash contributions means the grantee's cash outlay, including the 
outlay of money contributed to the grantee or subgrantee by other public 
agencies and institutions, and private organizations and individuals. 
When authorized by Federal legislation, Federal funds received from 
other assistance agreements may be considered as grantee or subgrantee 
cash contributions.
    Contract means (except as used in the definitions for ``grant'' and 
``subgrant'' in this section and except where qualified by ``Federal'') 
a procurement contract under a grant or subgrant, and means a 
procurement subcontract under a contract.
    Cost sharing or matching means the value of the third party in-kind 
contributions and the portion of the costs of a federally assisted 
project or program not borne by the Federal Government.
    Cost-type contract means a contract or subcontract under a grant in 
which the contractor or subcontractor is paid on the basis of the costs 
it incurs, with or without a fee.
    Equipment means tangible, nonexpendable, personal property having a 
useful life of more than one year and an acquisition cost of $5,000 or 
more per unit. A grantee may use its own definition of equipment 
provided that such definition would at least include all equipment 
defined above.
    Expenditure report means: (1) For nonconstruction grants, the SF-269 
``Financial Status Report'' (or other equivalent report); (2) for 
construction grants, the SF-271 ``Outlay Report and Request for 
Reimbursement'' (or other equivalent report).
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement

[[Page 171]]

Act, 85 Stat 688) certified by the Secretary of the Interior as eligible 
for the special programs and services provided by him through the Bureau 
of Indian Affairs.
    Government means a State or local government or a federally 
recognized Indian tribal government.
    Grant means an award of financial assistance, including cooperative 
agreements, in the form of money, or property in lieu of money, by the 
Federal Government to an eligible grantee. The term does not include 
technical assistance which provides services instead of money, or other 
assistance in the form of revenue sharing, loans, loan guarantees, 
interest subsidies, insurance, or direct appropriations. Also, the term 
does not include assistance, such as a fellowship or other lump sum 
award, which the grantee is not required to account for.
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity is 
designated in the grant award document.
    Local government means a county, municipality, city, town, township, 
local public authority (including any public and Indian housing agency 
under the United States Housing Act of 1937) school district, special 
district, intrastate district, council of governments (whether or not 
incorporated as a nonprofit corporation under state law), any other 
regional or interstate government entity, or any agency or 
instrumentality of a local government.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a given period that will require payment by the grantee during 
the same or a future period.
    OMB means the United States Office of Management and Budget.
    Outlays (expenditures) mean charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of actual cash disbursement for direct 
charges for goods and services, the amount of indirect expense incurred, 
the value of in-kind contributions applied, and the amount of cash 
advances and payments made to contractors and subgrantees. For reports 
prepared on an accrued expenditure basis, outlays are the sum of actual 
cash disbursements, the amount of indirect expense incurred, the value 
of inkind contributions applied, and the new increase (or decrease) in 
the amounts owed by the grantee for goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Percentage of completion method refers to a system under which 
payments are made for construction work according to the percentage of 
completion of the work, rather than to the grantee's cost incurred.
    Prior approval means documentation evidencing consent prior to 
incurring specific cost.
    Real property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Share, when referring to the awarding agency's portion of real 
property, equipment or supplies, means the same percentage as the 
awarding agency's portion of the acquiring party's total costs under the 
grant to which the acquisition costs under the grant to which the 
acquisition cost of the property was charged. Only costs are to be 
counted--not the value of third-party in-kind contributions.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public and Indian housing agency under United States Housing Act of 
1937.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money, made under a grant by a grantee to 
an eligible subgrantee. The term includes financial

[[Page 172]]

assistance when provided by contractual legal agreement, but does not 
include procurement purchases, nor does it include any form of 
assistance which is excluded from the definition of ``grant'' in this 
part.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided.
    Supplies means all tangible personal property other than 
``equipment'' as defined in this part.
    Suspension means depending on the context, either (1) temporary 
withdrawal of the authority to obligate grant funds pending corrective 
action by the grantee or subgrantee or a decision to terminate the 
grant, or (2) an action taken by a suspending official in accordance 
with agency regulations implementing E.O. 12549 to immediately exclude a 
person from participating in grant transactions for a period, pending 
completion of an investigation and such legal or debarment proceedings 
as may ensue.
    Termination means permanent withdrawal of the authority to obligate 
previously-awarded grant funds before that authority would otherwise 
expire. It also means the voluntary relinquishment of that authority by 
the grantee or subgrantee. ``Termination'' does not include: (1) 
Withdrawal of funds awarded on the basis of the grantee's underestimate 
of the unobligated balance in a prior period; (2) Withdrawal of the 
unobligated balance as of the expiration of a grant; (3) Refusal to 
extend a grant or award additional funds, to make a competing or 
noncompeting continuation, renewal, extension, or supplemental award; or 
(4) voiding of a grant upon determination that the award was obtained 
fraudulently, or was otherwise illegal or invalid from inception.
    Terms of a grant or subgrant mean all requirements of the grant or 
subgrant, whether in statute, regulations, or the award document.
    Third party in-kind contributions mean property or services which 
benefit a federally assisted project or program and which are 
contributed by non-Federal third parties without charge to the grantee, 
or a cost-type contractor under the grant agreement.
    Unliquidated obligations for reports prepared on a cash basis mean 
the amount of obligations incurred by the grantee that has not been 
paid. For reports prepared on an accrued expenditure basis, they 
represent the amount of obligations incurred by the grantee for which an 
outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.



Sec. 1234.4  Applicability.

    (a) General. Subparts A through D of this part apply to all grants 
and subgrants to governments, except where inconsistent with Federal 
statutes or with regulations authorized in accordance with the exception 
provision of Sec. 1234.6, or:
    (1) Grants and subgrants to State and local institutions of higher 
education or State and local hospitals.
    (2) The block grants authorized by the Omnibus Budget Reconciliation 
Act of 1981 (Community Services; Preventive Health and Health Services; 
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child 
Health Services; Social Services; Low-Income Home Energy Assistance; 
States' Program of Community Development Block Grants for Small Cities; 
and Elementary and Secondary Education other than programs administered 
by the Secretary of Education under title V, subtitle D, chapter 2, 
section 583--the Secretary's discretionary grant program) and titles I-
III of the Job Training Partnership Act of 1982 and under the Public 
Health Services Act (section 1921), Alcohol and Drug Abuse Treatment and 
Rehabilitation Block Grant and part C of title V, Mental Health Service 
for the Homeless Block Grant).
    (3) Entitlement grants to carry out the following programs of the 
Social Security Act:
    (i) Aid to Needy Families with Dependent Children (title IV-A of the 
Act, not including the Work Incentive

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Program (WIN) authorized by section 402(a)19(G); HHS grants for WIN are 
subject to this part);
    (ii) Child Support Enforcement and Establishment of Paternity (title 
IV-D of the Act);
    (iii) Foster Care and Adoption Assistance (title IV-E of the Act);
    (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and 
XVI-AABD of the Act); and
    (v) Medical Assistance (Medicaid) (title XIX of the Act) not 
including the State Medicaid Fraud Control program authorized by section 
1903(a)(6)(B).
    (4) Entitlement grants under the following programs of The National 
School Lunch Act:
    (i) School Lunch (section 4 of the Act),
    (ii) Commodity Assistance (section 6 of the Act),
    (iii) Special Meal Assistance (section 11 of the Act),
    (iv) Summer Food Service for Children (section 13 of the Act), and
    (v) Child Care Food Program (section 17 of the Act).
    (5) Entitlement grants under the following programs of The Child 
Nutrition Act of 1966:
    (i) Special Milk (section 3 of the Act), and
    (ii) School Breakfast (section 4 of the Act).
    (6) Entitlement grants for State Administrative expenses under The 
Food Stamp Act of 1977 (section 16 of the Act).
    (7) A grant for an experimental, pilot, or demonstration project 
that is also supported by a grant listed in paragraph (a)(3) of this 
section;
    (8) Grant funds awarded under subsection 412(e) of the Immigration 
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the 
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 
1809), for cash assistance, medical assistance, and supplemental 
security income benefits to refugees and entrants and the administrative 
costs of providing the assistance and benefits;
    (9) Grants to local education agencies under 20 U.S.C. 236 through 
241-1(a), and 242 through 244 (portions of the Impact Aid program), 
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for 
Handicapped Children); and
    (10) Payments under the Veterans Administration's State Home Per 
Diem Program (38 U.S.C. 641(a)).
    (b) Entitlement programs. Entitlement programs enumerated above in 
Sec. 1234.4(a) (3) through (8) are subject to Subpart E.



Sec. 1234.5  Effect on other issuances.

    All other grants administration provisions of codified program 
regulations, program manuals, handbooks and other nonregulatory 
materials which are inconsistent with this part are superseded, except 
to the extent they are required by statute, or authorized in accordance 
with the exception provision in Sec. 1234.6.



Sec. 1234.6  Additions and exceptions.

    (a) For classes of grants and grantees subject to this part, Federal 
agencies may not impose additional administrative requirements except in 
codified regulations published in the Federal Register.
    (b) Exceptions for classes of grants or grantees may be authorized 
only by OMB.
    (c) Exceptions on a case-by-case basis and for subgrantees may be 
authorized by the affected Federal agencies.



                    Subpart B--Pre-Award Requirements



Sec. 1234.10  Forms for applying for grants.

    (a) Scope. (1) This section prescribes forms and instructions to be 
used by governmental organizations (except hospitals and institutions of 
higher education operated by a government) in applying for grants. This 
section is not applicable, however, to formula grant programs which do 
not require applicants to apply for funds on a project basis.
    (2) This section applies only to applications to Federal agencies 
for grants, and is not required to be applied by grantees in dealing 
with applicants for subgrants. However, grantees are encouraged to avoid 
more detailed or burdensome application requirements for subgrants.

[[Page 174]]

    (b) Authorized forms and instructions for governmental 
organizations. (1) In applying for grants, applicants shall only use 
standard application forms or those prescribed by the granting agency 
with the approval of OMB under the Paperwork Reduction Act of 1980.
    (2) Applicants are not required to submit more than the original and 
two copies of preapplications or applications.
    (3) Applicants must follow all applicable instructions that bear OMB 
clearance numbers. Federal agencies may specify and describe the 
programs, functions, or activities that will be used to plan, budget, 
and evaluate the work under a grant. Other supplementary instructions 
may be issued only with the approval of OMB to the extent required under 
the Paperwork Reduction Act of 1980. For any standard form, except the 
SF-424 facesheet, Federal agencies may shade out or instruct the 
applicant to disregard any line item that is not needed.
    (4) When a grantee applies for additional funding (such as a 
continuation or supplemental award) or amends a previously submitted 
application, only the affected pages need be submitted. Previously 
submitted pages with information that is still current need not be 
resubmitted.



Sec. 1234.11  State plans.

    (a) Scope. The statutes for some programs require States to submit 
plans before receiving grants. Under regulations implementing Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' States 
are allowed to simplify, consolidate and substitute plans. This section 
contains additional provisions for plans that are subject to regulations 
implementing the Executive order.
    (b) Requirements. A State need meet only Federal administrative or 
programmatic requirements for a plan that are in statutes or codified 
regulations.
    (c) Assurances. In each plan the State will include an assurance 
that the State shall comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding. For this assurance and other assurances required in the 
plan, the State may:
    (1) Cite by number the statutory or regulatory provisions requiring 
the assurances and affirm that it gives the assurances required by those 
provisions,
    (2) Repeat the assurance language in the statutes or regulations, or
    (3) Develop its own language to the extent permitted by law.
    (d) Amendments. A State will amend a plan whenever necessary to 
reflect: (1) New or revised Federal statutes or regulations or (2) a 
material change in any State law, organization, policy, or State agency 
operation. The State will obtain approval for the amendment and its 
effective date but need submit for approval only the amended portions of 
the plan.



Sec. 1234.12  Special grant or subgrant conditions for ``high-risk'' grantees.

    (a) A grantee or subgrantee may be considered ``high risk'' if an 
awarding agency determines that a grantee or subgrantee:
    (1) Has a history of unsatisfactory performance, or
    (2) Is not financially stable, or
    (3) Has a management system which does not meet the management 
standards set forth in this part, or
    (4) Has not conformed to terms and conditions of previous awards, or
    (5) Is otherwise not responsible; and if the awarding agency 
determines that an award will be made, special conditions and/or 
restrictions shall correspond to the high risk condition and shall be 
included in the award.
    (b) Special conditions or restrictions may include:
    (1) Payment on a reimbursement basis;
    (2) Withholding authority to proceed to the next phase until receipt 
of evidence of acceptable performance within a given funding period;
    (3) Requiring additional, more detailed financial reports;
    (4) Additional project monitoring;
    (5) Requiring the grante or subgrantee to obtain technical or 
management assistance; or
    (6) Establishing additional prior approvals.

[[Page 175]]

    (c) If an awarding agency decides to impose such conditions, the 
awarding official will notify the grantee or subgrantee as early as 
possible, in writing, of:
    (1) The nature of the special conditions/restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions and
    (4) The method of requesting reconsideration of the conditions/
restrictions imposed.



                   Subpart C--Post-Award Requirements

                        Financial Administration



Sec. 1234.20  Standards for financial management systems.

    (a) A State must expand and account for grant funds in accordance 
with State laws and procedures for expending and accounting for its own 
funds. Fiscal control and accounting procedures of the State, as well as 
its subgrantees and cost-type contractors, must be sufficient to--
    (1) Permit preparation of reports required by this part and the 
statutes authorizing the grant, and
    (2) Permit the tracing of funds to a level of expenditures adequate 
to establish that such funds have not been used in violation of the 
restrictions and prohibitions of applicable statutes.
    (b) The financial management systems of other grantees and 
subgrantees must meet the following standards:
    (1) Financial reporting. Accurate, current, and complete disclosure 
of the financial results of financially assisted activities must be made 
in accordance with the financial reporting requirements of the grant or 
subgrant.
    (2) Accounting records. Grantees and subgrantees must maintain 
records which adequately identify the source and application of funds 
provided for financially-assisted activities. These records must contain 
information pertaining to grant or subgrant awards and authorizations, 
obligations, unobligated balances, assets, liabilities, outlays or 
expenditures, and income.
    (3) Internal control. Effective control and accountability must be 
maintained for all grant and subgrant cash, real and personal property, 
and other assets. Grantees and subgrantees must adequately safeguard all 
such property and must assure that it is used solely for authorized 
purposes.
    (4) Budget control. Actual expenditures or outlays must be compared 
with budgeted amounts for each grant or subgrant. Financial information 
must be related to performance or productivity data, including the 
development of unit cost information whenever appropriate or 
specifically required in the grant or subgrant agreement. If unit cost 
data are required, estimates based on available documentation will be 
accepted whenever possible.
    (5) Allowable cost. Applicable OMB cost principles, agency program 
regulations, and the terms of grant and subgrant agreements will be 
followed in determining the reasonableness, allowability, and 
allocability of costs.
    (6) Source documentation. Accounting records must be supported by 
such source documentation as cancelled checks, paid bills, payrolls, 
time and attendance records, contract and subgrant award documents, etc.
    (7) Cash management. Procedures for minimizing the time elapsing 
between the transfer of funds from the U.S. Treasury and disbursement by 
grantees and subgrantees must be followed whenever advance payment 
procedures are used. Grantees must establish reasonable procedures to 
ensure the receipt of reports on subgrantees' cash balances and cash 
disbursements in sufficient time to enable them to prepare complete and 
accurate cash transactions reports to the awarding agency. When advances 
are made by letter-of-credit or electronic transfer of funds methods, 
the grantee must make drawdowns as close as possible to the time of 
making disbursements. Grantees must monitor cash drawdowns by their 
subgrantees to assure that they conform substantially to the same 
standards of timing and amount as apply to advances to the grantees.

[[Page 176]]

    (c) An awarding agency may review the adequacy of the financial 
management system of any applicant for financial assistance as part of a 
preaward review or at any time subsequent to award.



Sec. 1234.21  Payment.

    (a) Scope. This section prescribes the basic standard and the 
methods under which a Federal agency will make payments to grantees, and 
grantees will make payments to subgrantees and contractors.
    (b) Basic standard. Methods and procedures for payment shall 
minimize the time elapsing between the transfer of funds and 
disbursement by the grantee or subgrantee, in accordance with Treasury 
regulations at 31 CFR Part 205.
    (c) Advances. Grantees and subgrantees shall be paid in advance, 
provided they maintain or demonstrate the willingness and ability to 
maintain procedures to minimize the time elapsing between the transfer 
of the funds and their disbursement by the grantee or subgrantee.
    (d) Reimbursement. Reimbursement shall be the preferred method when 
the requirements in paragraph (c) of this section are not met. Grantees 
and subgrantees may also be paid by reimbursement for any construction 
grant. Except as otherwise specified in regulation, Federal agencies 
shall not use the percentage of completion method to pay construction 
grants. The grantee or subgrantee may use that method to pay its 
construction contractor, and if it does, the awarding agency's payments 
to the grantee or subgrantee will be based on the grantee's or 
subgrantee's actual rate of disbursement.
    (e) Working capital advances. If a grantee cannot meet the criteria 
for advance payments described in paragraph (c) of this section, and the 
Federal agency has determined that reimbursement is not feasible because 
the grantee lacks sufficient working capital, the awarding agency may 
provide cash or a working capital advance basis. Under this procedure 
the awarding agency shall advance cash to the grantee to cover its 
estimated disbursement needs for an initial period generally geared to 
the grantee's disbursing cycle. Thereafter, the awarding agency shall 
reimburse the grantee for its actual cash disbursements. The working 
capital advance method of payment shall not be used by grantees or 
subgrantees if the reason for using such method is the unwillingness or 
inability of the grantee to provide timely advances to the subgrantee to 
meet the subgrantee's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. (1) Grantees and subgrantees shall disburse repayments to and 
interest earned on a revolving fund before requesting additional cash 
payments for the same activity.
    (2) Except as provided in paragraph (f)(1) of this section, grantees 
and subgrantees shall disburse program income, rebates, refunds, 
contract settlements, audit recoveries and interest earned on such funds 
before requesting additional cash payments.
    (g) Withholding payments. (1) Unless otherwise required by Federal 
statute, awarding agencies shall not withhold payments for proper 
charges incurred by grantees or subgrantees unless--
    (i) The grantee or subgrantee has failed to comply with grant award 
conditions or
    (ii) The grantee or subgrantee is indebted to the United States.
    (2) Cash withheld for failure to comply with grant award condition, 
but without suspension of the grant, shall be released to the grantee 
upon subsequent compliance. When a grant is suspended, payment 
adjustments will be made in accordance with Sec. 1234.43(c).
    (3) A Federal agency shall not make payment to grantees for amounts 
that are withheld by grantees or subgrantees from payment to contractors 
to assure satisfactory completion of work. Payments shall be made by the 
Federal agency when the grantees or subgrantees actually disburse the 
withheld funds to the contractors or to escrow accounts established to 
assure satisfactory completion of work.
    (h) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, grantees 
and subgrantees are encouraged to use minority banks (a bank which is 
owned at least 50 percent

[[Page 177]]

by minority group members). A list of minority owned banks can be 
obtained from the Minority Business Development Agency, Department of 
Commerce, Washington, DC 20230.
    (2) A grantee or subgrantee shall maintain a separate bank account 
only when required by Federal-State agreement.
    (i) Interest earned on advances. Except for interest earned on 
advances of funds exempt under the Intergovernmental Cooperation Act (31 
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C. 
450), grantees and subgrantees shall promptly, but at least quarterly, 
remit interest earned on advances to the Federal agency. The grantee or 
subgrantee may keep interest amounts up to $100 per year for 
administrative expenses.



Sec. 1234.22  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of organization, there 
is a set of Federal principles for determining allowable costs. 
Allowable costs will be determined in accordance with the cost 
principles applicable to the organization incurring the costs. The 
following chart lists the kinds of organizations and the applicable cost 
principles.

------------------------------------------------------------------------
           For the costs of a--                Use the principles in--  
------------------------------------------------------------------------
State, local or Indian tribal government..  OMB Circular A-87.          
Private nonprofit organization other than   OMB Circular A-122.         
 an (1) institution of higher education,                                
 (2) hospital, or (3) organization named                                
 in OMB Circular A-122 as not subject to                                
 that circular.                                                         
Educational institutions..................  OMB Circular A-21.          
For-profit organization other than a        48 CFR Part 31. Contract    
 hospital and an organization named in OBM   Cost Principles and        
 Circular A-122 as not subject to that       Procedures, or uniform cost
 circular.                                   accounting standards that  
                                             comply with cost principles
                                             acceptable to the Federal  
                                             agency.                    
------------------------------------------------------------------------



Sec. 1234.23  Period of availability of funds.

    (a) General. Where a funding period is specified, a grantee may 
charge to the award only costs resulting from obligations of the funding 
period unless carryover of unobligated balances is permitted, in which 
case the carryover balances may be charged for costs resulting from 
obligations of the subsequent funding period.
    (b) Liquidation of obligations. A grantee must liquidate all 
obligations incurred under the award not later than 90 days after the 
end of the funding period (or as specified in a program regulation) to 
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the 
grantee.



Sec. 1234.24  Matching or cost sharing.

    (a) Basic rule: Costs and contributions acceptable. With the 
qualifications and exceptions listed in paragraph (b) of this section, a 
matching or cost sharing requirement may be satisfied by either or both 
of the following:
    (1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable 
costs borne by non-Federal grants or by others cash donations from non-
Federal third parties.
    (2) The value of third party in-kind contributions applicable to the 
period to which the cost sharing or matching requirements applies.
    (b) Qualifications and exceptions--(1) Costs borne by other Federal 
grant agreements. Except as provided by Federal statute, a cost sharing 
or matching requirement may not be met by costs borne by another Federal 
grant. This prohibition does not apply to income earned by a grantee or 
subgrantee from a contract awarded under another Federal grant.

[[Page 178]]

    (2) General revenue sharing. For the purpose of this section, 
general revenue sharing funds distributed under 31 U.S.C. 6702 are not 
considered Federal grant funds.
    (3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or 
matching requirement of a grant agreement if they have been or will be 
counted towards satisfying a cost sharing or matching requirement of 
another Federal grant agreement, a Federal procurement contract, or any 
other award of Federal funds.
    (4) Costs financed by program income. Costs financed by program 
income, as defined in Sec. 1234.25, shall not count towards satisfying a 
cost sharing or matching requirement unless they are expressly permitted 
in the terms of the assistance agreement. (This use of general program 
income is described in Sec. 1234.25(g).)
    (5) Services or property financed by income earned by contractors. 
Contractors under a grant may earn income from the activities carried 
out under the contract in addition to the amounts earned from the party 
awarding the contract. No costs of services or property supported by 
this income may count toward satisfying a cost sharing or matching 
requirement unless other provisions of the grant agreement expressly 
permit this kind of income to be used to meet the requirement.
    (6) Records. Costs and third party in-kind contributions counting 
towards satisfying a cost sharing or matching requirement must be 
verifiable from the records of grantees and subgrantee or cost-type 
contractors. These records must show how the value placed on third party 
in-kind contributions was derived. To the extent feasible, volunteer 
services will be supported by the same methods that the organization 
uses to support the allocability of regular personnel costs.
    (7) Special standards for third party in-kind contributions. (i) 
Third party in-kind contributions count towards satisfying a cost 
sharing or matching requirement only where, if the party receiving the 
contributions were to pay for them, the payments would be allowable 
costs.
    (ii) Some third party in-kind contributions are goods and services 
that, if the grantee, subgrantee, or contractor receiving the 
contribution had to pay for them, the payments would have been an 
indirect costs. Costs sharing or matching credit for such contributions 
shall be given only if the grantee, subgrantee, or contractor has 
established, along with its regular indirect cost rate, a special rate 
for allocating to individual projects or programs the value of the 
contributions.
    (iii) A third party in-kind contribution to a fixed-price contract 
may count towards satisfying a cost sharing or matching requirement only 
if it results in:
    (A) An increase in the services or property provided under the 
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for cost 
sharing or matching purposes will conform to the rules in the succeeding 
sections of this part. If a third party in-kind contribution is a type 
not treated in those sections, the value placed upon it shall be fair 
and reasonable.
    (c) Valuation of donated services--(1) Volunteer services. Unpaid 
services provided to a grantee or subgrantee by individuals will be 
valued at rates consistent with those ordinarily paid for similar work 
in the grantee's or subgrantee's organization. If the grantee or 
subgrantee does not have employees performing similar work, the rates 
will be consistent with those ordinarily paid by other employers for 
similar work in the same labor market. In either case, a reasonable 
amount for fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a 
grantee, subgrantee, or cost-type contractor furnishes free of charge 
the services of an employee in the employee's normal line of work, the 
services will be valued at the employee's regular rate of pay exclusive 
of the employee's fringe benefits and overhead costs. If the services

[[Page 179]]

are in a different line of work, paragraph (c)(1) of this section 
applies.
    (d) Valuation of third party donated supplies and loaned equipment 
or space. (1) If a third party donates supplies, the contribution will 
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a 
building but retains title, the contribution will be valued at the fair 
rental rate of the equipment or space.
    (e) Valuation of third party donated equipment, buildings, and land. 
If a third party donates equipment, buildings, or land, and title passes 
to a grantee or subgrantee, the treatment of the donated property will 
depend upon the purpose of the grant or subgrant, as follows:
    (1) Awards for capital expenditures. If the purpose of the grant or 
subgrant is to assist the grantee or subgrantee in the acquisition of 
property, the market value of that property at the time of donation may 
be counted as cost sharing or matching,
    (2) Other awards. If assisting in the acquisition of property is not 
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of 
this section apply:
    (i) If approval is obtained from the awarding agency, the market 
value at the time of donation of the donated equipment or buildings and 
the fair rental rate of the donated land may be counted as cost sharing 
or matching. In the case of a subgrant, the terms of the grant agreement 
may require that the approval be obtained from the Federal agency as 
well as the grantee. In all cases, the approval may be given only if a 
purchase of the equipment or rental of the land would be approved as an 
allowable direct cost. If any part of the donated property was acquired 
with Federal funds, only the non-federal share of the property may be 
counted as cost-sharing or matching.
    (ii) If approval is not obtained under paragraph (e)(2)(i) of this 
section, no amount may be counted for donated land, and only 
depreciation or use allowances may be counted for donated equipment and 
buildings. The depreciation or use allowances for this property are not 
treated as third party in-kind contributions. Instead, they are treated 
as costs incurred by the grantee or subgrantee. They are computed and 
allocated (usually as indirect costs) in accordance with the cost 
principles specified in Sec. 1234.22, in the same way as depreciation or 
use allowances for purchased equipment and buildings. The amount of 
depreciation or use allowances for donated equipment and buildings is 
based on the property's market value at the time it was donated.
    (f) Valuation of grantee or subgrantee donated real property for 
construction/acquisition. If a grantee or subgrantee donates real 
property for a construction or facilities acquisition project, the 
current market value of that property may be counted as cost sharing or 
matching. If any part of the donated property was acquired with Federal 
funds, only the non-federal share of the property may be counted as cost 
sharing or matching.
    (g) Appraisal of real property. In some cases under paragraphs (d), 
(e) and (f) of this section, it will be necessary to establish the 
market value of land or a building or the fair rental rate of land or of 
space in a building. In these cases, the Federal agency may require the 
market value or fair rental value be set by an independent appraiser, 
and that the value or rate be certified by the grantee. This requirement 
will also be imposed by the grantee on subgrantees.



Sec. 1234.25  Program income.

    (a) General. Grantees are encouraged to earn income to defray 
program costs. Program income includes income from fees for services 
performed, from the use or rental of real or personal property acquired 
with grant funds, from the sale of commodities or items fabricated under 
a grant agreement, and from payments of principal and interest on loans 
made with grant funds. Except as otherwise provided in regulations of 
the Federal agency, program income does not include interest on grant 
funds, rebates, credits, discounts, refunds, etc. and interest earned on 
any of them.
    (b) Definition of program income. Program income means gross income 
received by the grantee or subgrantee directly generated by a grant 
supported activity, or earned only as a result of

[[Page 180]]

the grant agreement during the grant period. ``During the grant period'' 
is the time between the effective date of the award and the ending date 
of the award reflected in the final financial report.
    (c) Cost of generating program income. If authorized by Federal 
regulations or the grant agreement, costs incident to the generation of 
program income may be deducted from gross income to determine program 
income.
    (d) Governmental revenues. Taxes, special assessments, levies, 
fines, and other such revenues raised by a grantee or subgrantee are not 
program income unless the revenues are specifically identified in the 
grant agreement or Federal agency regulations as program income.
    (e) Royalties. Income from royalties and license fees for 
copyrighted material, patents, and inventions developed by a grantee or 
subgrantee is program income only if the revenues are specifically 
identified in the grant agreement or Federal agency regulations as 
program income. (See Sec. 1234.34.)
    (f) Property. Proceeds from the sale of real property or equipment 
will be handled in accordance with the requirements of Secs. 1234.31 and 
1234.32.
    (g) Use of program income. Program income shall be deducted from 
outlays which may be both Federal and non-Federal as described below, 
unless the Federal agency regulations or the grant agreement specify 
another alternative (or a combination of the alternatives). In 
specifying alternatives, the Federal agency may distinguish between 
income earned by the grantee and income earned by subgrantees and 
between the sources, kinds, or amounts of income. When Federal agencies 
authorize the alternatives in paragraphs (g) (2) and (3) of this 
section, program income in excess of any limits stipulated shall also be 
deducted from outlays.
    (1) Deduction. Ordinarily program income shall be deducted from 
total allowable costs to determine the net allowable costs. Program 
income shall be used for current costs unless the Federal agency 
authorizes otherwise. Program income which the grantee did not 
anticipate at the time of the award shall be used to reduce the Federal 
agency and grantee contributions rather than to increase the funds 
committed to the project.
    (2) Addition. When authorized, program income may be added to the 
funds committed to the grant agreement by the Federal agency and the 
grantee. The program income shall be used for the purposes and under the 
conditions of the grant agreement.
    (3) Cost sharing or matching. When authorized, program income may be 
used to meet the cost sharing or matching requirement of the grant 
agreement. The amount of the Federal grant award remains the same.
    (h) Income after the award period. There are no Federal requirements 
governing the disposition of program income earned after the end of the 
award period (i.e., until the ending date of the final financial report, 
see paragraph (a) of this section), unless the terms of the agreement or 
the Federal agency regulations provide otherwise.



Sec. 1234.26  Non-Federal audit.

    (a) Basic rule. Grantees and subgrantees are responsible for 
obtaining audits in accordance with the Single Audit Act of 1984 (31 
U.S.C. 7501-7) and Federal agency implementing regulations. The audits 
shall be made by an independent auditor in accordance with generally 
accepted government auditing standards covering financial and compliance 
audits.
    (b) Subgrantees. State or local governments, as those terms are 
defined for purposes of the Single Audit Act, that receive Federal 
financial assistance and provide $25,000 or more of it in a fiscal year 
to a subgrantee shall:
    (1) Determine whether State or local subgrantees have met the audit 
requirements of the Act and whether subgrantees covered by OMB Circular 
A-110, ``Uniform Requirements for Grants and Other Agreements with 
Institutions of Higher Education, Hospitals and Other Nonprofit 
Organizations'' have met the audit requirement. Commercial contractors 
(private forprofit and private and governmental organizations) providing 
goods and services to State and local governments are not required to 
have a single audit performed. State and local govenments

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should use their own procedures to ensure that the contractor has 
complied with laws and regulations affecting the expenditure of Federal 
funds;
    (2) Determine whether the subgrantee spent Federal assistance funds 
provided in accordance with applicable laws and regulations. This may be 
accomplished by reviewing an audit of the subgrantee made in accordance 
with the Act, Circular A-110, or through other means (e.g., program 
reviews) if the subgrantee has not had such an audit;
    (3) Ensure that appropriate corrective action is taken within six 
months after receipt of the audit report in instance of noncompliance 
with Federal laws and regulations;
    (4) Consider whether subgrantee audits necessitate adjustment of the 
grantee's own records; and
    (5) Require each subgrantee to permit independent auditors to have 
access to the records and financial statements.
    (c) Auditor selection. In arranging for audit services, Sec. 1234.36 
shall be followed.

                    Changes, Property, and Subawards



Sec. 1234.30  Changes.

    (a) General. Grantees and subgrantees are permitted to rebudget 
within the approved direct cost budget to meet unanticipated 
requirements and may make limited program changes to the approved 
project. However, unless waived by the awarding agency, certain types of 
post-award changes in budgets and projects shall require the prior 
written approval of the awarding agency.
    (b) Relation to cost principles. The applicable cost principles (see 
Sec. 1234.22) contain requirements for prior approval of certain types 
of costs. Except where waived, those requirements apply to all grants 
and subgrants even if paragraphs (c) through (f) of this section do not.
    (c) Budget changes--(1) Nonconstruction projects. Except as stated 
in other regulations or an award document, grantees or subgrantees shall 
obtain the prior approval of the awarding agency whenever any of the 
following changes is anticipated under a nonconstruction award:
    (i) Any revision which would result in the need for additional 
funding.
    (ii) Unless waived by the awarding agency, cumulative transfers 
among direct cost categories, or, if applicable, among separately 
budgeted programs, projects, functions, or activities which exceed or 
are expected to exceed ten percent of the current total approved budget, 
whenever the awarding agency's share exceeds $100,000.
    (iii) Transfer of funds allotted for training allowances (i.e., from 
direct payments to trainees to other expense categories).
    (2) Construction projects. Grantees and subgrantees shall obtain 
prior written approval for any budget revision which would result in the 
need for additional funds.
    (3) Combined construction and nonconstruction projects. When a grant 
or subgrant provides funding for both construction and nonconstruction 
activities, the grantee or subgrantee must obtain prior written approval 
from the awarding agency before making any fund or budget transfer from 
nonconstruction to construction or vice versa.
    (d) Programmatic changes. Grantees or subgrantees must obtain the 
prior approval of the awarding agency whenever any of the following 
actions is anticipated:
    (1) Any revision of the scope or objectives of the project 
(regardless of whether there is an associated budget revision requiring 
prior approval).
    (2) Need to extend the period of availability of funds.
    (3) Changes in key persons in cases where specified in an 
application or a grant award. In research projects, a change in the 
project director or principal investigator shall always require approval 
unless waived by the awarding agency.
    (4) Under nonconstruction projects, contracting out, subgranting (if 
authorized by law) or otherwise obtaining the services of a third party 
to perform activities which are central to the purposes of the award. 
This approval requirement is in addition to the approval requirements of 
Sec. 1234.36 but does not apply to the procurement of equipment, 
supplies, and general support services.

[[Page 182]]

    (e) Additional prior approval requirements. The awarding agency may 
not require prior approval for any budget revision which is not 
described in paragraph (c) of this section.
    (f) Requesting prior approval. (1) A request for prior approval of 
any budget revision will be in the same budget formal the grantee used 
in its application and shall be accompanied by a narrative justification 
for the proposed revision.
    (2) A request for a prior approval under the applicable Federal cost 
principles (see Sec. 1234.22) may be made by letter.
    (3) A request by a subgrantee for prior approval will be addressed 
in writing to the grantee. The grantee will promptly review such request 
and shall approve or disapprove the request in writing. A grantee will 
not approve any budget or project revision which is inconsistent with 
the purpose or terms and conditions of the Federal grant to the grantee. 
If the revision, requested by the subgrantee would result in a change to 
the grantee's approved project which requires Federal prior approval, 
the grantee will obtain the Federal agency's approval before approving 
the subgrantee's request.



Sec. 1234.31  Real property.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to real property acquired under a grant or subgrant 
will vest upon acquisition in the grantee or subgrantee respectively.
    (b) Use. Except as otherwise provided by Federal statutes, real 
property will be used for the originally authorized purposes as long as 
needed for that purposes, and the grantee or subgrantee shall not 
dispose of or encumber its title or other interests.
    (c) Disposition. When real property is no longer needed for the 
originally authorized purpose, the grantee or subgrantee will request 
disposition instructions from the awarding agency. The instructions will 
provide for one of the following alternatives:
    (1) Retention of title. Retain title after compensating the awarding 
agency. The amount paid to the awarding agency will be computed by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the fair market value of the property. 
However, in those situations where a grantee or subgrantee is disposing 
of real property acquired with grant funds and acquiring replacement 
real property under the same program, the net proceeds from the 
disposition may be used as an offset to the cost of the replacement 
property.
    (2) Sale of property. Sell the property and compensate the awarding 
agency. The amount due to the awarding agency will be calculated by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the proceeds of the sale after deduction of 
any actual and reasonable selling and fixing-up expenses. If the grant 
is still active, the net proceeds from sale may be offset against the 
original cost of the property. When a grantee or subgrantee is directed 
to sell property, sales procedures shall be followed that provide for 
competition to the extent practicable and result in the highest possible 
return.
    (3) Transfer of title. Transfer title to the awarding agency or to a 
third-party designated/approved by the awarding agency. The grantee or 
subgrantee shall be paid an amount calculated by applying the grantee or 
subgrantee's percentage of participation in the purchase of the real 
property to the current fair market value of the property.



Sec. 1234.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to equipment acquired under a grant or subgrant will 
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment 
acquired under a grant by the State in accordance with State laws and 
procedures. Other grantees and subgrantees will follow paragraphs (c) 
through (e) of this section.
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in 
the program or project for which it was acquired as long as needed, 
whether or not the project or program continues to be supported by 
Federal funds. When

[[Page 183]]

no longer needed for the original program or project, the equipment may 
be used in other activities currently or previously supported by a 
Federal agency.
    (2) The grantee or subgrantee shall also make equipment available 
for use on other projects or programs currently or previously supported 
by the Federal Government, providing such use will not interfere with 
the work on the projects or program for which it was originally 
acquired. First preference for other use shall be given to other 
programs or projects supported by the awarding agency. User fees should 
be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 1234.25(a) to earn 
program income, the grantee or subgrantee must not use equipment 
acquired with grant funds to provide services for a fee to compete 
unfairly with private companies that provide equivalent services, unless 
specifically permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee 
may use the equipment to be replaced as a trade-in or sell the property 
and use the proceeds to offset the cost of the replacement property, 
subject to the approval of the awarding agency.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
with grant funds, until disposition takes place will, as a minimum, meet 
the following requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of property, who holds title, the acquisition date, and cost of 
the property, percentage of Federal participation in the cost of the 
property, the location, use and condition of the property, and any 
ultimate disposition data including the date of disposal and sale price 
of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell 
the property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a grant or subgrant is no longer needed for the original project 
or program or for other activities currently or previously supported by 
a Federal agency, disposition of the equipment will be made as follows:
    (1) Items of equipment with a current per-unit fair market value of 
less than $5,000 may be retained, sold or otherwise disposed of with no 
further obligation to the awarding agency.
    (2) Items of equipment with a current per unit fair market value in 
excess of $5,000 may be retained or sold and the awarding agency shall 
have a right to an amount calculated by multiplying the current market 
value or proceeds from sale by the awarding agency's share of the 
equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate 
disposition actions, the awarding agency may direct the grantee or 
subgrantee to take excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is 
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance 
with Federal agency rules and procedures, and submit an annual inventory 
listing.
    (3) When the equipment is no longer needed, the grantee or 
subgrantee will request disposition instructions from the Federal 
agency.
    (g) Right to transfer title. The Federal awarding agency may reserve 
the right to transfer title to the Federal Government or a third part 
named by the awarding agency when such a third party is otherwise 
eligible under existing statutes. Such transfers shall be subject to the 
following standards:

[[Page 184]]

    (1) The property shall be identified in the grant or otherwise made 
known to the grantee in writing.
    (2) The Federal awarding agency shall issue disposition instruction 
within 120 calendar days after the end of the Federal support of the 
project for which it was acquired. If the Federal awarding agency fails 
to issue disposition instructions within the 120 calendar-day period the 
grantee shall follow Sec. 1234.32(e).
    (3) When title to equipment is transferred, the grantee shall be 
paid an amount calculated by applying the percentage of participation in 
the purchase to the current fair market value of the property.



Sec. 1234.33  Supplies.

    (a) Title. Title to supplies acquired under a grant or subgrant will 
vest, upon acquisition, in the grantee or subgrantee respectively.
    (b) Disposition. If there is a residual inventory of unused supplies 
exceeding $5,000 in total aggregate fair market value upon termination 
or completion of the award, and if the supplies are not needed for any 
other federally sponsored programs or projects, the grantee or 
subgrantee shall compensate the awarding agency for its share.



Sec. 1234.34  Copyrights.

    The Federal awarding agency reserves a royalty-free, nonexclusive, 
and irrevocable license to reproduce, publish or otherwise use, and to 
authorize others to use, for Federal Government purposes:
    (a) The copyright in any work developed under a grant, subgrant, or 
contract under a grant or subgrant; and
    (b) Any rights of copyright to which a grantee, subgrantee or a 
contractor purchases ownership with grant support.



Sec. 1234.35  Subawards to debarred and suspended parties.

    Grantees and subgrantees must not make any award or permit any award 
(subgrant or contract) at any tier to any party which is debarred or 
suspended or is otherwise excluded from or ineligible for participation 
in Federal assistance programs under Executive Order 12549, ``Debarment 
and Suspension.''



Sec. 1234.36  Procurement.

    (a) States. When procuring property and services under a grant, a 
State will follow the same policies and procedures it uses for 
procurements from its non-Federal funds. The State will ensure that 
every purchase order or other contract includes any clauses required by 
Federal statutes and executive orders and their implementing 
regulations. Other grantees and subgrantees will follow paragraphs (b) 
through (i) in this section.
    (b) Procurement standards. (1) Grantees and subgrantees will use 
their own procurement procedures which reflect applicable State and 
local laws and regulations, provided that the procurements conform to 
applicable Federal law and the standards identified in this section.
    (2) Grantees and subgrantees will maintain a contract administration 
system which ensures that contractors perform in accordance with the 
terms, conditions, and specifications of their contracts or purchase 
orders.
    (3) Grantees and subgrantees will maintain a written code of 
standards of conduct governing the performance of their employees 
engaged in the award and administration of contracts. No employee, 
officer or agent of the grantee or subgrantee shall participate in 
selection, or in the award or administration of a contract supported by 
Federal funds if a conflict of interest, real or apparent, would be 
involved. Such a conflict would arise when:
    (i) The employee, officer or agent,
    (ii) Any member of his immediate family,
    (iii) His or her partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm selected for 
award. The grantee's or subgrantee's officers, employees or agents will 
neither solicit nor accept gratuities, favors or anything of monetary 
value from contractors, potential contractors, or parties to 
subagreements. Grantee and subgrantees may set minimum rules where the 
financial interest is not substantial or the gift is an unsolicited item 
of

[[Page 185]]

nominal intrinsic value. To the extent permitted by State or local law 
or regulations, such standards or conduct will provide for penalties, 
sanctions, or other disciplinary actions for violations of such 
standards by the grantee's and subgrantee's officers, employees, or 
agents, or by contractors or their agents. The awarding agency may in 
regulation provide additional prohibitions relative to real, apparent, 
or potential conflicts of interest.
    (4) Grantee and subgrantee procedures will provide for a review of 
proposed procurements to avoid purchase of unnecessary or duplicative 
items. Consideration should be given to consolidating or breaking out 
procurements to obtain a more economical purchase. Where appropriate, an 
analysis will be made of lease versus purchase alternatives, and any 
other appropriate analysis to determine the most economical approach.
    (5) To foster greater economy and efficiency, grantees and 
subgrantees are encouraged to enter into State and local 
intergovernmental agreements for procurement or use of common goods and 
services.
    (6) Grantees and subgrantees are encouraged to use Federal excess 
and surplus property in lieu of purchasing new equipment and property 
whenever such use is feasible and reduces project costs.
    (7) Grantees and subgrantees are encouraged to use value engineering 
clauses in contracts for construction projects of sufficient size to 
offer reasonable opportunities for cost reductions. Value engineering is 
a systematic and creative anaylsis of each contract item or task to 
ensure that its essential function is provided at the overall lower 
cost.
    (8) Grantees and subgrantees will make awards only to responsible 
contractors possessing the ability to perform successfully under the 
terms and conditions of a proposed procurement. Consideration will be 
given to such matters as contractor integrity, compliance with public 
policy, record of past performance, and financial and technical 
resources.
    (9) Grantees and subgrantees will maintain records sufficient to 
detail the significant history of a procurement. These records will 
include, but are not necessarily limited to the following: Rationale for 
the method of procurement, selection of contract type, contractor 
selection or rejection, and the basis for the contract price.
    (10) Grantees and subgrantees will use time and material type 
contracts only--
    (i) After a determination that no other contract is suitable, and
    (ii) If the contract includes a ceiling price that the contractor 
exceeds at its own risk.
    (11) Grantees and subgrantees alone will be responsible, in 
accordance with good administrative practice and sound business 
judgment, for the settlement of all contractual and administrative 
issues arising out of procurements. These issues include, but are not 
limited to source evaluation, protests, disputes, and claims. These 
standards do not relieve the grantee or subgrantee of any contractual 
responsibilities under its contracts. Federal agencies will not 
substitute their judgment for that of the grantee or subgrantee unless 
the matter is primarily a Federal concern. Violations of law will be 
referred to the local, State, or Federal authority having proper 
jurisdiction.
    (12) Grantees and subgrantees will have protest procedures to handle 
and resolve disputes relating to their procurements and shall in all 
instances disclose information regarding the protest to the awarding 
agency. A protestor must exhaust all administrative remedies with the 
grantee and subgrantee before pursuing a protest with the Federal 
agency. Reviews of protests by the Federal agency will be limited to:
    (i) Violations of Federal law or regulations and the standards of 
this section (violations of State or local law will be under the 
jurisdiction of State or local authorities) and
    (ii) Violations of the grantee's or subgrantee's protest procedures 
for failure to review a complaint or protest. Protests received by the 
Federal agency other than those specified above will be referred to the 
grantee or subgrantee.
    (c) Competition. (1) All procurement transactions will be conducted 
in a manner providing full and open competition consistent with the 
standards

[[Page 186]]

of Sec. 1234.36. Some of the situations considered to be restrictive of 
competition include but are not limited to:
    (i) Placing unreasonable requirements on firms in order for them to 
qualify to do business,
    (ii) Requiring unnecessary experience and excessive bonding,
    (iii) Noncompetitive pricing practices between firms or between 
affiliated companies,
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts,
    (v) Organizational conflicts of interest,
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement, and
    (vii) Any arbitrary action in the procurement process.
    (2) Grantees and subgrantees will conduct procurements in a manner 
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or 
proposals, except in those cases where applicable Federal statutes 
expressly mandate or encourage geographic preference. Nothing in this 
section preempts State licensing laws. When contracting for 
architectural and engineering (A/E) services, geographic location may be 
a selection criteria provided its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (3) Grantees will have written selection procedures for procurement 
transactions. These procedures will ensure that all solicitations:
    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured. Such 
description shall not, in competitive procurements, contain features 
which unduly restrict competition. The description may include a 
statement of the qualitative nature of the material, product or service 
to be procured, and when necessary, shall set forth those minimum 
essential characteristics and standards to which it must conform if it 
is to satisfy its intended use. Detailed product specifications should 
be avoided if at all possible. When it is impractical or uneconomical to 
make a clear and accurate description of the technical requirements, a 
``brand name or equal'' description may be used as a means to define the 
performance or other salient requirements of a procurement. The specific 
features of the named brand which must be met by offerors shall be 
clearly stated; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (4) Grantees and subgrantees will ensure that all prequalified lists 
of persons, firms, or products which are used in acquiring goods and 
services are current and include enough qualified sources to ensure 
maximum open and free competition. Also, grantees and subgrantees will 
not preclude potential bidders from qualifying during the solicitation 
period.
    (d) Methods of procurement to be followed--(1) Procurement by small 
purchase procedures. Small purchase procedures are those relatively 
simple and informal procurement methods for securing services, supplies, 
or other property that do not cost more than $25,000 in the aggregate. 
If small purchase procurements are used, price or rate quotations will 
be obtained from an adequate number of qualified sources.
    (2) Procurement by sealed bids (formal advertising). Bids are 
publicly solicited and a firm-fixed-price contract (lump sum or unit 
price) is awarded to the responsible bidder whose bid, conforming with 
all the material terms and conditions of the invitation for bids, is the 
lowest in price. The sealed bid method is the preferred method for 
procuring construction, if the conditions in Sec. 1234.36(d)(2)(i) 
apply.
    (i) In order for sealed bidding to be feasible, the following 
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase 
description is available;
    (B) Two or more responsible bidders are willing and able to compete 
effectively for the business; and
    (C) The procurement lends itself to a firm fixed price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.

[[Page 187]]

    (ii) If sealed bids are used, the following requirements apply:
    (A) The invitation for bids will be publicly advertised and bids 
shall be solicited from an adequate number of known suppliers, providing 
them sufficient time prior to the date set for opening the bids;
    (B) The invitation for bids, which will include any specifications 
and pertinent attachments, shall define the items or services in order 
for the bidder to properly respond;
    (C) All bids will be publicly opened at the time and place 
prescribed in the invitation for bids;
    (D) A firm fixed-price contract award will be made in writing to the 
lowest responsive and responsible bidder. Where specified in bidding 
documents, factors such as discounts, transportation cost, and life 
cycle costs shall be considered in determining which bid is lowest. 
Payment discounts will only be used to determine the low bid when prior 
experience indicates that such discounts are usually taken advantage of; 
and
    (E) Any or all bids may be rejected if there is a sound documented 
reason.
    (3) Procurement by competitive proposals. The technique of 
competitive proposals is normally conducted with more than one source 
submitting an offer, and either a fixed-price or cost-reimbursement type 
contract is awarded. It is generally used when conditions are not 
appropriate for the use of sealed bids. If this method is used, the 
following requirements apply:
    (i) Requests for proposals will be publicized and identify all 
evaluation factors and their relative importance. Any response to 
publicized requests for proposals shall be honored to the maximum extent 
practical;
    (ii) Proposals will be solicited from an adequate number of 
qualified sources;
    (iii) Grantees and subgrantees will have a method for conducting 
technical evaluations of the proposals received and for selecting 
awardees;
    (iv) Awards will be made to the responsible firm whose proposal is 
most advantageous to the program, with price and other factors 
considered; and
    (v) Grantees and subgrantees may use competitive proposal procedures 
for qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby competitors' qualifications are evaluated 
and the most qualified competitor is selected, subject to negotiation of 
fair and reasonable compensation. The method, where price is not used as 
a selection factor, can only be used in procurement of A/E professional 
services. It cannot be used to purchase other types of services though 
A/E firms are a potential source to perform the proposed effort.
    (4) Procurement by noncompetitive proposals is procurement through 
solicitation of a proposal from only one source, or after solicitation 
of a number of sources, competition is determined inadequate.
    (i) Procurement by noncompetitive proposals may be used only when 
the award of a contract is infeasible under small purchase procedures, 
sealed bids or competitive proposals and one of the following 
circumstances applies:
    (A) The item is available only from a single source;
    (B) The public exigency or emergency for the requirement will not 
permit a delay resulting from competitive solicitation.
    (C) The awarding agency authorizes noncompetitive proposals; or
    (D) After solicitation of a number of sources, competition is 
determined inadequate.
    (ii) Cost analysis, i.e., verifying the proposed cost data, the 
projections of the data, and the evaluation of the specific elements of 
costs and profit, is required.
    (iii) Grantees and subgrantees may be required to submit the 
proposed procurement to the awarding agency for pre-award review in 
accordance with paragraph (g) of this section.
    (e) Contracting with small and minority firms, women's business 
enterprise and labor surplus area firms. (1) The grantee and subgrantee 
will take all necessary affirmative steps to assure that minority firms, 
women's business enterprises, and labor surplus area firms are used when 
possible.
    (2) Affirmative steps shall include:
    (i) Placing qualified small and minority businesses and women's 
business enterprises on solicitation lists;

[[Page 188]]

    (ii) Assuring that small and minority businesses, and women's 
business enterprises are solicited whenever they are potential sources;
    (iii) Dividing total requirements, when economically feasible, into 
smaller tasks or quantities to permit maximum participation by small and 
minority business, and women's business enterprises;
    (iv) Establishing delivery schedules, where the requirement permits, 
which encourage participation by small and minority business, and 
women's business enterprises;
    (v) Using the services and assistance of the Small Business 
Administration, and the Minority Business Development Agency of the 
Department of Commerce; and
    (vi) Requiring the prime contractor, if subcontracts are to be let, 
to take the affirmative steps listed in paragraphs (e)(2) (i) through 
(v) of this section.
    (f) Contract cost and price. (1) Grantees and subgrantees must 
perform a cost or price analysis in connection with every procurement 
action including contract modifications. The method and degree of 
analysis is dependent on the facts surrounding the particular 
procurement situation, but as a starting point, grantees must make 
independent estimates before receiving bids or proposals. A cost 
analysis must be performed when the offeror is required to submit the 
elements of his estimated cost, e.g., under professional, consulting, 
and architectural engineering services contracts. A cost analysis will 
be necessary when adequate price competition is lacking, and for sole 
source procurements, including contract modifications or change orders, 
unless price resonableness can be established on the basis of a catalog 
or market price of a commercial product sold in substantial quantities 
to the general public or based on prices set by law or regulation. A 
price analysis will be used in all other instances to determine the 
reasonableness of the proposed contract price.
    (2) Grantees and subgrantees will negotiate profit as a separate 
element of the price for each contract in which there is no price 
competition and in all cases where cost analysis is performed. To 
establish a fair and reasonable profit, consideration will be given to 
the complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit rates 
in the surrounding geographical area for similar work.
    (3) Costs or prices based on estimated costs for contracts under 
grants will be allowable only to the extent that costs incurred or cost 
estimates included in negotiated prices are consistent with Federal cost 
principles (see Sec. 1234.22). Grantees may reference their own cost 
principles that comply with the applicable Federal cost principles.
    (4) The cost plus a percentage of cost and percentage of 
construction cost methods of contracting shall not be used.
    (g) Awarding agency review. (1) Grantees and subgrantees must make 
available, upon request of the awarding agency, technical specifications 
on proposed procurements where the awarding agency believes such review 
is needed to ensure that the item and/or service specified is the one 
being proposed for purchase. This review generally will take place prior 
to the time the specification is incorporated into a solicitation 
document. However, if the grantee or subgrantee desires to have the 
review accomplished after a solication has been developed, the awarding 
agency may still review the specifications, with such review usually 
limited to the technical aspects of the proposed purchase.
    (2) Grantees and subgrantees must on request make available for 
awarding agency pre-award review procurement documents, such as requests 
for proposals or invitations for bids, independent cost estimates, etc., 
when:
    (i) A grantee's or subgrantee's procurement procedures or operation 
fails to comply with the procurement standards in this seciton; or
    (ii) The procurement is expected to exceed $25,000 and is to be 
awarded without competition or only one bid or offer is received in 
response to a solicitation; or
    (iii) The procurement, which is expected to exceed $25,000, 
specifies a ``brand name'' product; or

[[Page 189]]

    (iv) The proposed award over $25,000 is to be awarded to other than 
the apparent low bidder under a sealed bid procurement; or
    (v) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than $25,000.
    (3) A grantee or subgrantee will be exempt from the pre-award review 
in paragraph (g)(2) of this section if the awarding agency determines 
that its procurement systems comply with the standards of this section.
    (i) A grantee or subgrantee may request that its procurement system 
be reviewed by the awarding agency to determine whether its system meets 
these standards in order for its system to be certified. Generally, 
these reviews shall occur where there is a continuous high-dollar 
funding, and third-party contracts are awarded on a regular basis;
    (ii) A grantee or subgrantee may self-certify its procurement 
system. Such self-certification shall not limit the awarding agency's 
right to survey the system. Under a self-certification procedure, 
awarding agencies may wish to rely on written assurances from the 
grantee or subgrantee that it is complying with these standards. A 
grantee or subgrantee will cite specific procedures, regulations, 
standards, etc., as being in compliance with these requirements and have 
its system available for review.
    (h) Bonding requirements. For construction or facility improvement 
contracts or subconstracts exceeding $100,000, the awarding agency may 
accept the bonding policy and requirements of the grantee or subgrantee 
provided the awarding agency has made a determination that the awarding 
agency's interest is adequately protected. If such a determination has 
not been made, the minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder will, upon acceptance of 
his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by law of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (i) Contract provisions. A grantee's and subgrantee's contracts must 
contain provisions in paragraph (i) of this section. Federal agencies 
are permitted to require changes, remedies, changed conditions, access 
and records retention, suspension of work, and other clauses approved by 
the Office of Procurement Policy.
    (1) Administrative, contractual, or legal remedies in instances 
where contractors violate or breach contract terms, and provide for such 
sanctions and penalties as may be appropriate (Contracts other than 
small purchases).
    (2) Termination for cause and for convenience by the grantee or 
subgrantee including the manner by which it will be effected and the 
basis for settlement (All contracts in excess of $10,000).
    (3) Compliance with Executive Order 11246 of September 24, 1965 
entitled ``Equal Employment Opportunity,'' as amended by Executive Order 
11375 of October 13, 1967 and as supplemented in Department of Labor 
regulations (41 CFR chapter 60) (All construction contracts awarded in 
excess of $10,000 by grantees and their contractors or subgrantees).
    (4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 
874) as supplemented in Department of Labor regulations (29 CFR part 3) 
(All contracts and subgrants for construction or repair).
    (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) as 
supplemented by Department of Labor regulations (29 CFR part 5) 
(Construction

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contracts in excess of $2,000 awarded by grantees and subgrantees when 
required by Federal grant program legislation).
    (6) Compliance with sections 103 and 107 of the Contract Work Hours 
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by 
Department of Labor regulations (29 CFR part 5). (Construction contracts 
awarded by grantees and subgrantees in excess of $2,000, and in excess 
of $2,500 for other contracts which involve the employment of mechanics 
or laborers)
    (7) Notice of awarding agency requirements and regulations 
pertaining to reporting.
    (8) Notice of awarding agency requirements and regulations 
pertaining to patent rights with respect to any discovery or invention 
which arises or is developed in the course of or under such contract.
    (9) Awarding agency requirements and regulations pertaining to 
copyrights and rights in data.
    (10) Access by the grantee, the subgrantee, the Federal grantor 
agency, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records of the contractor which are directly pertinent to that specific 
contract for the purpose of making audit, examination, excerpts, and 
transcriptions.
    (11) Retention of all required records for three years after 
grantees or subgrantees make final payments and all other pending 
matters are closed.
    (12) Compliance with all applicable standards, orders, or 
requirements issued under section 306 of the Clear Air Act (42 U.S.C. 
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive 
Order 11738, and Environmental Protection Agency regulations (40 CFR 
part 15) (Contracts, subcontracts, and subgrants of amounts in excess of 
$100,000).
    (13) Mandatory standards and policies relating to energy efficiency 
which are contained in the state energy conservation plan issued in 
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163).



Sec. 1234.37  Subgrants.

    (a) States. States shall follow state law and procedures when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. States shall:
    (1) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations;
    (2) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statute and regulation;
    (3) Ensure that a provision for compliance with Sec. 1234.42 is 
placed in every cost reimbursement subgrant; and
    (4) Conform any advances of grant funds to subgrantees substantially 
to the same standards of timing and amount that apply to cash advances 
by Federal agencies.
    (b) All other grantees. All other grantees shall follow the 
provisions of this part which are applicable to awarding agencies when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. Grantees shall:
    (1) Ensure that every subgrant includes a provision for compliance 
with this part;
    (2) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations; 
and
    (3) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statutes and regulations.
    (c) Exceptions. By their own terms, certain provisions of this part 
do not apply to the award and administration of subgrants:
    (1) Section 1234.10;
    (2) Section 1234.11;
    (3) The letter-of-credit procedures specified in Treasury 
Regulations at 31 CFR part 205, cited in Sec. 1234.21; and
    (4) Section 1234.50.

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              Reports, Records, Retention, and Enforcement



Sec. 1234.40  Monitoring and reporting program performance.

    (a) Monitoring by grantees. Grantees are responsible for managing 
the day-to-day operations of grant and subgrant supported activities. 
Grantees must monitor grant and subgrant supported activities to assure 
compliance with applicable Federal requirements and that performance 
goals are being achieved. Grantee monitoring must cover each program, 
function or activity.
    (b) Nonconstruction performance reports. The Federal agency may, if 
it decides that performance information available from subsequent 
applications contains sufficient information to meet its programmatic 
needs, require the grantee to submit a performance report only upon 
expiration or termination of grant support. Unless waived by the Federal 
agency this report will be due on the same date as the final Financial 
Status Report.
    (1) Grantees shall submit annual performance reports unless the 
awarding agency requires quarterly or semi-annual reports. However, 
performance reports will not be required more frequently than quarterly. 
Annual reports shall be due 90 days after the grant year, quarterly or 
semi-annual reports shall be due 30 days after the reporting period. The 
final performance report will be due 90 days after the expiration or 
termination of grant support. If a justified request is submitted by a 
grantee, the Federal agency may extend the due date for any performance 
report. Additionally, requirements for unnecessary performance reports 
may be waived by the Federal agency.
    (2) Performance reports will contain, for each grant, brief 
information on the following:
    (i) A comparison of actual accomplishments to the objectives 
established for the period. Where the output of the project can be 
quantified, a computation of the cost per unit of output may be required 
if that information will be useful.
    (ii) The reasons for slippage if established objectives were not 
met.
    (iii) Additional pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (3) Grantees will not be required to submit more than the original 
and two copies of performance reports.
    (4) Grantees will adhere to the standards in this section in 
prescribing performance reporting requirements for subgrantees.
    (c) Construction performance reports. For the most part, on-site 
technical inspections and certified percentage-of-completion data are 
relied on heavily by Federal agencies to monitor progress under 
construction grants and subgrants. The Federal agency will require 
additional formal performance reports only when considered necessary, 
and never more frequently than quarterly.
    (d) Significant developments. Events may occur between the scheduled 
performance reporting dates which have significant impact upon the grant 
or subgrant supported activity. In such cases, the grantee must inform 
the Federal agency as soon as the following types of conditions become 
known:
    (1) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the award. This disclosure 
must include a statement of the action taken, or contemplated, and any 
assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more 
beneficial results than originally planned.
    (e) Federal agencies may make site visits as warranted by program 
needs.
    (f) Waivers, extensions. (1) Federal agencies may waive any 
performance report required by this part if not needed.
    (2) The grantee may waive any performance report from a subgrantee 
when not needed. The grantee may extend the due date for any performance 
report from a subgrantee if the grantee will still be able to meet its 
performance reporting obligations to the Federal agency.

[[Page 192]]



Sec. 1234.41  Financial reporting.

    (a) General. (1) Except as provided in paragraphs (a) (2) and (5) of 
this section, grantees will use only the forms specified in paragraphs 
(a) through (e) of this section, and such supplementary or other forms 
as may from time to time be authorized by OMB, for:
    (i) Submitting financial reports to Federal agencies, or
    (ii) Requesting advances or reimbursements when letters of credit 
are not used.
    (2) Grantees need not apply the forms prescribed in this section in 
dealing with their subgrantees. However, grantees shall not impose more 
burdensome requirements on subgrantees.
    (3) Grantees shall follow all applicable standard and supplemental 
Federal agency instructions approved by OMB to the extend required under 
the Paperwork Reduction Act of 1980 for use in connection with forms 
specified in paragraphs (b) through (e) of this section. Federal 
agencies may issue substantive supplementary instructions only with the 
approval of OMB. Federal agencies may shade out or instruct the grantee 
to disregard any line item that the Federal agency finds unnecessary for 
its decisionmaking purposes.
    (4) Grantees will not be required to submit more than the original 
and two copies of forms required under this part.
    (5) Federal agencies may provide computer outputs to grantees to 
expedite or contribute to the accuracy of reporting. Federal agencies 
may accept the required information from grantees in machine usable 
format or computer printouts instead of prescribed forms.
    (6) Federal agencies may waive any report required by this section 
if not needed.
    (7) Federal agencies may extend the due date of any financial report 
upon receiving a justified request from a grantee.
    (b) Financial Status Report--(1) Form. Grantees will use Standard 
Form 269 or 269A, Financial Status Report, to report the status of funds 
for all nonconstruction grants and for construction grants when required 
in accordance with Sec. 1234.41(e)(2)(iii).
    (2) Accounting basis. Each grantee will report program outlays and 
program income on a cash or accrual basis as prescribed by the awarding 
agency. If the Federal agency requires accrual information and the 
grantee's accounting records are not normally kept on the accural basis, 
the grantee shall not be required to convert its accounting system but 
shall develop such accrual information through and analysis of the 
documentation on hand.
    (3) Frequency. The Federal agency may prescribe the frequency of the 
report for each project or program. However, the report will not be 
required more frequently than quarterly. If the Federal agency does not 
specify the frequency of the report, it will be submitted annually. A 
final report will be required upon expiration or termination of grant 
support.
    (4) Due date. When reports are required on a quarterly or semiannual 
basis, they will be due 30 days after the reporting period. When 
required on an annual basis, they will be due 90 days after the grant 
year. Final reports will be due 90 days after the expiration or 
termination of grant support.
    (c) Federal Cash Transactions Report--(1) Form. (i) For grants paid 
by letter or credit, Treasury check advances or electronic transfer of 
funds, the grantee will submit the Standard Form 272, Federal Cash 
Transactions Report, and when necessary, its continuation sheet, 
Standard Form 272a, unless the terms of the award exempt the grantee 
from this requirement.
    (ii) These reports will be used by the Federal agency to monitor 
cash advanced to grantees and to obtain disbursement or outlay 
information for each grant from grantees. The format of the report may 
be adapted as appropriate when reporting is to be accomplished with the 
assistance of automatic data processing equipment provided that the 
information to be submitted is not changed in substance.
    (2) Forecasts of Federal cash requirements. Forecasts of Federal 
cash requirements may be required in the ``Remarks'' section of the 
report.
    (3) Cash in hands of subgrantees. When considered necessary and 
feasible by the Federal agency, grantees may be required to report the 
amount of cash

[[Page 193]]

advances in excess of three days' needs in the hands of their 
subgrantees or contractors and to provide short narrative explanations 
of actions taken by the grantee to reduce the excess balances.
    (4) Frequency and due date. Grantees must submit the report no later 
than 15 working days following the end of each quarter. However, where 
an advance either by letter of credit or electronic transfer of funds is 
authorized at an annualized rate of one million dollars or more, the 
Federal agency may require the report to be submitted within 15 working 
days following the end of each month.
    (d) Request for advance or reimbursement--(1) Advance payments. 
Requests for Treasury check advance payments will be submitted on 
Standard Form 270, Request for Advance or Reimbursement. (This form will 
not be used for drawdowns under a letter of credit, electronic funds 
transfer or when Treasury check advance payments are made to the grantee 
automatically on a predetermined basis.)
    (2) Reimbursements. Requests for reimbursement under nonconstruction 
grants will also be submitted on Standard Form 270. (For reimbursement 
requests under construction grants, see paragraph (e)(1) of this 
section.)
    (3) The frequency for submitting payment requests is treated in 
Sec. 1234.41(b)(3).
    (e) Outlay report and request for reimbursement for construction 
programs. (1) Grants that support construction activities paid by 
reimbursement method. (i) Requests for reimbursement under construction 
grants will be submitted on Standard Form 271, Outlay Report and Request 
for Reimbursement for Construction Programs. Federal agencies may, 
however, prescribe the Request for Advance or Reimbursement form, 
specified in Sec. 1234.41(d), instead of this form.
    (ii) The frequency for submitting reimbursement requests is treated 
in Sec. 1234.41(b)(3).
    (2) Grants that support construction activities paid by letter of 
credit, electronic funds transfer or Treasury check advance. (i) When a 
construction grant is paid by letter of credit, electronic funds 
transfer or Treasury check advances, the grantee will report its outlays 
to the Federal agency using Standard Form 271, Outlay Report and Request 
for Reimbursement for Construction Programs. The Federal agency will 
provide any necessary special instruction. However, frequency and due 
date shall be governed by Sec. 1234.41(b) (3) and (4).
    (ii) When a construction grant is paid by Treasury check advances 
based on periodic requests from the grantee, the advances will be 
requested on the form specified in Sec. 1234.41(d).
    (iii) The Federal agency may substitute the Financial Status Report 
specified in Sec. 1234.41(b) for the Outlay Report and Request for 
Reimbursement for Construction Programs.
    (3) Accounting basis. The accounting basis for the Outlay Report and 
Request for Reimbursement for Construction Programs shall be governed by 
Sec. 1234.41(b)(2).



Sec. 1234.42  Retention and access requirements for records.

    (a) Applicability. (1) This section applies to all financial and 
programmatic records, supporting documents, statistical records, and 
other records of grantees or subgrantees which are:
    (i) Required to be maintained by the terms of this part, program 
regulations or the grant agreement, or
    (ii) Otherwise reasonably considered as pertinent to program 
regulations or the grant agreement.
    (2) This section does not apply to records maintained by contractors 
or subcontractors. For a requirement to place a provision concerning 
records in certain kinds of contracts, see Sec. 1234.36(i)(10).
    (b) Length of retention period. (1) Except as otherwise provided, 
records must be retained for three years from the starting date 
specified in paragraph (c) of this section.
    (2) If any litigation, claim, negotiation, audit or other action 
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action 
and resolution of all issues which arise from it, or until the end of 
the regular 3-year period, whichever is later.

[[Page 194]]

    (3) To avoid duplicate recordkeeping, awarding agencies may make 
special arrangements with grantees and subgrantees to retain any records 
which are continuously needed for joint use. The awarding agency will 
request transfer of records to its custody when it determines that the 
records possess long-term retention value. When the records are 
transferred to or maintained by the Federal agency, the 3-year retention 
requirement is not applicable to the grantee or subgrantee.
    (c) Starting date of retention period--(1) General. When grant 
support is continued or renewed at annual or other intervals, the 
retention period for the records of each funding period starts on the 
day the grantee or subgrantee submits to the awarding agency its single 
or last expenditure report for that period. However, if grant support is 
continued or renewed quarterly, the retention period for each year's 
records starts on the day the grantee submits its expenditure report for 
the last quarter of the Federal fiscal year. In all other cases, the 
retention period starts on the day the grantee submits its final 
expenditure report. If an expenditure report has been waived, the 
retention period starts on the day the report would have been due.
    (2) Real property and equipment records. The retention period for 
real property and equipment records starts from the date of the 
disposition or replacement or transfer at the direction of the awarding 
agency.
    (3) Records for income transactions after grant or subgrant support. 
In some cases grantees must report income after the period of grant 
support. Where there is such a requirement, the retention period for the 
records pertaining to the earning of the income starts from the end of 
the grantee's fiscal year in which the income is earned.
    (4) Indirect cost rate proposals, cost allocations plans, etc. This 
paragraph applies to the following types of documents, and their 
supporting records: indirect cost rate computations or proposals, cost 
allocation plans, and any similar accounting computations of the rate at 
which a particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (i) If submitted for negotiation. If the proposal, plan, or other 
computation is required to be submitted to the Federal Government (or to 
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of 
such submission.
    (ii) If not submitted for negotiation. If the proposal, plan, or 
other computation is not required to be submitted to the Federal 
Government (or to the grantee) for negotiation purposes, then the 3-year 
retention period for the proposal plan, or computation and its 
supporting records starts from end of the fiscal year (or other 
accounting period) covered by the proposal, plan, or other computation.
    (d) Substitution of microfilm. Copies made by microfilming, 
photocopying, or similar methods may be substituted for the original 
records.
    (e) Access to records--(1) Records of grantees and subgrantees. The 
awarding agency and the Comptroller General of the United States, or any 
of their authorized representatives, shall have the right of access to 
any pertinent books, documents, papers, or other records of grantees and 
subgrantees which are pertinent to the grant, in order to make audits, 
examinations, excerpts, and transcripts.
    (2) Expiration of right of access. The rights of access in this 
section must not be limited to the required retention period but shall 
last as long as the records are retained.
    (f) Restrictions on public access. The Federal Freedom of 
Information Act (5 U.S.C. 552) does not apply to records Unless required 
by Federal, State, or local law, grantees and subgrantees are not 
required to permit public access to their records.



Sec. 1234.43  Enforcement.

    (a) Remedies for noncompliance. If a grantee or subgrantee 
materially fails to comply with any term of an award, whether stated in 
a Federal statute or regulation, an assurance, in a State plan or 
application, a notice of award, or elsewhere, the awarding agency may 
take one or more of the following actions, as appropriate in the 
circumstances:

[[Page 195]]

    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee or more severe enforcement 
action by the awarding agency,
    (2) Disallow (that is, deny both use of funds and matching credit 
for) all or part of the cost of the activity or action not in 
compliance,
    (3) Wholly or partly suspend or terminate the current award for the 
grantee's or subgrantee's program,
    (4) Withhold further awards for the program, or
    (5) Take other remedies that may be legally available.
    (b) Hearings, appeals. In taking an enforcement action, the awarding 
agency will provide the grantee or subgrantee an opportunity for such 
hearing, appeal, or other administrative proceeding to which the grantee 
or subgrantee is entitled under any statute or regulation applicable to 
the action involved.
    (c) Effects of suspension and termination. Costs of grantee or 
subgrantee resulting from obligations incurred by the grantee or 
subgrantee during a suspension or after termination of an award are not 
allowable unless the awarding agency expressly authorizes them in the 
notice of suspension or termination or subsequently. Other grantee or 
subgrantee costs during suspension or after termination which are 
necessary and not reasonably avoidable are allowable if:
    (1) The costs result from obligations which were properly incurred 
by the grantee or subgrantee before the effective date of suspension or 
termination, are not in anticipation of it, and, in the case of a 
termination, are noncancellable, and,
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude grantee or subgrantee from being subject to 
``Debarment and Suspension'' under E.O. 12549 (see Sec. 1234.35).



Sec. 1234.44  Termination for convenience.

    Except as provided in Sec. 1234.43 awards may be terminated in whole 
or in part only as follows:
    (a) By the awarding agency with the consent of the grantee or 
subgrantee in which case the two parties shall agree upon the 
termination conditions, including the effective date and in the case of 
partial termination, the portion to be terminated, or
    (b) By the grantee or subgrantee upon written notification to the 
awarding agency, setting forth the reasons for such termination, the 
effective date, and in the case of partial termination, the portion to 
be terminated. However, if, in the case of a partial termination, the 
awarding agency determines that the remaining portion of the award will 
not accomplish the purposes for which the award was made, the awarding 
agency may terminate the award in its entirety under either Sec. 1234.43 
or paragraph (a) of this section.



                 Subpart D--After-The-Grant Requirements



Sec. 1234.50  Closeout.

    (a) General. The Federal agency will close out the award when it 
determines that all applicable administrative actions and all required 
work of the grant has been completed.
    (b) Reports. Within 90 days after the expiration or termination of 
the grant, the grantee must submit all financial, performance, and other 
reports required as a condition of the grant. Upon request by the 
grantee, Federal agencies may extend this timeframe. These may include 
but are not limited to:
    (1) Final performance or progress report.
    (2) Financial Status Report (SF 269) or Outlay Report and Request 
for Reimbursement for Construction Programs (SF-271) (as applicable).
    (3) Final request for payment (SF-270) (if applicable).
    (4) Invention disclosure (if applicable).
    (5) Federally-owned property report:
In accordance with Sec. 1234.32(f), a grantee must submit an inventory 
of all federally owned property (as distinct from

[[Page 196]]

property acquired with grant funds) for which it is accountable and 
request disposition instructions from the Federal agency of property no 
longer needed.
    (c) Cost adjustment. The Federal agency will, within 90 days after 
receipt of reports in paragraph (b) of this section, make upward or 
downward adjustments to the allowable costs.
    (d) Cash adjustments. (1) The Federal agency will make prompt 
payment to the grantee for allowable reimbursable costs.
    (2) The grantee must immediately refund to the Federal agency any 
balance of unobligated (unencumbered) cash advanced that is not 
authorized to be retained for use on other grants.



Sec. 1234.51  Later disallowances and adjustments.

    The closeout of a grant does not affect:
    (a) The Federal agency's right to disallow costs and recover funds 
on the basis of a later audit or other review;
    (b) The grantee's obligation to return any funds due as a result of 
later refunds, corrections, or other transactions;
    (c) Records retention as required in Sec. 1234.42;
    (d) Property management requirements in Secs. 1234.31 and 1234.32; 
and
    (e) Audit requirements in Sec. 1234.26.



Sec. 1234.52  Collection of amounts due.

    (a) Any funds paid to a grantee in excess of the amount to which the 
grantee is finally determined to be entitled under the terms of the 
award constitute a debt to the Federal Government. If not paid within a 
reasonable period after demand, the Federal agency may reduce the debt 
by:
    (1) Making an adminstrative offset against other requests for 
reimbursements,
    (2) Withholding advance payments otherwise due to the grantee, or
    (3) Other action permitted by law.
    (b) Except where otherwise provided by statutes or regulations, the 
Federal agency will charge interest on an overdue debt in accordance 
with the Federal Claims Collection Standards (4 CFR Ch. II). The date 
from which interest is computed is not extended by litigation or the 
filing of any form of appeal.



                    Subpart E--Entitlement [Reserved]



PART 1235--LOCALLY GENERATED CONTRIBUTIONS IN OLDER AMERICAN VOLUNTEER PROGRAMS--Table of Contents




Sec.
1235.1  Definitions.
1235.2  Implementation guidance.
1235.3  Statement of policy.

Appendix to Part 1235--Procedures to Resolve Questioned Costs

    Authority: 42 U.S.C. 5024; 42 U.S.C. 5060.

    Source: 56 FR 4732, Feb. 6, 1991, unless otherwise noted.



Sec. 1235.1  Definitions.

    As used in this part and in section 224 of the Domestic Volunteer 
Service Act of 1973, as amended, the following definitions shall apply:
    (a) Director means the Director of ACTION.
    (b) Locally Generated Contributions means all contributions 
generated by the grantee in support of the grant, including non-ACTION 
Federal, State, local government and privately raised contributions.
    (c) Amount Required by the Director means the proportion of the non-
Federal contribution (including in-kind contributions) for a grant or 
contract made under the Domestic Volunteer Service Act of 1973, as 
amended, required by the Director in order to receive ACTION funds. This 
proportion is generally 10% for the Foster Grandparent Program/Senior 
Companion Program (FGP/SCP) and generally 10%, 20% and 30% for the 
Retired Senior Volunteer Program (RSVP) in the first, second, and 
subsequent years respectively. The ``amount required by the Director'' 
is also called the ``local match.''
    (d) In Excess of the Amount Required by the Director means of the 
total locally generated contributions, the amount over and above the 
percentage match (generally 10% for FGP/SCP and 10%, 20% and 30% for 
RSVP in the first,

[[Page 197]]

second, and subsequent years respectively) required by the Director of 
ACTION to be raised from non-ACTION sources to support the grant.
    (e) Inconsistent with the Provisions of This Act means expenditures 
not in support of ACTION programs, as defined by the Domestic Volunteer 
Service Act of 1973, as amended. For example:
    (1) Inconsistency with the age threshold for volunteers for all 
Older American Volunteer Programs (OAVP);
    (2) Inconsistency with the low income test for the FGP and SCP 
programs;
    (3) Variations from the approved stipend levels for the FGP and SCP 
programs;
    (4) Inconsistency with the prohibition against political activity 
under all the OAVP programs; and/or
    (5) Unreasonable cost for a low-cost volunteer program.



Sec. 1235.2  Implementation guidance.

    ACTION's implementation of section 224 of the DVSA is based on 
fundamental principles regarding the Congressional intent of the Section 
as well as the Executive Branch's policy on Federal financial assistance 
to grantees. These principles include:
    (a) That ACTION may not restrict grantees' use of excess 
contributions as long as those expenditures are ``not inconsistent'' 
with the Domestic Volunteer Service Act of 1973, as amended;
    (b) That grantees are to fully account for and document expenditures 
of non-Federal contributions, regardless of whether they are used to 
meet ACTION's local match requirement or are in excess of the 
requirement; and
    (c) That all expenditures in support of a Federal grant can be 
audited by the responsible Federal Agency or by independent auditors 
performing audits pursuant to OMB Circulars A-128 and A-133. Copies of 
OMB Circulars A-128 and A-133 are available at ACTION, 1100 Vermont 
Avenue, NW., Room 9200, Washington, DC 20525.



Sec. 1235.3  Statement of policy.

    (a) Expenditures of locally generated non-Federal contributions 
required by the Director as matching funds must meet the requirements 
specified in ACTION's Grant Management and Program Operations Handbook, 
ACTION Order 2650.2, as amended, and the Domestic Volunteer Service Act 
of 1973, as amended. Copies of ACTION's Grants Management and Program 
Operations Handbook, ACTION Order 2650.2, as amended, are available at 
ACTION, 1100 Vermont Avenue, NW., Room 9200, Washington, DC 20525.
    (b) All expenditures by the grantee of Federal and non-Federal funds 
(including expenditures from excess locally generated contributions) in 
support of the grant are subject to ACTION authorized audits.
    (c) ACTION will not restrict the manner in which locally generated 
contributions in excess of the required match are expended if these 
expenditures are not inconsistent with the Domestic Volunteer Service 
Act of 1973, as amended.

      Appendix to Part 1235--Procedures to Resolve Questioned Costs

    I. Because implementation of section 224 may impact on how 
questioned costs are treated when raised in the context of an audit or 
program monitoring exercise, this appendix explains how questioned costs 
will be resolved. This part does not create any new auditing 
requirements.
    II. All expenditures in support of a federal grant may be reviewed 
by an authorized audit or program monitoring review. Adequate financial 
records and supporting documentation must be maintained for both cash 
and in-kind contributions. (See ACTION's Grants Management Handbook for 
Grantees, ACTION Order 2650.2)
    III. Three definitions are important to understand in relation to 
resolution of questioned costs:
    (a) The term ``questioned cost'', pursuant to the Inspector General 
Act of 1978, as amended, 5 U.S.C. Appendix 3, means an expenditure of 
grant funds that is questioned because of:
    (1) An alleged violation of a provision of the Domestic Volunteer 
Service Act of 1973, as amended, or other law, regulation, or grant 
governing the expenditure of funds by the grantee;
    (2) A finding that at the time of an audit or program review the 
cost is not supported by adequate documentation; or
    (3) A finding that the expenditure of funds for the intended purpose 
is unnecessary or unreasonable.
    (b) The term ``disallowed cost'' means a questioned cost related to 
federal or local

[[Page 198]]

match expenditures that ACTION management, in a management decision, has 
sustained or agreed should not be charged to the Government.
    (c) The term ``program finding'' means a questioned cost identified 
as from the grantee's excess locally generated contributions which is 
referred to ACTION program management for consideration.
    IV. When costs are questioned from locally generated contributions, 
a distinction will be made between costs as part of the local match and 
costs as part of the excess contribution.
    V. Normally, when expenditures of Federal or non-Federal local match 
funds are questioned, a management decision is made to either allow or 
disallow the costs. When an expenditure of excess locally generated 
funds is questioned, however, it will not be treated as a potential 
disallowed cost but identified as a program finding and referred to 
ACTION program management for resolution.
    VI. Program findings may include, but are not limited to:
    (a) Inadequate records to document the expenditures and provide 
assurance of the grantee's internal controls over the use of its cash 
and in-kind contributions; and
    (b) Evidence that expenditures were made that are inconsistent with 
the Domestic Volunteer Service Act of 1973, as amended.
    VII. Once program findings are determined by ACTION program 
management, decisions may be made to take corrective steps, including 
but not limited to:
    (a) Requiring the grantee to adhere to stated program goals and 
objectives as a condition for future funding;
    (b) Requiring the grantee to adopt a stronger financial management 
and control system.

Based on past experience, it is expected that corrective steps will be 
needed only in rare instances.
    VIII. If the grantee has raised locally generated contributions in 
excess of the matching requirement and those expenditures are not 
questioned, and are consistent with the DVSA of 1973, as amended, for 
local match expenditures, they may be substituted for any disallowed 
portion of local match costs in order for the grantee to meet its 
matching requirement.

[[Page 199]]



CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 
                           AND HUMAN SERVICES




  --------------------------------------------------------------------

 SUBCHAPTER A--OFFICE OF HUMAN DEVELOPMENT SERVICES, GENERAL PROVISIONS 
                               [RESERVED]
SUBCHAPTER B--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, HEAD 
                              START PROGRAM
Part                                                                Page
1301            Head Start grants administration............         201
1302            Policies and procedures for selection, 
                    initial funding, and refunding of Head 
                    Start grantees, and for selection of 
                    replacement grantees....................         208
1303            Appeal Procedures for Head Start grantees 
                    and current or prospective delegate 
                    agencies................................         212
1304            Program performance standards for operation 
                    of Head Start programs by grantees and 
                    delegate agencies.......................         225
1305            Eligibility, recruitment, selection, 
                    enrollment and attendance in Head Start.         242
1306            Head Start staffing requirements and program 
                    options.................................         247
1308            Head Start program performance standards on 
                    services for children with disabilities.         253
   SUBCHAPTER C--THE ADMINISTRATION ON AGING, OLDER AMERICANS PROGRAMS
1321            Grants to State and community programs on 
                    aging...................................         283
1326            Grants to Indian tribes for support and 
                    nutrition services......................         298

[[Page 200]]

1328            Grants for supportive and nutritional 
                    services to older Hawaiian natives......         302
 SUBCHAPTER D--THE ADMINISTRATION FOR NATIVE AMERICANS, NATIVE AMERICAN 
                                PROGRAMS
1336            Native American Programs....................         307
SUBCHAPTER E--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, CHILD 
           ABUSE AND NEGLECT PREVENTION AND TREATMENT PROGRAM
1340            Child abuse and neglect prevention and 
                    treatment...............................         321
   SUBCHAPTER F--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, 
                    FAMILY AND YOUTH SERVICES BUREAU
1351            Runaway and Homeless Youth Program..........         335
   SUBCHAPTER G--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, 
  FOSTER CARE MAINTENANCE PAYMENTS, ADOPTION ASSISTANCE, CHILD WELFARE 
                                SERVICES
1355            General.....................................         340
1356            Requirements applicable to Title IV-E.......         365
1357            Requirements applicable to Title IV-B.......         376
     SUBCHAPTER H--FAMILY VIOLENCE PREVENTION AND SERVICES PROGRAMS
1370            Family violence prevention and services 
                    programs................................         382
    SUBCHAPTER I--THE ADMINISTRATION ON DEVELOPMENTAL DISABILITIES, 
                   DEVELOPMENTAL DISABILITIES PROGRAM
1385            Requirements applicable to the developmental 
                    disabilities program....................         383
1386            Formula Grant Programs......................         388
1387            Projects of national significance...........         412
1388            The University affiliated programs (Eff. 
                    Oct. 30, 1996)..........................         412
                        SUBCHAPTER J--[RESERVED]
                        SUBCHAPTER K--[RESERVED]
                               Sec. 1301.2

[[Page 201]]



 SUBCHAPTER A--OFFICE OF HUMAN DEVELOPMENT SERVICES, GENERAL PROVISIONS 
                               [RESERVED]





SUBCHAPTER B--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, HEAD 
                              START PROGRAM





PART 1301--HEAD START GRANTS ADMINISTRATION--Table of Contents




                           Subpart A--General

Sec.
1301.1  Purpose and scope.
1301.2  Definitions.

                     Subpart B--General Requirements

1301.10  General.
1301.11  Insurance and bonding.
1301.12  Annual audit of Head Start programs.
1301.13  Accounting system certification.

                 Subpart C--Federal Financial Assistance

1301.20  Matching requirements.
1301.21  Criteria for increase in Federal financial assistance.

             Subpart D--Personnel and General Administration

1301.30  General requirements.
1301.31  Personnel policies.
1301.32  Limitations on costs of development and administration of a 
          Head Start program.
1301.33  Delegation of program operations.
1301.34  Grantee appeals.

    Authority: 42 U.S.C. 9831 et seq.

    Source: 44 FR 24061, Apr. 24, 1979, unless otherwise noted.



                           Subpart A--General



Sec. 1301.1  Purpose and scope.

    This part establishes regulations applicable to program 
administration and grants management for all grants under the Act, 
including grants for technical assistance and training and grants for 
research, demonstration, and pilot projects.



Sec. 1301.2  Definitions.

    For the purposes of this part, unless the context requires 
otherwise:
    Act means title V of the Economic Opportunity Act of 1964, as 
amended.
    Budget period means the interval of time, into which a multi-year 
period of assistance (project period) is divided for budgetary and 
funding purposes.
    Community means a city, county, a multi-city or multi-county unit 
within a state, an Indian reservation, or any neighborhood or other 
geographic area (irrespective of boundaries or political subdivisions) 
which provides a suitable organizational base and possesses the 
commonality of interest needed to operate a Head Start program.
    Delegate agency means a public or private non-profit organization or 
agency to which a grantee has delegated all or part of its 
responsibility for operating a Head Start program.
    Development and administrative costs mean costs incurred in 
accordance with an approved Head Start budget which do not directly 
relate to the provision of program component services, including 
services to children with disabilities, as set forth and described in 
the Head Start program performance standards (45 CFR part 1304).
    Dual benefit costs mean costs incurred in accordance with an 
approved Head Start budget which directly relate to both development and 
administrative functions and to the program component services, 
including services to children with disabilities, as set forth and 
described in the Head Start program performance standards (45 CFR part 
1304).
    Head Start Agency or ``grantee'' means a local public or private 
non-profit agency designated to operate a Head Start program by the 
responsible HHS official, in accordance with part 1302 of this chapter.
    Head Start program means a program, funded under the Act and carried 
out by a Head Start agency or a delegate agency, that provides ongoing 
comprehensive child development services.
    Independent auditor means an individual accountant or an accounting 
firm,

[[Page 202]]

public or private agency, association, corporation, or partnership, that 
is sufficiently independent of the agency being audited to render 
objective and unbiased opinions, conclusions, and judgments.
    Indirect costs mean those costs of a Head Start agency, as approved 
by the cognizant agency, the agency which has authority to set the 
grantee's indirect cost rate, which are not readily identifiable with a 
particular project or program but nevertheless are necessary to the 
general operation of the agency and the conduct of its activities.
    Major disaster means any natural disaster or catastrophe which is of 
such severity and magnitude as to directly affect the capability of the 
Head Start agency of agencies providing Head Start programs to the 
damaged community to continue the programs without an increase in the 
Federal share above 80 percent.
    Program costs mean costs incurred in accordance with an approved 
Head Start budget which directly relate to the provision of program 
component services, including services to children with disabilities, as 
set forth and described in the Head Start Program Performance Standards 
(45 CFR part 1304).
    Responsible HHS official means the official of the Department of 
Health and Human Services who has authority to make grants under the 
Act.
    Total approved costs mean the sum of all costs of the Head Start 
program approved for a given budget period by the Administration on 
Children, Youth and Families, as indicated on the Financial Assistance 
Award. Total approved costs consist of the Federal share plus any 
approved non-Federal share, including non-Federal share above the 
statutory minimum.

[44 FR 24061, Apr. 24, 1979, as amended at 57 FR 41884, Sept. 14, 1992]



                     Subpart B--General Requirements



Sec. 1301.10  General.

    (a) Except as specified in paragraph (b) of this section, the 
following HHS regulations shall apply to all grants made under the Act:

    45 CFR part 16 Department grant appeals process (except as provided 
in Sec. 1301.34)
    45 CFR part 46 Protection of Human Subjects
    45 CFR part 74 Administration of grants
    45 CFR part 75 Informal grant appeals procedures (Indirect cost 
rates and other cost allocations)
    45 CFR part 80 Nondiscrimination under programs receiving Federal 
assistance through the Department of Health and Human Services--
Effectuation of title VI of the Civil Rights Act of 1964
    45 CFR part 81 Practice and procedure for hearings under part 80
    45 CFR part 84 Nondiscrimination on the basis of handicap in 
Federally assisted programs.

    (b) 45 CFR part 74 is superseded as follows:
    (1) Section 1301.11 of this subpart supersedes Sec. 74.15 of part 74 
with respect to insurance and bonding of private, non-profit Head Start 
agencies; and
    (2) Section 1301.12 of this subpart supersedes Sec. 74.61 of part 74 
with respect to audit requirements for all Head Start agencies.



Sec. 1301.11  Insurance and bonding.

    (a) Private nonprofit Head Start agencies and their delegate 
agencies shall carry reasonable amounts of student accident insurance, 
liability insurance for accidents of their premises, and transportation 
liability insurance.
    (b) Private nonprofit Head Start and delegate agencies shall make 
arrangements for bonding officials and employees authorized to disburse 
program funds.



Sec. 1301.12  Annual audit of Head Start programs.

    (a) An audit of the Head Start program covering the prior budget 
period of each Head Start agency and its delegate agencies, if any, 
shall be made by an independent auditor to determine:
    (1) Whether the agency's financial statements are accurate;
    (2) Whether the agency is complying with the terms and conditions of 
the grant; and
    (3) Whether appropriate financial and administrative procedures and 
controls have been installed and are operating effectively. Head Start 
agencies shall either include delegate agency audits as a part of their 
own audits or provide

[[Page 203]]

for separate independent audits of their delegate agencies.
    (b) Upon a written request showing necessity, the responsible HHS 
official may approve a period other than the prior budget period to be 
covered by the annual audit.
    (c) Unless otherwise approved by the responsible HHS official, the 
report of the audit shall be submitted to the responsible HHS official, 
in the manner and form prescribed by him or her, within 4 months after 
the prior budget period.



Sec. 1301.13  Accounting system certification.

    (a) Upon request by the responsible HHS official, each Head Start 
agency or its delegate agency shall submit an accounting system 
certification, prepared by an independent auditor, stating that the 
accounting system or systems established by the Head Start agency, or 
its delegate, has appropriate internal controls for safeguarding assets, 
checking the accuracy and reliability of accounting data, and promoting 
operating efficiency.
    (b) A Head Start agency shall not delegate any of its Head Start 
program responsibilities to a delegate agency prior to receiving a 
certification that the delegate agency's accounting system meets the 
requirements specified in paragraph (a) of this section.



                 Subpart C--Federal Financial Assistance



Sec. 1301.20  Matching requirements.

    (a) Federal financial assistance granted under the act for a Head 
Start program shall not exceed 80 percent of the total costs of the 
program, unless:
    (1) An amount in excess of that percentage is approved under section 
1301.21; or
    (2) The Head Start agency received Federal financial assistance in 
excess of 80 percent for any budget period falling within fiscal year 
1973 or fiscal year 1974. Under the circumstances described in clause
    (3) Of the preceding sentence, the agency is entitled to receive the 
same percentage of Federal financial assistance that it received during 
such budget periods.
    (b) The non-Federal share will not be required to exceed 20 percent 
of the total costs of the program.
    (c) Federal financial assistance awarded to Head Start grantees for 
training and technical assistance activities shall be included in the 
Federal share in determining the total approved costs of the program. 
Such financial assistance is, therefore, subject to the 20 percent non-
Federal matching requirement of this subpart.

[44 FR 24061, Apr. 24, 1979, as amended at 57 FR 41884, Sept. 14, 1992]



Sec. 1301.21  Criteria for increase in Federal financial assistance.

    The responsible HHS official, on the basis of a written application 
and any supporting evidence he or she may require, will approve 
financial assistance in excess of 80 percent if he or she concludes that 
the Head Start agency has made a reasonable effort to meet its required 
non-Federal share but is unable to do so; and the Head Start agency is 
located in a county:
    (a) That has a personal per capita income of less that $3,000 per 
year; or
    (b) That has been involved in a major disaster.



             Subpart D--Personnel and General Administration



Sec. 1301.30  General requirements.

    Head Start agencies and delegate agencies shall conduct the Head 
Start program in an effective and efficient manner, free of political 
bias or family favoritism. Each agency shall also provide reasonable 
public access to information and to the agency's records pertaining to 
the Head Start program.



Sec. 1301.31  Personnel policies.

    (a) Head Start agencies must establish and implement personnel 
policies for themselves and their delegate agencies. At a minimum, such 
policies must govern the following: staff qualifications, recruitment 
and selection, classification of positions, salaries, employee benefits 
(including leave, holidays, overtime, and fringe benefits),

[[Page 204]]

conflicts of interest, official travel, career development, performance 
evaluations, and employee management relations (including employee 
grievances and adverse actions).
    (b) The policies must be in writing, approved by the Head Start 
Policy Council or Committee, and made available to all Head Start 
grantee and delegate agency employees.
    (c) The policies must require that all prospective employees must 
sign a declaration prior to employment which lists:
    (1) All pending and prior criminal arrests and charges related to 
child sexual abuse and their disposition;
    (2) Convictions related to other forms of child abuse and/or 
neglect; and
    (3) All convictions of violent felonies.
    (d) The declaration required by paragraph (c) of this section may 
exclude:
    (1) Traffic fines of $50.00 or less;
    (2) Any offense, other than any offense related to child abuse and/
or child sexual abuse or violent felonies, committed before the 
prospective employee's 18th birthday, which was finally adjudicated in a 
juvenile court or under a youth offender law;
    (3) Any conviction the record of which has been expunged under 
Federal or State law; and
    (4) Any conviction set aside under the Federal Youth Corrections Act 
or similar State authority.
    (e) The policies governing recruitment and selection of staff must 
require that before an employee is hired for a probationary period, the 
grantee or delegate agency will have conducted:
    (1) An interview of the applicant, and
    (2) A check of personal and employment references provided by the 
applicant, including verification of the accurary of the information 
provided by the applicant.
    (f) The policies governing recruitment and selection of staff must 
provide for a probationary period for all new employees that allows time 
to monitor employee performance and to examine and act on the results of 
criminal record checks discussed in paragraph (g) of this section.
    (g)(1) The personal policies governing recruitment and selection of 
permanent Head Start staff must require that before staff are hired on a 
permanent basis, the grantee or delegate agency will have conducted a 
State and/or national criminal record check if required by State law 
and/or administrative requirement.
    (2) An agency must not adopt an arbitrary policy of refusal to hire 
solely on the basis of arrest, a pending criminal charge, or a 
conviction. The agency must review each case in order to assess the 
relevancy of an arrest charge or conviction to a hiring decision.
    (h) Grantees or delegate agencies must develop a plan for responding 
to suspected or known child abuse or sexual abuse of Head Start children 
whether it occurs inside or outside the program. The policy was 
originally promulgated in the January 26, 1977 Federal Register (42 FR 
4970-4971), ``Identification and Reporting of Child Abuse and Neglect,'' 
and is published as an appendix to this section.

(Approved by the Office of Management and Budget under control number 
0980-0173)

[53 FR 5979, Feb. 29, 1988]

Appendix A to Sec. 1301.31--Identification and Reporting of Child Abuse 
                               and Neglect

    The Chapter N-30-356-1 in the Head Start Policy Manual reads as 
follows:

    N-30-356-1-00 Purpose.
    10 Scope.
    20 Applicable law and policy.
    30 Policy.

    Authority: 80 Stat. 2304 (42 U.S.C. 2928h).

    N-30-356-1-00  Purpose. This chapter sets forth the policy governing 
the prevention, identification, treatment, and reporting of child abuse 
and neglect in Head Start.
    N-30-356-1-10  Scope. This policy applies to all Head Start and 
delegate agencies that operate or propose to operate a Full-Year or 
Summer Head Start program, or experimental or demonstration programs 
funded by Head Start. This issuance constitutes Head Start policy and 
noncompliance with this policy will result in appropriate action by the 
responsible HEW official.
    N-30-356-1-20  Applicable law and policy. Section 511 of the 
Headstart-Follow Through Act, Pub. L. 93-644, requires Head Start 
agencies to provide comprehensive health, nutritional educational, 
social and other services to the children to attain their full 
potential. The prevention, identification, treatment, and reporting of 
child abuse and neglect is a part of the social services in Head Start. 
In order for a State to be eligible for grants

[[Page 205]]

under the Child Abuse Prevention and Treatment Act (hereinafter called 
``the Act''), Pub. L. 93-247, the State must have a child abuse and 
neglect reporting law which defines ``child abuse and neglect'' 
substantially as that term is defined in the regulations implementing 
the Act, 45 CFR 1340.1-2(b). That definition is as follows:
    A. ``(b) `Child abuse and neglect' means harm or threatened harm to 
a child's health or welfare by a person responsible for the child's 
health or welfare.
    ``1. `Harm or threatened harm to a child's health or welfare' can 
occur through: Nonaccidental physical or mental injury; sexual abuse, as 
defined by State law; or neglectful treatment or maltreatment, including 
the failure to provide adequate food, clothing, or shelter. Provided, 
however, that a parent or guardian legitimately practicing his religious 
beliefs who thereby does not provide specified medical treatment for a 
child, for that reason alone shall not be considered a negligent parent 
or guardian; however, such an exception shall not preclude a court from 
ordering that medical services to be provided to the child, where his 
health requires it.
    ``2. `Child' means a person under the age of eighteen.
    ``3. `A person responsible for a child's health or welfare' includes 
the child's parent, guardian, or other person responsible for the 
child's health or welfare, whether in the same home as the child, a 
relative's home, a foster care home, or a residential institution.''

In addition, among other things, the State would have to provide for the 
reporting of known or suspected instances of child abuse and neglect.
    It is to be anticipated that States will attempt to comply with 
these requirements. However, a Head Start program, in dealing with and 
reporting child abuse and neglect, will be subject to and will act in 
accordance with the law of the State in which it operates whether or not 
that law meets the requirements of the Act. Thus, it is the intention of 
this policy in the interest of the protection of children to insure 
compliance with and, in some respects, to supplement State or local law, 
not to supersede it. Thus, the phrase ``child abuse and neglect,'' as 
used herein, refers to both the definition of abuse and neglect under 
applicable State or local law, and the evidentiary standard required for 
reporters under applicable State or local law.
    N-30-356-1-30  Policy--A. General provisions. 1. Head start agencies 
and delegate agencies must report child abuse and neglect in accordance 
with the provisions of applicable State or local law.
    a. In those States and localities with laws which require such 
reporting by pre-school and day care staff, Head Start agencies and 
delegate agencies must report to the State or local agencies designated 
by the State under applicable State or local Child Abuse and Neglect 
reporting law.
    b. In those States and localities in which such reporting by pre-
school and day care staff is ``permissive'' under State or local law, 
Head Start agencies and delegate agencies must report child abuse and 
neglect if applicable State or local law provides immunity from civil 
and criminal liability for goodfaith voluntary reporting.
    2. Head Start agencies and delegate agencies will preserve the 
confidentiality of all records pertaining to child abuse or neglect in 
accordance with applicable State or local law.
    3. Consistent with this policy, Head Start programs will not 
undertake, on their own, to treat cases of child abuse and neglect. Head 
Start programs will, on the other hand, cooperate fully with child 
protective service agencies in their communities and make every effort 
to retain in their programs children allegedly abused or neglected--
recognizing that the child's participation in Head Start may be 
essential in assisting families with abuse or neglect problems.
    4. With the approval of the policy council, Head Start programs may 
wish to make a special effort to include otherwise eligible children 
suffering from abuse or neglect, as referred by the child protective 
services agency.
    However, it must be emphasized that Head Start is not nor is it to 
become a primary instrument for the treatment of child abuse and 
neglect. Nevertheless, Head Start has an important preventative role to 
play in respect to child abuse and neglect.
    B. Special provisions--1. Staff responsibility. Directors of Head 
Start agencies and delegate agencies that have not already done so shall 
immediately designate a staff member who will have responsibility for:
    a. Establishing and maintaining cooperative relationships with the 
agencies providing child protective services in the community, and with 
any other agency to which child abuse and neglect must be reported under 
State law, including regular formal and informal communication with 
staff at all levels of the agencies;
    b. Informing parents and staff of what State and local laws require 
in cases of child abuse and neglect;
    c. Knowing what community medical and social services are available 
for families with an abuse or neglect problem;
    d. Reporting instances of child abuse and neglect among Head Start 
children reportable under State law on behalf of the Head Start program;
    e. Discussing the report with the family if it appears desirable or 
necessary to do so;
    f. Informing other staff regarding the process for identifying and 
reporting child abuse and neglect. (In a number of States it is a

[[Page 206]]

statutory requirement for professional child-care staff to report abuse 
and neglect. Each program should establish a procedure for 
identification and reporting.)
    2. Training. Head Start agencies and delegate agencies shall provide 
orientation and training for staff on the identification and reporting 
of child abuse and neglect. They should provide an orientation for 
parents on the need to prevent abuse and neglect and provide protection 
for abused and neglected children. Such orientation ought to foster a 
helpful rather than a punitive attitude toward abusing or neglecting 
parents and other caretakers.

[53 FR 5979, Feb. 29, 1988]



Sec. 1301.32  Limitations on costs of development and administration of a Head Start program.

    (a) General provisions. (1) Allowable costs for developing and 
administering a Head Start program may not exceed 15 percent of the 
total approved costs of the program, unless the responsible HHS official 
grants a waiver approving a higher percentage for a specific period of 
time not to exceed twelve months.
    (2) The limit of 15 percent for development and administrative costs 
is a maximum. In cases where the costs for development and 
administration are at or below 15 percent, but are judged by the 
responsible HHS official to be excessive, the grantee must eliminate 
excessive development and administrative costs.
    (b) Development and administrative costs. (1) Costs classified as 
development and administrative costs are those costs related to the 
overall management of the program. These costs can be in both the 
personnel and non-personnel categories.
    (2) Grantees must charge the costs of organization-wide management 
functions as development and administrative costs. These functions 
include planning, coordination and direction; budgeting, accounting, and 
auditing; and management of purchasing, property, payroll and personnel.
    (3) Development and administrative costs include, but are not 
limited to, the salaries of the executive director, personnel officer, 
fiscal officer/bookkeeper, purchasing officer, payroll/insurance/
property clerk, janitor for administrative office space, and costs 
associated with volunteers carrying out administrative functions.
    (4) Other development and administrative costs include expenses 
related to administrative staff functions such as the costs allocated to 
fringe benefits, travel, per diem, transportation and training.
    (5) Development and administrative costs include expenses related to 
bookkeeping and payroll services, audits, and bonding; and, to the 
extent they support development and administrative functions and 
activities, the costs of insurance, supplies, copy machines, postage, 
and utilities, and occupying, operating and maintaining space.
    (c) Program costs. Program costs include, but are not limited to:
    (1) Personnel and non-personnel costs directly related to the 
provision of program component services and component training and 
transportation for staff, parents and volunteers;
    (2) Costs of functions directly associated with the delivery of 
program component services through the direction, coordination or 
implementation of a specific component;
    (3) Costs of the salaries of program component coordinators and 
component staff, janitorial and transportation staff involved in program 
component efforts, and the costs associated with parent involvement and 
component volunteer services; and
    (4) Expenses related to program staff functions, such as the 
allocable costs of fringe benefits, travel, per diem and transportation, 
training, food, center/classroom supplies and equipment, parent 
activities funds, insurance, and the occupation, operation and 
maintenance of program component space, including utilities.
    (d) Dual benefit costs. (1) Some costs benefit both the program 
components as well as development and administrative functions within 
the Head Start program. In such cases, grantees must identify and 
allocate appropriately the portion of the costs that are for development 
and administration.
    (2) Dual benefit costs include, but are not limited to, salaries, 
benefits and other costs (such as travel, per diem, and training costs) 
of staff who perform both program and development and administrative 
functions. Grantees

[[Page 207]]

must determine and allocate appropriately the part of these costs 
dedicated to development and administration.
    (3) Space costs, and costs related to space, such as utilities, are 
frequently dual benefit costs. The grantee must determine and allocate 
appropriately the amount or percentage of space dedicated to development 
and administration.
    (e) Relationship between development and administrative costs and 
indirect costs. (1) Grantees must categorize costs in a Head Start 
program as development and administrative or program costs. These 
categorizations are separate from the decision to charge such costs 
directly or indirectly.
    (2) Grantees must charge all costs, whether program or development 
and administrative, either directly to the project or as part of an 
indirect cost pool.
    (f) Requirements for compliance. (1) Head Start grantees must 
calculate the percentage of their total approved costs allocated to 
development and administration as a part of their budget submission for 
initial funding, refunding or for a request for supplemental assistance 
in connection with a Head Start program. These costs may be a part of 
the direct or the indirect cost pool.
    (2) The Head Start grant applicant shall delineate all development 
and administrative costs in its application.
    (3) Indirect costs which are categorized as program costs must be 
fully explained in the application.
    (g) Waiver. (1) The responsible HHS official may grant a waiver of 
the 15 percent limitation on development and administrative costs and 
approve a higher percentage for a specific period of time not to exceed 
twelve months. The conditions under which a waiver will be considered 
are listed below and encompass those situations under which development 
and administrative costs are being incurred, but the provision of actual 
services has not begun or has been suspended. A waiver may be granted 
when:
    (i) A new Head Start grantee or delegate agency is being established 
or services are being expanded by an existing Head Start grantee or 
delegate agency, and the delivery of component services to children and 
families is delayed until all program development and planning is well 
underway or completed; or
    (ii) Component services are disrupted in an existing Head Start 
program due to circumstances not under the control of the grantee.
    (2) A Head Start grantee that estimates that the cost of development 
and administration will exceed 15 percent of total approved costs must 
submit a request for a waiver that explains the reasons for exceeding 
the limitation. This must be done as soon as the grantee determines that 
it cannot comply with the 15 percent limit, regardless of where the 
grantee is within the grant funding cycle.
    (3) The request for the waiver must include the period of time for 
which the waiver is requested. It must also describe the action the 
grantee will take to reduce its development and administrative costs so 
that the grantee will be able to assure that these costs will not exceed 
15 percent of the total approved costs of the program after the 
completion of the waiver period.
    (4) If granted, the waiver and the period of time for which it will 
be granted will be indicated on the Financial Assistance Award.
    (5) If a waiver requested as a part of a grant application for 
funding or refunding is not approved, no Financial Assistance Award will 
be awarded to the Head Start program until the grantee resubmits a 
revised budget that complies with the 15 percent limitation.

(Information collection requirements contained in paragraphs (f) (2) and 
(3) of this section were approved on January 26, 1993, by the Office of 
Management and Budget under Control Number 0980-1043).

[57 FR 41885, Sept. 14, 1992, as amended at 58 FR 26918, May 6, 1993]



Sec. 1301.33  Delegation of program operations.

    Federal financial assistance is not available for program operations 
where such operations have been delegated to a delegate agency by a Head 
Start agency unless the delegation of program operations is made by a 
written agreement and has been approved by

[[Page 208]]

the responsible HHS official before the delegation is made.



Sec. 1301.34  Grantee appeals.

    An agency receiving a grant under the Act for technical assistance 
and training, or for a research, demonstration, or pilot project may 
appeal adverse decisions in accordance with part 16 of this title. Head 
Start agencies are also subject to the appeal procedures in part 16 
except appeals by those agencies for suspension, termination and denial 
of refunding are subject to part 1303 of this title.



PART 1302--POLICIES AND PROCEDURES FOR SELECTION, INITIAL FUNDING, AND REFUNDING OF HEAD START GRANTEES, AND FOR SELECTION OF REPLACEMENT GRANTEES--Table of Contents




                           Subpart A--General

Sec.
1302.1  Purpose and scope.
1302.2  Definitions.
1302.3  Consultation with public officials and consumers.
1302.4  Transfer of unexpended balances.
1302.5  Notice for show cause and hearing.

               Subpart B--Basis for Selection of Grantees

1302.10  Selection among applicants.
1302.11  Selection among applicants to replace grantee.
1302.12  Priority for previously selected Head Start agencies.

Subpart C--Change in Grantee Requiring Amendment of Approved Application 
                  or Replacement of Head Start Program

1302.20  Grantee to show both legal status and financial viability.
1302.21  Grantee shows legal status but not financial viability.
1302.22  Suspension or termination of grantee which shows financial 
          viability but not legal status.
1302.23  Suspension or termination of grantee which shows legal status 
          but not financial viability.
1302.24  Denial of refunding of grantee.
1302.25  Control of funds of grantee scheduled for change.

    Authority: 42 U.S.C. 9831 et seq.


    Source: 44 FR 24062, Apr. 24, 1979, unless otherwise noted.



                           Subpart A--General



Sec. 1302.1  Purpose and scope.

    The purpose of this part is to set forth policies and procedures for 
the selection, initial funding and refunding of Head Start grantees and 
for the selection of replacement grantees in the event of the voluntary 
or involuntary termination, or denial of refunding, of Head Start 
programs. It particularly provides for consideration of the need for 
selection of a replacement grantee where the continuing eligibility 
(legal status) and fiscal capability (financial viability) of a grantee 
to operate a Head Start program is cast in doubt by the cessation of 
funding under section 519 of the Act or by the occurrence of some other 
major change. It is intended that Head Start programs be administered 
effectively and responsibly; that applicants to administer programs 
receive fair and equitable consideration; and that the legal rights of 
current Head Start grantees be fully protected.



Sec. 1302.2  Definitions.

    As used in this part--
    Act means Title V of The Economic Opportunity Act of 1964, as 
amended.
    Approvable application means an application for a Head Start 
program, either as an initial application or as an application to amend 
an approved application governing an on-going Head Start program, which, 
in addition to showing that the applicant has legal status and financial 
viability, provides for comprehensive services for children and families 
and for effective and responsible administration which are in conformity 
with the Act and applicable regulations, the Head Start Manual and Head 
Start policies.
    Community action agency means a public or private nonprofit agency 
or organization designated as a community action agency by the Director 
of the Community Services Administration pursuant to section 210(a) or 
section 210(d) of the Act.
    Community action program means a program operated by a community 
action agency.
    Financial viability means the capability of an applicant or the 
continuing capability of a grantee to furnish the

[[Page 209]]

non-Federal share of the cost of operating an approvable or approved 
Head Start program.
    Head Start grantee or grantee means a public or private nonprofit 
agency or organization whose application to operate a Head Start program 
pursuant to section 514 of the Act has been approved by the responsible 
HHS official.
    Legal status means the existence of an applicant or grantee as a 
public agency or organization under the law of the State in which it is 
located, or existence as a private nonprofit agency or organization as a 
legal entity recognized under the law of the State in which it is 
located. Existence as a private non-profit agency or organization may be 
established under applicable State or Federal law.
    Responsible HHS official means the official of the Department of 
Health and Human Services who has authority to make grants under the 
Act.



Sec. 1302.3  Consultation with public officials and consumers.

    Responsible HHS officials will consult with Governors, or their 
representatives, appropriate local general purpose government officials, 
and Head Start Policy Council and other appropriate representatives of 
communities to be served on the proposed replacement of Head Start 
grantees.



Sec. 1302.4  Transfer of unexpended balances.

    When replacing a grantee, unexpended balances of funds in the 
possession of such grantee in the fiscal year following the fiscal year 
for which the funds were appropriated may be transferred to the 
replacement grantee if the approved application of the replacement 
grantee provides for the continuation of the Head Start services without 
significant change to the same enrollees and their parents and 
undertakes to offer employment to the staff of the terminating grantee. 
A letter of concurrence in the change should be obtained from the 
terminating grantee whenever possible.



Sec. 1302.5  Notice for show cause and hearing.

    (a) Except in emergency situations, the responsible HHS official 
will not suspend financial assistance under the Act unless the grantee 
has been given an opportunity, in accordance with part 1303, subpart D, 
of this chapter, to show cause why such action should not be taken.
    (b) The responsible HHS official will not terminate a grant, suspend 
a grant for longer than 30 days, or deny refunding to a grantee, unless 
the grantee has been given an opportunity for a hearing in accordance 
with part 1303 of this chapter.



               Subpart B--Bases for Selection of Grantees



Sec. 1302.10  Selection among applicants.

    (a) The basis for selection of applicants proposing to operate a 
Head Start program will be the extent to which the applicants 
demonstrate in their application the most effective Head Start program.
    (b) In addition to the applicable criteria at section 641(d) of the 
Head Start Act, the criteria for selection will include:
    (1) The cost effectiveness of the proposed program;
    (2) The qualifications and experience of the applicant and the 
applicant's staff in planning, organizing and providing comprehensive 
child development services at the community level, including the 
administrative and fiscal capability of the applicant to administer all 
Head Start programs carried out in the designated service area;
    (3) The quality of the proposed program as indicated by adherence to 
or evidence of the intent and capability to adhere to Head Start 
Performance Standards (in 45 CFR part 1304) and program policies, 
including the opportunities provided for employment of target area 
residents and career development for paraprofessional and other staff 
and provisions made for the direct participation of parents in the 
planning, conduct and administration of the program;
    (4) The proposed program design and option including the suitability 
of facilities and equipment proposed to be used in carrying out the 
program, as it relates to community needs and as the applicant proposes 
to implement the

[[Page 210]]

program in accordance with program policies and regulations; and
    (5) The need for Head Start services in the community served by the 
applicant.

[57 FR 41887, Sept. 14, 1992]



Sec. 1302.11  Selection among applicants to replace grantee.

    The bases for making a selection among applicants which submit 
approvable applications to replace a grantee, in addition to the basis 
in Sec. 1302.10 of this part, shall be:
    (a) The extent to which provision is made for a continuation of 
services to the eligible children who have been participating as 
enrollees in the program;
    (b) The extent to which provision is made for continuation of 
services to the target area or areas served by the program; and
    (c) The extent to which provision is made for continued employment 
by the applicant of the qualified personnel of the existing program.



Sec. 1302.12  Priority for previously selected Head Start agencies.

    Before selecting Head Start agency, the responsible HHS official, in 
addition to considering the factors specified in Secs. 1302.10 and 
1302.11, will give priority to an agency which was receiving funds under 
the Act on January 4, 1975, to operate a Head Start program.



Subpart C--Change in Grantee Requiring Amendment of Approved Application 
                  or Replacement of Head Start Program



Sec. 1302.20  Grantee to show both legal status and financial viability.

    (a) Upon the occurrence of a change in the legal condition of a 
grantee or of a substantial diminution of the financial resources of a 
grantee, or both, for example, such as might result from cessation of 
grants to the grantee under section 514 of the Act, the grantee is 
required within 30 days after the effective date of the regulations in 
this Part or the date the grantee has notice or knowledge of the change, 
whichever is later, to show in writing to the satisfaction of the 
responsible HHS official that it has and will continue to have legal 
status and financial viability. Failure to make this showing may result 
in suspension, termination or denial of refunding.
    (b) The responsible HHS official will notify the grantee in writing 
of the decision as to the grantee's legal status and financial viability 
within 30 days after receiving the grantee's written submittal.
    (c) When it is consistent with proper and efficient administration, 
the responsible HHS official may extend a grantee's program year to end 
on the date when a change in its legal condition or a substantial 
diminution of financial resources, or both, is scheduled to take place.



Sec. 1302.21  Grantee shows legal status but not financial viability.

    (a) If a grantee shows legal status but impaired financial viability 
the responsible HHS official will entertain a timely request for 
amendment of the grantee's approved application which restores the 
grantee's financial viability either by a reduction in the program which 
produces minimum disruption to services and functions, or by an 
amendment which incorporates essential functions and services not 
previously funded as part of the total cost of the Head Start program, 
and, therefore, requires an increase in the amount of the Head Start 
grant but which will not result in a Federal share of the total cost of 
the Head Start program in excess of the percentage authorized by the Act 
or applicable regulations. In considering such a request which includes 
an increase in the Head Start grant the responsible HHS official will 
take into account the funds available to him for obligation and whether 
the proposed increase is consistent with that distribution of Head Start 
funds which:
    (1) Maximizes the number of childen served within his area of 
responsibility, or in the case of experimental or demonstration 
programs, the experimental or demonstration benefits to be achieved, and
    (2) Maintains approximately the same distribution of Head Start 
program funds to States as exist during

[[Page 211]]

the fiscal year in which his decision is made.
    (b) A request for amendment will be considered to be timely if it is 
included with the written submittal required by Sec. 1302.20(a) of this 
part, submitted within 30 days after receiving the notice required by 
Sec. 1302.20(b) of this part, or submitted as a part of a timely 
application for refunding.
    (c) The grantee will be notified in writing by the responsible HHS 
official within 30 days after submission of the requested amendment of 
the decision to approve or disapprove the requested amendment. If the 
requested amendment is disapproved the notice will contain a statement 
of the reasons for disapproval.



Sec. 1302.22  Suspension or termination of grantee which shows financial viability but not legal status.

    If a grantee fails to show that it will continue to have legal 
status after the date of change even though it may show financial 
viability, the grant shall be suspended or terminated or refunding shall 
be denied as of the date of change. If it appears reasonable to the 
responsible HHS official that the deficiency in legal status will be 
corrected within 30 days he may suspend the grant for not to exceed 30 
days after the date of change or the date of submission of a timely 
request for amendment. If such correction has not been made within the 
30 day period the grant shall be terminated.



Sec. 1302.23  Suspension or termination of grantee which shows legal status but not financial viability.

    (a) If the date of change of financial viability precedes or will 
precede the end of the grantee's program year the grant will be 
suspended or terminated on that date, or, if a request for amendment has 
been submitted under Sec. 1302.21 of this part, upon written notice of 
disapproval of the requested amendment, whichever is later. If it 
appears reasonable to the responsible HHS official that the deficiency 
in financial viability will be corrected within 30 days he may suspend 
the grant for not to exceed 30 days after the date of change or notice 
of disapproval. If such correction has not been made within the 30 day 
period the grant will be terminated.



Sec. 1302.24  Denial of refunding of grantee.

    (a) If the date of change will coincide with or will come after the 
end of the program year and the grantee has notice or knowledge of such 
change prior to the end of the program year any action taken to approve 
the grantee's application for refunding for the following program year 
shall be subject to rescission or ratification depending upon the 
decision of the responsible HHS official on the grantee's legal status 
and financial viability and on any requested amendment submitted by the 
grantee. If the requested amendment is disapproved the responsible HHS 
official may extend the program year in accordance with Sec. 1302.20(c) 
of this part.
    (b) If the date of change coincides with the end of the program year 
and the grantee does not have notice or knowledge of the change prior 
thereto and the grantee's application for refunding for the following 
program year has been approved, such approval shall be subject to 
rescission or ratification depending upon the decision of the 
responsible HHS official on the grantee's legal status and viability and 
on any requested financial amendment submitted by the grantee.
    (c) If the date of change will coincide with or will come after the 
end of the program year and if the responsible HHS official has prior 
notice thereof from the grantee or other official source such as the 
Community Services Administration action to approve any application for 
refunding submitted by the grantee shall be deferred pending decision by 
the responsible HHS official on the grantee's legal status and financial 
viability and any requested amendment submitted by the grantee.
    (d) When the responsible HHS official determines to approve a 
requested amendment for refunding he will approve it for the full term 
of the proposed program period, if that period as approved is no longer 
than a program year.

[[Page 212]]



Sec. 1302.25  Control of funds of grantee scheduled for change.

    Responsible HHS officials will place strict controls on the release 
of grant funds to grantees which are scheduled for change by cessation 
of their grants under section 519 of the Act. Specifically, the 
following controls will be established:
    (a) Funds will be released on a monthly basis regardless of the form 
of grant payment.
    (b) Funds released each month will be limited to the amount required 
to cover actual disbursements during that period for activities 
authorized under the approved Head Start program.
    (c) The amount of funds released must be approved each month by the 
responsible HHS official.



PART 1303--APPEAL PROCEDURES FOR HEAD START GRANTEES AND CURRENT OR PROSPECTIVE DELEGATE AGENCIES--Table of Contents




                           Subpart A--General

Sec.
1303.1  Purpose and application.
1303.2  Definitions.
1303.3  Right to attorney, attorney fees, and travel costs.
1303.4  Remedies.
1303.5  Service of process.
1303.6  Successor agencies and officials.
1303.7  Effect of failure to file or serve documents in a timely manner.
1303.8  Waiver of requirements.

                     Subpart B--Appeals by Grantees

1303.10  Purpose.
1303.11  Suspension on notice and opportunity to show cause.
1303.12  Summary suspension and opportunity to show cause.
1303.13  Appeal by a grantee of a suspension continuing for more than 30 
          days.
1303.14  Appeal by a grantee from a termination of financial assistance.
1303.15  Appeal by a grantee from a denial of refunding.
1303.16  Conduct of hearing.

     Subpart C--Appeals by Current or Prospective Delegate Agencies

1303.20  Appeals to grantees by current or prospective delegate agencies 
          of rejection of an application, failure to act on an 
          application, or termination of a grant or contract.
1303.21  Procedures for appeal by current or prospective delegate 
          agencies to the responsible HHS official from denials by 
          grantees of an application or failure to act on an 
          application.
1303.22  Decision on appeal in favor of grantee.
1303.23  Decision on appeal in favor of the current or prospective 
          delegate agency.

1303.24  OMB control number.
    Authority: 42 U.S.C. 9801 et seq.

    Source: 57 FR 59264, Dec. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 1303.1  Purpose and application.

    This part prescribes regulations based on section 646 of the Head 
Start Act, 42 U.S.C. 9841, as it applies to grantees and current or 
prospective delegate agencies engaged in or wanting to engage in the 
operation of Head Start programs under the Act. It prescribes the 
procedures for appeals by current and prospective delegate agencies from 
specified actions or inaction by grantees. It also provides procedures 
for reasonable notice and opportunity to show cause in cases of 
suspension of financial assistance by the responsible HHS official and 
for an appeal to the Departmental Appeals Board by grantees in cases of 
denial of refunding, termination of financial assistance, and suspension 
of financial assistance.



Sec. 1303.2  Definitions.

    As used in this part:
    Act means the Head Start Act, 42 U.S.C. section 9831, et seq.
    ACYF means the Administration on Children, Youth and Families in the 
Department of Health and Human Services, and includes Regional staff.
    Agreement means either a grant or a contract between a grantee and a 
delegate agency for the conduct of all or part of the grantee's Head 
Start program.
    Day means the 24 hour period beginning at 12 a.m. local time and 
continuing for the next 24 hour period. It includes all calendar days 
unless otherwise expressly noted.
    Delegate Agency means a public or private non-profit organization or

[[Page 213]]

agency to which a grantee has delegated by written agreement the 
carrying out of all or part of its Head Start program.
    Denial of Refunding means the refusal of a funding agency to fund an 
application for a continuation of a Head Start program for a subsequent 
program year when the decision is based on a determination that the 
grantee has improperly conducted its program, or is incapable of doing 
so properly in the future, or otherwise is in violation of applicable 
law, regulations, or other policies.
    Funding Agency means the agency that provides funds directly to 
either a grantee or a delegate agency. ACYF is the funding agency for a 
grantee, and a grantee is the funding agency for a delegate agency.
    Grantee means the local public or private non-profit agency which 
has been designated as a Head Start agency under 42 U.S.C. 9836 and 
which has been granted financial assistance by the responsible HHS 
official to operate a Head Start program.
    Interim Grantee means an agency which has been appointed to operate 
a Head Start program for a period of time not to exceed one year while 
an appeal of a denial of refunding, termination or suspension action is 
pending.
    Prospective Delegate Agency means a public or private non-profit 
agency or organization which has applied to a grantee to serve as a 
delegate agency.
    Responsible HHS Official means the official who is authorized to 
make the grant of financial assistance to operate a Head Start program 
or his or her designee.
    Submittal means the date of actual receipt or the date the material 
was served in accordance with Sec. 1303.5 of this part for providing 
documents or notices of appeals, and similar matters, to either 
grantees, delegate agencies, prospective delegate agencies, or ACYF.
    Substantial Rejection means that a funding agency requires that the 
funding of a current delegate agency be reduced to 80 percent or less of 
the current level of operations for any reason other than a 
determination that the delegate agency does not need the funds to serve 
all the eligible persons it proposes to serve.
    Suspension of a grant means temporary withdrawal of the grantee's 
authority to obligate grant funds pending corrective action by the 
grantee.
    Termination of a grant or delegate agency agreement means permanent 
withdrawal of the grantee's or delegate agency's authority to obligate 
previously awarded grant funds before that authority would otherwise 
expire. It also means the voluntary relinquishment of that authority by 
the grantee or delegate agency. Termination does not include:
    (1) Withdrawal of funds awarded on the basis of the grantee's or 
delegate agency's underestimate of the unobligated balance in a prior 
period;
    (2) Refusal by the funding agency to extend a grant or award 
additional funds (such as refusal to make a competing or noncompeting 
continuation renewal, extension or supplemental award);
    (3) Withdrawal of the unobligated balance as of the expiration of a 
grant;
    (4) Annulment, i.e., voiding of a grant upon determination that the 
award was obtained fraudulently or was otherwise illegal or invalid from 
its inception.
    Work day means any 24 hour period beginning at 12 a.m. local time 
and continuing for 24 hours. It excludes Saturdays, Sundays, and legal 
holidays. Any time ending on one of the excluded days shall extend to 5 
p.m. of the next full work day.



Sec. 1303.3  Right to attorney, attorney fees, and travel costs.

    (a) All parties to proceedings under this part, including informal 
proceedings, have the right to be represented by an attorney.
    (1) Attorney fees may be charged to the program grant in an amount 
equal to the usual and customary fees charged in the locality. However, 
such fees may not exceed $250.00 per day, adjusted annually to reflect 
the percentage change in the Consumer Price Index for All Urban 
Consumers (issued by the Bureau of Labor Statistics) beginning one year 
after the effective date of these regulations. The grantee or delegate 
agency may use current operating funds to pay these costs. The

[[Page 214]]

fees of only one attorney may be charged to the program grant with 
respect to a particular dispute. Such fees may not be charged if the 
grantee or delegate agency has an attorney on its staff, or if it has a 
retainer agreement with an attorney which fully covers fees connected 
with litigation. The grantee or delegate agency shall have the burden of 
establishing the usual and customary fees and shall furnish 
documentation to support that determination that is satisfactory to the 
responsible HHS official.
    (2) A grantee or delegate agency may designate up to two persons to 
attend and participate in proceedings held under this Part. Travel and 
per diem costs of such persons, and of an attorney representing the 
grantee or delegate agency, shall not exceed those allowable under 
Standard Governmental Travel Regulations in effect at the time of the 
travel.
    (b) In the event that use of program funds under this section would 
result in curtailment of program operations or inability to liquidate 
prior obligations, the party so affected may apply to the responsible 
HHS official for payment of these expenses.
    (c) The responsible HHS official, upon being satisfied that these 
expenditures would result in curtailment of program operations or 
inability to liquidate prior obligations, must make payment therefor to 
the affected party by way of reimbursement from currently available 
funds.



Sec. 1303.4  Remedies.

    The procedures established by subparts B and C of this Part shall 
not be construed as precluding ACYF from pursuing any other remedies 
authorized by law.



Sec. 1303.5  Service of process.

    Whenever documents are required to be filed or served under this 
part, or notice provided under this part, certified mail shall be used 
with a return receipt requested. Alternatively, any other system may be 
used that provides proof of the date of receipt of the documents by the 
addressee. If this regulation is not complied with, and if a party 
alleges that it failed to receive documents allegedly sent to it, there 
will be a rebuttable presumption that the documents or notices were not 
sent as required by this part, or as alleged by the party that failed to 
use the required mode of service. The presumption may be rebutted only 
by a showing supported by a preponderance of evidence that the material 
was in fact submitted in a timely manner.



Sec. 1303.6  Successor agencies and officials.

    Wherever reference is made to a particular Federal agency, office, 
or official it shall be deemed to apply to any other agency, office, or 
official which subsequently becomes responsible for administration of 
the program or any portion of it.



Sec. 1303.7  Effect of failure to file or serve documents in a timely manner.

    (a) Whenever an appeal is not filed within the time specified in 
these or related regulations, the potential appellant shall be deemed to 
have consented to the proposed action and to have waived all rights of 
appeal.
    (b) Whenever a party has failed to file a response or other 
submission within the time required in these regulations, or by order of 
an appropriate HHS responsible official, the party shall be deemed to 
have waived the right to file such response or submission.
    (c) A party fails to comply with the requisite deadlines or time 
frames if it exceeds them by any amount.
    (d) The time to file an appeal, response, or other submission may be 
waived in accordance with Sec. 1303.8 of this part.



Sec. 1303.8  Waiver of requirements.

    (a) Any procedural requirements required by these regulations may be 
waived by the responsible HHS official or such waiver requests may be 
granted by the Departmental Appeals Board in those cases where the Board 
has jurisdiction. Requests for waivers must be in writing and based on 
good cause.
    (b) Approvals of waivers must be in writing and signed by the 
responsible HHS official or by the Departmental Appeals Board when it 
has jurisdiction.
    (c) ``Good cause'' consists of the following:

[[Page 215]]

    (1) Litigation dates cannot be changed;
    (2) Personal emergencies pertaining to the health of a person 
involved in and essential to the proceeding or to a member of that 
person's immediate family, spouse, parents, or siblings;
    (3) The complexity of the case is such that preparation of the 
necessary documents cannot reasonably be expected to be completed within 
the standard time frames;
    (4) Other matters beyond the control of the party requesting the 
waiver, such as strikes and natural disasters.
    (d) Under no circumstances may ``good cause'' consist of a failure 
to meet a deadline due to the oversight of either a party or its 
representative.
    (e) Waivers of timely filing or service shall be granted only when 
necessary in the interest of fairness to all parties, including the 
Federal agency. They will be granted sparingly as prompt resolution of 
disputes is a major goal of these regulations. The responsible HHS 
official or the Departmental Appeals Board shall have the right, on own 
motion or on motion of a party, to require such documentation as deemed 
necessary in support of a request for a waiver.
    (f) A request for an informal meeting by a delegate agency, 
including a prospective delegate agency, may be denied by the 
responsible HHS official, on motion of the grantee or on his or her own 
motion, if the official concludes that the written appeal fails to state 
plausible grounds for reversing the grantee's decision or the grantee's 
failure to act on an application.
    (g) The requirements of this section may not be waived.



                     Subpart B--Appeals by Grantees



Sec. 1303.10  Purpose.

    (a) This subpart establishes rules and procedures for the suspension 
of a grantee, denial of a grantee's application for refunding, or 
termination of assistance under the Act for circumstances related to the 
particular grant, such as ineffective or improper use of Federal funds 
or for failure to comply with applicable laws, regulations, policies, 
instructions, assurances, terms and conditions or, in accordance with 
part 1302 of this chapter, upon loss by the grantee of legal status or 
financial viability.
    (b) This subpart does not apply to any administrative action based 
upon any violation, or alleged violation, of title VI of the Civil 
Rights Act of 1964.



Sec. 1303.11   Suspension on notice and opportunity to show cause.

    (a) After receiving concurrence from the Commissioner, ACYF, the 
responsible HHS official may suspend financial assistance to a grantee 
in whole or in part for breach or threatened breach of any requirement 
stated in Sec. 1303.10 pursuant to notice and opportunity to show cause 
why assistance should not be suspended.
    (b) The responsible HHS official will notify the grantee as required 
by Sec. 1303.5 or by telegram that ACYF intends to suspend financial 
assistance, in whole or in part, unless good cause is shown why such 
action should not be taken. The notice will include:
    (1) The grounds for the proposed suspension;
    (2) The effective date of the proposed suspension;
    (3) Information that the grantee has the opportunity to submit 
written material in opposition to the intended suspension and to meet 
informally with the responsible HHS official regarding the intended 
suspension;
    (4) Information that the written material must be submitted to the 
responsible HHS official at least seven days prior to the effective date 
of the proposed suspension and that a request for an informal meeting 
must be made in writing to the responsible HHS official no later than 
seven days after the day the notice of intention to suspend was mailed 
to the grantee;
    (5) Invitation to correct the deficiency by voluntary action; and
    (6) A copy of this subpart.
    (c) If the grantee requests an informal meeting, the responsible HHS 
official will fix a time and place for the meeting. In no event will 
such meeting be scheduled less than seven days after the notice of 
intention to suspend was sent to the grantee.

[[Page 216]]

    (d) The responsible HHS official may at his or her discretion extend 
the period of time or date for making requests or submitting material by 
the grantee and will notify the grantee of any such extension.
    (e) At the time the responsible HHS official sends the notice of 
intention to suspend financial assistance to the grantee, the official 
will send a copy of it to any delegate agency whose activities or 
failures to act are a substantial cause of the proposed suspension, and 
will inform such delegate agency that it is entitled to submit written 
material in opposition and to participate in the informal meeting with 
the responsible HHS official if one is held. In addition, the 
responsible HHS official may give such notice to any other Head Start 
delegate agency of the grantee.
    (f) Within three days of receipt of the notice of intention to 
suspend financial assistance, the grantee shall send a copy of such 
notice and a copy of this subpart to all delegate agencies which would 
be financially affected by the proposed suspension action. Any delegate 
agency that wishes to submit written material may do so within the time 
stated in the notice. Any delegate agency that wishes to participate in 
the informal meeting regarding the intended suspension, if not otherwise 
afforded a right to participate, may request permission to do so from 
the responsible HHS official, who may grant or deny such permission. In 
acting upon any such request from a delegate agency, the responsible HHS 
official will take into account the effect of the proposed suspension on 
the particular delegate agency, the extent to which the meeting would 
become unduly complicated as a result of granting such permission, and 
the extent to which the interests of the delegate agency requesting such 
permission appear to be adequately represented by other participants.
    (g) The responsible HHS official will consider any timely material 
presented in writing, any material presented during the course of the 
informal meeting as well as any showing that the grantee has adequately 
corrected the deficiency which led to the suspension proceedings. The 
decision of the responsible HHS official will be made within five days 
after the conclusion of the informal meeting, or, if no informal meeting 
is held, within five days of receipt by the responsible HHS official of 
written material from all concerned parties. If the responsible HHS 
official concludes that the grantee has failed to show cause why 
financial assistance should not be suspended, the official may suspend 
financial assistance in whole or in part and under such terms and 
conditions as he or she specifies.
    (h) Notice of such suspension will be promptly transmitted to the 
grantee as required in Sec. 1303.5 of this part or by some other means 
showing the date of receipt, and shall become effective upon delivery or 
on the date delivery is refused or the material is returned. Suspension 
shall not exceed 30 days unless the responsible HHS official and the 
grantee agree to a continuation of the suspension for an additional 
period of time. If termination proceedings are initiated in accordance 
with Sec. 1303.14, the suspension of financial assistance will be 
rescinded.
    (i) New obligations incurred by the grantee during the suspension 
period will be not be allowed unless the granting agency expressly 
authorizes them in the notice of suspension or an amendment to it. 
Necessary and otherwise allowable costs which the grantee could not 
reasonably avoid during the suspension period will be allowed if they 
result from obligations properly incurred by the grantee before the 
effective date of the suspension and not in anticipation of suspension 
or termination. At the discretion of the granting agency, third-party 
in-kind contributions applicable to the suspension period may be allowed 
in satisfaction of cost sharing or matching requirements.
    (j) The responsible HHS official may appoint an agency to serve as 
an interim grantee to operate the program until the grantee's suspension 
is lifted.
    (k) The responsible HHS official may modify the terms, conditions 
and nature of the suspension or rescind the suspension action at any 
time on his or her own initiative or upon a satisfactory showing that 
the grantee has adequately corrected the deficiency which

[[Page 217]]

led to the suspension and that repetition is not threatened. Suspension 
partly or fully rescinded may, at the discretion of the responsible HHS 
official, be reimposed with or without further proceedings, except that 
the total time of suspension may not exceed 30 days unless termination 
proceedings are initiated in accordance with Sec. 1303.14 or unless the 
responsible HHS official and the grantee agree to continuation of the 
suspension for an additional period of time. If termination proceedings 
are initiated, the suspension of financial assistance will be rescinded.



Sec. 1303.12  Summary suspension and opportunity to show cause.

    (a) After receiving concurrence from the Commissioner, ACYF, the 
responsible HHS official may suspend financial assistance in whole or in 
part without prior notice and an opportunity to show cause if it is 
determined that immediate suspension is necessary because of a serious 
risk of:
    (1) Substantial injury to property or loss of project funds; or
    (2) Violation of a Federal, State, or local criminal statute; or
    (3) If staff or participants' health and safety are at risk.
    (b) The notice of summary suspension will be given to the grantee as 
required by Sec. 1303.5 of this part, or by some other means showing the 
date of receipt, and shall become effective on delivery or on the date 
delivery is refused or the material is returned unclaimed.
    (c) The notice must include the following items:
    (1) The effective date of the suspension;
    (2) The grounds for the suspension;
    (3) The extent of the terms and conditions of any full or partial 
suspension;
    (4) A statement prohibiting the grantee from making any new 
expenditures or incurring any new obligations in connection with the 
suspended portion of the program; and
    (5) A statement advising the grantee that it has an opportunity to 
show cause at an informal meeting why the suspension should be 
rescinded. The request for an informal meeting must be made by the 
grantee in writing to the responsible HHS official no later than five 
workdays after the effective date of the notice of summary suspension as 
described in paragraph (b) of this section.
    (d) If the grantee requests in writing the opportunity to show cause 
why the suspension should be rescinded, the responsible HHS official 
will fix a time and place for an informal meeting for this purpose. This 
meeting will be held within five workdays after the grantee's request is 
received by the responsible HHS official. Notwithstanding the provisions 
of this paragraph, the responsible HHS official may proceed to deny 
refunding or initiate termination proceedings at any time even though 
financial assistance of the grantee has been suspended in whole or in 
part.
    (e) Notice of summary suspension must also be furnished by the 
grantee to its delegate agencies within two workdays of its receipt of 
the notice from ACYF by certified mail, return receipt requested, or by 
any other means showing dates of transmittal and receipt or return as 
undeliverable or unclaimed. Delegate agencies affected by the summary 
suspension have the right to participate in the informal meeting as set 
forth in paragraph (d) of this section.
    (f) The effective period of a summary suspension of financial 
assistance may not exceed 30 days unless:
    (1) The conditions creating the summary suspension have not been 
corrected; or
    (2) The parties agree to a continuation of the summary suspension 
for an additional period of time; or
    (3) The grantee, in accordance with paragraph (d) of this section, 
requests an opportunity to show cause why the summary suspension should 
be rescinded, in which case it may remain in effect in accordance with 
paragraph (h) of this section; or
    (4) Termination or denial of refunding proceedings are initiated in 
accordance with Sec. 1303.14 or Sec. 1303.15.
    (g) Any summary suspension that remains in effect for more than 30 
days is subject to the requirements of Sec. 1303.13 of this part. The 
only exceptions are where there is an agreement under paragraph (f)(2) 
of this section, or the

[[Page 218]]

circumstances described in paragraph (f)(4) or (h)(1) of this section 
exist.
    (h)(1) If the grantee requests an opportunity to show cause why a 
summary suspension should be rescinded, the suspension of financial 
assistance will continue in effect until the grantee has been afforded 
such opportunity and a decision has been made by the responsible HHS 
official.
    (2) If the suspension continues for more than 30 days, the 
suspension remains in effect even if it is appealed to the Departmental 
Appeals Board.
    (3) Notwithstanding any other provisions of these or other 
regulations, if a denial of refunding occurs or a termination action is 
instituted while the summary suspension is in effect, the suspension 
shall merge into the later action and funding shall not be available 
until the action is rescinded or a decision favorable to the grantee is 
rendered.
    (i) The responsible HHS official must consider any timely material 
presented in writing, any material presented during the course of the 
informal meeting, as well as any other evidence that the grantee has 
adequately corrected the deficiency which led to the summary suspension.
    (j) A decision must be made within five work days after the 
conclusion of the informal meeting with the responsible HHS official. If 
the responsible HHS official concludes, after considering the 
information provided at the informal meeting, that the grantee has 
failed to show cause why the suspension should be rescinded, the 
responsible HHS official may continue the suspension, in whole or in 
part and under the terms and conditions specified in the notice of 
suspension.
    (k) New obligations incurred by the grantee during the suspension 
period will not be allowed unless the granting agency expressly 
authorizes them in the notice of suspension or by an amendment to the 
notice. Necessary and otherwise allowable costs which the grantee could 
not reasonably avoid during the suspension period will be allowed if 
they result from obligations properly incurred by the grantee before the 
effective date of the suspension and not in anticipation of suspension, 
denial of refunding or termination.
    (l) The responsible HHS official may appoint an agency to serve as 
an interim grantee to operate the program until either the grantee's 
summary suspension is lifted or a new grantee is selected in accordance 
with subpart B of this part.
    (m) At the discretion of the funding agency, third-party in-kind 
contributions applicable to the suspension period may be allowed in 
satisfaction of cost sharing or matching requirements.
    (n) The responsible HHS official may modify the terms, conditions 
and nature of the summary suspension or rescind the suspension action at 
any time upon receiving satisfactory evidence that the grantee has 
adequately corrected the deficiency which led to the suspension and that 
the deficiency will not occur again. Suspension partly or fully 
rescinded may, at the discretion of the responsible HHS official, be 
reimposed with or without further proceedings.



Sec. 1303.13  Appeal by a grantee of a suspension continuing for more than 30 days.

    (a) This section applies to summary suspensions that are initially 
issued for more than 30 days and summary suspensions continued for more 
than 30 days except those identified in paragraph Sec. 1303.12(g) of 
this part.
    (b) After receiving concurrence from the Commissioner, ACYF, the 
responsible HHS official may suspend a grant for more than 30 days. A 
suspension may, among other bases, be imposed for the same reasons that 
justify termination of financial assistance or which justify a denial of 
refunding of a grant.
    (c) A notice of a suspension under this section shall set forth:
    (1) The reasons for the action;
    (2) The duration of the suspension, which may be indefinite;
    (3) The fact that the action may be appealed to the Departmental 
Appeals Board and the time within which it must be appealed.
    (d) During the period of suspension a grantee may not incur any 
valid obligations against Federal Head Start grant funds, nor may any 
grantee expenditure or provision of in-kind services or items of value 
made during the

[[Page 219]]

period be counted as applying toward any required matching contribution 
required of a grantee, except as otherwise provided in this part.
    (e) The responsible HHS official may appoint an agency to serve as 
an interim grantee to operate the program until either the grantee's 
suspension is lifted or a new grantee is selected in accordance with 
subparts B and C of 45 CFR part 1302.
    (f) Any appeal to the Departmental Appeals Board must be made within 
five days of the grantee's receipt of notice of suspension or return of 
the notice as undeliverable, refused, or unclaimed. Such an appeal must 
be in writing and it must fully set forth the grounds for the appeal and 
be accompanied by all documentation that the grantee believes is 
relevant and supportive of its position.
    All such appeals shall be addressed to the Departmental Appeals 
Board, and the appellant will send a copy of the appeal to the 
Commissioner, ACYF, and the responsible HHS official. Appeals will be 
governed by the Departmental Appeals Board's regulations at 45 CFR part 
16, except as otherwise provided in the Head Start appeals regulations. 
Any grantee requesting a hearing as part of its appeal shall be afforded 
one by the Departmental Appeals Board.
    (g) If a grantee is successful on its appeal any costs incurred 
during the period of suspension that are otherwise allowable may be paid 
with Federal grant funds. Moreover, any cash or in-kind contributions of 
the grantee during the suspension period that are otherwise allowable 
may be counted toward meeting the grantee's non-Federal share 
requirement.
    (h) If a grantee's appeal is denied by the Departmental Appeals 
Board, but the grantee is subsequently restored to the program because 
it has corrected those conditions which warranted the suspension, its 
activities during the period of the suspension remain outside the scope 
of the program.
    Federal funds may not be used to offset any costs during the period, 
nor may any cash or in-kind contributions received during the period be 
used to meet non-Federal share requirements.
    (i) If the Federal agency institutes termination proceedings during 
a suspension, or denies refunding, the two actions shall merge and the 
grantee need not file a new appeal. Rather, the Departmental Appeals 
Board will be notified by the Federal agency and will automatically be 
vested with jurisdiction over the termination action or the denial of 
refunding and will, pursuant to its rules and procedures, permit the 
grantee to respond to the notice of termination. In a situation where a 
suspension action is merged into a termination action in accordance with 
this section, the suspension continues until there is an administrative 
decision by the Departmental Appeals Board on the grantee's appeal.



Sec. 1303.14  Appeal by a grantee from a termination of financial assistance.

    (a) After receiving concurrence from the Commissioner, ACYF, the 
responsible HHS official may terminate financial assistance to a 
grantee. Financial assistance may be terminated in whole or in part.
    (b) Financial assistance may be terminated for any or all of the 
following reasons:
    (1) The grantee is no longer financially viable;
    (2) The grantee has lost the requisite legal status or permits;
    (3) The grantee has failed to comply with the required fiscal or 
program reporting requirements applicable to grantees in the Head Start 
program;
    (4) The grantee has failed to meet the performance standards for 
operation of Head Start programs that are applicable to grantees;
    (5) The grantee has failed to comply with the eligibility 
requirements and limitations on enrollment in the Head Start program, or 
both;
    (6) The grantee has failed to comply with the Head Start grants 
administration requirements set forth in 45 CFR part 1301;
    (7) The grantee has failed to comply with the requirements of the 
Head Start Act;
    (8) The grantee is debarred from receiving Federal grants or 
contracts;
    (9) The grantee fails to abide by any other terms and conditions of 
its award

[[Page 220]]

of financial assistance, or any other applicable laws, regulations, or 
other applicable Federal or State requirements or policies.
    (c) A notice of termination shall set forth:
    (1) The violations or actions justifying the termination.
    (2) The fact that the termination may be appealed within 10 days to 
the Departmental Appeals Board (with a copy of the appeal sent to the 
responsible HHS official and the Commissioner, ACYF) and that such 
appeals shall be governed by 45 CFR part 16, except as otherwise 
provided in the Head Start appeals regulations, and that any grantee 
which requests a hearing shall be afforded one, as mandated by 42 U.S.C. 
9841. Such an appeal must be in writing and must fully set forth the 
grounds for the appeal and be accompanied by all of the documentation 
that the grantee believes is relevant and supportive of its position.
    (3) That the appeal may be made only by the Board of Directors of 
the grantee or an official acting on behalf of such Board.
    (4) That, if the activities of a delegate agency are the basis, in 
whole or in part, for the proposed termination, the identity of the 
delegate agency.
    (5) Information that the grantee has a right to request a hearing in 
writing within a period of time specified in the notice which is not 
later than 10 days from the date of sending the notice.
    (d) (1) During a grantee's appeal of a termination decision, funding 
will continue until an adverse decision is rendered or until expiration 
of the then current budget period. At the end of the current budget 
period, if a decision has not been rendered, the responsible HHS 
official shall award an interim grant to the grantee until a decision is 
made.
    (2) If a grantee's funding has been suspended, no funding shall be 
available during the termination proceedings, or at any other time, 
unless the action is rescinded or the grantee's appeal is successful. An 
interim grantee will be appointed during the appeal period.
    (3) If a grantee does not appeal an administrative decision to court 
within 30 days of its receipt of the decision, a replacement grantee 
will be immediately sought. An interim grantee may be named, if needed, 
pending the selection of a replacement grantee.
    (4) An interim grantee may be sought even though the grantee has 
appealed an administrative decision to court within 30 days, if the 
responsible HHS official determines it necessary to do so. Examples of 
circumstances that warrant an interim grantee are to protect children 
and families from harm and Federal funds from misuse or dissipation or 
both.
    (e) If a grantee requests a hearing, it shall send a copy of its 
request to all delegate agencies which would be financially affected by 
the termination of assistance and to each delegate agency identified in 
the notice. The copies of the request shall be sent to these delegate 
agencies at the same time the grantee's request is made of ACYF. The 
grantee shall promptly send ACYF a list of the delegate agencies to 
which it has sent the copies and the date on which they were sent.
    (f) If the Departmental Appeals Board informs a grantee that a 
proposed termination action has been set down for hearing, the grantee 
shall, within five days of its receipt of this notice, send a copy of it 
to all delegate agencies which would be financially affected by the 
termination and to each delegate agency identified in the notice. The 
grantee shall send the Departmental Appeals Board and the responsible 
HHS official a list of all delegate agencies notified and the dates of 
notification.
    (g) If the responsible HHS official has initiated termination 
proceedings because of the activities of a delegate agency, that 
delegate agency may participate in the hearing as a matter of right. Any 
other delegate agency, person, agency or organization that wishes to 
participate in the hearing may request permission to do so from the 
presiding officer of the hearing. Such participation shall not, without 
the consent of ACYF and the grantee, alter the time limitations for the 
delivery of papers or other procedures set forth in this section.
    (h) The results of the proceeding and any measure taken thereafter 
by ACYF pursuant to this part shall be fully

[[Page 221]]

binding upon the grantee and all its delegate agencies, whether or not 
they actually participated in the hearing.
    (i) A grantee may waive a hearing and submit written information and 
argument for the record. Such material shall be submitted within a 
reasonable period of time to be fixed by the Departmental Appeals Board 
upon the request of the grantee. The failure of a grantee to request a 
hearing, or to appear at a hearing for which a date had been set, unless 
excused for good cause, shall be deemed a waiver of the right to a 
hearing and consent to the making of a decision on the basis of written 
information and argument submitted by the parties to the Departmental 
Appeals Board.
    (j) The responsible HHS official may attempt, either personally or 
through a representative, to resolve the issues in dispute by informal 
means prior to the hearing.



Sec. 1303.15  Appeal by a grantee from a denial of refunding.

    (a) After receiving concurrence from the Commissioner, ACYF, a 
grantee's application for refunding may be denied by the responsible HHS 
official for circumstances described in paragraph (c) of this section.
    (b) When an intention to deny a grantee's application for refunding 
is arrived at on a basis to which this subpart applies, the responsible 
HHS official will provide the grantee as much advance notice thereof as 
is reasonably possible, in no event later than 30 days after the receipt 
by ACYF of the application. The notice will inform the grantee that it 
has the opportunity for a full and fair hearing on whether refunding 
should be denied.
    (1) Such appeals shall be governed by 45 CFR part 16, except as 
otherwise provided in the Head Start appeals regulations. Any grantee 
which requests a hearing shall be afforded one, as mandated by 42 U.S.C. 
9841.
    (2) Any such appeals must be filed within ten work days after the 
grantee receives notice of the decision to deny refunding.
    (c) Refunding of a grant may be denied for any or all of the reasons 
for which a grant may be terminated, as set forth in Sec. 1303.14(b) of 
this part.
    (d) Decisions to deny refunding shall be in writing, signed by the 
responsible HHS official, dated, and sent in compliance with Sec. 1303.5 
of this part or by telegram, or by any other mode establishing the date 
sent and received by the addressee, or the date it was determined 
delivery could not be made, or the date delivery was refused. A Notice 
of Decision shall contain:
    (1) A statement that indicates the grounds which justify the 
proposed denial of refunding;
    (2) The identity of the delegate agency, if the activities of that 
delegate agency are the basis, in whole or in part, for the proposed 
denial of refunding; and
    (3) A statement that, if the grantee wishes to appeal the denial of 
refunding of financial assistance, it must appeal directly to the 
Departmental Appeals Board, and send a copy of the appeal to the 
responsible HHS official and the Commissioner, ACYF. Such an appeal must 
be in writing and it must fully set forth the grounds for the appeal and 
be accompanied by all documentation that the grantee believes is 
relevant and supportive of its position. Appeals will be governed by the 
Departmental Appeals Board's regulations at 45 CFR part 16, except as 
otherwise provided in the Head Start appeals regulations.
    (e) The appeal may be made only by the Board of Directors of the 
grantee or by an official acting on behalf of such Board.



Sec. 1303.16  Conduct of hearing.

    (a) The presiding officer shall conduct a full and fair hearing, 
avoid delay, maintain order, and make a sufficient record of the facts 
and issues. To accomplish these ends, the presiding officer shall have 
all powers authorized by law, and may make all procedural and 
evidentiary rulings necessary for the conduct of the hearing. The 
hearing shall be open to the public unless the presiding officer for 
good cause shown otherwise determines.
    (b) Communications outside the record are prohibited as provided by 
45 CFR 16.17.
    (c) Both ACYF and the grantee are entitled to present their case by 
oral or

[[Page 222]]

documentary evidence, to submit rebuttal evidence and to conduct such 
examination and cross-examination as may be required for a full and true 
disclosure of all facts bearing on the issues. The issues shall be those 
stated in the notice required to be filed by paragraph (g) of this 
section, those stipulated in a prehearing conference or those agreed to 
by the parties.
    (d) In addition to ACYF, the grantee, and any delegate agencies 
which have a right to appear, the presiding officer may permit the 
participation in the proceedings of such persons or organizations as 
deemed necessary for a proper determination of the issues involved. Such 
participation may be limited to those issues or activities which the 
presiding officer believes will meet the needs of the proceeding, and 
may be limited to the filing of written material.
    (e) Any person or organization that wishes to participate in a 
proceeding may apply for permission to do so from the presiding officer. 
This application, which shall be made as soon as possible after the 
notice of termination, denial of refunding or suspension has been 
received by the grantee, shall state the applicant's interest in the 
proceeding, the evidence or arguments the applicant intends to 
contribute, and the necessity for the introduction of such evidence or 
arguments.
    (f) The presiding officer shall permit or deny such participation 
and shall give notice of his or her decision to the applicant, the 
grantee, and ACYF, and, in the case of denial, a brief statement of the 
reasons therefor. Even if previously denied, the presiding officer may 
subsequently permit such participation if, in his or her opinion, it is 
warranted by subsequent circumstances. If participation is granted, the 
presiding officer shall notify all parties of that fact and may, in 
appropriate cases, include in the notification a brief statement of the 
issues as to which participation is permitted.
    (g) The Departmental Appeals Board will send the responsible HHS 
official, the grantee and any other party a notice which states the 
time, place, nature of the hearing, and the legal authority and 
jurisdiction under which the hearing is to be held. The notice will also 
identify with reasonable specificity and ACYF requirements which the 
grantee is alleged to have violated. The notice will be served and filed 
not later than ten work days prior to the hearing.



     Subpart C--Appeals by Current or Prospective Delegate Agencies



Sec. 1303.20  Appeals to grantees by current or prospective delegate agencies of rejection of an application, failure to act on an application or termination of 
          a grant or contract.

    (a) A grantee must give prompt, fair and adequate consideration to 
applications submitted by current or prospective delegate agencies to 
operate Head Start programs. The failure of the grantee to act within 30 
days after receiving the application is deemed to be a rejection of the 
application.
    (b) A grantee must notify an applicant in writing within 30 days 
after receiving the application of its decision to either accept or to 
wholly or substantially reject it. If the decision is to wholly or 
substantially reject the application, the notice shall contain a 
statement of the reasons for the decision and a statement that the 
applicant has a right to appeal the decision within ten work days after 
receipt of the notice. If a grantee fails to act on the application by 
the end of the 30 day period which grantees have to review applications, 
the current or prospective delegate agency may appeal to the grantee, in 
writing, within 15 work days of the end of the 30 day grantee review 
period.
    (c) A grantee must notify a delegate agency in writing of its 
decision to terminate its agreement with the delegate agency, explaining 
the reasons for its decision and that the delegate agency has the right 
to appeal the decision to the grantee within ten work days after receipt 
of the notice.
    (d) The grantee has 20 days to review the written appeal and issue 
its decision. If the grantee sustains its earlier termination of an 
award or its rejection of an application, the current or prospective 
delegate agency then may appeal, in writing, to the responsible HHS 
official. The appeal must be submitted to the responsible HHS official

[[Page 223]]

within ten work days after the receipt of the grantee's final decision. 
The appeal must fully set forth the grounds for the appeal.
    (e) A grantee may not reject the application or terminate the 
operations of a delegate agency on the basis of defects or deficiencies 
in the application or in the operation of the program without first:
    (1) Notifying the delegate agency of the defects and deficiencies;
    (2) Providing, or providing for, technical assistance so that 
defects and deficiencies can be corrected by the delegate agency; and
    (3) Giving the delegate agency the opportunity to make appropriate 
corrections.
    (f) An appeal filed pursuant to a grantee failing to act on a 
current or prospective delegate agency's application within a 30 day 
period need only contain a copy of the application, the date filed, and 
any proof of the date the grantee received the application. The grantee 
shall have five days in which to respond to the appeal.
    (g) Failure to appeal to the grantee regarding its decision to 
reject an application, terminate an agreement, or failure to act on an 
application shall bar any appeal to the responsible HHS official.



Sec. 1303.21  Procedures for appeal by current or prospective delegate agencies to the responsible HHS official from denials by grantees of an application or 
          failure to act on an application.

    (a) Any current or prospective delegate agency that is dissatisfied 
with the decision of a grantee rendered under Sec. 1303.20 may appeal to 
the responsible HHS official whose decision is final and not appealable 
to the Commissioner, ACYF. Such an appeal must be in writing and it must 
fully set forth the grounds for the appeal and be accompanied by all 
documentation that the current or prospective delegate agency believes 
is relevant and supportive of this position, including all written 
material or documentation submitted to the grantee under the procedures 
set forth in Sec. 1303.20, as well as a copy of any decision rendered by 
the grantee. A copy of the appeal and all material filed with the 
responsible HHS official must be simultaneously served on the grantee.
    (b) In providing the information required by paragraph (a) of this 
section, delegate agencies must set forth:
    (1) Whether, when and how the grantee advised the delegate agency of 
alleged defects and deficiencies in the delegate agency's application or 
in the operation of its program prior to the grantee's rejection or 
termination notice;
    (2) Whether the grantee provided the delegate agency reasonable 
opportunity to correct the defects and deficiencies, the details of the 
opportunity that was given and whether or not the grantee provided or 
provided for technical advice, consultation, or assistance to the 
current delegate agency concerning the correction of the defects and 
deficiencies;
    (3) What steps or measures, if any, were undertaken by the delegate 
agency to correct any defects or deficiencies;
    (4) When and how the grantee notified the delegate agency of its 
decision;
    (5) Whether the grantee told the delegate agency the reasons for its 
decision and, if so, how such reasons were communicated to the delegate 
agency and what they were;
    (6) If it is the delegate agency's position that the grantee acted 
arbitrarily or capriciously, the reasons why the delegate agency takes 
this position; and
    (7) Any other facts and circumstances which the delegate agency 
believes supports its appeal.
    (c) The grantee may submit a written response to the appeal of a 
prospective delegate agency. It may also submit additional information 
which it believes is relevant and supportive of its position.
    (d) In the case of an appeal by a delegate agency, the grantee must 
submit a written statement to the responsible HHS official responding to 
the items specified in paragraph (b) of this section. The grantee must 
include information that explains why it acted properly in arriving at 
its decision or in failing to act, and any other facts and circumstances 
which the grantee believes supports its position.

[[Page 224]]

    (e)(1) The responsible HHS official may meet informally with the 
current or prospective delegate agency if such official determines that 
such a meeting would be beneficial to the proper resolution of the 
appeal. Such meetings may be conducted by conference call.
    (2) An informal meeting must be requested by the current or 
prospective delegate agency at the time of the appeal. In addition, the 
grantee may request an informal meeting with the responsible HHS 
official. If none of the parties requests an informal meeting, the 
responsible HHS official may hold such a meeting if he or she believes 
it would be beneficial for a proper resolution of the dispute. Both the 
grantee and the current or prospective delegate agency may attend any 
informal meeting concerning the appeal. If a party wishes to oppose a 
request for a meeting it must serve its opposition on the responsible 
HHS official and any other party within five work days of its receipt of 
the request.
    (f) A grantee's response to appeals by current or prospective 
delegate agencies must be submitted to the responsible HHS official 
within ten work days of receipt of the materials served on it by the 
current or prospective delegate agency in accordance with paragraph (a) 
of this section. The grantee must serve a copy of its response on the 
current or prospective delegate agency.
    (g) The responsible HHS official shall notify the current or 
prospective delegate agency and the grantee whether or not an informal 
meeting will be held. If an informal meeting is held, it must be held 
within ten work days after the notice by the responsible HHS official is 
mailed. The responsible HHS official must designate either the Regional 
Office or the place where the current or prospective delegate agency or 
grantee is located for holding the informal meeting.
    (h) If an informal meeting is not held, each party shall have an 
opportunity to reply in writing to the written statement submitted by 
the other party. The written reply must be submitted to the responsible 
HHS official within five work days after the notification required by 
paragraph (g) of this section. If a meeting is not to be held, notice of 
that fact shall be served on the parties within five work days of the 
receipt of a timely response to such a request or the expiration of the 
time for submitting a response to such a request.
    (i) In deciding an appeal under this section, the responsible HHS 
official will arrive at his or her decision by considering:
    (1) The material submitted in writing and the information presented 
at any informal meeting;
    (2) The application of the current or prospective delegate agency;
    (3) His or her knowledge of the grantee's program as well as any 
evaluations of his or her staff about the grantee's program and current 
or prospective delegate agency's application and prior performance; and
    (4) Any other evidence deemed relevant by the responsible HHS 
official.



Sec. 1303.22  Decision on appeal in favor of grantee.

    (a) If the responsible HHS official finds in favor of the grantee, 
the appeal will be dismissed unless there is cause to remand the matter 
back to the grantee.
    (b) The grantee's decision will be sustained unless it is determined 
by the responsible HHS official that the grantee acted arbitrarily, 
capriciously, or otherwise contrary to law, regulation, or other 
applicable requirements.
    (c) The decision will be made within ten workdays after the informal 
meeting. The decision, including a statement of the reasons therefor, 
will be in writing, and will be served on the parties within five 
workdays from the date of the decision by the responsible HHS official.
    (d) If the decision is made on the basis of written materials only, 
the decision will be made within five workdays of the receipt of the 
materials. The decision will be served on the parties no more than five 
days after it is made.



Sec. 1303.23  Decision on appeal in favor of the current or prospective delegate agency.

    (a) The responsible HHS official will remand the rejection of an 
application or termination of an agreement to the grantee for prompt 
reconsideration and

[[Page 225]]

decision if the responsible HHS official's decision does not sustain the 
grantee's decision, and if there are issues which require further 
development before a final decision can be made. The grantee's 
reconsideration and decision must be made in accordance with all 
applicable requirements of this part as well as other relevant 
regulations, statutory provisions, and program issuances. The grantee 
must issue its decision on remand in writing to both the current or 
prospective delegate agency and the responsible HHS official within 15 
workdays after the date of receipt of the remand.
    (b) If the current or prospective delegate agency is dissatisfied 
with the grantee's decision on remand, it may appeal to the responsible 
HHS official within five workdays of its receipt of that decision. Any 
such appeal must comply with the requirements of Sec. 1303.21 of this 
part.
    (c) If the responsible HHS official finds that the grantee's 
decision on remand is incorrect or if the grantee fails to issue its 
decision within 15 work days, the responsible HHS official will 
entertain an application by the current or prospective delegate agency 
for a direct grant.
    (1) If such an application is approved, there will be a commensurate 
reduction in the level of funding of the grantee and whatever other 
action is deemed appropriate in the circumstances. Such reduction in 
funding shall not be considered a termination or denial of refunding and 
may not be appealed under this part.
    (2) If such an application is not approved, the responsible HHS 
official will take whatever action he or she deems appropriate under the 
circumstances.
    (d) If, without fault on the part of a delegate agency, its 
operating funds are exhausted before its appeal has been decided, the 
grantee will furnish sufficient funds for the maintenance of the 
delegate agency's current level of operations until a final 
administrative decision has been reached.
    (e) If the responsible HHS official sustains the decision of the 
grantee following remand, he or she shall notify the parties of the fact 
within 15 work days of the receipt of final submittal of documents, or 
of the conclusion of any meeting between the official and the parties, 
whichever is later.



Sec. 1303.24  OMB control number.

    The collection of information requirements in sections 1303.10 
through 1303.23 of this part were approved on January 22, 1993, by the 
Office of Management and Budget and assigned OMB control number 0980-
0242.

[58 FR 13019, Mar. 9, 1993]



PART 1304--PROGRAM PERFORMANCE STANDARDS FOR OPERATION OF HEAD START PROGRAMS BY GRANTEES AND DELEGATE AGENCIES--Table of Contents




                           Subpart A--General

Sec.
1304.1-1  Purpose and application.
1304.1-2  Definitions.
1304.1-3  Head Start Program goals.
1304.1-4  Performance standards plan development.
1304.1-5  Performance standards implementation and enforcement.

   Subpart B--Education Services Objectives and Performance Standards

1304.2-1  Education services objectives.
1304.2-2  Education services plan content: Operations.
1304.2-3  Education services plan content: Facilities.

     Subpart C--Health Services Objectives and Performance Standards

1304.3-1  Health services general objectives.
1304.3-2  Health Services Advisory Committee.
1304.3-3  Medical and dental history, screening, and examination.
1304.3-4  Medical and dental treatment.
1304.3-5  Medical and dental records.
1304.3-6  Health education.
1304.3-7  Mental health objectives.
1304.3-8  Mental health services.
1304.3-9  Nutrition objectives.
1304.3-10  Nutrition services.

     Subpart D--Social Services Objectives and Performance Standards

1304.4-1  Social services objectives.
1304.4-2  Social services plan content.

[[Page 226]]

   Subpart E--Parent Involvement Objectives and Performance Standards

1304.5-1  Parent involvement objectives.
1304.5-2  Parent Involvement Plan content: Parent participation.
1304.5-3  Parent Involvement Plan content: Enhancing development of 
          parenting skills.
1304.5-4  Parent Involvement Plan content: Communications among program 
          management, program staff, and parents.
1304.5-5  Parent Involvement Plan content: Parents, area residents, and 
          the program.

Appendix A to Part 1304--[Reserved]
Appendix B to Part 1304--Head Start Policy Manual: The Parents

    Authority: 42 U.S.C. 9801 et seq.

    Source: 40 FR 27562, June 30, 1975, unless otherwise noted.

    Editorial Note: Nomenclature changes to Part 1304 appear at 58 FR 
5518, Jan. 21, 1993.



                           Subpart A--General



Sec. 1304.1-1   Purpose and application.

    This part sets out the goals of the Head Start program as they may 
be achieved by the combined attainment of the objectives of the basic 
components of the program, with emphasis on the program performance 
standards necessary and required to attain those objectives. With the 
required development of plans covering the implementation of the 
performance standards, grantees and delegate agencies will have firm 
bases for operations most likely to lead to demonstrable benefits to 
children and their families. While compliance with the performance 
standards is required as a condition of Federal Head Start funding, it 
is expected that the standards will be largely self-enforcing. This part 
applies to all Head Start grantees and delegate agencies.



Sec. 1304.1-2   Definitions.

    As used in this part:
    (a) The term ACYF means the Administration on Children, Youth and 
Families, Administration for Children and Families, U.S. Department of 
Health and Human Services, and includes appropriate Regional Office 
staff.
    (b) The term responsible HHS official means the official who is 
authorized to make the grant of assistance in question, or his designee.
    (c) The term Commissioner means the Commissioner of the 
Administration on Children, Youth and Families.
    (d) The term grantee means the public or private non-profit agency 
which has been granted assistance by ACYF to carry on a Head Start 
program.
    (e) The term delegate agency means a public or private nonprofit 
organization or agency to which a grantee has delegated the carrying on 
of all or part of its Head Start program.
    (f) The term goal means the ultimate purpose or interest toward 
which total Head Start program efforts are directed.
    (g) The term objective means the ultimate purpose or interest toward 
which Head Start program component efforts are directed.
    (h) The term program performance standards or performance standards 
means the Head Start program functions, activities and facilities 
required and necessary to meet the objectives and goals of the Head 
Start program as they relate directly to children and their families.
    (i) The term ``children with disabilities'' means children with 
mental retardation, hearing impairments including deafness, speech or 
language impairments, visual impairments including blindness, serious 
emotional disturbance, orthopedic impairments, autism, traumatic brain 
injury, other health impairments, or specific learning disabilities who, 
by reason thereof need special education and related services. The term 
``children with disabilities'' for children aged 3 to 5, inclusive, may, 
at a State's discretion, include children experiencing developmental 
delays, as defined by the State and as measured by appropriate 
diagnostic instruments and procedures, in one or more of the following 
areas: physical development, cognitive development, communication 
development, social or emotional development, or adaptive development; 
and who, by reason thereof, need special education and related services.

[40 FR 27562, June 30, 1975, as amended at 58 FR 5518, Jan. 21, 1993]



Sec. 1304.1-3   Head Start Program goals.

    (a) The Head Start Program is based on the premise that all children 
share

[[Page 227]]

certain needs, and that children of low income families, in particular, 
can benefit from a comprehensive developmental program to meet those 
needs. The Head Start program approach is based on the philosophy that:
    (1) A child can benefit most from a comprehensive, interdisciplinary 
program to foster development and remedy problems as expressed in a 
broad range of services, and that
    (2) The child's entire family, as well as the community must be 
involved. The program should maximize the strengths and unique 
experiences of each child. The family, which is perceived as the 
principal influence on the child's development, must be a direct 
participant in the program. Local communities are allowed latitude in 
developing creative program designs so long as the basic goals, 
objectives and standards of a comprehensive program are adhered to.
    (b) The overall goal of the Head Start program is to bring about a 
greater degree of social competence in children of low income families. 
By social competence is meant the child's everyday effectiveness in 
dealing with both present environment and later responsibilities in 
school and life. Social competence takes into account the 
interrelatedness of cognitive and intellectual development, physical and 
mental health, nutritional needs, and other factors that enable a child 
to function optimally. The Head Start program is a comprehensive 
developmental approach to helping children achieve social competence. To 
the accomplishment of this goal, Head Start objectives and performance 
standards provide for:
    (1) The improvement of the child's health and physical abilities, 
including appropriate steps to correct present physical and mental 
problems and to enhance every child's access to an adequate diet. The 
improvement of the family's attitude toward future health care and 
physical abilities.
    (2) The encouragement of self-confidence, spontaneity, curiosity, 
and self-discipline which will assist in the development of the child's 
social and emotional health.
    (3) The enhancement of the child's mental processes and skills with 
particular attention to conceptual and communications skills.
    (4) The establishment of patterns and expectations of success for 
the child, which will create a climate of confidence for present and 
future learning efforts and overall development.
    (5) An increase in the ability of the child and the family to relate 
to each other and to others.
    (6) The enhancement of the sense of dignity and self-worth within 
the child and his family.



Sec. 1304.1-4   Performance standards plan development.

    Each grantee and delegate agency shall develop a plan for 
implementing the performance standards prescribed in Subparts B, C, D, 
and E of this part for use in the operation of its Head Start program 
(hereinafter called ``plan,'' or ``performance standards plan''). The 
plan shall provide that the Head Start program covered thereby shall 
meet or exceed the performance standards. The plan shall be in writing 
and shall be developed by the appropriate professional Head Start staff 
of the grantee or delegate agency with cooperation from other Head Start 
staff, with technical assistance and advice as needed from personnel of 
the Regional Office and professional consultants, and with the advice 
and concurrence of the policy council or policy committee. The plan must 
be reviewed by grantee or delegate agency staff and the policy council 
or policy committee at least annually and revised and updated as may be 
necessary.



Sec. 1304.1-5   Performance standards implementation and enforcement.

    (a) Grantees and delegate agencies must be in compliance with or 
exceed the performance standards prescribed in subparts B, C, D, and E, 
of this part at the commencement of the grantee's program year next 
following July 1, 1975, effective date of the regulations in this part, 
or 6 months after that date, whichever is later, and thereafter, unless 
the period for full compliance is extended in accordance with paragraph 
(f) of this section.
    (b) If the responsible HHS official as a result of information 
obtained from program self-evaluation, pre-review, or

[[Page 228]]

routine monitoring, is aware or has reason to believe that a Head Start 
program, with respect to performance standards other than those for 
which the time for compliance has been extended in accordance with 
paragraph (f) of this section, is not in compliance with performance 
standards, he shall notify the grantee promptly in writing of the 
deficiencies and inform the grantee that it, or if the deficiencies are 
in a Head Start program operated by a delegate agency, the delegate 
agency, has a period stated in the notice not to exceed 90 days to come 
into compliance. If the notice is with respect to a delegate agency, the 
grantee shall immediately notify the delegate agency and inform it of 
the time within which the deficiencies must be corrected. Upon receiving 
the notice the grantee or delegate agency shall immediately analyze its 
operations to determine how it might best comply with the performance 
standards. In this process it shall review, among other things, its 
utilization of all available local resources, and whether it is 
receiving the benefits of State and other Federal programs for which it 
is eligible and which are available. It shall review and realign where 
feasible program priorities, operations, and financial and manpower 
allocations. It shall also consider the possibility of choosing an 
alternate program option for the delivery of Head Start Services in 
accordance with ACYF Notice N-30-334-1, Program Options for Project Head 
Start, attached hereto as Appendix A, which the grantee, with ACYF 
concurrence, determines that it would be able to operate as a quality 
program in compliance with performance standards.
    (c) The grantee or delegate agency shall report in writing in detail 
its efforts to meet the performance standards within the time given in 
the notice to the responsible HHS official. A delegate agency shall 
report through the grantee. If the reporting agency, grantee or delegate 
agency, determines that it is unable to comply with the performance 
standards, the responsible HHS official shall be notified promptly in 
writing by the grantee, which notice shall contain a description of the 
deficiencies not able to be corrected and the reasons therefor. If 
insufficient funding is included as a principal reason for inability to 
comply with performance standards, the notice shall specify the exact 
amount, and basis for, the funding deficit and efforts made to obtain 
funding from other sources.
    (d) The responsible HHS official on the basis of the reports 
submitted pursuant to paragraph (c) of this section, will undertake to 
assist grantees, and delegate agencies through their grantees, to comply 
with the performance standards, including by furnishing or by 
recommending technical assistance.
    (e) If the grantee or delegate agency has not complied with the 
performance standards, other than those for which the time for 
compliance has been extended in accordance with paragraph (f) of this 
section, within the period stated in the notice issued under paragraph 
(b) of this section, the grantee shall be notified promptly by the 
responsible HHS official of the commencement of suspension or 
termination proceedings or of the intention to deny refunding, as may be 
appropriate, under part 1303 (appeals procedures) of this chapter.
    (f) The time within which a grantee or delegate agency shall be 
required to correct deficiencies in implementation of the performance 
standards may be extended by the responsible HHS official to a maximum 
of one year, only with respect to the following deficiencies:
    (1) The space per child provided by the Head Start program does not 
comply with the Education Services performance standard but there is no 
risk to the health or safety of the children;
    (2) The Head Start program is unable to provide Medical or Dental 
Treatment Services as required by Health Services Performance Standards 
because funding is insufficient and there are no community or other 
resources available;
    (3) The services of a mental health professional is not available or 
accessible to the program as required by the Health Services Performance 
Standards; or
    (4) The deficient service is not able to be corrected within the 90 
days notice period, notwithstanding full effort at

[[Page 229]]

compliance, because of lack of funds and outside community resources, 
but it is reasonable to expect that the services will be brought into 
compliance within the extended period, and, the overall high quality of 
the Head Start program otherwise will be maintained during the 
extension.



   Subpart B--Education Services Objectives and Performance Standards



Sec. 1304.2-1   Education services objectives.

    The objectives of the Education Service component of the Head Start 
program are to:
    (a) Provide children with a learning environment and the varied 
experiences which will help them develop socially, intellectually, 
physically, and emotionally in a manner appropriate to their age and 
stage of development toward the overall goal of social competence.
    (b) Integrate the educational aspects of the various Head Start 
components in the daily program of activities.
    (c) Involve parents in educational activities of the program to 
enhance their role as the principal influence on the child's education 
and development.
    (d) Assist parents to increase knowledge, understanding, skills, and 
experience in child growth and development.
    (e) Identify and reinforce experience which occur in the home that 
parents can utilize as educational activities for their children.



Sec. 1304.2-2   Education services plan content: Operations.

    (a) The education services component of the performance standards 
plan shall provide strategies for achieving the education objectives. In 
so doing it shall provide for program activities that include an 
organized series of experiences designed to meet the individual 
differences and needs of participating children, the special needs of 
handicapped children, the needs of specific educational priorities of 
the local population and the community. Program activities must be 
carried out in a manner to avoid sex role stereotyping. In addition, the 
plan shall provide methods for assisting parents in understanding and 
using alternative ways to foster learning and development of their 
children.
    (b) The education services component of the plan shall provide for:
    (1) A supportive social and emotional climate which:
    (i) Enhances children's understanding of themselves as individuals, 
and in relation to others, by providing for individual, small group, and 
large group, activities;
    (ii) Gives children many opportunities for success through program 
activities;
    (iii) Provides an environment of acceptance which helps each child 
build ethnic pride, a positive self-concept, enhance his individual 
strengths, and develop facility in social relationships.
    (2) Development of intellectual skills by:
    (i) Encouraging children to solve problems, initiate activities, 
explore, experiment, question, and gain mastery through learning by 
doing;
    (ii) Promoting language understanding and use in an atmosphere that 
encourages easy communication among children and between children and 
adults;
    (iii) Working toward recognition of the symbols for letters and 
numbers according to the individual developmental level of the children;
    (iv) Encouraging children to organize their experiences and 
understand concepts; and
    (v) Providing a balanced program of staff directed and child 
initiated activities.
    (3) Promotion of physical growth by:
    (i) Providing adequate indoor and outdoor space, materials, 
equipment, and time for children to use large and small muscles to 
increase their physical skills; and
    (ii) Providing appropriate guidance while children are using 
equipment and materials in order to promote children's physical growth.
    (c) The education services component of the plan shall provide for a 
program which is individualized to meet the special needs of children 
from various populations by:
    (1) Having a curriculum which is relevant and reflective of the 
needs of the population served (bilingual/bicultural,

[[Page 230]]

multi-cultural, rural, urban, reservation, migrant, etc.);
    (2) Having staff and program resources reflective of the racial and 
ethnic population of the children in the program.
    (i) Including persons who speak the primary language of the children 
and are knowledgeable about their heritage; and, at a minimum, when a 
majority of the children speak a language other than English, at least 
one teacher or aide interacting regularly with the children must speak 
their language; and,
    (ii) Where only a few children or a single child speak a language 
different from the rest, one adult in the center should be available to 
communicate in the native language;
    (3) Including parents in curriculum development and having them 
serve as resource persons (e.g., for bilingual-bicultural activities).
    (d) The education services component of the plan shall provide 
procedures for on-going observation, recording and evaluation of each 
child's growth and development for the purpose of planning activities to 
suit individual needs. It shall provide, also, for integrating the 
educational aspects of other Head Start components into the daily 
education services program.
    (e) The plan shall provide methods for enhancing the knowledge and 
understanding of both staff and parents of the educational and 
developmental needs and activities of children in the program. These 
shall include:
    (1) Parent participation in planning the education program, and in 
center, classroom and home program activities;
    (2) Parent training in activities that can be used in the home to 
reinforce the learning and development of their children in the center;
    (3) Parent training in the observation of growth and development of 
their children in the home environment and identification of and 
handling special developmental needs;
    (4) Participation in staff and staff-parent conferences and the 
making of periodic home visits (no less than two) by members of the 
education staff;
    (5) Staff and parent training, under a program jointly developed 
with all components of the Head Start program, in child development and 
behavioral developmental problems of preschool children; and
    (6) Staff training in identification of and handling children with 
special needs and working with the parents of such children, and in 
coordinating relevant referral resources.



Sec. 1304.2-3   Education services plan content: Facilities.

    (a) The education services component of the plan shall provide for a 
physical environment conducive to learning and reflective of the 
different stages of development of the children. Home-based projects 
must make affirmative efforts to achieve this environment. For center-
based programs, space shall be organized into functional areas 
recognized by the children, and space, light, ventilation, heat, and 
other physical arrangements must be consistent with the health, safety, 
and developmental needs of the children. To comply with this standard:
    (1) There shall be a safe and effective heating system;
    (2) No highly flammable furnishings or decorations shall be used.
    (3) Flammable and other dangerous materials and potential poisons 
shall be stored in locked cabinets or storage facilities accessible only 
to authorized persons;
    (4) Emergency lighting shall be available in case of power failure;
    (5) Approved, working fire extinguishers shall be readily available;
    (6) Indoor and outdoor premises shall be kept clean and free, on a 
daily basis, of undesirable and hazardous material and conditions;
    (7) Outdoor play areas shall be made so as to prevent children from 
leaving the premises and getting into unsafe and unsupervised areas;
    (8) Paint coatings in premises used for care of children shall be 
determined to assure the absence of a hazardous quantity of lead;
    (9) Rooms shall be well lighted;
    (10) A source of water approved by the appropriate local authority 
shall be available in the facility; and adequate toilets and handwashing 
facilities shall be available and easily reached by children;

[[Page 231]]

    (11) All sewage and liquid wastes shall be disposed of through a 
sewer system approved by an appropriate, responsible authority, and 
garbage and trash shall be stored in a safe and sanitary manner until 
collected;
    (12) There shall be at least 35 square feet of indoor space per 
child available for the care of children (i.e., exclusive of bathrooms, 
halls, kitchen, and storage places). There shall be at least 75 square 
feet per child outdoors; and
    (13) Adequate provisions shall be made for handicapped children to 
ensure their safety and comfort.
    Evidence that the center meets or exceeds State or local licensing 
requirements for similar kinds of facilities for fire, health and safety 
shall be accepted as prima facie compliance with the fire, health and 
safety requirements of this section.
    (b) The plan shall provide for appropriate and sufficient furniture, 
equipment and materials to meet the needs of the program, and for their 
arrangement in such a way as to facilitate learning, assure a balanced 
program of spontaneous and structured activities, and encourage self-
reliance in the children. The equipment and materials shall be:
    (1) Consistent with the specific educational objectives of the local 
program;
    (2) Consistent with the cultural and ethnic background of the 
children;
    (3) Geared to the age, ability, and developmental needs of the 
children;
    (4) Safe, durable, and kept in good condition;
    (5) Stored in a safe and orderly fashion when not in use;
    (6) Accessible, attractive, and inviting to the children; and
    (7) Designed to provide a variety of learning experiences and to 
encourage experimentation and exploration.



     Subpart C--Health Services Objectives and Performance Standards



Sec. 1304.3-1   Health services general objectives.

    The general objectives of the health services component of the Head 
Start program are to:
    (a) Provide a comprehensive health services program which includes a 
broad range of medical, dental, mental health and nutrition services to 
preschool children, including handicapped children, to assist the 
child's physical, emotional, cognitive and social development toward the 
overall goal of social competence.
    (b) Promote preventive health services and early intervention.
    (c) Provide the child's family with the necessary skills and insight 
and otherwise attempt to link the family to an ongoing health care 
system to ensure that the child continues to receive comprehensive 
health care even after leaving the Head Start program.



Sec. 1304.3-2   Health Services Advisory Committee.

    The plan shall provide for the creation of a Health Services 
Advisory Committee whose purpose shall be advising in the planning, 
operation and evaluation of the health services program and which shall 
consist of Head Start parents and health services providers in the 
community and other specialists in the various health disciplines. 
(Existing committees may be modified or combined to carry out this 
function.)



Sec. 1304.3-3   Medical and dental history, screening, and examinations.

    (a) The health services component of the performance standards plan 
shall provide that for each child enrolled in the Head Start program a 
complete medical, dental and developmental history will be obtained and 
recorded, a thorough health screening will be given, and medical and 
dental examinations will be performed. The plan will provide also for 
advance parent or guardian authorization for all health services under 
this subpart.
    (b) Effective with the beginning of the 1993-94 program year, 
grantees must provide for health and developmental screenings by 45 days 
after the beginning of services for children in the fall, or for a child 
who enters late, by 45 days after the child enters into the program and 
must include:
    (1) Growth assessment (head circumference up to two years old), 
height, weight and age.

[[Page 232]]

    (2) Vision testing.
    (3) Hearing testing.
    (4) Hemoglobin or hematocrit determination.
    (5) Tuberculin testing indicated in ACYF Head Start Guidance 
Material.
    (6) Urinalysis.
    (7) Based on community health problems, other selected screenings 
where appropriate, e.g., sickle cell anemia, lead poisoning, and 
intestinal parasites.
    (8) Assessment of current immunization status.
    (9) During the course of health screening, procedures must be in 
effect for identifying speech problems, determining their cause, and 
providing services.
    (10) Identification of the special needs of handicapped children.
    (c) Medical examinations for children shall include:
    (1) Examination of all systems or regions which are made suspect by 
the history or screening test.
    (2) Search for certain defects in specific regions common or 
important in this age group, i.e., skin, eye, ear, nose, throat, heart, 
lungs, and groin (inguinal) area.
    (d) The plan shall provide, also, in accordance with local and state 
health regulations that employed program staff have initial health 
examinations, periodic check-ups, and are found to be free from 
communicable disease; and, that voluntary staff be screened for 
tuberculosis.

[40 FR 27562, June 30, 1975, as amended at 58 FR 5518, Jan. 21, 1993]



Sec. 1304.3-4   Medical and dental treatment.

    (a) The plan shall provide for treatment and follow-up services 
which include:
    (1) Obtaining or arranging for treatment of all health problems 
detected. (Where funding is provided by non-Head Start funding sources 
there must be written documentation that such funds are used to the 
maximum feasible extent. Head Start funds may be used only when no other 
source of funding is available).
    (2) Completion of all recommended immunizations--diptheria, 
pertussis, tetanus (DPT), polio, measles, German measles. Mumps 
immunization shall be provided where appropriate.
    (3) Obtaining or arranging for basic dental care services as 
follows:
    (i) Dental examination.
    (ii) Services required for the relief of pain or infection.
    (iii) Restoration of decayed primary and permanent teeth.
    (iv) Pulp therapy for primary and permanent teeth as necessary.
    (v) Extraction of non-restorable teeth.
    (vi) Dental prophylaxis and instruction in self-care oral hygiene 
procedures.
    (vii) Application of topical fluoride in communities which lack 
adequate fluoride levels in the public water supply.
    (b) There must be a plan of action for medical emergencies. 
(Indicated in ACYF Head Start Guidance Material.)



Sec. 1304.3-5   Medical and dental records.

    The plan shall provide for:
    (a) The establishment and maintenance of individual health records 
which contain the child's medical and developmental history, screening 
results, medical and dental examination data, and evaluation of this 
material, and up-to-date information about treatment and follow-up;
    (b) Forwarding, with parent consent, the records to either the 
school or health delivery system or both when the child leaves the 
program; and
    (c) Giving parents a summary of the record which includes 
information on immunization and follow-up treatment; and
    (d) Utilization of the Health Program Assessment Report (HPAR); and
    (e) Assurance that in all cases parents will be told the nature of 
the data to be collected and the uses to which the data will be put, and 
that the uses will be restricted to the stated purposes.



Sec. 1304.3-6   Health education.

    (a) The plan shall provide for an organized health education program 
for program staff, parents and children which ensures that:
    (1) Parents are provided with information about all available health 
resources;

[[Page 233]]

    (2) Parents are encouraged to become involved in the health care 
process relating to their child. One or both parents should be 
encouraged to accompany their child to medical and dental exams and 
appointments;
    (3) Staff are taught and parents are provided the opportunity to 
learn the principles of preventive health, emergency first-aid measures, 
and safety practices;
    (4) Health education is integrated into on-going classroom and other 
program activities.
    (5) The children are familiarized with all health services they will 
receive prior to the delivery of those services.



Sec. 1304.3-7   Mental health objectives.

    The objectives of the mental health part of the health services 
component of the Head Start program are to:
    (a) Assist all children participating in the program in emotional, 
cognitive and social development toward the overall goal of social 
competence in coordination with the education program and other related 
component activities;
    (b) Provide handicapped children and children with special needs 
with the necessary mental health services which will ensure that the 
child and family achieve the full benefits of participation in the 
program;
    (c) Provide staff and parents with an understanding of child growth 
and development, an appreciation of individual differences, and the need 
for a supportive environment;
    (d) Provide for prevention, early identification and early 
intervention in problems that interfere with a child's development;
    (e) Develop a positive attitude toward mental health services and a 
recognition of the contribution of psychology, medicine, social 
services, education and other disciplines to the mental health program; 
and
    (f) Mobilize community resources to serve children with problems 
that prevent them from coping with their environment.



Sec. 1304.3-8   Mental health services.

    (a) The mental health part of the plan shall provide that a mental 
health professional shall be available, at least on a consultation 
basis, to the Head Start program and to the children. The mental health 
professional shall:
    (1) Assist in planning mental health program activities;
    (2) Train Head Start staff;
    (3) Periodically observe children and consult with teachers and 
other staff;
    (4) Advise and assist in developmental screening and assessment;
    (5) Assist in providing special help for children with atypical 
behavior or development, including speech;
    (6) Advise in the utilization of other community resources and 
referrals;
    (7) Orient parents and work with them to achieve the objectives of 
the mental health program; and
    (8) Take appropriate steps in conjunction with health and education 
services to refer children for diagnostic examination to determine 
whether their emotional or behavior problems have a physical basis.
    (b) The plan shall also provide for:
    (1) Attention to pertinent medical and family history of each child 
so that mental health services can be made readily available when 
needed;
    (2) Use of existing community mental health resources;
    (3) Coordination with the education services component to provide a 
program keyed to individual developmental levels;
    (4) Confidentiality of records;
    (5) Regular group meetings of parents and program staff;
    (6) Parental consent for special mental health services;
    (7) Opportunity for parents to obtain individual assistance; and,
    (8) Active involvement of parents in planning and implementing the 
individual mental health needs of their children.



Sec. 1304.3-9   Nutrition objectives.

    The objectives of the nutrition part of the health services 
component of the Head Start program are to:
    (a) Help provide food which will help meet the child's daily 
nutritional needs in the child's home or in another clean and pleasant 
environment, recognizing individual differences and cultural patterns, 
and thereby promote sound physical, social, and emotional growth and 
development.

[[Page 234]]

    (b) Provide an environment for nutritional services which will 
support and promote the use of the feeding situation as an opportunity 
for learning;
    (c) Help staff, child and family to understand the relationship of 
nutrition to health, factors which influence food practices, variety of 
ways to provide for nutritional needs and to apply this knowledge in the 
development of sound food habits even after leaving the Head Start 
program;
    (d) Demonstrate the interrelationships of nutrition to other 
activities of the Head Start program and its contribution to the overall 
child development goals; and
    (e) Involve all staff, parents and other community agencies as 
appropriate in meeting the child's nutritional needs so that nutritional 
care provided by Head Start complements and supplements that of the home 
and community.



Sec. 1304.3-10   Nutrition services.

    (a) The nutrition services part of the health services component of 
the performance standards plan must identify the nutritional needs and 
problems of the children in the Head Start program and their families. 
In so doing account must be taken of:
    (1) The nutrition assessment data (height, weight, hemoglobin 
hematocrit) obtained for each child;
    (2) Information about family eating habits and special dietary needs 
and feeding problems, especially of handicapped children; and,
    (3) Information about major community nutrition problems.
    (b) The plan, designed to assist in meeting the daily nutritional 
needs of the children, shall provide that:
    (1) Every child in a part-day program will receive a quantity of 
food in meals (preferably hot) and snacks which provides at least \1/3\ 
of daily nutritional needs, with consideration for meeting any special 
needs of children, including the child with a handicapping condition;
    (2) Every child in a full-day program will receive snack(s), lunch, 
and other meals as appropriate which will provide \1/2\ to \2/3\ of 
daily nutritional needs depending on the length of the program;
    (3) All children in morning programs who have not received breakfast 
at the time they arrive at the Head Start program will be served a 
nourishing breakfast;
    (4) The kinds of food served conform to minimum standards for meal 
patterns indicated in ACYF Head Start Guidance Material;
    (5) The quantities of food served conform to recommended amounts 
indicated in ACYF Head Start guidance materials; and,
    (6) Meal and snack periods are scheduled appropriately to meet 
children's needs and are posted along with menus; e.g., breakfast must 
be served at least 2\1/2\ hours before lunch, and snacks must be served 
at least 1\1/2\ hours before lunch or supper.
    (c) The plan shall undertake to assure that the nutrition services 
contribute to the development and socialization of the children by 
providing that:
    (1) A variety of foods which broaden the child's food experience in 
addition to those that consider cultural and ethnic preferences is 
served;
    (2) Food is not used as punishment or reward, and that children are 
encouraged but not forced to eat or taste;
    (3) The size and number of servings of food reflect consideration of 
individual children's needs;
    (4) Sufficient time is allowed for children to eat;
    (5) Chairs, tables, and eating utensils are suitable for the size 
and developmental level of the children with special consideration for 
meeting the needs of children with handicapping conditions;
    (6) Children and staff, including volunteers, eat together sharing 
the same menu and a socializing experience in a relaxed atmosphere; and
    (7) Opportunity is provided for the involvement of children in 
activities related to meal service. (For example: family style service.)
    (d) The plan shall set forth an organized nutrition education 
program for staff, parents, and children. This program shall assure 
that:
    (1) Meal periods and food are planned to be used as an integral part 
of the total education program;

[[Page 235]]

    (2) Children participate in learning activities planned to effect 
the selection and enjoyment of a wide variety of nutritious foods;
    (3) Families receive education in the selection and preparation of 
foods to meet family needs, guidance in home and money management and 
help in consumer education so that they can fulfill their major role and 
responsibility for the nutritional health of the family;
    (4) All staff, including administrative, receive education in 
principles of nutrition and their application to child development and 
family health, and ways to create a good physical, social and emotional 
environment which supports and promotes development of sound food habits 
and their role in helping the child and family to achieve adequate 
nutrition.
    (e) The plan shall make special provision for the involvement of 
parents and appropriate community agencies in planning, implementing, 
and evaluating the nutrition services. It shall provide that:
    (1) The Policy Council or Committee and the Health Services Advisory 
Committee have opportunity to review and comment on the nutrition 
services;
    (2) The nutritional status of the children will be discussed with 
their parents;
    (3) Information about menus and nutrition activities will be shared 
regularly with parents;
    (4) Parents are informed of the benefits of food assistance 
programs; and
    (5) Community agencies are enlisted to assist eligible families 
participate in food assistance programs.
    (f) The plan shall provide for compliance with applicable local, 
State, and Federal sanitation laws and regulations for food service 
operations including standards for storage, preparation and service of 
food, and health of food handlers, and for posting of evidence of such 
compliance. The plan shall provide, also, that vendors and caterers 
supplying food and beverages comply with similar applicable laws and 
regulations.
    (g) The plan shall provide for direction of the nutrition services 
by a qualified full-time staff nutritionist or for periodic and 
regularly scheduled supervision by a qualified nutritionist or dietitian 
as defined in the Head Start Guidance Material. Also, the plan shall 
provide that all nutrition services staff will receive preservice and 
in-service training as necessary to demonstrate and maintain proficiency 
in menu planning, food purchasing, food preparation and storage, and 
sanitation and personal hygiene.
    (h) The plan shall provide for the establishment and maintenance of 
records covering the nutrition services budget, expenditures for food, 
menus utilized, numbers and types of meals served daily with separate 
recordings for children and adults, inspection reports made by health 
authorities, recipes and any other information deemed necessary for 
efficient operation.



     Subpart D--Social Services Objectives and Performance Standards



Sec. 1304.4-1   Social services objectives.

    The objectives of the social services component of the performance 
standards plan are to:
    (a) Establish and maintain an outreach and recruitment process which 
systematically insures enrollment of eligible children.
    (b) Provide enrollment of eligible children regardless of race, sex, 
creed, color, national origin, or handicapping condition.
    (c) Achieve parent participation in the center and home program and 
related activities.
    (d) Assist the family in its own efforts to improve the condition 
and quality of family life.
    (e) Make parents aware of community services and resources and 
facilitate their use.



Sec. 1304.4-2   Social services plan content.

    (a) The social services plan shall provide procedures for:
    (1) Recruitment of children, taking into account the demographic 
make-up of the community and the needs of the children and families;
    (2) Recruitment of handicapped children;
    (3) Providing or referral for appropriate counseling;

[[Page 236]]

    (4) Emergency assistance or crisis intervention;
    (5) Furnishing information about available community services and 
how to use them;
    (6) Follow-up to assure delivery of needed assistance;
    (7) Establishing a role of advocacy and spokesman for Head Start 
families;
    (8) Contacting of parent or guardian with respect to an enrolled 
child whose participation in the Head Start program is irregular or who 
has been absent four consecutive days; and
    (9) Identification of the social service needs of Head Start 
families and working with other community agencies to develop programs 
to meet those needs.
    (b) The plan shall provide for close cooperation with existing 
community resources including:
    (1) Helping Head Start parent groups work with other neighborhood 
and community groups with similar concerns;
    (2) Communicating to other community agencies the needs of Head 
Start families and ways of meeting these needs;
    (3) Helping to assure better coordination, cooperation, and 
information sharing with community agencies;
    (4) Calling attention to the inadequacies of existing community 
services, or to the need for additional services, and assisting in 
improving available services, or bringing in new services; and
    (5) Preparing and making available a community resource list to Head 
Start staff and families.
    (c) The plan shall provide for the establishment, maintenance, and 
confidentiality of records of up-to-date, pertinent family data, 
including completed enrollment forms, referral and follow-up reports, 
reports of contacts with other agencies, and reports of contacts with 
families.



   Subpart E--Parent Involvement Objectives and Performance Standards



Sec. 1304.5-1   Parent involvement objectives.

    The objectives of the parent involvement component of the 
performance standards plan are to:
    (a) Provide a planned program of experiences and activities which 
support and enhance the parental role as the principal influence in 
their child's education and development.
    (b) Provide a program that recognizes the parent as:
    (1) Responsible guardians of their children's well being.
    (2) Prime educators of their children.
    (3) Contributors to the Head Start program and to their communities.
    (c) Provide the following kinds of opportunities for parent 
participation:
    (1) Direct involvement in decision making in program planning and 
operations.
    (2) Participation in classroom and other program activities as paid 
employees, volunteers or observers.
    (3) Activities for parents which they have helped to develop.
    (4) Working with their own children in cooperation with Head Start 
staff.



Sec. 1304.5-2   Parent Involvement Plan content: Parent participation.

    (a) The basic parent participation policy of the Head Start program, 
with which all Head Start programs must comply as a condition of being 
granted financial assistance, is contained in Head Start Policy Manual, 
Instruction I-31--Section B2, The Parents (ACYF Transmittal Notice 70.2, 
dated August 10, 1970). This policy manual instruction is set forth in 
Appendix B to this part.
    (b) The plan shall describe in detail the implementation of Head 
Start Policy Manual Instruction I-31--section B2, The Parents (Appendix 
B). The plan shall assure that participation of Head Start parents is 
voluntary and shall not be required as a condition of the child's 
enrollment.



Sec. 1304.5-3   Parent Involvement Plan content: Enhancing development of parenting skills.

    The plan shall provide methods and opportunities for involving 
parents in:
    (a) Experiences and activities which lead to enhancing the 
development of their skills, self-confidence, and sense of independence 
in fostering an environment in which their children can develop to their 
full potential.

[[Page 237]]

    (b) Experiences in child growth and development which will 
strengthen their role as the primary influence in their children's 
lives.
    (c) Ways of providing educational and developmental activities for 
children in the home and community.
    (d) Health, mental health, dental and nutrition education.
    (e) Identification, and use, of family and community resources to 
meet the basic life support needs of the family.
    (f) Identification of opportunities for continuing education which 
may lead towards self-enrichment and employment.
    (g) Meeting with the Head Start teachers and other appropriate staff 
for discussion and assessment of their children's individual needs and 
progress.



Sec. 1304.5-4   Parent Involvement Plan content: Communications among program management, program staff, and parents.

    (a) The plan shall provide for two-way communication between staff 
and parents carried out on a regular basis throughout the program year 
which provides information about the program and its services; program 
activities for the children; the policy groups; and resources within the 
program and the community. Communication must be designed and carried 
out in a way which reaches parents and staff effectively. Policy Groups, 
staff and parents must participate in the planning and development of 
the communication system used.
    (b) The plan shall provide a system for the regular provision of 
information to members of Policy Groups. The purpose of such 
communication is to enable the Policy Group to make informed decisions 
in a timely and effective manner, to share professional expertise and 
generally to be provided with staff support. At a minimum, information 
provided will include:
    (1) Timetable for planning, development, and submission of 
proposals;
    (2) Head Start policies, guidelines, and other communications from 
the Administration on Children, Youth and Families;
    (3) Financial reports and statements of funds expended in the Head 
Start account; and
    (4) Work plans, grant applications, and personnel policies for Head 
Start.
    (c) The entire Head Start staff shall share responsibility for 
providing assistance in the conduct of the above activities. In 
addition, Health Services, Education, and Social Services staff shall 
contribute their direct services to assist the Parent Involvement staff. 
If staff resources are not available, the necessary resources shall be 
sought within the community.



Sec. 1304.5-5   Parent Involvement Plan content: Parents, area residents, and the program.

    The plan shall provide for:
    (a) The establishment of effective procedures by which parents and 
area residents concerned will be enabled to influence the character of 
programs affecting their interests.
    (b) Their regular participation in the implementation of such 
programs and,
    (c) Technical and other support needed to enable parents and area 
residents to secure on their own behalf available assistance from public 
and private sources.

                   Appendix A to Part 1304--[Reserved]

     Appendix B to Part 1304--Head Start Policy Manual: The Parents

    This appendix sets forth policy governing the involvement of parents 
of Head Start children ``. . . in the development, conduct, and overall 
program direction at the local level.''

                           I-30-2 The Parents

                             a. introduction

    Head Start believes that the gains made by the child in Head Start 
must be understood and built upon by the family and the community. To 
achieve this goal, Head Start provides for the involvement of the 
child's parents and other members of the family in the experiences he 
receives in the child development center by giving them many 
opportunities for a richer appreciation of the young child's needs and 
how to satisfy them.
    Many of the benefits of Head Start are rooted in ``change''. These 
changes must take place in the family itself, in the community, and in 
the attitudes of people and institutions that have an impact on both.
    It is clear that the success of Head Start in bringing about 
substantial changes demands the fullest involvement of the parents, 
parental-substitutes, and families of children

[[Page 238]]

enrolled in its programs. This involvement begins when a Head Start 
program begins and should gain vigor and vitality as planning and 
activities go forward.
    Successful parental involvement enters into every part of Head 
Start, influences other anti-poverty programs, helps bring about changes 
in institutions in the community, and works toward altering the social 
conditions that have formed the systems that surround the economically 
disadvantaged child and his family.
    Project Head Start must continue to discover new ways for parents to 
become deeply involved in decision-making about the program and in the 
development of activities that they deem helpful and important in 
meeting their particular needs and conditions. For some parents, 
participation may begin on a simple level and move to more complex 
levels. For other parents the movement will be immediate, because of 
past experiences, into complex levels of sharing and giving. Every Head 
Start program is obligated to provide the channels through which such 
participation and involvement can be provided for and enriched.
    Unless this happens, the goals of Head Start will not be achieved 
and the program itself will remain a creative experience for the 
preschool child in a setting that is not reinforced by needed changes in 
social systems into which the child will move after his Head Start 
experience.
    This sharing in decisions for the future is one of the primary aims 
of parent participation and involvement in Project Head Start.

                       b. the role of the parents

    Every Head Start Program Must Have Effective Parent Participation. 
There are at least four major kinds of parent participation in local 
Head Start programs.

    1. PARTICIPATION IN THE PROCESS OF MAKING DECISIONS ABOUT THE NATURE 
AND OPERATION OF THE PROGRAM.
    2. PARTICIPATION IN THE CLASSROOM AS PAID EMPLOYEES, VOLUNTEERS OR 
OBSERVERS.
    3. ACTIVITIES FOR THE PARENTS WHICH THEY HAVE HELPED TO DEVELOP.
    4. WORKING WITH THEIR CHILDREN IN COOPERATION WITH THE STAFF OF THE 
CENTER.

    Each of these is essential to an effective Head Start program both 
at the grantee level and the delegate agency level. Every Head Start 
program must hire/designate a Coordinator of Parent Activities to help 
bring about appropriate parent participation. This staff member may be a 
volunteer in smaller communities.

1. Parent Participation in the Process of Making Decisions About the 
Nature and Operation of the Program

Head Start Policy Groups

    a. Structure. The formal structure by which parents can participate 
in policy making and operation of the program will vary with the local 
administrative structure of the program.
    Normally, however, the Head Start policy groups will consist of the 
following:
    1. Head Start Center Committee. This committee must be set up at the 
center level. Where centers have several classes, it is recommended that 
there also be parent class committees.
    2. Head Start Policy Committee. This committee must be set up at the 
delegate agency level when the program is administered in whole or in 
part by such agencies.
    3. Head Start Policy Council. This Council must be set up at the 
grantee level.
    When a grantee has delegated the entire Head Start program to one 
Delegate Agency, it is not necessary to have a Policy Council in 
addition to a Delegate Agency Policy Committee. Instead one policy group 
serves both the Grantee Board and the Delegate Agency Board.
    b. Composition. Chart A describes the composition of each of these 
groups.

                                 Chart A                                
------------------------------------------------------------------------
              Organization                         Composition          
------------------------------------------------------------------------
1. Head Start Center Committee.........  1. Parents whose children are  
                                          enrolled in that center.      
2. Head Start Policy Committee           2. At least 50% parents of Head
 (delegate agency).                       Start children presently      
                                          enrolled in that delegate     
                                          agency program plus           
                                          representatives of the        
                                          community.\1\                 
3. Head Start Policy Council (grantee).  3. At least 50% parents of Head
                                          Start children presently      
                                          enrolled in that grantee's    
                                          program plus representatives  
                                          of the community.\2\          
------------------------------------------------------------------------
\1\Representatives of the Community (Delegate Agency level): A          
  representative of neighborhood community groups (public and private)  
  and of local neighborhood community or professional organizations,    
  which have a concern for children of low income families and can      
  contribute to the development of the program. The number of such      
  representatives will vary depending on the number of organizations    
  which should appropriately be represented. The Delegate Agency        
  determines the composition of their committee (within the above       
  guidelines) and methods to be used in selecting representatives of the
  community. Parents of former Head Start children may serve as         
  representatives of the community on delegate agency policy groups. All
  representatives of the community selected by the agency must be       
  approved by elected parent members of the committee. In no case,      
  however, should representatives of the community exceed 50% of the    
  total committee.                                                      

[[Page 239]]

                                                                        
\2\Representatives of the Community (Grantee Agency level): A           
  representative of major agencies (public and private) and major       
  community civic or professional organizations which have a concern for
  children of low income families and can contribute to the program. The
  number of such representatives will vary, depending on the number of  
  organizations which should appropriately be represented. The applicant
  agency determines the composition of the council (within the above    
  guidelines) and the methods to be used in selecting representatives of
  the community. Parents of former Head Start children may serve as     
  representatives of the community on grantee agency policy groups. All 
  representatives of the community selected by the agency must be       
  approved by elected parent members of the committee. In no case,      
  however, should representatives of the community exceed 50% of the    
  total committee or council.                                           

Special Notes

    1. All parents serving on policy groups must be elected by parents 
of Head Start children currently enrolled in the program.
    2. It is strongly recommended that the community action agency board 
have representation from the Head Start Policy Council to assure 
coordination of Head Start activities with other CAA programs. 
Conversely, community action agency board representation on the Policy 
Council is also recommended.
    3. It is important that the membership of policy groups be rotated 
to assure a regular influx of new ideas into the program. For this 
purpose, terms of membership must be limited to no more than three 
years.
    4. No staff member (nor members of their families as defined in CAP 
Memo 23A) of the applicant or delegate agencies shall serve on the 
council or committee in a voting capacity. Staff members may attend the 
meetings of councils or committees in a consultative non-voting capacity 
upon request of the council or committee.
    5. Every corporate board operating a Head Start program must have a 
Policy Committee or Council as defined by HHS. The corporate body and 
the Policy Committee or Council must not be one and the same.
    6. Policy groups for summer programs present a special problem 
because of the difficulty of electing parent representatives in advance. 
Therefore, the policy group for one summer program must remain in office 
until its successors have been elected and taken office. The group from 
the former program should meet frequently between the end of the program 
and the election of new members to assure some measure of program 
continuity. These meetings should be for the purpose of (a) assuring 
appropriate follow up of the children (b) aiding the development of the 
upcoming summer Head Start program, (c) writing of the application, (d) 
hiring of the director and establishment of criteria for hiring staff 
and, when necessary (e) orientation of the new members. In short, the 
policy group from a former program must not be dissolved until a new 
group is elected. The expertise of those parents who have previously 
served should be used whenever possible.
    c. Functions. The following paragraphs and charts describe the 
minimum functions and degrees of responsibility for the various policy 
groups involved in administration of local Head Start programs. Local 
groups may negotiate for additional functions and a greater share of 
responsibility if all parties agree. All such agreements are subject to 
such limitations as may be called for by HHS policy. Questions about 
this should be referred to your HHS regional office.
    (1) The Head Start Center Committee shall carry out at least the 
following minimum responsibilities:
    (a) Assists teacher, center director, and all other persons 
responsible for the development and operation of every component 
including curriculum in the Head Start program.
    (b) Works closely with classroom teachers and all other component 
staff to carry out the daily activities program.
    (c) Plans, conducts, and participates in informal as well as formal 
programs and activities for center parents and staff.
    (d) Participates in recruiting and screening of center employees 
within guidelines established by HHS, the Grantee Council and Board, and 
Delegate Agency Committee and Board.
    (2) The Head Start Policy Committee. Chart B outlines the major 
management functions connected with local Head Start program 
administered by delegate agencies and the degree of responsibility 
assigned to each participating group.
    In addition to those listed functions, the committee shall:
    (a) Serve as a link between public and private organizations, the 
grantee Policy Council, the Delegate Agency Board of Directors, and the 
community it serves.
    (b) Have the opportunity to initiate suggestions and ideas for 
program improvements and to receive a report on action taken by the 
administering agency with regard to its recommendations.
    (c) Plan, coordinate and organize agency-wide activities for parents 
with the assistance of staff.
    (d) Assist in communicating with parents and encouraging their 
participation in the program.
    (e) Aid in recruiting volunteer services from parents, community 
residents and community organizations, and assist in the mobilization of 
community resources to meet identified needs.
    (f) Administer the Parent Activity funds.
    (3) The Head Start Policy Council. Chart C outlines the major 
management functions connected with the Head Start program at the 
grantee level, whether it be a community

[[Page 240]]

action or limited purpose agency, and the degree of responsibility 
assigned to each participating group.
    In addition to those listed functions, the Council shall:
    (a) Serve as a link between public and private organizations, the 
Delegate Agency Policy Committees, Neighborhood Councils, the Grantee 
Board of Directors and the community it serves.
    (b) Have the opportunity to initiate suggestions and ideas for 
program improvements and to receive a report on action taken by the 
administering agency with regard to its recommendations.
    (c) Plan, coordinate and organize agency-wide activities for parents 
with the assistance of staff.
    (d) Approve the selection of Delegate Agencies.
    (e) Recruit volunteer services from parents, community residents and 
community organizations, and mobilizes community resources to meet 
identified needs.
    (f) Distribute Parent Activity funds to Policy Committees.
    It may not be easy for Head Start directors and professional staff 
to share responsibility when decisions must be made. Even when they are 
committed to involving parents, the Head Start staff must take care to 
avoid dominating meetings by force of their greater training and 
experience in the process of decisionmaking. At these meetings, 
professionals may be tempted to do most of the talking. They must learn 
to ask parents for their ideas, and listen with attention, patience and 
understanding. Self-confidence and self-respect are powerful motivating 
forces. Activities which bring out these qualities in parents can prove 
invaluable in improving family life of young children from low income 
homes.
    Members of Head Start Policy Groups whose family income falls below 
the ``poverty line index'' may receive meeting allowances or be 
reimbursed for travel, per diem, meal and baby sitting expenses incurred 
because of Policy Group meetings. The procedures necessary to secure 
reimbursement funds and their regulations are detailed in OEO 
Instruction 6803-1.

   2. Participation in the Classroom as Paid Employees, Volunteers or 
                                Observers

    Head Start classes must be open to parents at times reasonable and 
convenient to them. There are very few occasions when the presence of a 
limited number of parents would present any problem in operation of the 
program.
    Having parents in the classroom has three advantages. It:
    a. Gives the parents a better understanding of what the center is 
doing for the children and the kinds of home assistance they may 
require.
    b. Shows the child the depth of his parents concern.
    c. Gives the staff an opportunity to know the parents better and to 
learn from them.
    There are, of course, many center activities outside the classroom 
(e.g., field trips, clinic visits, social occasions) in which the 
presence of parents is equally desirable.
    Parents are one of the categories of persons who must receive 
preference for employment as non-professionals. Participation as 
volunteers may also be possible for many parents. Experience obtained as 
a volunteer may be helpful in qualifying for non-professional 
employment. At a minimum parents should be encouraged to observe classes 
several times. In order to permit fathers to observe it might be a good 
idea to have some parts of the program in the evening or on weekends.
    Head Start Centers are encouraged to set aside space within the 
Center which can be used by parents for meetings and staff conferences.

       3. Activities for Parents Which They Have Helped To Develop

    Head Start programs must develop a plan for parent education 
programs which are responsive to needs expressed by the parents 
themselves. Other community agencies should be encouraged to assist in 
the planning and implementation of these programs.
    Parents may also wish to work together on community problems of 
common concern such as health, housing, education and welfare and to 
sponsor activities and programs around interests expressed by the group. 
Policy Committees must anticipate such needs when developing program 
proposals and include parent activity funds to cover the cost of parent 
sponsored activities.

4. Working With Their Children in Their Own Home in Connection with the 
Staff of the Center

    HHS requires that each grantee make home visits a part of its 
program when parents permit such visits. Teachers should visit parents 
of summer children a minimum of once; in full year programs there should 
be at least three visits, if the parents have consented to such home 
visits. (Education staff are now required to make no less than two home 
visits during a given program year in accordance with Sec. 1304.2-
2(e)(4).) In those rare cases where a double shift has been approved for 
teachers it may be necessary to use other types of personnel to make 
home visits. Personnel, such as teacher aides, health aides and social 
workers may also make home visits with, or independently of, the 
teaching staff but coordinated through the parent program staff in order 
to eliminate uncoordinated visits.
    Head Start staff should develop activities to be used at home by 
other family members

[[Page 241]]

that will reinforce and support the child's total Head Start experience.
    Staff, parents and children will all benefit from home visits and 
activities. Grantees shall not require that parents permit home visits 
as a condition of the child's participation in Head Start. However, 
every effort must be made to explain the advantages of visits to 
parents.

Definitions as used on charts B and C

    A. General Responsibility. The individual or group with legal and 
fiscal responsibility guides and directs the carrying out of the 
function described through the person or group given operating 
responsibility.
    B. Operating Responsibility. The individual or group that is 
directly responsible for carrying out or performing the function, 
consistent with the general guidance and direction of the individual or 
group holding general responsibility.
    C. Must Approve or Disapprove. The individual or group (other than 
persons or groups holding general and operating responsibility, A and B 
above) must approve before the decision is finalized or action taken. 
The individual or group must also have been consulted in the decision 
making process prior to the point of seeking approval.
    If they do not approve, the proposal cannot be adopted, or the 
proposed action taken, until agreement is reached between the 
disagreeing groups or individuals.
    D. Must be Consulted. The individual or group must be called upon 
before any decision is made or approval is granted to give advice or 
information but not to make the decision or grant approval.
    E. May be Consulted. The individual or group may be called upon for 
information, advice or recommendations by those individuals or groups 
having general responsibility or operating responsibility.

----------------------------------------------------------------------------------------------------------------
                                       Chart B--Delegate agency                  Chart C--Grantee agency        
                              ----------------------------------------------------------------------------------
                                                       Head                                     Head            
           Function                      Executive    Start      Head              Executive    Start     Head  
                                 Board    director    policy     Start     Board    director   policy     Start 
                                                    committee  director                        council  director
----------------------------------------------------------------------------------------------------------------
         I. Planning                                                                                            
                                                                                                                
(a) Identify child                                                                                              
 development needs in the                                                                                       
 area to be served (by CAA\1\                                                                                   
 if not delegated)...........         A          B          D         D         A          B         D         D
(b) Establish goals of Head                                                                                     
 Start program and develop                                                                                      
 ways to meet them within HHS                                                                                   
 guidelines..................         A          C          C         B         A          C         C         B
(c) Determine delegate                                                                                          
 agencies and areas in the                                                                                      
 community in which Head                                                                                        
 Start programs will operate.  ........  .........  .........  ........         A          D         C         B
(d) Determine location of                                                                                       
 centers or classes..........         A          D          C         B  ........  .........  ........  ........
(e) Develop plans to use all                                                                                    
 available community                                                                                            
 resources in Head Start.....         A          D          C         B         A          D         C         B
(f) Establish criteria for                                                                                      
 selection of children within                                                                                   
 applicable laws and HHS                                                                                        
 guidelines..................  ........  .........  .........  ........         A          C         C         B
(g) Develop plan for                                                                                            
 recruitment of children.....         A          C          C         B  ........  .........  ........  ........
                                                                                                                
  II. General Administration                                                                                    
                                                                                                                
(a) Determine the composition                                                                                   
 of the appropriate policy                                                                                      
 group and the method for                                                                                       
 setting it up (within HHS                                                                                      
 guidelines).................         A          B          C         D         A          B         C         D
(b) Determine what services                                                                                     
 should be provided to Head                                                                                     
 Start from the CAA\1\                                                                                          
 central office and the                                                                                         
 neighborhood centers........  ........  .........  .........  ........         A          B         C         D
(c) Determine what services                                                                                     
 should be provided to Head                                                                                     
 Start from delegate agency..         A          B          C         D  ........  .........  ........  ........
(d) Establish a method of                                                                                       
 hearing and resolving                                                                                          
 community complaints about                                                                                     
 the Head Start program......         D          C          A         B         D          C         A         B
(e) Direct the CAA\1\ Head                                                                                      
 Start staff in day-to-day                                                                                      
 operations..................  ........  .........  .........  ........         E          A         E         B
(f) Direct the delegate                                                                                         
 agency Head Start staff in                                                                                     
 day-to-day operations.......         E          A          E         B  ........  .........  ........  ........
(g) Insure that standards for                                                                                   
 acquiring space, equipment,                                                                                    
 and supplies are met........         A          D          D         B         A          D         D         B
                                                                                                                

[[Page 242]]

                                                                                                                
III. Personnel Administration                                                                                   
                                                                                                                
(a) Determine Head Start                                                                                        
 personnel policies                                                                                             
 (including establishment of                                                                                    
 hiring and firing criteria                                                                                     
 for Head Start staff, career                                                                                   
 development plans, and                                                                                         
 employee grievance                                                                                             
 procedures).................                                                                                   
  Grantee agency.............  ........  .........  .........  ........         A          C         C         B
  Delegate agency............         A          C          C         B  ........  .........  ........  ........
(b) Hire and fire Head Start                                                                                    
 Director of grantee agency..  ........  .........  .........  ........         A          B         C  ........
(c) Hire and fire Head Start                                                                                    
 staff of grantee agency.....  ........  .........  .........  ........         E          A         C         B
(d) Hire and fire Head Start                                                                                    
 Director of delegate agency.         A          B          C  ........  ........  .........  ........  ........
(e) Hire and fire Head Start                                                                                    
 staff of delegate agency....         E          A          C         B  ........  .........  ........  ........
                                                                                                                
IV. Grant Application Process                                                                                   
                                                                                                                
(a) Prepare request for funds                                                                                   
 and proposed work program:                                                                                     
  Prior to sending to CAA\1\.         A          C          C         B  ........  .........  ........  ........
  Prior to sending to HHS....  ........  .........  .........  ........         A          C         C         B
(b) Make major changes in                                                                                       
 budget and work program                                                                                        
 while program is in                                                                                            
 operation...................         A          C          C         B         A          C         C         B
(c) Provide information                                                                                         
 needed for prereview to                                                                                        
 policy council..............         A          D          C         B  ........  .........  ........  ........
(d) Provide information                                                                                         
 needed for prereview to HHS.  ........  .........  .........  ........         A          D         C         B
                                                                                                                
        V. Evaluation                                                                                           
                                                                                                                
Conduct self-evaluation of                                                                                      
 agency's Head Start program.         A          D          B         D         A          D         B         D
----------------------------------------------------------------------------------------------------------------
\1\CAA or general term ``grantee''.                                                                             
                                                                                                                
A=General responsibility                                                                                        
B=Operating responsibility                                                                                      
C=Must approve or disapprove                                                                                    
D=Must be consulted                                                                                             
E=May be consulted                                                                                              



PART 1305--ELIGIBILITY, RECRUITMENT, SELECTION, ENROLLMENT AND ATTENDANCE IN HEAD START--Table of Contents




Sec.
1305.1  Purpose and scope.
1305.2  Definitions.
1305.3  Determining community needs.
1305.4  Age of children and family income eligibility.
1305.5  Recruitment of children.
1305.6  Selection process.
1305.7  Enrollment and re-enrollment.
1305.8  Attendance.
1305.9  Policy on fees.
1305.10  Compliance.

    Authority: 42 U.S.C. 9801 et seq.

    Source: 57 FR 46725, Oct. 9, 1992, unless otherwise noted.



Sec. 1305.1  Purpose and scope.

    This part prescribes requirements for determining community needs 
and recruitment areas. It contains requirements and procedures for the 
eligibility determination, recruitment, selection, enrollment and 
attendance of children in Head Start programs and explains the policy 
concerning the charging of fees by Head Start programs.



Sec. 1305.2  Definitions.

    (a) Children with disabilities means children with mental 
retardation, hearing impairments including deafness, speech or language 
impairments, visual impairments including blindness, serious emotional 
disturbance, orthopedic impairments, autism, traumatic brain injury, 
other health impairments or

[[Page 243]]

specific learning disabilities who, by reason thereof need special 
education and related services. The term ``children with disabilities'' 
for children aged 3 to 5, inclusive, may, at a State's discretion, 
include children experiencing developmental delays, as defined by the 
State and as measured by appropriate diagnostic instruments and 
procedures, in one or more of the following areas: physical development, 
cognitive development, communication development, social or emotional 
development, or adaptive development; and who, by reason thereof, need 
special education and related services.
    (b) Enrollment means the official acceptance of a family by a Head 
Start program and the completion of all procedures necessary for a child 
and family to begin receiving services.
    (c) Enrollment opportunities mean vacancies that exist at the 
beginning of the enrollment year, or during the year because of children 
who leave the program, that must be filled for a program to achieve and 
maintain its funded enrollment.
    (d) Enrollment year means the period of time, not to exceed twelve 
months, during which a Head Start program provides center or home-based 
services to a group of children and their families.
    (e) Family means all persons living in the same household who are:
    (1) Supported by the income of the parent(s) or guardian(s) of the 
child enrolling or participating in the program, and (2) related to the 
parent(s) or guardian(s) by blood, marriage, or adoption.
    (f) Funded enrollment means the number of children which the Head 
Start grantee is to serve, as indicated on the grant award.
    (g) Head Start eligible means a child that meets the requirements 
for age and family income as established in this regulation or, if 
applicable, as established by grantees that meet the requirements of 
section 645(a) (2) of the Head Start Act. Up to ten percent of the 
children enrolled may be from families that exceed the low-income 
guidelines.
    (h) Head Start program means a Head Start grantee or its delegate 
agency(ies).
    (i) Income means gross cash income and includes earned income, 
military income (including pay and allowances), veterans benefits, 
social security benefits, unemployment compensation, and public 
assistance benefits.
    (j) Income guidelines means the official poverty line specified in 
section 652 of the Head Start Act.
    (k) Low-income family means a family whose total annual income 
before taxes is equal to, or less than, the income guidelines. For the 
purpose of eligibility, a child from a family that is receiving public 
assistance or a child in foster care is eligible even if the family 
income exceeds the income guidelines.
    (l) Migrant family means, for purposes of Head Start eligibility, a 
family with children under the age of compulsory school attendance who 
change their residence by moving from one geographic location to 
another, either intrastate or interstate, within the past twelve months, 
for the purpose of engaging in agricultural work that involves the 
production and harvesting of tree and field crops and whose family 
income comes primarily from this activity.
    (m) Recruitment means the systematic ways in which a Head Start 
program identifies families whose children are eligible for Head Start 
services, informs them of the services available, and encourages them to 
apply for enrollment in the program.
    (n) Recruitment area means that geographic locality within which a 
Head Start program seeks to enroll Head Start children and families. The 
recruitment area can be the same as the service area or it can be a 
smaller area or areas within the service area.
    (o) Responsible HHS official means the official of the U.S. 
Department of Health and Human Services having authority to make Head 
Start grant awards, or his or her designee.
    (p) Selection means the systematic process used to review all 
applications for Head Start services and to identify those children and 
families that are to be enrolled in the program.
    (q) Service area means the geographic area identified in an approved 
grant application within which a grantee may provide Head Start 
services.

[[Page 244]]

    (r) Vacancy means an unfilled enrollment opportunity for a child and 
family in the Head Start program.

[57 FR 46725, Oct. 9, 1992, as amended at 58 FR 5518, Jan. 21, 1993]



Sec. 1305.3  Determining community    needs.

    (a) Each grantee must identify its proposed service area in its Head 
Start grant application and define it by county or sub-county area, such 
as a municipality, town or census tract or a federally recognized Indian 
reservation. A grantee's service area must be approved, in writing, by 
the responsible HHS official in order to assure that the service area is 
of reasonable size and does not overlap with that of other Head Start 
grantees.
    (b) Each Head Start grantee must conduct a community needs 
assessment within its service area once every three years. The community 
needs assessment must include the collection and analysis of the 
following information about the grantee's Head Start service area:
    (1) The demographic make-up of Head Start eligible children and 
families, including their estimated number, geographic location, and 
racial and ethnic composition;
    (2) Other child development and child care programs that are serving 
Head Start eligible children, including publicly funded State and local 
preschool programs, and the approximate number of Head Start eligible 
children served by each;
    (3) The estimated number of children with disabilities four years 
old or younger, including types of disabilities and relevant services 
and resources provided to these children by community agencies;
    (4) Data regarding the education, health, nutrition and social 
service needs of Head Start eligible children and their families;
    (5) The education, health, nutrition and social service needs of 
Head Start eligible children and their families as defined by families 
of Head Start eligible children and by institutions in the community 
that serve young children;
    (6) Resources in the community that could be used to address the 
needs of Head Start eligible children and their families, including 
assessments of their availability and accessibility.
    (c) The Head Start grantee must use information from the community 
needs assessment to:
    (1) Help determine the grantee's philosophy, and its long-range and 
short-range program objectives;
    (2) Determine the type of component services that are most needed 
and the program option or options that will be implemented;
    (3) Determine the recruitment area that will be served by the 
grantee, if limitations in the amount of resources make it impossible to 
serve the entire service area.
    (4) If there are delegate agencies, determine the recruitment area 
that will be served by the grantee and the recruitment area that will be 
served by each delegate agency.
    (5) Determine appropriate locations for centers and the areas to be 
served by home-based programs; and
    (6) Set criteria that define the types of children and families who 
will be given priority for recruitment and selection.
    (d) In each of the two years following completion of the community 
needs assessment, the grantee must conduct a review to determine whether 
there have been significant changes in the information described in 
paragraph (b) of this section. If so, the community needs assessment 
must be updated and the decisions described in paragraph (c) of this 
section must be reconsidered.
    (e) The recruitment area must include the entire service area, 
unless the resources available to the Head Start grantee are inadequate 
to serve the entire service area.
    (f) In determining the recruitment area when it does not include the 
entire service area, the grantee must:
    (1) Select an area or areas that are among those having the greatest 
need for Head Start services as determined by the community needs 
assessment; and
    (2) Include as many Head Start eligible children as possible within 
the recruitment area, so that:
    (i) The greatest number of Head Start eligible children can be 
recruited

[[Page 245]]

and have an opportunity to be considered for selection and enrollment in 
the Head Start program, and
    (ii), the Head Start program can enroll the children and families 
with the greatest need for its services.



Sec. 1305.4  Age of children and family income eligibility.

    (a) To be eligible for Head Start services, a child must be at least 
three years old by the date used to determine eligibility for public 
school in the community in which the Head Start program is located, 
except in cases where the Head Start program's approved grant provides 
specific authority to serve younger children. Examples of such 
exceptions are programs serving children of migrant families and Parent 
and Child Center programs.
    (b) At least 90 percent of the children who are enrolled in each 
Head Start program must be from low-income families. Up to ten percent 
of the children who are enrolled may be children from families that 
exceed the low-income guidelines but who meet criteria the program has 
established for selecting such children and who would benefit from Head 
Start services.
    (c) The family income must be verified by the Head Start program 
before determining that a child is eligible to participate in the 
program.
    (d) Verification must include examination of any of the following: 
Individual Income Tax Form 1040, W-2 forms, pay stubs, pay envelopes, 
written statements from employers, or documentation showing current 
status as recipients of public assistance.
    (e) A signed statement by an employee of the Head Start program, 
identifying which of these documents was examined and stating that the 
child is eligible to participate in the program, must be maintained to 
indicate that income verification has been made.



Sec. 1305.5  Recruitment of children.

    (a) In order to reach those most in need of Head Start services, 
each Head Start grantee and delegate agency must develop and implement a 
recruitment process that is designed to actively inform all families 
with Head Start eligible children within the recruitment area of the 
availability of services and encourage them to apply for admission to 
the program. This process may include canvassing the local community, 
use of news releases and advertising, and use of family referrals and 
referrals from other public and private agencies.
    (b) During the recruitment process that occurs prior to the 
beginning of the enrollment year, a Head Start program must solicit 
applications from as many Head Start eligible families within the 
recruitment area as possible. If necessary, the program must assist 
families in filling out the application form in order to assure that all 
information needed for selection is completed.
    (c) Each program, except migrant programs, must obtain a number of 
applications during the recruitment process that occurs prior to the 
beginning of the enrollment year that is greater than the enrollment 
opportunities that are anticipated to be available over the course of 
the next enrollment year in order to select those with the greatest need 
for Head Start services.



Sec. 1305.6  Selection process.

    (a) Each Head Start program must have a formal process for 
establishing selection criteria and for selecting children and families 
that considers all eligible applicants for Head Start services. The 
selection criteria must be based on those contained in paragraphs (b) 
and (c) of this section.
    (b) In selecting the children and families to be served, the Head 
Start program must consider the income of eligible families, the age of 
the child, the availability of kindergarten or first grade to the child, 
and the extent to which a child or family meets the criteria that each 
program is required to establish in Sec. 1305.3(c)(6).
    (c) At least 10 percent of the total number of enrollment 
opportunities in each grantee and each delegate agency during an 
enrollment year must be made available to children with disabilities who 
meet the definition for children with disabilities in Sec. 1305.2(a). An 
exception to this requirement will be granted only if the responsible 
HHS

[[Page 246]]

official determines, based on such supporting evidence as he or she may 
require, that the grantee made a reasonable effort to comply with this 
requirement but was unable to do so because there was an insufficient 
number of children with disabilities in the recruitment area who wished 
to attend the program and for whom the program was an appropriate 
placement based on their Individual Education Plans (IEP), with services 
provided directly by Head Start or in conjunction with other providers.
    (d) Each Head Start program must develop at the beginning of each 
enrollment year and maintain during the year a waiting list that ranks 
children according to the program's selection criteria to assure that 
eligible children enter the program as vacancies occur.



Sec. 1305.7  Enrollment and re-enrollment.

    (a) Each child enrolled in a Head Start program, except those 
enrolled in a migrant program, must be allowed to remain in Head Start 
until kindergarten or first grade is available for the child in the 
child's community, except that the Head Start program may choose not to 
enroll a child when there are compelling reasons for the child not to 
remain in Head Start, such as when there is a change in the child's 
family income and there is a child with a greater need for Head Start 
services.
    (b) A Head Start grantee must maintain its funded enrollment level. 
When a program determines that a vacancy exists, no more than 30 
calendar days may elapse before the vacancy is filled. A program may 
elect not to fill a vacancy when 60 calendar days or less remain in the 
program's enrollment year.
    (c) If a child has been found income eligible and is participating 
in a Head Start program, he or she remains income eligible through that 
enrollment year and the immediately succeeding enrollment year.



Sec. 1305.8  Attendance.

    (a) When the monthly average daily attendance rate in a center-based 
program falls below 85 percent, a Head Start program must analyze the 
causes of absenteeism. The analysis must include a study of the pattern 
of absences for each child, including the reasons for absences as well 
as the number of absences that occur on consecutive days.
    (b) If the absences are a result of illness or if they are well 
documented absences for other reasons, no special action is required. 
If, however, the absences result from other factors, including temporary 
family problems that affect a child's regular attendance, the program 
must initiate appropriate family support procedures for all children 
with four or more consecutive unexcused absences. These procedures must 
include home visits or other direct contact with the child's parents. 
Contacts with the family must emphasize the benefits of regular 
attendance, while at the same time remaining sensitive to any special 
family circumstances influencing attendance patterns. All contacts with 
the child's family as well as special family support service activities 
provided by program staff must be documented.
    (c) In circumstances where chronic absenteeism persists and it does 
not seem feasible to include the child in either the same or a different 
program option, the child's slot must be considered an enrollment 
vacancy.



Sec. 1305.9  Policy on fees.

    A Head Start program must not prescribe any fee schedule or 
otherwise provide for the charging of any fees for participation in the 
program. If the family of a child determined to be eligible for 
participation by a Head Start program volunteers to pay part or all of 
the costs of the child's participation, the Head Start program may 
accept the voluntary payments and record the payments as program income.
    Under no circumstances shall a Head Start program solicit, 
encourage, or in any other way condition a child's enrollment or 
participation in the program upon the payment of a fee.



Sec. 1305.10  Compliance.

    A grantee's failure to comply with the requirements of this Part may 
result in a denial of refunding or termination in accordance with 45 CFR 
part 1303.


[[Page 247]]





PART 1306--HEAD START STAFFING REQUIREMENTS AND PROGRAM OPTIONS--Table of Contents




                           Subpart A--General

Sec.
1306.1  Purpose and scope.
1306.2  Effective dates.
1306.3  Definitions.

          Subpart B--Head Start Program Staffing Requirements.

1306.20  Program staffing patterns.
1306.21  Staff qualification requirements.
1306.22  Volunteers.
1306.23  Training.

                  Subpart C--Head Start Program Options

1306.30  Provision of comprehensive child development services.
1306.31  Choosing a Head Start program option.
1306.32  Center-based program option.
1306.33  Home-based program option.
1306.34  Combination program option.
1306.35  Additional Head Start program option variations.
1306.36  Compliance waiver.

    Authority: 42 U.S.C. 9831 et seq.

    Source: 57 FR 58092, Dec. 8, 1992, unless otherwise noted.

                           Subpart A--General



Sec. 1306.1  Purpose and scope.

    This part sets forth requirements for Head Start program staffing 
and program options that all Head Start grantees, with the exception of 
the Parent Child Center programs, are required to meet. These 
requirements, including those pertaining to staffing patterns, the 
choice of the program options to be implemented and the acceptable 
ranges in the implementation of those options, have been developed to 
help maintain and improve the quality of Head Start and to help promote 
lasting benefits to the children and families being served.



Sec. 1306.2  Effective dates.

    (a) Except as provided in paragraph (b) of this section, Head Start 
grantees funded or refunded after June 7, 1993, must comply with these 
requirements by such times in their grant cycles as new groups of 
children begin receiving services. This does not preclude grantees from 
voluntarily coming into compliance with these regulations prior to the 
effective date.
    (b) With respect to the requirements of Sec. 1306.32(b)(2), grantees 
that are currently operating classes in double session center-based 
options for less than three and a half hours per day, but for at least 
three hours per day, may continue to do so until September 1, 1995, at 
which time they must comply with the three and one-half hour minimum 
class time requirement.



Sec. 1306.3  Definitions.

    (a) Center-based program option means Head Start services provided 
to children primarily in classroom settings.
    (b) Combination program option means Head Start services provided to 
children in both a center setting and through intensive work with the 
child's parents and family at home.
    (c) Days of operation means the planned days during which children 
will be receiving direct Head Start component services in a classroom, 
on a field trip or on trips for health-related activities, in group 
socialization or when parents are receiving a home visit.
    (d) Double session variation means a variation of the center-based 
program option that operates with one teacher who works with one group 
of children in a morning session and a different group of children in an 
afternoon session.
    (e) Full-day variation means a variation of the center-based program 
option in which program operations continue for longer than six hours 
per day.
    (f) Group socialization activities means the sessions in which 
children and parents enrolled in the home-based or combination program 
option interact with other home-based or combination children and 
parents in a Head Start classroom, community facility, home, or on a 
field trip.
    (g) Head Start class means a group of children supervised and taught 
by two paid staff members (a teacher and a teacher aide or two teachers) 
and, where possible, a volunteer.
    (h) Head Start parent means a Head Start child's mother or father, 
other family member who is a primary caregiver, foster parent, guardian 
or the person with whom the child has

[[Page 248]]

been placed for purposes of adoption pending a final adoption decree.
    (i) Head Start program is one operated by a Head Start grantee or 
delegate agency.
    (j) Home-based program option means Head Start services provided to 
children, primarily in the child's home, through intensive work with the 
child's parents and family as the primary factor in the growth and 
development of the child.
    (k) Home visits means the visits made to a child's home by the class 
teacher in a center-based program option, or home visitors in a home-
based program option, for the purpose of assisting parents in fostering 
the growth and development of their child.
    (l) Hours of operation means the planned hours per day during which 
children and families will be receiving direct Head Start component 
services in a classroom, on a field trip, while receiving medical or 
dental services, or during a home visit or group socialization activity. 
Hours of operation do not include travel time to and from the center at 
the beginning and end of a session.
    (m) Parent-teacher conference means the meeting held at the Head 
Start center between the child's teacher and the child's parents during 
which the child's progress and accomplishments are discussed.

           Subpart B--Head Start Program Staffing Requirements



Sec. 1306.20  Program staffing patterns.

    (a) Grantees must provide adequate supervision of their staff.
    (b) Grantees operating center-based program options must employ two 
paid staff persons (a teacher and a teacher aide or two teachers) for 
each class. Whenever possible, there should be a third person in the 
classroom who is a volunteer.
    (c) Grantees operating home-based program options must employ home 
visitors responsible for home visits and group socialization activities.
    (d) Grantees operating a combination program option must employ, for 
their classroom operations, two paid staff persons, a teacher and a 
teacher aide or two teachers, for each class. Whenever possible, there 
should be a third person in the classroom who is a volunteer. They must 
employ staff for home visits who meet the qualifications the grantee 
requires for home visitors.
    (e) Classroom staff and home visitors must be able to communicate 
with the families they serve either directly or through a translator. 
They should also be familiar with the ethnic background of these 
families.



Sec. 1306.21  Staff qualification requirements.

    Head Start programs must comply with section 648 of the Head Start 
Act and any subsequent amendments, regarding the qualifications of 
classroom teachers.



Sec. 1306.22  Volunteers.

    (a) Head Start programs must use volunteers to the fullest extent 
possible. Head Start grantees must develop and implement a system to 
actively recruit, train and utilize volunteers in the program.
    (b) Special efforts must be made to have volunteer participation, 
especially parents, in the classroom and during group socialization 
activities.



Sec. 1306.23  Training.

    (a) Head Start grantees must provide pre-service training and in-
service training opportunities to program staff and volunteers to assist 
them in acquiring or increasing the knowledge and skills they need to 
fulfill their job responsibilities. This training must be directed 
toward improving the ability of staff and volunteers to deliver services 
required by Head Start regulations and policies.
    (b) Head Start grantees must provide staff with information and 
training about the underlying philosophy and goals of Head Start and the 
program options being implemented.

                  Subpart C--Head Start Program Options



Sec. 1306.30  Provisions of comprehensive child development services.

    (a) All Head Start grantees must provide comprehensive child 
development services, as defined in the Head Start Performance 
Standards.

[[Page 249]]

    (b) All Head Start grantees must provide classroom or group 
socialization activities for the child as well as home visits to the 
parents. The major purpose of the classroom or socialization activities 
is to help meet the child's development needs and to foster the child's 
social competence. The major purpose of the home visits is to enhance 
the parental role in the growth and development of the child.
    (c) The facilities used by Head Start grantees for regularly 
scheduled center-based and combination program option classroom 
activities or home-based socialization activities must comply with State 
and local requirements concerning licensing. In cases where these 
licensing standards are less comprehensive or less stringent than Head 
Start regulations, or where no State or local licensing standards are 
applicable, grantees are, at a minimum, required to assure that their 
facilities are in compliance with Head Start Performance Standards 
related to health and safety found in 45 CFR 1304.2-3.
    (d) All grantees must identify, secure and use community resources 
in the provision of services to Head Start children and their families 
prior to using Head Start funds for these services.



Sec. 1306.31  Choosing a Head Start program option.

    (a) Grantees may choose to implement one or more than one of three 
program options: a center-based option, a home-based program option or a 
combination program option.
    (b) The program option chosen must meet the needs of the children 
and families as indicated by the community needs assessment conducted by 
the grantee.
    (c) When assigning children to a particular program option, Head 
Start grantees that operate more than one program option must consider 
such factors as the child's age, developmental level, disabilities, 
health or learning problems, previous preschool experiences and family 
situation. Grantees must also consider parents' concerns and wishes 
prior to making final assignments.



Sec. 1306.32  Center-based program option.

    (a) Class size. (1) Head Start classes must be staffed by a teacher 
and an aide or two teachers and, whenever possible, a volunteer.
    (2) Grantees must determine their class size based on the 
predominant age of the children who will participate in the class and 
whether or not a center-based double session variation is being 
implemented.
    (3) For classes serving predominantly four or five-year-old 
children, the average class size of that group of classes must be 
between 17 and 20 children, with no more than 20 children enrolled in 
any one class.
    (4) When double session classes serve predominantly four or five-
year-old-children, the average class size of that group of classes must 
be between 15 and 17 children. A double session class for four or five-
year old children may have no more than 17 children enrolled. (See 
paragraph (c) of this section for other requirements regarding the 
double session variation.)
    (5) For classes serving predominantly three-year-old children, the 
average class size of that group of classes must be between 15 and 17 
children, with no more than 17 children enrolled in any one class.
    (6) When double session classes serve predominantly three-year-old 
children, the average class size of that group of classes must be 
between 13 and 15 children. A double session class for three-year-old 
children may have no more than 15 children enrolled. (See paragraph (c) 
of this section for other requirements regarding the double session 
variation.)
    (7) It is recommended that at least 13 children be enrolled in each 
center-based option class where feasible.
    (8) A class is considered to serve predominantly four- or five-year-
old children if more than half of the children in the class will be four 
or five years old by whatever date is used by the State or local 
jurisdiction in which the Head Start program is located to determine 
eligibility for public school.
    (9) A class is considered to serve predominantly three-year-old 
children if more than half of the children in the

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class will be three years old by whatever date is used by the State or 
local jurisdiction in which Head Start is located to determine 
eligibility for public school.
    (10) Head Start grantees must determine the predominant age of 
children in the class at the start of the year. There is no need to 
change that determination during the year.
    (11) In some cases, State or local licensing requirements may be 
more stringent than these class requirements, preventing the required 
minimum numbers of children from being enrolled in the facility used by 
Head Start. Where this is the case, Head Start grantees must try to find 
alternative facilities that satisfy licensing requirements for the 
numbers of children cited above. If no alternative facilities are 
available, the responsible HHS official has the discretion to approve 
enrollment of fewer children than required above.
    (12) The chart below may be used for easy reference:

------------------------------------------------------------------------
                                              Funded class size [Funded 
 Predominant age of children in the class            enrollment]        
------------------------------------------------------------------------
4 and 5 year olds.........................  Program average of 17-20    
                                             children enrolled per class
                                             in these classes. No more  
                                             than 20 children enrolled  
                                             in any class.              
4 and 5 year olds in double session         Program average of 15-17    
 classes.                                    children enrolled per class
                                             in these classes. No more  
                                             than 17 children enrolled  
                                             in any class.              
3 year olds...............................  Program average of 15-17    
                                             children enrolled per class
                                             in these classes. No more  
                                             than 17 children enrolled  
                                             in any class.              
3 year olds in double session classes.....  Program average of 13-15    
                                             children enrolled per class
                                             in these classes. No more  
                                             than 15 children enrolled  
                                             in any class.              
------------------------------------------------------------------------


    (b) Center-based program option requirements. (1) Classes must 
operate for four or five days per week or some combination of four and 
five days per week.
    (2) Classes must operate for a minimum of three and one-half to a 
maximum of six hours per day with four hours being optimal.
    (3) The annual number of required days of planned class operations 
(days when children are scheduled to attend) is determined by the number 
of days per week each program operates. Programs that operate for four 
days per week must provide at least 128 days per year of planned class 
operations. Programs that operate for five days per week must provide at 
least 160 days per year of planned class operations. Grantees 
implementing a combination of four and five days per week must plan to 
operate between 128 and 160 days per year. The minimum number of planned 
days of service per year can be determined by computing the relative 
number of four and five day weeks that the program is in operation. All 
center-based program options must provide a minimum of 32 weeks of 
scheduled days of class operations over an eight or nine month period. 
Every effort should be made to schedule makeup classes using existing 
resources if planned class days fall below the number required per year.
    (4) Programs must make a reasonable estimate of the number of days 
during a year that classes may be closed due to problems such as 
inclement weather or illness, based on their experience in previous 
years. Grantees must make provisions in their budgets and program plans 
to operate makeup classes and provide these classes, when needed, to 
prevent the number of days of service available to the children from 
falling below 128 days per year.
    (5) Each individual child is not required to receive the minimum 
days of service, although this is to be encouraged in accordance with 
Head Start policies regarding attendance. The minimum number of days 
also does not apply to children with disabilities whose individualized 
education plan may require fewer planned days of service in the Head 
Start program.
    (6) Head Start grantees operating migrant programs are not subject 
to the requirement for a minimum number of planned days, but must make 
every effort to provide as many days of service as possible to each 
migrant child and family.
    (7) Staff must be employed for sufficient time to allow them to 
participate in pre-service training, to plan and set up the program at 
the start of the year, to close the program at the end of the

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year, to conduct home visits, to conduct health examinations, screening 
and immunization activities, to maintain records, and to keep service 
component plans and activities current and relevant. These activities 
should take place outside of the time scheduled for classes in center-
based programs or home visits in home-based programs.
    (8) Head Start grantees must develop and implement a system that 
actively encourages parents to participate in two home visits annually 
for each child enrolled in a center-based program option. These visits 
must be initiated and carried out by the child's teacher. The child may 
not be dropped from the program if the parents will not participate in 
the visits.
    (9) Head Start grantees operating migrant programs are required to 
plan for a minimum of two parent-teacher conferences for each child 
during the time they serve that child. Should time and circumstance 
allow, migrant programs must make every effort to conduct home visits.
    (c) Double session variation. (1) A center-based option with a 
double session variation employs a single teacher to work with one group 
of children in the morning and a different group of children in the 
afternoon. Because of the larger number of children and families to whom 
the teacher must provide services, double session program options must 
comply with the requirements regarding class size explained in paragraph 
(a) of this section and with all other center-based requirements in 
paragraph (b) of this section with the exceptions and additions noted in 
paragraphs (c) (2) and (3) of this section.
    (2) Each program must operate classes for four days per week.
    (3) Each double session classroom staff member must be provided 
adequate break time during the course of the day. In addition, teachers, 
aides and volunteers must have appropriate time to prepare for each 
session together, to set up the classroom environment and to give 
individual attention to children entering and leaving the center.
    (d) Full day variation. (1) A Head Start grantee implementing a 
center-based program option may operate a full day variation and provide 
more than six hours of class operations per day using Head Start funds. 
These programs must comply with all the requirements regarding the 
center-based program option found in paragraphs (a) and (b) of this 
section with the exception of paragraph (b)(2) regarding the hours of 
service per day.
    (2) Programs are encouraged to meet the needs of Head Start families 
for full day services by securing funds from other agencies. Before 
implementing a full day variation of a center-based option, a Head Start 
grantee should demonstrate that alternative enrollment opportunities or 
funding from non-Head Start sources are not available for Head Start 
families needing full-day child care services.
    (3) Head Start grantees may provide full day services only to those 
children and families with special needs that justify full day services 
or to those children whose parents are employed or in job training with 
no caregiver present in the home. The records of each child receiving 
services for more than six hours per day must show how each child meets 
the criteria stated above.
    (e) Non-Head Start services. Grantees may charge for services which 
are provided outside the hours of the Head Start program.



Sec. 1306.33  Home-based program option.

    (a) Grantees implementing a home-based program option must:
    (1) Provide one home visit per week per family (a minimum of 32 home 
visits per year) lasting for a minimum of 1 and \1/2\ hours each.
    (2) Provide, at a minimum, two group socialization activities per 
month for each child (a minimum of 16 group socialization activities 
each year).
    (3) Make up planned home visits or scheduled group socialization 
activities that were canceled by the grantee or by program staff when 
this is necessary to meet the minimums stated above. Medical or social 
service appointments may not replace home visits or scheduled group 
socialization activities.
    (4) Allow staff sufficient employed time to participate in pre-
service training, to plan and set up the program at the start of the 
year, to close the program at the end of the year, to

[[Page 252]]

maintain records, and to keep component and activities plans current and 
relevant. These activities should take place when no home visits or 
group socialization activities are planned.
    (5) Maintain an average caseload of 10 to 12 families per home 
visitor with a maximum of 12 families for any individual home visitor.
    (b) Home visits must be conducted by trained home visitors with the 
content of the visit jointly planned by the home visitor and the 
parents. Home visitors must conduct the home visit with the 
participation of parents. Home visits may not be conducted by the home 
visitor with only babysitters or other temporary caregivers in 
attendance.
    (1) The purpose of the home visit is to help parents improve their 
parenting skills and to assist them in the use of the home as the 
child's primary learning environment. The home visitor must work with 
parents to help them provide learning opportunities that enhance their 
child's growth and development.
    (2) Home visits must, over the course of a month, contain elements 
of all Head Start program components. The home visitor is the person 
responsible for introducing, arranging and/or providing Head Start 
services.
    (c) Group socialization activities must be focused on both the 
children and parents. They may not be conducted by the home visitor with 
babysitters or other temporary caregivers.
    (1) The purpose of these socialization activities for the children 
is to emphasize peer group interaction through age appropriate 
activities in a Head Start classroom, community facility, home, or on a 
field trip. The children are to be supervised by the home visitor with 
parents observing at times and actively participating at other times.
    (2) These activities must be designed so that parents are expected 
to accompany their children to the group socialization activities at 
least twice each month to observe, to participate as volunteers or to 
engage in activities designed specifically for the parents.
    (3) Grantees must follow the nutrition requirements specified in 45 
CFR 1304.3-10(b)(1) and provide appropriate snacks and meals to the 
children during group socialization activities.



Sec. 1306.34  Combination program option.

    (a) Combination program option requirements: (1) Grantees 
implementing a combination program option must provide class sessions 
and home visits that result in an amount of contact with children and 
families that is, at a minimum, equivalent to the services provided 
through the center-based program option or the home-based program 
option.
    (2) Acceptable combinations of minimum number of class sessions and 
corresponding number of home visits are shown below. Combination 
programs must provide these services over a period of 8 to 12 months.

------------------------------------------------------------------------
                                                              Number of 
                 Number of class sessions                    home visits
------------------------------------------------------------------------
96........................................................             8
92-95.....................................................             9
88-91.....................................................            10
84-87.....................................................            11
80-83.....................................................            12
76-79.....................................................            13
72-75.....................................................            14
68-71.....................................................            15
64-67.....................................................            16
60-63.....................................................            17
56-59.....................................................            18
52-55.....................................................            19
48-51.....................................................            20
44-47.....................................................            21
40-43.....................................................            22
36-39.....................................................            23
32-35.....................................................            24
------------------------------------------------------------------------


    (3) The following are examples of various configurations that are 
possible for a program that operates for 32 weeks:

     A program operating classes three days a week and providing 
one home visit a month (96 classes and 8 home visits a year);
     A program operating classes two days a week and providing 
two home visits a month (64 classes and 16 home visits a year);
     A program operating classes one day a week and providing 
three home visits a month (32 classes and 24 home visits a year).

    (4) Grantees operating the combination program option must make a 
reasonable estimate of the number of days during a year that centers may 
be closed due to problems such as inclement weather or illness, based on 
their experience in previous years. Grantees must make provisions in 
their budgets and program plans to operate make-up

[[Page 253]]

classes up to the estimated number, and provide these classes, when 
necessary, to prevent the number of days of classes from falling below 
the number required by paragraph (a)(2) of this section. Grantees must 
make up planned home visits that were canceled by the program or by the 
program staff if this is necessary to meet the minimums required by 
paragraph (a)(2) of this section. Medical or social service appointments 
may not replace home visits.
    (b) Requirements for class sessions: (1) Grantees implementing the 
combination program option must comply with the class size requirements 
contained in Sec. 1306.32(a).
    (2) The provisions of the following sections apply to grantees 
operating the combination program option: Sec. 1306.32(b) (2), (5), (6), 
(7) and (9).
    (3) If a grantee operates a double session or a full day variation, 
it must meet the provisions concerning double-sessions contained in 
Sec. 1306.32(c)(1) and (3) and the provisions for the center-based 
program option's full day variation found in Sec. 1306.32(d).
    (c) Requirements for home visits: (1) Home visits must last for a 
minimum of 1 and \1/2\ hours each.
    (2) The provisions of the following section, concerning the home-
based program option, must be adhered to by grantees implementing the 
combination program option: Sec. 1306.33(a) (4) and (5); and 
Sec. 1306.33(b).



Sec. 1306.35  Additional Head Start program option variations.

    In addition to the center-based, home-based and combination program 
options defined above, the Commissioner of the Administration on 
Children, Youth and Families retains the right to fund alternative 
program variations to meet the unique needs of communities or to 
demonstrate or test alternative approaches for providing Head Start 
services.



Sec. 1306.36  Compliance waiver.

    An exception to one or more of the requirements contained in 
Secs. 1306.32 through 1306.34 of subpart C will be granted only if the 
Commissioner of the Administration on Children, Youth and Families 
determines, on the basis of supporting evidence, that the grantee made a 
reasonable effort to comply with the requirement but was unable to do so 
because of limitations or circumstances with a specific community or 
communities served by the grantee.



PART 1308--HEAD START PROGRAM PERFORMANCE STANDARDS ON SERVICES FOR CHILDREN WITH DISABILITIES--Table of Contents




                           Subpart A--General

Sec.
1308.1  Purpose.
1308.2  Scope.
1308.3  Definitions.

                  Subpart B--Disabilities Service Plan

1308.4  Purpose and scope of disabilities service plan.

            Subpart C--Social Services Performance Standards

1308.5  Recruitment and enrollment of children with disabilities.

            Subpart D--Health Services Performance Standards

1308.6  Assessment of children.
1308.7  Eligibility criteria: Health impairment.
1308.8  Eligibility criteria: Emotional/behavioral disorders.
1308.9  Eligibility criteria: Speech or language impairments.
1308.10  Eligibility criteria: Mental retardation.
1308.11  Eligibility criteria: Hearing impairment including deafness.
1308.12  Eligibility criteria: Orthopedic impairment.
1308.13  Eligibility criteria: Visual impairment including blindness.
1308.14  Eligibility criteria: Learning disabilities.
1308.15  Eligibility criteria: Autism.
1308.16  Eligibility criteria: Traumatic brain injury.
1308.17  Eligibility criteria: Other impairments.
1308.18  Disabilities/health services coordination.

           Subpart E--Education Services Performance Standards

1308.19  Developing individualized education programs (IEPs).

[[Page 254]]

               Subpart F--Nutrition Performance Standards

1308.20  Nutrition services.

           Subpart G--Parent Involvement Performance Standards

1308.21  Parent participation and transition of children into Head Start 
          and from Head Start to public school.

Appendix to Part 1308--Head Start Program Performance Standards on 
          Services to Children With Disabilities

    Authority: 42 U.S.C. 9801 et seq.

    Source: 58 FR 5501, Jan. 21, 1993, unless otherwise noted.



                           Subpart A--General



Sec. 1308.1  Purpose.

    This rule sets forth the requirements for providing special services 
for 3- through 5-year-old children with disabilities enrolled in Head 
Start programs. These requirements are to be used in conjunction with 
the Head Start Program Performance Standards at 45 CFR part 1304. The 
purpose of this part is to ensure that children with disabilities 
enrolled in Head Start programs receive all the services to which they 
are entitled under the Head Start Program Performance Standards at 45 
CFR part 1304, as amended.



Sec. 1308.2  Scope.

    This rule applies to all Head Start grantees and delegate agencies.



Sec. 1308.3  Definitions.

    As used in this part:
    (a) The term ACYF means the Administration on Children, Youth and 
Families, Administration for Children and Families, U.S. Department of 
Health and Human Services, and includes appropriate Regional Office 
staff.
    (b) The term children with disabilities means children with mental 
retardation, hearing impairments including deafness, speech or language 
impairments, visual impairments including blindness, serious emotional 
disturbance, orthopedic impairments, autism, traumatic brain injury, 
other health impairments or specific learning disabilities; and who, by 
reason thereof, need special education and related services. The term 
children with disabilities for children aged 3 to 5, inclusive, may, at 
a State's discretion, include children experiencing developmental 
delays, as defined by the State and as measured by appropriate 
diagnostic instruments and procedures, in one or more of the following 
areas: physical development, cognitive development, communication 
development, social or emotional development, or adaptive development; 
and who, by reason thereof, need special education and related services.
    (c) The term Commissioner means the Commissioner of the 
Administration on Children, Youth and Families.
    (d) The term day means a calendar day.
    (e) The term delegate agency means a public or private non-profit 
agency to which a grantee has delegated the responsibility for operating 
all or part of its Head Start program.
    (f) The term disabilities coordinator means the person on the Head 
Start staff designated to manage on a full or part-time basis the 
services for children with disabilities described in part 1308.
    (g) The term eligibility criteria means the criteria for determining 
that a child enrolled in Head Start requires special education and 
related services because of a disability.
    (h) The term grantee means the public or private non-profit agency 
which has been granted financial assistance by ACYF to administer a Head 
Start program.
    (i) The term individualized education program (IEP) means a written 
statement for a child with disabilities, developed by the public agency 
responsible for providing free appropriate public education to a child, 
and contains the special education and related services to be provided 
to an individual child.
    (j) The term least restrictive environment means an environment in 
which services to children with disabilities are provided:
    (1) to the maximum extent appropriate, with children who are not 
disabled and in which;
    (2) special classes or other removal of children with disabilities 
from the regular educational environment occurs only when the nature or 
severity of the

[[Page 255]]

disability is such that education in regular classes with the use of 
supplementary aids and services cannot be achieved satisfactorily.
    (k) The term Performance Standards means the Head Start program 
functions, activities and facilities required and necessary to meet the 
objectives and goals of the Head Start program as they relate directly 
to children and their families.
    (l) The term related services means transportation and such 
developmental, corrective, and other supportive services as are required 
to assist a child with a disability to benefit from special education, 
and includes speech pathology and audiology, psychological services, 
physical and occupational therapy, recreation, including therapeutic 
recreation, early identification and assessment of disabilities in 
children, counseling services, including rehabilitation counseling, and 
medical services for diagnostic or evaluation purposes. The term also 
includes school health services, social work services, and parent 
counseling and training. It includes other developmental, corrective or 
supportive services if they are required to assist a child with a 
disability to benefit from special education, including assistive 
technology services and devices.
    (1) The term assistive technology device means any item, piece of 
equipment, or product system, whether acquired commercially off the 
shelf, modified, or customized, that is used to increase, maintain, or 
improve functional capabilities of individuals with disabilities.
    (2) The term assistive technology service means any service that 
directly assists an individual with a disability in the selection, 
acquisition, or use of an assistive technology device. The term 
includes: The evaluation of the needs of an individual with a 
disability; purchasing, leasing, or otherwise providing for the 
acquisition of assistive technology devices by individuals with 
disabilities; selecting, designing, fitting, customizing, adapting, 
applying, maintaining, repairing, or replacing of assistive technology 
devices; coordinating and using other therapies, interventions, or 
services with assistive technology devices, such as those associated 
with existing education and rehabilitation plans and programs; training 
or technical assistance for an individual with disabilities, or, where 
appropriate, the family of an individual with disabilities; and training 
or technical assistance to professionals who employ or provide services 
involved in the major life functions of individuals with disabilities.
    (m) The term responsible HHS official means the official who is 
authorized to make the grant of assistance in question or his or her 
designee.
    (n) The term special education means specially designed instruction, 
at no cost to parents or guardians, to meet the unique needs of a child 
with a disability. These services include classroom or home-based 
instruction, instruction in hospitals and institutions, and specially 
designed physical education if necessary.



                  Subpart B--Disabilities Service Plan



Sec. 1308.4  Purpose and scope of disabilities service plan.

    (a) A Head Start grantee, or delegate agency, if appropriate, must 
develop a disabilities service plan providing strategies for meeting the 
special needs of children with disabilities and their parents. The 
purposes of this plan are to assure:
    (1) That all components of Head Start are appropriately involved in 
the integration of children with disabilities and their parents; and
    (2) That resources are used efficiently.
    (b) The plan must be updated annually.
    (c) The plan must include provisions for children with disabilities 
to be included in the full range of activities and services normally 
provided to all Head Start children and provisions for any modifications 
necessary to meet the special needs of the children with disabilities.
    (d) The Head Start grantee and delegate agency must use the 
disabilities service plan as a working document which guides all aspects 
of the agency's effort to serve children with disabilities. This plan 
must take into account the needs of the children for small group 
activities, for modifications of

[[Page 256]]

large group activities and for any individual special help.
    (e) The grantee or delegate agency must designate a coordinator of 
services for children with disabilities (disabilities coordinator) and 
arrange for preparation of the disabilities service plan and of the 
grantee application budget line items for services for children with 
disabilities. The grantee or delegate must ensure that all relevant 
coordinators, other staff and parents are consulted.
    (f) The disability service plan must contain:
    (1) Procedures for timely screening;
    (2) Procedures for making referrals to the LEA for evaluation to 
determine whether there is a need for special education and related 
services for a child, as early as the child's third birthday;
    (3) Assurances of accessibility of facilities; and
    (4) Plans to provide appropriate special furniture, equipment and 
materials if needed.
    (g) The plan, when appropriate, must address strategies for the 
transition of children into Head Start from infant/toddler programs (0-3 
years), as well as the transition from Head Start into the next 
placement. The plan must include preparation of staff and parents for 
the entry of children with severe disabilities into the Head Start 
program.
    (h) The grantee or delegate agency must arrange or provide special 
education and related services necessary to foster the maximum 
development of each child's potential and to facilitate participation in 
the regular Head Start program unless the services are being provided by 
the LEA or other agency. The plan must specify the services to be 
provided directly by Head Start and those provided by other agencies. 
The grantee or delegate agency must arrange for, provide, or procure 
services which may include, but are not limited to special education and 
these related services:
    (1) Audiology services, including identification of children with 
hearing loss and referral for medical or other professional attention; 
provision of needed rehabilitative services such as speech and language 
therapy and auditory training to make best use of remaining hearing; 
speech conservation; lip reading; determination of need for hearing aids 
and fitting of appropriate aids; and programs for prevention of hearing 
loss;
    (2) Physical therapy to facilitate gross motor development in 
activities such as walking prevent or slow orthopedic problems and 
improve posture and conditioning;
    (3) Occupational therapy to improve, develop or restore fine motor 
functions in activities such as using a fork or knife;
    (4) Speech or language services including therapy and use of 
assistive devices necessary for a child to develop or improve receptive 
or expressive means of communication;
    (5) Psychological services such as evaluation of each child's 
functioning and interpreting the results to staff and parents; and 
counseling and guidance services for staff and parents regarding 
disabilities;
    (6) Transportation for children with disabilities to and from the 
program and to special clinics or other service providers when the 
services cannot be provided on-site. Transportation includes adapted 
buses equipped to accommodate wheelchairs or other such devices if 
required; and
    (7) Assistive technology services or devices necessary to enable a 
child to improve functions such as vision, mobility or communication to 
meet the objectives in the IEP.
    (i) The disabilities service plan must include options to meet the 
needs and take into consideration the strengths of each child based upon 
the IEP so that a continuum of services available from various agencies 
is considered.
    (j) The options may include:
    (1) Joint placement of children with other agencies;
    (2) Shared provision of services with other agencies;
    (3) Shared personnel to supervise special education services, when 
necessary to meet State requirements on qualifications;
    (4) Administrative accommodations such as having two children share 
one enrollment slot when each child's IEP calls for part-time service 
because of their individual needs; and

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    (5) Any other strategies to be used to insure that special needs are 
met. These may include:
    (i) Increased staff;
    (ii) Use of volunteers; and
    (iii) Use of supervised students in such fields as child 
development, special education, child psychology, various therapies and 
family services to assist the staff.
    (k) The grantee must ensure that the disabilities service plan 
addresses grantee efforts to meet State standards for personnel serving 
children with disabilities by the 1994-95 program year. Special 
education and related services must be provided by or under the 
supervision of personnel meeting State qualifications by the 1994-95 
program year.
    (l) The disabilities service plan must include commitment to 
specific efforts to develop interagency agreements with the LEAs and 
other agencies within the grant