[Title 45 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 1999 Edition]
[From the U.S. Government Printing Office]


          45



          Public Welfare



[[Page i]]

          PART 1200 TO END

                         Revised as of October 1, 1999

          CONTAINING
          A CODIFICATION OF DOCUMENTS
          OF GENERAL APPLICABILITY
          AND FUTURE EFFECT

          AS OF OCTOBER 1, 1999
          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 : 1999



               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.................................................      vi

  Title 45:

    Subtitle B--Regulations Relating to Public Welfare--
      Continued:

          Chapter XII--Corporation for National and Community 
          Service.............................................       5

          Chapter XIII--Office of Human Development Services, 
          Department of Health and Human Services.............     145

          Chapter XVI--Legal Services Corporation.............     387

          Chapter XVII--National Commission on Libraries and 
          Information Science.................................     473

          Chapter XVIII--Harry S. Truman Scholarship 
          Foundation..........................................     493

          Chapter XXI--Commission of Fine Arts................     513

          Chapter XXIII--Arctic Research Commission...........     533

          Chapter XXIV--James Madison Memorial Fellowship 
          Foundation..........................................     543

          Chapter XXV--Corporation for National and Community 
          Service.............................................     563

  Finding Aids:

      Table of CFR Titles and Chapters........................     781

      Alphabetical List of Agencies Appearing in the CFR......     799

      Redesignation Table.....................................     809

      List of CFR Sections Affected...........................     811



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

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  45 CFR 1201.1 
                       refers to title 45, part 
                       1201, section 1.

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

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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, 1999), 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 
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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. 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 
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info@fedreg.nara.gov.

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ELECTRONIC SERVICES

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Government Manual, the Federal Register, Public Laws, Weekly Compilation 
of Presidential Documents and the Privacy Act Compilation are available 
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    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public

[[Page vii]]

law numbers, Federal Register finding aids, and related information. 
Connect to NARA's web site at www.nara.gov/fedreg. The NARA site also 
contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

October 1, 1999.



[[Page ix]]



                               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. 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--
Corporation for National and Community Service, 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 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, 1999.

    A subject index to 45 CFR parts 680-684 appears at the end of 
chapter VI in 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, Jonn V. Lilyea was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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                        TITLE 45--PUBLIC WELFARE




                  (This book contains part 1200 to end)

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

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

                                                                    Part

Chapter XII--Corporation for National and Community Service.        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 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--CORPORATION FOR NATIONAL AND COMMUNITY SERVICE




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

Part                                                                Page
120l            Production or disclosure of official 
                    information in response to court orders, 
                    subpoenas, notices of depositions, 
                    requests for admissions, 
                    interrogatories, or in connection with 
                    Federal or State litigation.............           7
1203            Nondiscrimination in Federally assisted 
                    programs--effectuation of title VI of 
                    the Civil Rights Act of 1964............          11
1204            Official seal...............................          20
1206            Grants and contracts--suspension and 
                    termination and denial of application 
                    for refunding...........................          21
1210            VISTA trainee deselection and volunteer 
                    early termination procedures............          31
1211            Volunteer grievance procedures..............          38
1212

Volunteer agencies procedures for National grant volunteers [Reserved]

1213            ACTION cooperative volunteer program........          44
1214            Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by ACTION..........          51
1216            Nondisplacement of employed workers and 
                    nonimpairment of contracts for service..          56
1217            VISTA volunteer leader......................          58
1218            VISTA volunteers--hearing opportunity.......          59
1219            Competitive service eligibility.............          60
1220            Payment of volunteer legal expenses.........          61
1222            Participation of project beneficiaries......          63
1225            Volunteer discrimination complaint procedure          64
1226            Prohibitions on electoral and lobbying 
                    activities..............................          71
1229            Governmentwide debarment and suspension 
                    (nonprocurement) and governmentwide 
                    requirements for drug-free workplace 
                    (grants)................................          76
1230            New restrictions on lobbying................          94

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1232            Non-discrimination on basis of handicap in 
                    programs receiving federal financial 
                    assistance from ACTION..................         105
1233            Intergovernmental review of ACTION programs.         111
1234            Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    State and local governments.............         114
1235            Locally generated contributions in Older 
                    American Volunteer Programs.............         141

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      PART 1201--PRODUCTION OR DISCLOSURE OF OFFICIAL INFORMATION IN RESPONSE TO COURT ORDERS, SUBPOENAS, NOTICES OF DEPOSITIONS, REQUESTS FOR ADMISSIONS, 
INTERROGATORIES, OR IN CONNECTION WITH FEDERAL OR STATE LITIGATION--Table of Contents




Sec.
1201.1  Definitions.
1201.2  Scope.
1201.3  Service of summonses and complaints.
1201.4  Service of subpoenas, court orders, and other demands or 
          requests for official information or action.
1201.5  Testimony and production of documents prohibited unless approved 
          by appropriate Corporation officials.
1201.6  Procedure when testimony or production of documents is sought.
1201.7  Procedure when response is required prior to receiving 
          instructions.
1201.8  Procedure in the event of an adverse ruling.
1201.9  Considerations in determining whether the Corporation will 
          comply with a demand or request.
1201.10  Prohibition on providing expert or opinion testimony.
1201.11  Authority.

    Authority: 42 U.S.C. 12501 et seq.

    Source: 63 FR 4598, Jan. 30, 1998, unless otherwise noted.



Sec. 1201.1  Definitions.

    (a) Corporation Employee means the Chief Executive Officer of the 
Corporation and all employees, former employees, National Civilian 
Community Corps Members (hereinafter sometimes known as ``Corps 
Members''), and VISTA Volunteers (hereinafter sometimes also known as 
``AmeriCorps*VISTA Members''), who are or were subject to the 
supervision, jurisdiction, or control of the Chief Executive Officer, 
except as the Corporation may otherwise determine in a particular case.
    (b) Litigation encompasses all pre-trial, trial, and post-trial 
stages of all judicial or administrative actions, hearings, 
investigations, or similar proceedings before courts, commissions, 
boards, or other judicial or quasi-judicial bodies or tribunals, whether 
criminal, civil, or administrative in nature.
    (c) Official Information means all information of any kind, however 
stored, that is in the custody and control of the Corporation, relates 
to information in the custody and control of the Corporation, or was 
acquired by individuals connected with the Corporation as part of their 
official status within the Corporation while such individuals are 
employed by, or serve on behalf of, the Corporation.



Sec. 1201.2  Scope.

    (a) This part states the procedures followed with respect to:
    (1) Service of summonses and complaints or other requests or demands 
directed to the Corporation or to any Corporation employee in connection 
with Federal or State litigation arising out of, or involving the 
performance of, official activities of the Corporation; and
    (2) Oral or written disclosure, in response to subpoenas, orders, or 
other requests or demands from Federal or by State judicial or quasi-
judicial authority, whether civil or criminal, or in response to 
requests for depositions, affidavits, admissions, responses to 
interrogatories, document production, or other litigation-related 
matters of:
    (i) Any material contained in the files of the Corporation; or
    (ii) Any information acquired:
    (A) When the subject of the request is currently a Corporation 
employee or was a Corporation employee; or
    (B) As part of the performance of the person's duties or by virtue 
of the person's position.
    (b) Sections 1201.3 through 1201.10 do not apply to:
    (1) Testimony or records provided in accordance with the Office of 
Personnel Management regulations implementing 5 U.S.C. 6322.
    (2) Requests for, and release of, records under the Freedom of 
Information Act, 5 U.S.C. 552, and the Privacy Act, 5 U.S.C. 552a.
    (3) Disclosures to the Office of Inspector General or requests by 
the Office of Inspector General for official information or records.
    (c) The procedures in this part apply to Corporation employees and 
official information within the Corporation Office of Inspector General. 
However, any

[[Page 8]]

determinations or other actions to be made by the General Counsel under 
this part, relating to employees or official information within the 
Office of Inspector General, shall be made by the Inspector General.

[63 FR 4598, Jan. 30, 1998, as amended at 63 FR 64199, Nov. 19, 1998]



Sec. 1201.3  Service of summonses and complaints.

    (a) Only the Corporation's General Counsel or his/her designee 
(hereinafter ``General Counsel''), is authorized to receive and accept 
summonses or complaints sought to be served upon the Corporation or its 
employees. All such documents should be delivered or addressed to 
General Counsel, Corporation for National and Community Service, 1201 
New York Avenue, NW., Suite 8200, Washington, DC 20525.
    (b) In the event any summons or complaint is delivered to a 
Corporation Employee other than in the manner specified in this part, 
such attempted service shall be ineffective, and the recipient thereof 
shall either decline to accept the proffered service or return such 
document under cover of a written communication that refers the person 
attempting to effect service to the procedures set forth in this part.
    (c) Except as otherwise provided in Sec. 1201.4(c), the Corporation 
is not an authorized agent for service of process with respect to civil 
litigation against Corporation Employees purely in their personal, non-
official capacity. Copies of summonses or complaints directed to 
Corporation Employees in connection with legal proceedings arising out 
of the performance of official duties may, however, be served upon the 
General Counsel.



Sec. 1201.4  Service of subpoenas, court orders, and other demands or requests for official information or action.

    (a) Except in cases in which the Corporation is represented by legal 
counsel who have entered an appearance or otherwise given notice of 
their representation, only the General Counsel is authorized to receive 
and accept subpoenas, or other demands or requests directed to any 
component of the Corporation or Corporation Employees, whether civil or 
criminal in nature, for:
    (1) Material, including documents, contained in the files of the 
Corporation;
    (2) Information, including testimony, affidavits, declarations, 
admissions, response to interrogatories, or informal statements, 
relating to material contained in the files of the Corporation or which 
any Corporation employee acquired in the course and scope of the 
performance of official duties;
    (3) Garnishment or attachment of compensation of Corporation 
Employees; or
    (4) The performance or non-performance of any official Corporation 
duty.
    (b) In the event that any subpoena, demand, or request is sought to 
be delivered to a Corporation Employee other than in the manner 
prescribed in paragraph (a) of this section, such attempted service 
shall be ineffective. Such Corporation Employee shall, after 
consultation with the General Counsel, decline to accept the subpoena, 
and demand or request the return of it under cover of a written 
communication referring to the procedures prescribed in this part.
    (c) Except as otherwise provided in this part, the Corporation is 
not an agent for service or otherwise authorized to accept on behalf of 
Corporation Employees any subpoenas, show-cause orders, or similar 
compulsory process of federal or state courts, or requests from private 
individuals or attorneys, which are not related to the employees' 
official duties except upon the express, written authorization of the 
individual Corporation Employee to whom such demand or request is 
directed.
    (d) Acceptance of such documents by the General Counsel does not 
constitute a waiver of any defenses that might otherwise exist with 
respect to service under the Federal Rules of Civil or Criminal 
Procedure at 28 U.S.C. Appendix, Rules 4-6 or 18 USC Appendix or other 
applicable rules.

[[Page 9]]



Sec. 1201.5  Testimony and production of documents prohibited unless approved by appropriate Corporation officials.

    (a) Unless authorized to do so by the General Counsel, no 
Corporation Employee shall, in response to a demand or request in 
connection with any litigation, whether criminal or civil, provide oral 
or written testimony by deposition, declaration, affidavit, or otherwise 
concerning any information acquired:
    (1) While such person was a Corporation Employee;
    (2) As part of the performance of that person's official duties; or
    (3) By virtue of that person's official status.
    (b) No Corporation Employee shall, in response to a demand or 
request in connection with any litigation, produce for use at such 
proceedings any document or any other material acquired as part of the 
performance of that individual's duties or by virtue of that 
individual's official status, unless authorized to do so by the General 
Counsel.



Sec. 1201.6  Procedure when testimony or production of documents is sought.

    (a) If Official Information is sought, either through testimony or 
otherwise, the party seeking such information must (except as otherwise 
required by federal law or authorized by the General Counsel) set forth 
in writing with as much specificity as possible, the nature and 
relevance of the Official Information sought. The party must identify 
the record or reasonably describe it in terms of date, format, subject 
matter, the offices originating or receiving the record, and the names 
of all persons to whom the record is known to relate. Corporation 
Employees may produce, disclose, release, comment upon, or testify 
concerning only those matters that were specified in writing and 
properly approved by the General Counsel. The General Counsel may waive 
this requirement in appropriate circumstances.
    (b) To the extent it deems necessary or appropriate, the Corporation 
may also require from the party seeking such testimony or documents a 
schedule of all reasonably foreseeable demands, including but not 
limited to the names of all current and former Corporation Employees 
from whom discovery will be sought, areas of inquiry, expected duration 
of proceedings requiring oral testimony, and identification of 
potentially relevant documents.
    (c) The General Counsel will notify the Corporation Employee and 
such other persons as circumstances may warrant of the decision 
regarding compliance with the request or demand.
    (d) The General Counsel will consult with the Department of Justice 
regarding legal representation for Corporation Employees in appropriate 
cases.



Sec. 1201.7  Procedure when response to demand is required prior to receiving instructions.

    (a) If a response to a demand or request for Official Information 
pursuant to litigation is required before the General Counsel renders a 
decision, the Corporation will request that either a Department of 
Justice attorney or a Corporation attorney designated for the purpose:
    (1) Appear, if feasible, with the employee upon whom the demand has 
been made;
    (2) Furnish the court or other authority with a copy of the 
regulations contained in this part;
    (3) Inform the court or other authority that the demand or request 
has been or is being, as the case may be, referred for the prompt 
consideration of the General Counsel; and
    (4) Respectfully request the court or authority to stay the demand 
or request pending receipt of the requested instructions.
    (b) In the event that an immediate demand or request for production 
or disclosure is made in circumstances that would preclude the proper 
designation or appearance of a Department of Justice or Corporation 
attorney on behalf of the Corporation employee, the Corporation Employee 
shall respectfully request the court or other authority for a reasonable 
stay of proceedings for the purpose of obtaining instructions from the 
Corporation.

[[Page 10]]



Sec. 1201.8  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand or request in response to a request made pursuant to Sec. 1201.7, 
or if the court or other authority rules that the demand or request must 
be complied with irrespective of the Corporation's instructions not to 
produce the material or disclose the information sought, the Corporation 
Employee upon whom the demand or request has been made shall, if so 
directed by the General Counsel, respectfully decline to comply with the 
demand or request, citing United States ex rel. Touhy v. Ragen, 340 U.S. 
462 (1951), and the regulations in this part.



Sec. 1201.9  Considerations in determining whether the Corporation will comply with a demand or request.

    (a) In deciding whether to comply with a demand or request, 
Corporation officials and attorneys are encouraged to consider:
    (1) Whether such compliance would be unduly burdensome or otherwise 
inappropriate under the applicable rules of discovery or the rules of 
procedure governing the case or matter in which the demand arose;
    (2) Whether compliance is appropriate under the relevant substantive 
law concerning privilege or disclosure of information;
    (3) The public interest;
    (4) The need to conserve the time of Corporation Employees for the 
conduct of official business;
    (5) The need to avoid spending the time and money of the United 
States for private purposes;
    (6) The need to maintain impartiality between private litigants in 
cases where a government interest is not implicated;
    (7) Whether compliance would have an adverse effect on performance 
by the Corporation of its mission and duties; and
    (8) The need to avoid involving the Corporation in controversial 
issues not related to its mission.
    (b) Among those demands and requests in response to which compliance 
may not ordinarily be authorized are those when compliance would:
    (1) Violate a statute, a rule of procedure, a specific regulation, 
or an executive order;
    (2) Reveal information properly classified in the interest of 
national security;
    (3) Reveal confidential commercial or financial information or trade 
secrets without the owner's consent;
    (4) Reveal the internal deliberative processes of the Executive 
Branch; or
    (5) Potentially impede or prejudice an ongoing law enforcement 
investigation.



Sec. 1201.10  Prohibition on providing expert or opinion testimony.

    (a) Except as provided in this section, Corporation Employees shall 
not provide opinion or expert testimony based upon information that they 
acquired in the scope and performance of their official Corporation 
duties, except on behalf of the United States or a party represented by 
the Department of Justice.
    (b) Upon a showing by the requester of exceptional need or unique 
circumstances and that the anticipated testimony will not be adverse to 
the interests of the United States, the General Counsel, in the exercise 
of discretion, may grant special, written authorization for Corporation 
Employees to appear and testify as expert witnesses at no expense to the 
United States.
    (c) If, despite the final determination of the General Counsel, a 
court of competent jurisdiction or other appropriate authority orders 
the appearance and expert or opinion testimony of a Corporation Employee 
such individual shall immediately inform the General Counsel of such 
order. If the General Counsel determines that no further legal review of 
or challenge to the court's order will be made, the Corporation Employee 
shall comply with the order. If so directed by the General Counsel, 
however, the individual shall respectfully decline to testify.



Sec. 1201.11  Authority.

    The Corporation receives authority to change its governing 
regulations from the National and Community Service Act of 1990 as 
amended (42 U.S.C. 12501 et seq.).

[[Page 11]]



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--Programs 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:
    (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;

[[Page 12]]

    (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, 
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

[[Page 13]]

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 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

[[Page 14]]

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 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.

[[Page 15]]

    (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 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

[[Page 16]]

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 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

[[Page 17]]

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, 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

[[Page 18]]

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 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

[[Page 19]]

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.
    (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

[[Page 20]]

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).



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]

[[Page 21]]



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.
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.

[[Page 22]]

    (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 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

[[Page 23]]

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 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

[[Page 24]]

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 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.

[[Page 25]]

    (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 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,

[[Page 26]]

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.



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

[[Page 27]]

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 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

[[Page 28]]

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 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

[[Page 29]]

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 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.

[[Page 30]]



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 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

[[Page 31]]

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 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 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 32]]

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 33]]

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 34]]



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 35]]

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 36]]

    (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 37]]



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 38]]

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 39]]

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 40]]

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.

[[Page 41]]

    (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 42]]

    (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 43]]

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.

[[Page 44]]



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 the 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 activities.
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 amount of such allowances and stipends may not exceed 
those authorized

[[Page 45]]

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 46]]

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 47]]

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 48]]



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 49]]

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 50]]

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 51]]

    (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 52]]

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 53]]

    (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 54]]

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 55]]

    (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 56]]

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 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.


[[Page 57]]


    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:
    (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

[[Page 58]]

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.



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.

[[Page 59]]

    (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.

    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.

[[Page 60]]

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:
    (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

[[Page 61]]

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 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

[[Page 62]]

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 
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.

[[Page 63]]



             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.
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

[[Page 64]]

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

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

[[Page 65]]



                      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;
    (3) The manner in which the Peace Corps or ACTION action directly 
affected the complainant; and
    (4) The relief sought.

[[Page 66]]


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 the 
procedures described in Subpart B

[[Page 67]]

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 68]]

    (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 69]]

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 70]]

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 71]]

    (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 72]]



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 73]]

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 74]]

    (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 75]]

    (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 76]]

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 77]]

    (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 78]]

    (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 79]]

    (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 80]]

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 81]]



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 82]]

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 83]]

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 84]]



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 85]]

    (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

[[Page 86]]

fact. The suspending official may reject any such findings, in whole or 
in 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 87]]



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 88]]

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 89]]

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 90]]

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 91]]

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 92]]

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 93]]

    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 94]]

              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 95]]

    (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,

[[Page 96]]

State, and local government, regardless of whether such entity is 
operated 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.

[[Page 97]]

    (d) Any person who requests or receives from a person referred to in 
paragraph (a) or (b) of this section:
    (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.

[[Page 98]]

    (e) Only those activities expressly authorized by this section are 
allowable under this section.



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

[[Page 99]]

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.
    (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

[[Page 100]]

conduct that is the basis for the imposition of such civil penalty.



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

[[Page 101]]

with, and the effectiveness of, the requirements herein. The evaluation 
may include any recommended changes that 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 102]]


       Appendix B to Part 1230--Disclosure Form To Report Lobbying
      [GRAPHIC] [TIFF OMITTED] TC03AP91.054
      

[[Page 103]]


[GRAPHIC] [TIFF OMITTED] TC03AP91.055


[[Page 104]]


[GRAPHIC] [TIFF OMITTED] TC03AP91.056


[[Page 105]]





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 inquiries.

                    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 106]]

    (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 107]]



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 108]]

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 109]]

    (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 110]]

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 111]]



                    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 112]]

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

[[Page 113]]

Director of changes in their program selections.
    (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 114]]



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 115]]



                           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

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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 117]]

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

[[Page 118]]

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 119]]

    (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 120]]

    (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 121]]

    (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 122]]

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 123]]

    (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 124]]

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 125]]

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

[[Page 126]]

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 127]]

    (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 128]]

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 129]]

    (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 130]]

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

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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.

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    (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 133]]

    (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

[[Page 134]]

    (iii) The procurement, which is expected to exceed $25,000, 
specifies a ``brand name'' product; or
    (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).

[[Page 135]]

    (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 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.

[[Page 136]]

              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 137]]



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 138]]

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 139]]

    (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 140]]

    (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 141]]

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 142]]

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 143]]

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 145]]



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............         147
1302            Policies and procedures for selection, 
                    initial funding, and refunding of Head 
                    Start grantees, and for selection of 
                    replacement grantees....................         152
1303            Appeal procedures for Head Start grantees 
                    and current or prospective delegate 
                    agencies................................         158
 1304           Program performance standards for the 
                    operation of Head Start programs by 
                    grantee and delegate agencies...........         171
1305            Eligibility, recruitment, selection, 
                    enrollment and attendance in Head Start.         197
1306            Head Start staffing requirements and program 
                    options.................................         203
1308            Head Start program performance standards on 
                    services for children with disabilities.         209
1309            Head Start facilities purchase..............         238
1311            Head Start Fellows Program..................         245

   SUBCHAPTER C--THE ADMINISTRATION ON AGING, OLDER AMERICANS PROGRAMS

1321            Grants to State and community programs on 
                    aging...................................         247
1326            Grants to Indian tribes for support and 
                    nutrition services......................         262

[[Page 146]]

1328            Grants for supportive and nutritional 
                    services to older Hawaiian natives......         266

 SUBCHAPTER D--THE ADMINISTRATION FOR NATIVE AMERICANS, NATIVE AMERICAN 
                                PROGRAMS

1336            Native American Programs....................         271

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...............................         285

   SUBCHAPTER F--THE ADMINISTRATION FOR CHILDREN, YOUTH AND FAMILIES, 
                    FAMILY AND YOUTH SERVICES BUREAU

1351            Runaway and Homeless Youth Program..........         299

SUBCHAPTER G--THE ADMINISTRATION ON CHILDREN, YOUTH AND FAMILIES, FOSTER 
  CARE MAINTENANCE PAYMENTS, ADOPTION ASSISTANCE, AND CHILD AND FAMILY 
                                SERVICES

1355            General.....................................         304
1356            Requirements applicable to Title IV-E.......         331
1357            Requirements applicable to Title IV-B.......         342

     SUBCHAPTER H--FAMILY VIOLENCE PREVENTION AND SERVICES PROGRAMS

1370            Family violence prevention and services 
                    programs................................         357

    SUBCHAPTER I--THE ADMINISTRATION ON DEVELOPMENTAL DISABILITIES, 
                   DEVELOPMENTAL DISABILITIES PROGRAM

1385            Requirements applicable to the developmental 
                    disabilities program....................         358
1386            Formula Grant Programs......................         361
1387            Projects of national significance...........         379
1388            The University affiliated programs..........         380

                       SUBCHAPTERS J-K [RESERVED]

[[Page 147]]



 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. 9801 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, public or private agency, association, corporation, or 
partnership, that is sufficiently independent of the agency being 
audited to render objective

[[Page 148]]

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 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

[[Page 149]]

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) Written policies. Grantee and delegate agencies must establish 
and implement written personnel policies for staff, that are approved by 
the Policy Council or Policy Committee and that are made available to 
all grantee and delegate agency staff. At a minimum, such policies must 
include:
    (1) Descriptions of each staff position, addressing, as appropriate, 
roles and responsibilities, relevant qualifications, salary range, and 
employee benefits (see 45 CFR 1304.52(c) and (d));
    (2) A description of the procedures for recruitment, selection and 
termination (see paragraph (b) of this Section, Staff recruitment and 
selection procedures);

[[Page 150]]

    (3) Standards of conduct (see 45 CFR 1304.52(h));
    (4) Descriptions of methods for providing staff and volunteers with 
opportunities for training, development, and advancement (see 45 CFR 
1304.52(k), Training and development);
    (5) A description of the procedures for conducting staff performance 
appraisals (see 45 CFR 1304.52(i), Staff performance appraisals);
    (6) Assurances that the program is an equal opportunity employer and 
does not discriminate on the basis of gender, race, ethnicity, religion 
or disability; and
    (7) A description of employee-management relation procedures, 
including those for managing employee grievances and adverse actions.
    (b) Staff recruitment and selection procedures. (1) Before an 
employee is hired, grantee or delegate agencies must conduct:
    (i) An interview with the applicant;
    (ii) A verification of personal and employment references; and
    (iii) A State or national criminal record check, as required by 
State law or administrative requirement. If it is not feasible to obtain 
a criminal record check prior to hiring, an employee must not be 
considered permanent until such a check has been completed.
    (2) Grantee and delegate agencies must require that all current and 
prospective employees sign a declaration prior to employment that lists:
    (i) All pending and prior criminal arrests and charges related to 
child sexual abuse and their disposition;
    (ii) Convictions related to other forms of child abuse and neglect; 
and
    (iii) All convictions of violent felonies.
    (3) Grantee and delegate agencies must review each application for 
employment individually in order to assess the relevancy of an arrest, a 
pending criminal charge, or a conviction.
    (c) Declaration exclusions. The declaration required by paragraph 
(b)(2) of this section may exclude:
    (1) Traffic fines of $200.00 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.
    (d) Probationary period. The policies governing the 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 the criminal record checks discussed 
in paragraph (b) (1) of this Section.
    (e) Reporting child abuse or sexual abuse. Grantee and delegate 
agencies must develop a plan for responding to suspected or known child 
abuse or sexual abuse as defined in 45 CFR 1340.2(d) whether it occurs 
inside or outside of the program.


(The information collection requirements are approved by the Office of 
Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraph (b).)


[61 FR 57225, Nov. 5, 1996, as amended at 63 FR 2313, Jan. 15, 1998]



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

[[Page 151]]

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 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.

[[Page 152]]

    (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 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.

[[Page 153]]

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.

            Subpart D--Replacement of Indian Tribal Grantees

1302.30  Procedure for identification of alternative agency.
1302.31  Requirements of alternative agency.
1302.32  Alternative agency--prohibition.

    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 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.
    Indian tribe means any tribe, band, nation, pueblo, or other 
organized group or community of Indians, including any Native village 
described in section 3(c) of the Alaska Native Claims Settlement Act (43 
U.S.C. 1602 (c)) or established pursuant to such Act (43 U.S.C. 1601 et 
seq.) that is recognized as eligible for special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    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.

[[Page 154]]

    Responsible HHS official means the official of the Department of 
Health and Human Services who has authority to make grants under the 
Act.

[44 FR 24062, Apr. 24, 1979, as amended at 63 FR 34329, June 24, 1998]



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 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

[[Page 155]]

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 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

[[Page 156]]

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.



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

[[Page 157]]

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.



            Subpart D--Replacement of Indian Tribal Grantees

    Source: 63 FR 34329, June 24, 1998, unless otherwise noted.



Sec. 1302.30  Procedure for identification of alternative agency.

    (a) An Indian tribe whose Head Start grant has been terminated, or 
which has been denied refunding as a Head Start grantee, may identify an 
agency and request the responsible HHS official to designate such agency 
as an alternative agency to provide Head Start services to the tribe if:
    (1) The tribe was the only agency that was receiving federal 
financial assistance to provide Head Start services to members of the 
tribe; and
    (2) The tribe would be otherwise precluded from providing such 
services to its members because of the termination or denial of 
refunding.
    (b)(1) The responsible HHS official, when notifying a tribal grantee 
of the intent to terminate financial assistance or deny its application 
for refunding, must notify the grantee that it may identify an agency 
and request that the agency serve as the alternative agency in the event 
that the grant is terminated or refunding denied.
    (2) The tribe must identify the alternate agency to the responsible 
HHS official, in writing, within the time for filing an appeal under 45 
CFR Part 1303.
    (3) The responsible HHS official will notify the tribe, in writing, 
whether the alternative agency proposed by the tribe is found to be 
eligible for Head Start funding and capable of operating a Head Start 
program. If the alternative agency identified by the tribe is not an 
eligible agency capable of operating a Head Start program, the tribe 
will have 15 days from the date of the sending of the notification to 
that effect from the responsible HHS official to identify another agency 
and request that the agency be designated. The responsible HHS official 
will notify the tribe in writing whether the second proposed alternate 
agency is found to be an eligible agency capable of operating the Head 
Start program.
    (4) If the tribe does not identify a suitable alternative agency, a 
replacement grantee will be designated under these regulations.
    (c) If the tribe appeals a termination of financial assistance or a 
denial of refunding, it will, consistent with the terms of 45 CFR Part 
1303, continue to be funded pending resolution of the appeal. However, 
the responsible HHS official and the grantee will proceed with the steps 
outlined in this regulation during the appeal process.
    (d) If the tribe does not identify an agency and request that the 
agency be appointed as the alternative agency, the responsible HHS 
official will seek a permanent replacement grantee under these 
regulations.



Sec. 1302.31  Requirements of alternative agency.

    The agency identified by the Indian tribe must establish that it 
meets all requirements established by the Head Start Act and these 
requirements for designation as a Head Start grantee and that it is 
capable of conducting a Head Start program. The responsible HHS 
official, in deciding whether to designate the proposed agency, will 
analyze the capacity and experience of the agency according to the 
criteria found in section 641(d) of the Head Start Act and Secs. 1302.10 
(b)(1) through (5) and 1302.11 of this part.



Sec. 1302.32  Alternative agency--prohibition.

    (a) No agency will be designated as the alternative agency pursuant 
to this subpart if the agency includes an employee who:
    (1) Served on the administrative or program staff of the Indian 
tribal grantee, and
    (2) Was responsible for a deficiency that:
    (i) Relates to the performance standards or financial management 
standards described in the Head Start Act; and
    (ii) Was the basis for the termination or denial of refunding 
described in Sec. 1302.30 of this part.

[[Page 158]]

    (b) The responsible HHS official shall determine whether an employee 
was responsible for a deficiency within the meaning and context of this 
section.



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 
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.

[[Page 159]]

    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 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

[[Page 160]]

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:
    (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.

[[Page 161]]

    (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.
    (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

[[Page 162]]

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 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.

[[Page 163]]



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 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

[[Page 164]]

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 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

[[Page 165]]

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 timely correct one or more 
deficiencies as defined in 45 CFR Part 1304;
    (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 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

[[Page 166]]

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 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

[[Page 167]]

representative, to resolve the issues in dispute by informal means prior 
to the hearing.

[57 FR 59264, Dec. 14, 1992, as amended at 61 FR 57226, Nov. 5, 1996]



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 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

[[Page 168]]

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 
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.

[[Page 169]]

    (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.
    (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

[[Page 170]]

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 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

[[Page 171]]

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 THE OPERATION OF HEAD START PROGRAMS BY GRANTEE AND DELEGATE AGENCIES--Table of Contents




                           Subpart A--General

Sec.
1304.1  Purpose and scope.
1304.2  Effective date.
1304.3  Definitions.

       Subpart B--Early Childhood Development and Health Services

1304.20  Child health and developmental services.
1304.21  Education and early childhood development.
1304.22  Child health and safety.
1304.23  Child nutrition.
1304.24  Child mental health.

              Subpart C--Family and Community Partnerships

1304.40  Family partnerships.
1304.41  Community partnerships.

                Subpart D--Program Design and Management

1304.50  Program governance.
1304.51  Management systems and procedures.
1304.52  Human resources management.
1304.53  Facilities, materials, and equipment.

                Subpart E--Implementation and Enforcement

1304.60  Deficiencies and quality improvement plans.
1304.61  Noncompliance.

    Authority: 42 U.S.C. 9801 et seq.

    Source: 61 FR 57210, Nov. 5, 1996, unless otherwise noted.



                           Subpart A--General



Sec. 1304.1  Purpose and scope.

    This part describes regulations implementing sections 641A, 644(a) 
and (c), and 645A(h) of the Head Start Act, as amended (42 U.S.C. 9801 
et seq.). Section 641A, paragraph (a)(3)(C) directs the Secretary of 
Health and Human

[[Page 172]]

Services to review and revise, as necessary, the Head Start Program 
Performance Standards in effect under prior law. This paragraph further 
provides that any revisions should not result in an elimination or 
reduction of requirements regarding the scope or types of Head Start 
services to a level below that of the requirements in effect on November 
2, 1978. Section 641A(a) directs the Secretary to issue regulations 
establishing performance standards and minimum requirements with respect 
to health, education, parent involvement, nutrition, social, transition, 
and other Head Start services as well as administrative and financial 
management, facilities, and other appropriate program areas. Sections 
644(a) and (c) require the issuance of regulations setting standards for 
the organization, management, and administration of Head Start programs. 
Section 645A(h) requires that the Secretary develop and publish 
performance standards for the newly authorized program for low-income 
pregnant women and families with infants and toddlers, entitled ``Early 
Head Start.'' The following regulations respond to these provisions in 
the Head Start Act, as amended, for new or revised Head Start Program 
Performance Standards. These new regulations define standards and 
minimum requirements for the entire range of Early Head Start and Head 
Start services, including those specified in the authorizing 
legislation. They are applicable to both Head Start and Early Head Start 
programs, with the exceptions noted, and are to be used in conjunction 
with the regulations at 45 CFR parts 1301, 1302, 1303, 1305, 1306, and 
1308.



Sec. 1304.2  Effective date.

    Early Head Start and Head Start grantee and delegate agencies must 
comply with these requirements on January 1, 1998. Nothing in this part 
prohibits grantee or delegate agencies from voluntarily complying with 
these regulations prior to the effective date.



Sec. 1304.3  Definitions.

    (a) As used in this part:
    (1) Assessment means the ongoing procedures used by appropriate 
qualified personnel throughout the period of a child's eligibility to 
identify:
    (i) The child's unique strengths and needs and the services 
appropriate to meet those needs; and
    (ii) The resources, priorities, and concerns of the family and the 
supports and services necessary to enhance the family's capacity to meet 
the developmental needs of their child.
    (2) Children with disabilities means, for children ages 3 to 5, 
those 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, specific learning disabilities, 
deaf-blindness, or multiple 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. Infants and 
toddlers with disabilities are those from birth to three years, as 
identified under the Part H Program (Individuals with Disabilities 
Education Act) in their State.
    (3) Collaboration and collaborative relationships:
    (i) With other agencies, means planning and working with them in 
order to improve, share and augment services, staff, information and 
funds; and
    (ii) With parents, means working in partnership with them.
    (4) Contagious means capable of being transmitted from one person to 
another.
    (5) Curriculum means a written plan that includes:
    (i) The goals for children's development and learning;
    (ii) The experiences through which they will achieve these goals;
    (iii) What staff and parents do to help children achieve these 
goals; and

[[Page 173]]

    (iv) The materials needed to support the implementation of the 
curriculum. The curriculum is consistent with the Head Start Program 
Performance Standards and is based on sound child development principles 
about how children grow and learn.
    (6) Deficiency means:
    (i) An area or areas of performance in which an Early Head Start or 
Head Start grantee agency is not in compliance with State or Federal 
requirements, including but not limited to, the Head Start Act or one or 
more of the regulations under parts 1301, 1304, 1305, 1306 or 1308 of 
this title and which involves:
    (A) A threat to the health, safety, or civil rights of children or 
staff;
    (B) A denial to parents of the exercise of their full roles and 
responsibilities related to program governance;
    (C) A failure to perform substantially the requirements related to 
Early Childhood Development and Health Services, Family and Community 
Partnerships, or Program Design and Management; or
    (D) The misuse of Head Start grant funds.
    (ii) The loss of legal status or financial viability, as defined in 
part 1302 of this title, loss of permits, debarment from receiving 
Federal grants or contracts or the improper use of Federal funds; or
    (iii) Any other violation of Federal or State requirements 
including, but not limited to, the Head Start Act or one or more of the 
regulations under parts 1301, 1304, 1305, 1306 or 1308 of this title, 
and which the grantee has shown an unwillingness or inability to correct 
within the period specified by the responsible HHS official, of which 
the responsible HHS official has given the grantee written notice of 
pursuant to section 1304.61.
    (7) Developmentally appropriate means any behavior or experience 
that is appropriate for the age span of the children and is implemented 
with attention to the different needs, interests, and developmental 
levels and cultural backgrounds of individual children.
    (8) Early Head Start program means a program that provides low-
income pregnant women and families with children from birth to age 3 
with family-centered services that facilitate child development, support 
parental roles, and promote self-sufficiency.
    (9) Family means for the purposes of the regulations in this part 
all persons:
    (i) Living in the same household who are:
    (A) Supported by the income of the parent(s) or guardian(s) of the 
child enrolling or participating in the program; or
    (B) Related to the child by blood, marriage, or adoption; or
    (ii) Related to the child enrolling or participating in the program 
as parents or siblings, by blood, marriage, or adoption.
    (10) Guardian means a person legally responsible for a child.
    (11) Health means medical, dental, and mental well-being.
    (12) Home visitor means the staff member in the home-based program 
option assigned to work with parents to provide comprehensive services 
to children and their families through home visits and group 
socialization activities.
    (13) Individualized Family Service Plan (IFSP) means a written plan 
for providing early intervention services to a child eligible under Part 
H of the Individuals with Disabilities Education Act (IDEA). (See 34 CFR 
303.340-303.346 for regulations concerning IFSPs.)
    (14) Minimum requirements means that each Early Head Start and Head 
Start grantee must demonstrate a level of compliance with Federal and 
State requirements such that no deficiency, as defined in this part, 
exists in its program.
    (15) Policy group means the formal group of parents and community 
representatives required to be established by the agency to assist in 
decisions about the planning and operation of the program.
    (16) Program attendance means the actual presence and participation 
in the program of a child enrolled in an Early Head Start or Head Start 
program.
    (17) Referral means directing an Early Head Start or Head Start 
child or family member(s) to an appropriate source or resource for help, 
treatment or information.
    (18) Staff means paid adults who have responsibilities related to 
children and

[[Page 174]]

their families who are enrolled in Early Head Start or Head Start 
programs.
    (19) Teacher means an adult who has direct responsibility for the 
care and development of children from birth to 5 years of age in a 
center-based setting.
    (20) Volunteer means an unpaid person who is trained to assist in 
implementing ongoing program activities on a regular basis under the 
supervision of a staff person in areas such as health, education, 
transportation, nutrition, and management.
    (b) In addition to the definitions in this section, the definitions 
as set forth in 45 CFR 1301.2, 1302.2, 1303.2, 1305.2, 1306.3, and 
1308.3 also apply, as used in this part.



       Subpart B--Early Childhood Development and Health Services



Sec. 1304.20  Child health and developmental services.

    (a) Determining child health status. (1) In collaboration with the 
parents and as quickly as possible, but no later than 90 calendar days 
(with the exception noted in paragraph (a)(2) of this section) from the 
child's entry into the program (for the purposes of 45 CFR 
1304.20(a)(1), 45 CFR 1304.20(a)(2), and 45 CFR 1304.20(b)(1), ``entry'' 
means the first day that Early Head Start or Head Start services are 
provided to the child), grantee and delegate agencies must:
    (i) Make a determination as to whether or not each child has an 
ongoing source of continuous, accessible health care. If a child does 
not have a source of ongoing health care, grantee and delegate agencies 
must assist the parents in accessing a source of care;
    (ii) Obtain from a health care professional a determination as to 
whether the child is up-to-date on a schedule of age appropriate 
preventive and primary health care which includes medical, dental and 
mental health. Such a schedule must incorporate the requirements for a 
schedule of well child care utilized by the Early and Periodic 
Screening, Diagnosis, and Treatment (EPSDT) program of the Medicaid 
agency of the State in which they operate, and the latest immunization 
recommendations issued by the Centers for Disease Control and 
Prevention, as well as any additional recommendations from the local 
Health Services Advisory Committee that are based on prevalent community 
health problems:
    (A) For children who are not up-to-date on an age-appropriate 
schedule of well child care, grantee and delegate agencies must assist 
parents in making the necessary arrangements to bring the child up-to-
date;
    (B) For children who are up-to-date on an age-appropriate schedule 
of well child care, grantee and delegate agencies must ensure that they 
continue to follow the recommended schedule of well child care; and
    (C) Grantee and delegate agencies must establish procedures to track 
the provision of health care services.
    (iii) Obtain or arrange further diagnostic testing, examination, and 
treatment by an appropriate licensed or certified professional for each 
child with an observable, known or suspected health or developmental 
problem; and
    (iv) Develop and implement a follow-up plan for any condition 
identified in 45 CFR 1304.20(a)(1)(ii) and (iii) so that any needed 
treatment has begun.
    (2) Grantee and delegate agencies operating programs of shorter 
durations (90 days or less) must complete the above processes and those 
in 45 CFR 1304.20(b)(1) within 30 calendar days from the child's entry 
into the program.
    (b) Screening for developmental, sensory, and behavioral concerns. 
(1) In collaboration with each child's parent, and within 45 calendar 
days of the child's entry into the program, grantee and delegate 
agencies must perform or obtain linguistically and age appropriate 
screening procedures to identify concerns regarding a child's 
developmental, sensory (visual and auditory), behavioral, motor, 
language, social, cognitive, perceptual, and emotional skills (see 45 
CFR 1308.6(b)(3) for additional information). To the greatest extent 
possible, these screening procedures must be sensitive to the child's 
cultural background.
    (2) Grantee and delegate agencies must obtain direct guidance from a 
mental health or child development professional on how to use the 
findings to address identified needs.

[[Page 175]]

    (3) Grantee and delegate agencies must utilize multiple sources of 
information on all aspects of each child's development and behavior, 
including input from family members, teachers, and other relevant staff 
who are familiar with the child's typical behavior.
    (c) Extended follow-up and treatment. (1) Grantee and delegate 
agencies must establish a system of ongoing communication with the 
parents of children with identified health needs to facilitate the 
implementation of the follow-up plan.
    (2) Grantee and delegate agencies must provide assistance to the 
parents, as needed, to enable them to learn how to obtain any prescribed 
medications, aids or equipment for medical and dental conditions.
    (3) Dental follow-up and treatment must include:
    (i) Fluoride supplements and topical fluoride treatments as 
recommended by dental professionals in communities where a lack of 
adequate fluoride levels has been determined or for every child with 
moderate to severe tooth decay; and
    (ii) Other necessary preventive measures and further dental 
treatment as recommended by the dental professional.
    (4) Grantee and delegate agencies must assist with the provision of 
related services addressing health concerns in accordance with the 
Individualized Education Program (IEP) and the Individualized Family 
Service Plan (IFSP).
    (5) Early Head Start and Head Start funds may be used for 
professional medical and dental services when no other source of funding 
is available. When Early Head Start or Head Start funds are used for 
such services, grantee and delegate agencies must have written 
documentation of their efforts to access other available sources of 
funding.
    (d) Ongoing care. In addition to assuring children's participation 
in a schedule of well child care, as described in Sec. 1304.20(a) of 
this part, grantee and delegate agencies must implement ongoing 
procedures by which Early Head Start and Head Start staff can identify 
any new or recurring medical, dental, or developmental concerns so that 
they may quickly make appropriate referrals. These procedures must 
include: periodic observations and recordings, as appropriate, of 
individual children's developmental progress, changes in physical 
appearance (e.g., signs of injury or illness) and emotional and 
behavioral patterns. In addition, these procedures must include 
observations from parents and staff.
    (e) Involving parents. In conducting the process, as described in 
Secs. 1304.20 (a), (b), and (c), and in making all possible efforts to 
ensure that each child is enrolled in and receiving appropriate health 
care services, grantee and delegate agencies must:
    (1) Consult with parents immediately when child health or 
developmental problems are suspected or identified;
    (2) Familiarize parents with the use of and rationale for all health 
and developmental procedures administered through the program or by 
contract or agreement, and obtain advance parent or guardian 
authorization for such procedures. Grantee and delegate agencies also 
must ensure that the results of diagnostic and treatment procedures and 
ongoing care are shared with and understood by the parents;
    (3) Talk with parents about how to familiarize their children in a 
developmentally appropriate way and in advance about all of the 
procedures they will receive while enrolled in the program;
    (4) Assist parents in accordance with 45 CFR 1304.40(f)(2) (i) and 
(ii) to enroll and participate in a system of ongoing family health care 
and encourage parents to be active partners in their children's health 
care process; and
    (5) If a parent or other legally responsible adult refuses to give 
authorization for health services, grantee and delegate agencies must 
maintain written documentation of the refusal.
    (f) Individualization of the program. (1) Grantee and delegate 
agencies must use the information from the screening for developmental, 
sensory, and behavioral concerns, the ongoing observations, medical and 
dental evaluations and treatments, and insights from the child's parents 
to help staff and parents determine how the program can best respond to 
each child's individual characteristics, strengths and needs.

[[Page 176]]

    (2) To support individualization for children with disabilities in 
their programs, grantee and delegate agencies must assure that:
    (i) Services for infants and toddlers with disabilities and their 
families support the attainment of the expected outcomes contained in 
the Individualized Family Service Plan (IFSP) for children identified 
under the infants and toddlers with disabilities program (Part H) of the 
Individuals with Disabilities Education Act, as implemented by their 
State or Tribal government;
    (ii) Enrolled families with infants and toddlers suspected of having 
a disability are promptly referred to the local early intervention 
agency designated by the State Part H plan to coordinate any needed 
evaluations, determine eligibility for Part H services, and coordinate 
the development of an IFSP for children determined to be eligible under 
the guidelines of that State's program. Grantee and delegate agencies 
must support parent participation in the evaluation and IFSP development 
process for infants and toddlers enrolled in their program;
    (iii) They participate in and support efforts for a smooth and 
effective transition for children who, at age three, will need to be 
considered for services for preschool age children with disabilities; 
and
    (iv) They participate in the development and implementation of the 
Individualized Education Program (IEP) for preschool age children with 
disabilities, consistent with the requirements of 45 CFR 1308.19.

(The information and collection requirements are approved by the Office 
of Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraphs (a), (c) and (d).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2313, Jan. 15, 1998]



Sec. 1304.21  Education and early childhood development.

    (a) Child development and education approach for all children. (1) 
In order to help children gain the skills and confidence necessary to be 
prepared to succeed in their present environment and with later 
responsibilities in school and life, grantee and delegate agencies' 
approach to child development and education must:
    (i) Be developmentally and linguistically appropriate, recognizing 
that children have individual rates of development as well as individual 
interests, temperaments, languages, cultural backgrounds, and learning 
styles;
    (ii) Be inclusive of children with disabilities, consistent with 
their Individualized Family Service Plan (IFSP) or Individualized 
Education Program (IEP) (see 45 CFR 1308.19);
    (iii) Provide an environment of acceptance that supports and 
respects gender, culture, language, ethnicity and family composition;
    (iv) Provide a balanced daily program of child-initiated and adult-
directed activities, including individual and small group activities; 
and
    (v) Allow and enable children to independently use toilet facilities 
when it is developmentally appropriate and when efforts to encourage 
toilet training are supported by the parents.
    (2) Parents must be:
    (i) Invited to become integrally involved in the development of the 
program's curriculum and approach to child development and education;
    (ii) Provided opportunities to increase their child observation 
skills and to share assessments with staff that will help plan the 
learning experiences; and
    (iii) Encouraged to participate in staff-parent conferences and home 
visits to discuss their child's development and education (see 45 CFR 
1304.40(e)(4) and 45 CFR 1304.40(i)(2)).
    (3) Grantee and delegate agencies must support social and emotional 
development by:
    (i) Encouraging development which enhances each child's strengths 
by:
    (A) Building trust;
    (B) Fostering independence;
    (C) Encouraging self-control by setting clear, consistent limits, 
and having realistic expectations;
    (D) Encouraging respect for the feelings and rights of others; and
    (E) Supporting and respecting the home language, culture, and family 
composition of each child in ways that support the child's health and 
well-being; and

[[Page 177]]

    (ii) Planning for routines and transitions so that they occur in a 
timely, predictable and unrushed manner according to each child's needs.
    (4) Grantee and delegate agencies must provide for the development 
of each child's cognitive and language skills by:
    (i) Supporting each child's learning, using various strategies 
including experimentation, inquiry, observation, play and exploration;
    (ii) Ensuring opportunities for creative self-expression through 
activities such as art, music, movement, and dialogue;
    (iii) Promoting interaction and language use among children and 
between children and adults; and
    (iv) Supporting emerging literacy and numeracy development through 
materials and activities according to the developmental level of each 
child.
    (5) In center-based settings, grantee and delegate agencies must 
promote each child's physical development by:
    (i) Providing sufficient time, indoor and outdoor space, equipment, 
materials and adult guidance for active play and movement that support 
the development of gross motor skills;
    (ii) Providing appropriate time, space, equipment, materials and 
adult guidance for the development of fine motor skills according to 
each child's developmental level; and
    (iii) Providing an appropriate environment and adult guidance for 
the participation of children with special needs.
    (6) In home-based settings, grantee and delegate agencies must 
encourage parents to appreciate the importance of physical development, 
provide opportunities for children's outdoor and indoor active play, and 
guide children in the safe use of equipment and materials.
    (b) Child development and education approach for infants and 
toddlers. (1) Grantee and delegate agencies' program of services for 
infants and toddlers must encourage (see 45 CFR 1304.3(a)(5) for a 
definition of curriculum):
    (i) The development of secure relationships in out-of-home care 
settings for infants and toddlers by having a limited number of 
consistent teachers over an extended period of time. Teachers must 
demonstrate an understanding of the child's family culture and, whenever 
possible, speak the child's language (see 45 CFR 1304.52(g)(2));
    (ii) Trust and emotional security so that each child can explore the 
environment according to his or her developmental level; and
    (iii) Opportunities for each child to explore a variety of sensory 
and motor experiences with support and stimulation from teachers and 
family members.
    (2) Grantee and delegate agencies must support the social and 
emotional development of infants and toddlers by promoting an 
environment that:
    (i) Encourages the development of self-awareness, autonomy, and 
self-expression; and
    (ii) Supports the emerging communication skills of infants and 
toddlers by providing daily opportunities for each child to interact 
with others and to express himself or herself freely.
    (3) Grantee and delegate agencies must promote the physical 
development of infants and toddlers by:
    (i) Supporting the development of the physical skills of infants and 
toddlers including gross motor skills, such as grasping, pulling, 
pushing, crawling, walking, and climbing; and
    (ii) Creating opportunities for fine motor development that 
encourage the control and coordination of small, specialized motions, 
using the eyes, mouth, hands, and feet.
    (c) Child development and education approach for preschoolers. (1) 
Grantee and delegate agencies, in collaboration with the parents, must 
implement a curriculum (see 45 CFR 1304.3(a)(5)) that:
    (i) Supports each child's individual pattern of development and 
learning;
    (ii) Provides for the development of cognitive skills by encouraging 
each child to organize his or her experiences, to understand concepts, 
and to develop age appropriate literacy, numeracy, reasoning, problem 
solving and decision-making skills which form a foundation for school 
readiness and later school success;

[[Page 178]]

    (iii) Integrates all educational aspects of the health, nutrition, 
and mental health services into program activities;
    (iv) Ensures that the program environment helps children develop 
emotional security and facility in social relationships;
    (v) Enhances each child's understanding of self as an individual and 
as a member of a group;
    (vi) Provides each child with opportunities for success to help 
develop feelings of competence, self-esteem, and positive attitudes 
toward learning; and
    (vii) Provides individual and small group experiences both indoors 
and outdoors.
    (2) Staff must use a variety of strategies to promote and support 
children's learning and developmental progress based on the observations 
and ongoing assessment of each child (see 45 CFR 1304.20(b), 1304.20(d), 
and 1304.20(e)).

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2313, Jan. 15, 1998]



Sec. 1304.22  Child health and safety.

    (a) Health emergency procedures. Grantee and delegate agencies 
operating center-based programs must establish and implement policies 
and procedures to respond to medical and dental health emergencies with 
which all staff are familiar and trained. At a minimum, these policies 
and procedures must include:
    (1) Posted policies and plans of action for emergencies that require 
rapid response on the part of staff (e.g., a child choking) or immediate 
medical or dental attention;
    (2) Posted locations and telephone numbers of emergency response 
systems. Up-to-date family contact information and authorization for 
emergency care for each child must be readily available;
    (3) Posted emergency evacuation routes and other safety procedures 
for emergencies (e.g., fire or weather-related) which are practiced 
regularly (see 45 CFR 1304.53 for additional information);
    (4) Methods of notifying parents in the event of an emergency 
involving their child; and
    (5) Established methods for handling cases of suspected or known 
child abuse and neglect that are in compliance with applicable Federal, 
State, or Tribal laws.
    (b) Conditions of short-term exclusion and admittance. (1) Grantee 
and delegate agencies must temporarily exclude a child with a short-term 
injury or an acute or short-term contagious illness, that cannot be 
readily accommodated, from program participation in center-based 
activities or group experiences, but only for that generally short-term 
period when keeping the child in care poses a significant risk to the 
health or safety of the child or anyone in contact with the child.
    (2) Grantee and delegate agencies must not deny program admission to 
any child, nor exclude any enrolled child from program participation for 
a long-term period, solely on the basis of his or her health care needs 
or medication requirements unless keeping the child in care poses a 
significant risk to the health or safety of the child or anyone in 
contact with the child and the risk cannot be eliminated or reduced to 
an acceptable level through reasonable modifications in the grantee or 
delegate agency's policies, practices or procedures or by providing 
appropriate auxiliary aids which would enable the child to participate 
without fundamentally altering the nature of the program.
    (3) Grantee and delegate agencies must request that parents inform 
them of any health or safety needs of the child that the program may be 
required to address. Programs must share information, as necessary, with 
appropriate staff regarding accommodations needed in accordance with the 
program's confidentiality policy.
    (c) Medication administration. Grantee and delegate agencies must 
establish and maintain written procedures regarding the administration, 
handling, and storage of medication for every child. Grantee and 
delegate agencies may modify these procedures as necessary to satisfy 
State or Tribal laws, but only where such laws are consistent with 
Federal laws. The procedures must include:
    (1) Labeling and storing, under lock and key, and refrigerating, if 
necessary, all medications, including those required for staff and 
volunteers;

[[Page 179]]

    (2) Designating a trained staff member(s) or school nurse to 
administer, handle and store child medications;
    (3) Obtaining physicians' instructions and written parent or 
guardian authorizations for all medications administered by staff;
    (4) Maintaining an individual record of all medications dispensed, 
and reviewing the record regularly with the child's parents;
    (5) Recording changes in a child's behavior that have implications 
for drug dosage or type, and assisting parents in communicating with 
their physician regarding the effect of the medication on the child; and
    (6) Ensuring that appropriate staff members can demonstrate proper 
techniques for administering, handling, and storing medication, 
including the use of any necessary equipment to administer medication.
    (d) Injury prevention. Grantee and delegate agencies must:
    (1) Ensure that staff and volunteers can demonstrate safety 
practices; and
    (2) Foster safety awareness among children and parents by 
incorporating it into child and parent activities.
    (e) Hygiene. (1) Staff, volunteers, and children must wash their 
hands with soap and running water at least at the following times:
    (i) After diapering or toilet use;
    (ii) Before food preparation, handling, consumption, or any other 
food-related activity (e.g., setting the table);
    (iii) Whenever hands are contaminated with blood or other bodily 
fluids; and
    (iv) After handling pets or other animals.
    (2) Staff and volunteers must also wash their hands with soap and 
running water:
    (i) Before and after giving medications;
    (ii) Before and after treating or bandaging a wound (nonporous 
gloves should be worn if there is contact with blood or blood-containing 
body fluids); and
    (iii) After assisting a child with toilet use.
    (3) Nonporous (e.g., latex) gloves must be worn by staff when they 
are in contact with spills of blood or other visibly bloody bodily 
fluids.
    (4) Spills of bodily fluids (e.g., urine, feces, blood, saliva, 
nasal discharge, eye discharge or any fluid discharge) must be cleaned 
and disinfected immediately in keeping with professionally established 
guidelines (e.g., standards of the Occupational Safety Health 
Administration, U.S. Department of Labor). Any tools and equipment used 
to clean spills of bodily fluids must be cleaned and disinfected 
immediately. Other blood-contaminated materials must be disposed of in a 
plastic bag with a secure tie.
    (5) Grantee and delegate agencies must adopt sanitation and hygiene 
procedures for diapering that adequately protect the health and safety 
of children served by the program and staff. Grantee and delegate 
agencies must ensure that staff properly conduct these procedures.
    (6) Potties that are utilized in a center-based program must be 
emptied into the toilet and cleaned and disinfected after each use in a 
utility sink used for this purpose.
    (7) Grantee and delegate agencies operating programs for infants and 
toddlers must space cribs and cots at least three feet apart to avoid 
spreading contagious illness and to allow for easy access to each child.
    (f) First aid kits. (1) Readily available, well-supplied first aid 
kits appropriate for the ages served and the program size must be 
maintained at each facility and available on outings away from the site. 
Each kit must be accessible to staff members at all times, but must be 
kept out of the reach of children.
    (2) First aid kits must be restocked after use, and an inventory 
must be conducted at regular intervals.

(The information collection requirements are approved by the Office of 
Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraph (c).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2313, Jan. 15, 1998]



Sec. 1304.23  Child nutrition.

    (a) Identification of nutritional needs. Staff and families must 
work together to identify each child's nutritional needs, taking into 
account staff and family discussions concerning:

[[Page 180]]

    (1) Any relevant nutrition-related assessment data (height, weight, 
hemoglobin/hematocrit) obtained under 45 CFR 1304.20(a);
    (2) Information about family eating patterns, including cultural 
preferences, special dietary requirements for each child with nutrition-
related health problems, and the feeding requirements of infants and 
toddlers and each child with disabilities (see 45 CFR 1308.20);
    (3) For infants and toddlers, current feeding schedules and amounts 
and types of food provided, including whether breast milk or formula and 
baby food is used; meal patterns; new foods introduced; food 
intolerances and preferences; voiding patterns; and observations related 
to developmental changes in feeding and nutrition. This information must 
be shared with parents and updated regularly; and
    (4) Information about major community nutritional issues, as 
identified through the Community Assessment or by the Health Services 
Advisory Committee or the local health department.
    (b) Nutritional services. (1) Grantee and delegate agencies must 
design and implement a nutrition program that meets the nutritional 
needs and feeding requirements of each child, including those with 
special dietary needs and children with disabilities. Also, the 
nutrition program must serve a variety of foods which consider cultural 
and ethnic preferences and which broaden the child's food experience.
    (i) All Early Head Start and Head Start grantee and delegate 
agencies must use funds from USDA Food and Consumer Services Child 
Nutrition Programs as the primary source of payment for meal services. 
Early Head Start and Head Start funds may be used to cover those 
allowable costs not covered by the USDA.
    (ii) Each child in a part-day center-based setting must receive 
meals and snacks that provide at least \1/3\ of the child's daily 
nutritional needs. Each child in a center-based full-day program must 
receive meals and snacks that provide \1/2\ to \2/3\ of the child's 
daily nutritional needs, depending upon the length of the program day.
    (iii) All children in morning center-based settings who have not 
received breakfast at the time they arrive at the Early Head Start or 
Head Start program must be served a nourishing breakfast.
    (iv) Each infant and toddler in center-based settings must receive 
food appropriate to his or her nutritional needs, developmental 
readiness, and feeding skills, as recommended in the USDA meal pattern 
or nutrient standard menu planning requirements outlined in 7 CFR parts 
210, 220, and 226.
    (v) For 3- to 5-year-olds in center-based settings, the quantities 
and kinds of food served must conform to recommended serving sizes and 
minimum standards for meal patterns recommended in the USDA meal pattern 
or nutrient standard menu planning requirements outlined in 7 CFR parts 
210, 220, and 226.
    (vi) For 3- to 5-year-olds in center-based settings or other Head 
Start group experiences, foods served must be high in nutrients and low 
in fat, sugar, and salt.
    (vii) Meal and snack periods in center-based settings must be 
appropriately scheduled and adjusted, where necessary, to ensure that 
individual needs are met. Infants and young toddlers who need it must be 
fed ``on demand'' to the extent possible or at appropriate intervals.
    (2) Grantee and delegate agencies operating home-based program 
options must provide appropriate snacks and meals to each child during 
group socialization activities (see 45 CFR 1306.33 for information 
regarding home-based group socialization).
    (3) Staff must promote effective dental hygiene among children in 
conjunction with meals.
    (4) Parents and appropriate community agencies must be involved in 
planning, implementing, and evaluating the agencies' nutritional 
services.
    (c) Meal service. Grantee and delegate agencies must ensure that 
nutritional services in center-based settings contribute to the 
development and socialization of enrolled children by providing that:
    (1) A variety of food is served which broadens each child's food 
experiences;

[[Page 181]]

    (2) Food is not used as punishment or reward, and that each child is 
encouraged, but not forced, to eat or taste his or her food;
    (3) Sufficient time is allowed for each child to eat;
    (4) All toddlers and preschool children and assigned classroom 
staff, including volunteers, eat together family style and share the 
same menu to the extent possible;
    (5) Infants are held while being fed and are not laid down to sleep 
with a bottle;
    (6) Medically-based diets or other dietary requirements are 
accommodated; and
    (7) As developmentally appropriate, opportunity is provided for the 
involvement of children in food-related activities.
    (d) Family assistance with nutrition. Parent education activities 
must include opportunities to assist individual families with food 
preparation and nutritional skills.
    (e) Food safety and sanitation. (1) Grantee and delegate agencies 
must post evidence of compliance with all applicable Federal, State, 
Tribal, and local food safety and sanitation laws, including those 
related to the storage, preparation and service of food and the health 
of food handlers. In addition, agencies must contract only with food 
service vendors that are licensed in accordance with State, Tribal or 
local laws.
    (2) For programs serving infants and toddlers, facilities must be 
available for the proper storage and handling of breast milk and 
formula.

(The information collection requirements are approved by the Office of 
Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraph (a).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2313, Jan. 15, 1998]



Sec. 1304.24  Child mental health.

    (a) Mental health services. (1) Grantee and delegate agencies must 
work collaboratively with parents (see 45 CFR 1304.40(f) for issues 
related to parent education) by:
    (i) Soliciting parental information, observations, and concerns 
about their child's mental health;
    (ii) Sharing staff observations of their child and discussing and 
anticipating with parents their child's behavior and development, 
including separation and attachment issues;
    (iii) Discussing and identifying with parents appropriate responses 
to their child's behaviors;
    (iv) Discussing how to strengthen nurturing, supportive environments 
and relationships in the home and at the program;
    (v) Helping parents to better understand mental health issues; and
    (vi) Supporting parents' participation in any needed mental health 
interventions.
    (2) Grantee and delegate agencies must secure the services of mental 
health professionals on a schedule of sufficient frequency to enable the 
timely and effective identification of and intervention in family and 
staff concerns about a child's mental health; and
    (3) Mental health program services must include a regular schedule 
of on-site mental health consultation involving the mental health 
professional, program staff, and parents on how to:
    (i) Design and implement program practices responsive to the 
identified behavioral and mental health concerns of an individual child 
or group of children;
    (ii) Promote children's mental wellness by providing group and 
individual staff and parent education on mental health issues;
    (iii) Assist in providing special help for children with atypical 
behavior or development; and
    (iv) Utilize other community mental health resources, as needed.



              Subpart C--Family and Community Partnerships



Sec. 1304.40  Family partnerships.

    (a) Family goal setting. (1) Grantee and delegate agencies must 
engage in a process of collaborative partnership-building with parents 
to establish mutual trust and to identify family goals, strengths, and 
necessary services and other supports. This process must be initiated as 
early after enrollment as possible and it must take into consideration 
each family's readiness and

[[Page 182]]

willingness to participate in the process.
    (2) As part of this ongoing partnership, grantee and delegate 
agencies must offer parents opportunities to develop and implement 
individualized family partnership agreements that describe family goals, 
responsibilities, timetables and strategies for achieving these goals as 
well as progress in achieving them. In home-based program options, this 
agreement must include the above information as well as the specific 
roles of parents in home visits and group socialization activities (see 
45 CFR 1306.33(b)).
    (3) To avoid duplication of effort, or conflict with, any 
preexisting family plans developed between other programs and the Early 
Head Start or Head Start family, the family partnership agreement must 
take into account, and build upon as appropriate, information obtained 
from the family and other community agencies concerning preexisting 
family plans. Grantee and delegate agencies must coordinate, to the 
extent possible, with families and other agencies to support the 
accomplishment of goals in the preexisting plans.
    (4) A variety of opportunities must be created by grantee and 
delegate agencies for interaction with parents throughout the year.
    (5) Meetings and interactions with families must be respectful of 
each family's diversity and cultural and ethnic background.
    (b) Accessing community services and resources. (1) Grantee and 
delegate agencies must work collaboratively with all participating 
parents to identify and continually access, either directly or through 
referrals, services and resources that are responsive to each family's 
interests and goals, including:
    (i) Emergency or crisis assistance in areas such as food, housing, 
clothing, and transportation;
    (ii) Education and other appropriate interventions, including 
opportunities for parents to participate in counseling programs or to 
receive information on mental health issues that place families at risk, 
such as substance abuse, child abuse and neglect, and domestic violence; 
and
    (iii) Opportunities for continuing education and employment training 
and other employment services through formal and informal networks in 
the community.
    (2) Grantee and delegate agencies must follow-up with each family to 
determine whether the kind, quality, and timeliness of the services 
received through referrals met the families' expectations and 
circumstances.
    (c) Services to pregnant women who are enrolled in programs serving 
pregnant women, infants, and toddlers. (1) Early Head Start grantee and 
delegate agencies must assist pregnant women to access comprehensive 
prenatal and postpartum care, through referrals, immediately after 
enrollment in the program. This care must include:
    (i) Early and continuing risk assessments, which include an 
assessment of nutritional status as well as nutrition counseling and 
food assistance, if necessary;
    (ii) Health promotion and treatment, including medical and dental 
examinations on a schedule deemed appropriate by the attending health 
care providers as early in the pregnancy as possible; and
    (iii) Mental health interventions and follow-up, including substance 
abuse prevention and treatment services, as needed.
    (2) Grantee and delegate agencies must provide pregnant women and 
other family members, as appropriate, with prenatal education on fetal 
development (including risks from smoking and alcohol), labor and 
delivery, and postpartum recovery (including maternal depression).
    (3) Grantee and delegate agencies must provide information on the 
benefits of breast feeding to all pregnant and nursing mothers. For 
those who choose to breast feed in center-based programs, arrangements 
must be provided as necessary.
    (d) Parent involvement--general. (1) In addition to involving 
parents in program policy-making and operations (see 45 CFR 1304.50), 
grantee and delegate agencies must provide parent involvement and 
education activities that are responsive to the ongoing and expressed 
needs of the parents, both as individuals and as members of a group.

[[Page 183]]

Other community agencies should be encouraged to assist in the planning 
and implementation of such programs.
    (2) Early Head Start and Head Start settings must be open to parents 
during all program hours. Parents must be welcomed as visitors and 
encouraged to observe children as often as possible and to participate 
with children in group activities. The participation of parents in any 
program activity must be voluntary, and must not be required as a 
condition of the child's enrollment.
    (3) Grantee and delegate agencies must provide parents with 
opportunities to participate in the program as employees or volunteers 
(see 45 CFR 1304.52(b)(3) for additional requirements about hiring 
parents).
    (e) Parent involvement in child development and education. (1) 
Grantee and delegate agencies must provide opportunities to include 
parents in the development of the program's curriculum and approach to 
child development and education (see 45 CFR 1304.3(a)(5) for a 
definition of curriculum).
    (2) Grantees and delegate agencies operating home-based program 
options must build upon the principles of adult learning to assist, 
encourage, and support parents as they foster the growth and development 
of their children.
    (3) Grantee and delegate agencies must provide opportunities for 
parents to enhance their parenting skills, knowledge, and understanding 
of the educational and developmental needs and activities of their 
children and to share concerns about their children with program staff 
(see 45 CFR 1304.21 for additional requirements related to parent 
involvement).
    (4) Grantee and delegate agencies must provide, either directly or 
through referrals to other local agencies, opportunities for children 
and families to participate in family literacy services by:
    (i) Increasing family access to materials, services, and activities 
essential to family literacy development; and
    (ii) Assisting parents as adult learners to recognize and address 
their own literacy goals.
    (5) In addition to the two home visits, teachers in center-based 
programs must conduct staff-parent conferences, as needed, but no less 
than two per program year, to enhance the knowledge and understanding of 
both staff and parents of the educational and developmental progress and 
activities of children in the program (see 45 CFR 1304.21(a)(2)(iii) and 
45 CFR 1304.40(i) for additional requirements about staff-parent 
conferences and home visits).
    (f) Parent involvement in health, nutrition, and mental health 
education. (1) Grantee and delegate agencies must provide medical, 
dental, nutrition, and mental health education programs for program 
staff, parents, and families.
    (2) Grantee and delegate agencies must ensure that, at a minimum, 
the medical and dental health education program:
    (i) Assists parents in understanding how to enroll and participate 
in a system of ongoing family health care.
    (ii) Encourages parents to become active partners in their 
children's medical and dental health care process and to accompany their 
child to medical and dental examinations and appointments; and
    (iii) Provides parents with the opportunity to learn the principles 
of preventive medical and dental health, emergency first-aid, 
occupational and environmental hazards, and safety practices for use in 
the classroom and in the home. In addition to information on general 
topics (e.g., maternal and child health and the prevention of Sudden 
Infant Death Syndrome), information specific to the health needs of 
individual children must also be made available to the extent possible.
    (3) Grantee and delegate agencies must ensure that the nutrition 
education program includes, at a minimum:
    (i) Nutrition education in the selection and preparation of foods to 
meet family needs and in the management of food budgets; and
    (ii) Parent discussions with program staff about the nutritional 
status of their child.
    (4) Grantee and delegate agencies must ensure that the mental health 
education program provides, at a minimum (see 45 CFR 1304.24 for issues 
related to mental health education):

[[Page 184]]

    (i) A variety of group opportunities for parents and program staff 
to identify and discuss issues related to child mental health;
    (ii) Individual opportunities for parents to discuss mental health 
issues related to their child and family with program staff; and
    (iii) The active involvement of parents in planning and implementing 
any mental health interventions for their children.
    (g) Parent involvement in community advocacy. (1) Grantee and 
delegate agencies must:
    (i) Support and encourage parents to influence the character and 
goals of community services in order to make them more responsive to 
their interests and needs; and
    (ii) Establish procedures to provide families with comprehensive 
information about community resources (see 45 CFR 1304.41(a)(2) for 
additional requirements).
    (2) Parents must be provided regular opportunities to work together, 
and with other community members, on activities that they have helped 
develop and in which they have expressed an interest.
    (h) Parent involvement in transition activities. (1) Grantee and 
delegate agencies must assist parents in becoming their children's 
advocate as they transition both into Early Head Start or Head Start 
from the home or other child care setting, and from Head Start to 
elementary school, a Title I of the Elementary and Secondary Education 
Act preschool program, or a child care setting.
    (2) Staff must work to prepare parents to become their children's 
advocate through transition periods by providing that, at a minimum, a 
staff-parent meeting is held toward the end of the child's participation 
in the program to enable parents to understand the child's progress 
while enrolled in Early Head Start or Head Start.
    (3) To promote the continued involvement of Head Start parents in 
the education and development of their children upon transition to 
school, grantee and delegate agencies must:
    (i) Provide education and training to parents to prepare them to 
exercise their rights and responsibilities concerning the education of 
their children in the school setting; and
    (ii) Assist parents to communicate with teachers and other school 
personnel so that parents can participate in decisions related to their 
children's education.
    (4) See 45 CFR 1304.41(c) for additional standards related to 
children's transition to and from Early Head Start or Head Start.
    (i) Parent involvement in home visits. (1) Grantee and delegate 
agencies must not require that parents permit home visits as a condition 
of the child's participation in Early Head Start or Head Start center-
based program options. Every effort must be made to explain the 
advantages of home visits to the parents.
    (2) The child's teacher in center-based programs must make no less 
than two home visits per program year to the home of each enrolled 
child, unless the parents expressly forbid such visits, in accordance 
with the requirements of 45 CFR 1306.32(b)(8). Other staff working with 
the family must make or join home visits, as appropriate.
    (3) Grantee and delegate agencies must schedule home visits at times 
that are mutually convenient for the parents or primary caregivers and 
staff.
    (4) In cases where parents whose children are enrolled in the 
center-based program option ask that the home visits be conducted 
outside the home, or in cases where a visit to the home presents 
significant safety hazards for staff, the home visit may take place at 
an Early Head Start or Head Start site or at another safe location that 
affords privacy. Home visits in home-based program options must be 
conducted in the family's home. (See 45 CFR 1306.33 regarding the home-
based program option.)
    (5) In addition, grantee and delegate agencies operating home-based 
program options must meet the requirements of 45 CFR 1306.33(a)(1) 
regarding home visits.

[[Page 185]]

    (6) Grantee and delegate agencies serving infants and toddlers must 
arrange for health staff to visit each newborn within two weeks after 
the infant's birth to ensure the well-being of both the mother and the 
child.

(The information and collection requirements are approved by the Office 
of Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraph (a).

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2313, 2314, Jan. 15, 
1998]



Sec. 1304.41  Community partnerships.

    (a) Partnerships. (1) Grantee and delegate agencies must take an 
active role in community planning to encourage strong communication, 
cooperation, and the sharing of information among agencies and their 
community partners and to improve the delivery of community services to 
children and families in accordance with the agency's confidentiality 
policies. Documentation must be maintained to reflect the level of 
effort undertaken to establish community partnerships (see 45 CFR 
1304.51 for additional planning requirements).
    (2) Grantee and delegate agencies must take affirmative steps to 
establish ongoing collaborative relationships with community 
organizations to promote the access of children and families to 
community services that are responsive to their needs, and to ensure 
that Early Head Start and Head Start programs respond to community 
needs, including:
    (i) Health care providers, such as clinics, physicians, dentists, 
and other health professionals;
    (ii) Mental health providers;
    (iii) Nutritional service providers;
    (iv) Individuals and agencies that provide services to children with 
disabilities and their families (see 45 CFR 1308.4 for specific service 
requirements);
    (v) Family preservation and support services;
    (vi) Child protective services and any other agency to which child 
abuse must be reported under State or Tribal law;
    (vii) Local elementary schools and other educational and cultural 
institutions, such as libraries and museums, for both children and 
families;
    (viii) Providers of child care services; and
    (ix) Any other organizations or businesses that may provide support 
and resources to families.
    (3) Grantee and delegate agencies must perform outreach to encourage 
volunteers from the community to participate in Early Head Start and 
Head Start programs.
    (4) To enable the effective participation of children with 
disabilities and their families, grantee and delegate agencies must make 
specific efforts to develop interagency agreements with local education 
agencies (LEAs) and other agencies within the grantee and delegate 
agency's service area (see 45 CFR 1308.4(h) for specific requirements 
concerning interagency agreements).
    (b) Advisory committees. Each grantee directly operating an Early 
Head Start or Head Start program, and each delegate agency, must 
establish and maintain a Health Services Advisory Committee which 
includes Head Start parents, professionals, and other volunteers from 
the community. Grantee and delegate agencies also must establish and 
maintain such other service advisory committees as they deem appropriate 
to address program service issues such as community partnerships and to 
help agencies respond to community needs.
    (c) Transition services. (1) Grantee and delegate agencies must 
establish and maintain procedures to support successful transitions for 
enrolled children and families from previous child care programs into 
Early Head Start or Head Start and from Head Start into elementary 
school, a Title I of the Elementary and Secondary Education Act 
preschool program, or other child care settings. These procedures must 
include:
    (i) Coordinating with the schools or other agencies to ensure that 
individual Early Head Start or Head Start children's relevant records 
are transferred to the school or next placement in which a child ill 
enroll or from earlier placements to Early Head Start or Head Start;
    (ii) Outreach to encourage communication between Early Head Start or 
Head Start staff and their counterparts

[[Page 186]]

in the schools and other child care settings including principals, 
teachers, social workers and health staff to facilitate continuity of 
programming;
    (iii) Initiating meetings involving Head Start teachers and parents 
and kindergarten or elementary school teachers to discuss the 
developmental progress and abilities of individual children; and
    (iv) Initiating joint transition-related training for Early Head 
Start or Head Start staff and school or other child development staff.
    (2) To ensure the most appropriate placement and services following 
participation in Early Head Start, transition planning must be 
undertaken for each child and family at least six months prior to the 
child's third birthday. The process must take into account: The child's 
health status and developmental level, progress made by the child and 
family while in Early Head Start, current and changing family 
circumstances, and the availability of Head Start and other child 
development or child care services in the community. As appropriate, a 
child may remain in Early Head Start, following his or her third 
birthday, for additional months until he or she can transition into Head 
Start or another program.
    (3) See 45 CFR 1304.40(h) for additional requirements related to 
parental participation in their child's transition to and from Early 
Head Start or Head Start.

(The information collection requirements are approved by the Office of 
Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraph (a).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2314, Jan. 15, 1998]



                Subpart D--Program Design and Management



Sec. 1304.50  Program governance.

    (a) Policy Council, Policy Committee, and Parent Committee 
structure. (1) Grantee and delegate agencies must establish and maintain 
a formal structure of shared governance through which parents can 
participate in policy making or in other decisions about the program. 
This structure must consist of the following groups, as required:
    (i) Policy Council. This Council must be established at the grantee 
level.
    (ii) Policy Committee. This Committee must be established at the 
delegate agency level when the program is administered in whole or in 
part by such agencies (see 45 CFR 1301.2 for a definition of a delegate 
agency).
    (iii) Parent Committee. For center-based programs, this Committee 
must be established at the center level. For other program options, an 
equivalent Committee must be established at the local program level. 
When programs operate more than one option from the same site, the 
Parent Committee membership is combined unless parents choose to have a 
separate Committee for each option.
    (2) Parent Committees must be comprised exclusively of the parents 
of children currently enrolled at the center level for center-based 
programs or at the equivalent level for other program options (see 45 
CFR 1306.3(h) for a definition of a Head Start parent).
    (3) All Policy Councils, Policy Committees, and Parent Committees 
must be established as early in the program year as possible. Grantee 
Policy Councils and delegate Policy Committees may not be dissolved 
until successor Councils or Committees are elected and seated.
    (4) When a grantee has delegated the entire Head Start program to 
one delegate agency, it is not necessary to have a Policy Committee in 
addition to a grantee agency Policy Council.
    (5) The governing body (the group with legal and fiscal 
responsibility for administering the Early Head Start or Head Start 
program) and the Policy Council or Policy Committee must not have 
identical memberships and functions.
    (b) Policy group composition and formation. (1) Each grantee and 
delegate agency governing body operating an Early Head Start or Head 
Start program must (except where such authority is ceded to the Policy 
Council or Policy Committee) propose, within the framework of these 
regulations, the total size of their respective policy groups (based on 
the number of centers, classrooms or other program option units, and the 
number of children served by their Early Head Start or

[[Page 187]]

Head Start program), the procedures for the election of parent members, 
and the procedure for the selection of community representatives. These 
proposals must be approved by the Policy Council or Policy Committee.
    (2) Policy Councils and Policy Committees must be comprised of two 
types of representatives: parents of currently enrolled children and 
community representatives. At least 51 percent of the members of these 
policy groups must be the parents of currently enrolled children (see 45 
CFR 1306.3(h) for a definition of a Head Start parent).
    (3) Community representatives must be drawn from the local 
community: businesses; public or private community, civic, and 
professional organizations; and others who are familiar with resources 
and services for low-income children and families, including for example 
the parents of formerly enrolled children.
    (4) All parent members of Policy Councils or Policy Committees must 
stand for election or re-election annually. All community 
representatives also must be selected annually.
    (5) Policy Councils and Policy Committees must limit the number of 
one-year terms any individual may serve on either body to a combined 
total of three terms.
    (6) No grantee or delegate agency staff (or members of their 
immediate families) may serve on Policy Councils or Policy Committees 
except parents who occasionally substitute for regular Early Head Start 
or Head Start staff. In the case of Tribal grantees, this exclusion 
applies only to Tribal staff who work in areas directly related to or 
which directly impact upon any Early Head Start or Head Start 
administrative, fiscal or programmatic issues.
    (7) Parents of children currently enrolled in all program options 
must be proportionately represented on established policy groups.
    (c) Policy group responsibilities--general. At a minimum policy 
groups must be charged with the responsibilities described in paragraphs 
(d), (f), (g), and (h) of this section and repeated in appendix A of 
this section.
    (d) The Policy Council or Policy Committee. (1) Policy Councils and 
Policy Committees must work in partnership with key management staff and 
the governing body to develop, review, and approve or disapprove the 
following policies and procedures:
    (i) All funding applications and amendments to funding applications 
for Early Head Start and Head Start, including administrative services, 
prior to the submission of such applications to the grantee (in the case 
of Policy Committees) or to HHS (in the case of Policy Councils);
    (ii) Procedures describing how the governing body and the 
appropriate policy group will implement shared decision-making;
    (iii) Procedures for program planning in accordance with this part 
and the requirements of 45 CFR 1305.3;
    (iv) The program's philosophy and long- and short-range program 
goals and objectives (see 45 CFR 1304.51(a) and 45 CFR 1305.3 for 
additional requirements regarding program planning);
    (v) The selection of delegate agencies and their service areas (this 
regulation is binding on Policy Councils exclusively) (see 45 CFR 
1301.33 and 45 CFR 1305.3(a) for additional requirements about delegate 
agency and service area selection, respectively);
    (vi) The composition of the Policy Council or the Policy Committee 
and the procedures by which policy group members are chosen;
    (vii) Criteria for defining recruitment, selection, and enrollment 
priorities, in accordance with the requirements of 45 CFR part 1305;
    (viii) The annual self-assessment of the grantee or delegate 
agency's progress in carrying out the programmatic and fiscal intent of 
its grant application, including planning or other actions that may 
result from the review of the annual audit and findings from the Federal 
monitoring review (see 45 CFR 1304.51(i)(1) for additional requirements 
about the annual self-assessment);
    (ix) Program personnel policies and subsequent changes to those 
policies, in accordance with 45 CFR 1301.31, including standards of 
conduct for program staff, consultants, and volunteers;

[[Page 188]]

    (x) Decisions to hire or terminate the Early Head Start or Head 
Start director of the grantee or delegate agency; and
    (xi) Decisions to hire or terminate any person who works primarily 
for the Early Head Start or Head Start program of the grantee or 
delegate agency.
    (2) In addition, Policy Councils and Policy Committees must perform 
the following functions directly:
    (i) Serve as a link to the Parent Committees, grantee and delegate 
agency governing bodies, public and private organizations, and the 
communities they serve;
    (ii) Assist Parent Committees in communicating with parents enrolled 
in all program options to ensure that they understand their rights, 
responsibilities, and opportunities in Early Head Start and Head Start 
and to encourage their participation in the program;
    (iii) Assist Parent Committees in planning, coordinating, and 
organizing program activities for parents with the assistance of staff, 
and ensuring that funds set aside from program budgets are used to 
support parent activities;
    (iv) Assist in recruiting volunteer services from parents, community 
residents, and community organizations, and assist in the mobilization 
of community resources to meet identified needs; and
    (v) Establish and maintain procedures for working with the grantee 
or delegate agency to resolve community complaints about the program.
    (e) Parent Committee. The Parent Committee must carry out at least 
the following minimum responsibilities:
    (1) Advise staff in developing and implementing local program 
policies, activities, and services;
    (2) Plan, conduct, and participate in informal as well as formal 
programs and activities for parents and staff; and
    (3) Within the guidelines established by the governing body, Policy 
Council, or Policy Committee, participate in the recruitment and 
screening of Early Head Start and Head Start employees.
    (f) Policy Council, Policy Committee, and Parent Committee 
reimbursement. Grantee and delegate agencies must enable low-income 
members to participate fully in their group responsibilities by 
providing, if necessary, reimbursements for reasonable expenses incurred 
by the members.
    (g) Governing body responsibilities. (1) Grantee and delegate 
agencies must have written policies that define the roles and 
responsibilities of the governing body members and that inform them of 
the management procedures and functions necessary to implement a high 
quality program.
    (2) Grantee and delegate agencies must ensure that appropriate 
internal controls are established and implemented to safeguard Federal 
funds in accordance with 45 CFR 1301.13.
    (h) Internal dispute resolution. Each grantee and delegate agency 
and Policy Council or Policy Committee jointly must establish written 
procedures for resolving internal disputes, including impasse 
procedures, between the governing body and policy group.

[[Page 189]]

         Appendix A--Governance and Management Responsibilities

 
                       [A=General responsibility; B=Operating responsibility; C=Must approve or disapprove; D=Determined locally]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Grantee Agency                          Delegate Agency              Grantee or Delegate Management Staff
                                 -----------------------------------------------------------------------------------------------------------------------
            Function                                                                                                  HS* Program
                                    Governing Body      Policy Council      Governing Body       Policy Cmte.           Director        Agency Director
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       I. Planning
��������������������������������������������������������������������������������������������������������������������������������������������������������
 
(a) 1304.50(d)(1)(iii)                   A & C                 C                   C                   C                   B                   D
 Procedures for program planning
 in accordance with this Part
 and the requirements of 45 CFR
 1305.3.
(b) 1304.50(d)(1)(iv) The                A & C                 C                   C                   C                   B                   D
 program's philosophy and long-
 and short-range program goals
 and objectives (see 45 CFR
 1304.51(a) and 45 CFR 1305.3
 for additional requirements
 regarding program planning).
(c) 1304.50(d)(1)(v) The                 A & C                 C                  --                  --                   B                   D
 selection of delegate agencies                                                                                   (Grantee only)       (Grantee only)
 and their service areas (this
 regulation is binding on Policy
 Councils exclusively) (see 45
 CFR 1301.33 and 45 CFR
 1305.3(a) for additional
 requirements about delegate
 agency and service area
 selection, respectively).
(d) 1304.50(d)(1)(vii) Criteria            A                   C                   A                   C                   B                   D
 for defining recruitment,
 selection, and enrollment
 priorities, in accordance with
 the requirements of 45 CFR Part
 1305.
(e) 1304.50(d)(1)(i) All funding         A & C                 C                 A & C                 C                   B                   D
 applications and amendments to
 funding applications for Early
 Head Start and Head Start,
 including administrative
 services, prior to the
 submission of such applications
 to the grantee (in the case of
 Policy Committees) or to HHS
 (in the case of Policy
 Councils).
(f) 1304.50(f) Policy Council,             A                   C                   A                   C                   B                   D
 Policy Committee, and Parent
 Committee reimbursement.
 Grantee and delegate agencies
 must enable low-income members
 to participate fully in their
 group responsibilities by
 providing, if necessary,
 reimbursements for reasonable
 expenses incurred by the
 members.
(g) 1304.50(d)(1)(viii) The                A                   C                   A                   C                   B                   D
 annual self-assessment of the
 grantee or delegate agency's
 progress in carrying out the
 programmatic and fiscal intent
 of its grant application,
 including planning or other
 actions that may result from
 the review of the annual audit
 and findings from the Federal
 monitoring review (see 45 CFR
 1304.51(i)(1) for additional
 requirements about the annual
 self-assessment).
���������������������������������
 
                                                                 II. General Procedures
��������������������������������������������������������������������������������������������������������������������������������������������������������
 
(a) 1304.50(d)(1)(vi) The                A & C                 C                 A & C                 C                   B                   D
 composition of the Policy
 Council or the Policy Committee
 and the procedures by which
 policy group members are chosen.
(b) 1304.50(g)(1) Grantee and            A & C                --                 A & C                --                   --                  D
 delegate agencies must have
 written policies that define
 the roles and responsibilities
 of the governing body members
 and that inform them of the
 management procedures and
 functions necessary to
 implement a high quality
 program.
(c) 1304.50(d)(1)(ii) Procedures         A & C                 C                 A & C                 C                   D                   D
 describing how the governing
 body and the appropriate policy
 group will implement shared
 decision-making.

[[Page 190]]

 
(d) 1304.50(h) Internal dispute          A & C                 C                 A & C                 C                   D                   D
 resolution. Each grantee and
 delegate agency and Policy
 Council or Policy Committee
 jointly must establish written
 procedures for resolving
 internal disputes, including
 impasse procedures, between the
 governing body and policy group.
(e) 1304.50(d)(2)(v) Establish             B                   B                   B                   B                   D                   D
 and maintain procedures for
 hearing and working with the
 grantee or delegate agency to
 resolve community complaints
 about the program.
(f) 1304.50(g)(2) Grantee and              A                  --                   A                  --                   D                   D
 delegate agencies must ensure
 that appropriate internal
 controls are established and
 implemented to safeguard
 Federal funds in accordance
 with 45 CFR 1301.13.
(g) The annual independent audit           A                  --                   A                  --                   D                   D
 that must be conducted in
 accordance with 45 CFR 1301.12.
���������������������������������
 
                                                             III. Human Resources Management
��������������������������������������������������������������������������������������������������������������������������������������������������������
 
(a) 1304.50(d)(1)(ix) Program            A & C                 C                 A & C                 C                   D                   D
 personnel policies and
 subsequent changes to those
 policies, in accordance with 45
 CFR 1301.31, including
 standards of conduct for
 program staff, consultants, and
 volunteers.
(b) 1304.50(d)(1)(x) Decisions           A & C                 C                  --                  --                   --                  D
 to hire or terminate the Early
 Head Start or Head Start
 director of the grantee agency.
(c) 1304.50(d)(1)(xi) Decisions            A                   C                  --                  --                   B                   D
 to hire or terminate any person                                                                                  (Grantee only)
 who works primarily for the
 Early Head Start or Head Start
 program of the grantee agency.
(d) 1304.50(d)(1)(x) Decisions            --                  --                 A & C                 C                   --                  D
 to hire or terminate the Early
 Head Start or Head Start
 director of the delegate agency.
(e) 1304.50(d)(1)(xi) Decisions           --                  --                   A                   C                   B                   D
 to hire or terminate any person                                                                                  (Delegate only)
 who works primarily for the
 Early Head Start or Head Start
 program of the delegate agency.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              KEY AND DEFINITIONS AS USED IN CHART
 
* When a grantee or delegate agency operates an Early Head Start program only and not an Early Head Start and a Head Start program, these
  responsibilities apply to the Early Head Start Director.
 A. General Responsibility. The group with legal and fiscal responsibility that guides and oversees the carrying out of the functions described through
  the individual or group given operating responsibility.
 B. Operating Responsibility. The individual or group that is directly responsible for carrying out or performing the functions consistent with the
  general guidance and oversight from the group holding general responsibility.
 C. Must Approve or Disapprove. The group that must be involved in the decision-making process prior to the point of seeking approval. If it does not
  approve, a proposal cannot be adopted, or the proposed action taken, until agreement is reached between the disagreeing groups.
 D. Determined locally. Management staff functions as determined by the local governing body and in accordance with all Head Start regulations.


[[Page 191]]


(The information and collection requirements are approved by the Office 
of Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraphs (f), (g), and (h).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2314, Jan. 15, 1998]



Sec. 1304.51   Management systems and procedures.

    (a) Program planning. (1) Grantee and delegate agencies must develop 
and implement a systematic, ongoing process of program planning that 
includes consultation with the program's governing body, policy groups, 
and program staff, and with other community organizations that serve 
Early Head Start and Head Start or other low-income families with young 
children. Program planning must include:
    (i) An assessment of community strengths, needs and resources 
through completion of the Community Assessment, in accordance with the 
requirements of 45 CFR 1305.3;
    (ii) The formulation of both multi-year (long-range) program goals 
and short-term program and financial objectives that address the 
findings of the Community Assessment, are consistent with the philosophy 
of Early Head Start and Head Start, and reflect the findings of the 
program's annual self- assessment; and
    (iii) The development of written plan(s) for implementing services 
in each of the program areas covered by this part (e.g., Early Childhood 
Development and Health Services, Family and Community Partnerships, and 
Program Design and Management). See the requirements of 45 CFR parts 
1305, 1306, and 1308.
    (2) All written plans for implementing services, and the progress in 
meeting them, must be reviewed by the grantee or delegate agency staff 
and reviewed and approved by the Policy Council or Policy Committee at 
least annually, and must be revised and updated as needed.
    (b) Communications--general. Grantee and delegate agencies must 
establish and implement systems to ensure that timely and accurate 
information is provided to parents, policy groups, staff, and the 
general community.
    (c) Communication with families. (1) Grantee and delegate agencies 
must ensure that effective two-way comprehensive communications between 
staff and parents are carried out on a regular basis throughout the 
program year.
    (2) Communication with parents must be carried out in the parents' 
primary or preferred language or through an interpreter, to the extent 
feasible.
    (d) Communication with governing bodies and policy groups. Grantee 
and delegate agencies must ensure that the following information is 
provided regularly to their grantee and delegate governing bodies and to 
members of their policy groups:
    (1) Procedures and timetables for program planning;
    (2) Policies, guidelines, and other communications from HHS;
    (3) Program and financial reports; and
    (4) Program plans, policies, procedures, and Early Head Start and 
Head Start grant applications.
    (e) Communication among staff. Grantee and delegate agencies must 
have mechanisms for regular communication among all program staff to 
facilitate quality outcomes for children and families.
    (f) Communication with delegate agencies. Grantees must have a 
procedure for ensuring that delegate agency governing bodies, Policy 
Committees, and all staff receive all regulations, policies, and other 
pertinent communications in a timely manner.
    (g) Record-keeping systems. Grantee and delegate agencies must 
establish and maintain efficient and effective record-keeping systems to 
provide accurate and timely information regarding children, families, 
and staff and must ensure appropriate confidentiality of this 
information.
    (h) Reporting systems. Grantee and delegate agencies must establish 
and maintain efficient and effective reporting systems that:
    (1) Generate periodic reports of financial status and program 
operations in order to control program quality, maintain program 
accountability, and advise governing bodies, policy groups, and staff of 
program progress; and
    (2) Generate official reports for Federal, State, and local 
authorities, as required by applicable law.

[[Page 192]]

    (i) Program self-assessment and monitoring. (1) At least once each 
program year, with the consultation and participation of the policy 
groups and, as appropriate, other community members, grantee and 
delegate agencies must conduct a self-assessment of their effectiveness 
and progress in meeting program goals and objectives and in implementing 
Federal regulations.
    (2) Grantees must establish and implement procedures for the ongoing 
monitoring of their own Early Head Start and Head Start operations, as 
well as those of each of their delegate agencies, to ensure that these 
operations effectively implement Federal regulations.
    (3) Grantees must inform delegate agency governing bodies of any 
deficiencies in delegate agency operations identified in the monitoring 
review and must help them develop plans, including timetables, for 
addressing identified problems.

(The information and collection requirements are approved by the Office 
of Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraphs (a) and (i).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2314, Jan. 15, 1998]



Sec. 1304.52   Human resources management.

    (a) Organizational structure. (1) Grantee and delegate agencies must 
establish and maintain an organizational structure that supports the 
accomplishment of program objectives. This structure must address the 
major functions and responsibilities assigned to each staff position and 
must provide evidence of adequate mechanisms for staff supervision and 
support.
    (2) At a minimum, grantee and delegate agencies must ensure that the 
following program management functions are formally assigned to and 
adopted by staff within the program:
    (i) Program management (the Early Head Start or Head Start 
director);
    (ii) Management of early childhood development and health services, 
including child development and education; child medical, dental, and 
mental health; child nutrition; and, services for children with 
disabilities; and
    (iii) Management of family and community partnerships, including 
parent activities.
    (b) Staff qualifications--general. (1) Grantee and delegate agencies 
must ensure that staff and consultants have the knowledge, skills, and 
experience they need to perform their assigned functions responsibly.
    (2) In addition, grantee and delegate agencies must ensure that only 
candidates with the qualifications specified in this part and in 45 CFR 
1306.21 are hired.
    (3) Current and former Early Head Start and Head Start parents must 
receive preference for employment vacancies for which they are 
qualified.
    (4) Staff and program consultants must be familiar with the ethnic 
background and heritage of families in the program and must be able to 
serve and effectively communicate, to the extent feasible, with children 
and families with no or limited English proficiency.
    (c) Early Head Start or Head Start director qualifications. The 
Early Head Start or Head Start director must have demonstrated skills 
and abilities in a management capacity relevant to human services 
program management.
    (d) Qualifications of content area experts. Grantee and delegate 
agencies must hire staff or consultants who meet the qualifications 
listed below to provide content area expertise and oversight on an 
ongoing or regularly scheduled basis. Agencies must determine the 
appropriate staffing pattern necessary to provide these functions.
    (1) Education and child development services must be supported by 
staff or consultants with training and experience in areas that include: 
The theories and principles of child growth and development, early 
childhood education, and family support. In addition, staff or 
consultants must meet the qualifications for classroom teachers, as 
specified in section 648A of the Head Start Act and any subsequent 
amendments regarding the qualifications of teachers.
    (2) Health services must be supported by staff or consultants with 
training and experience in public health, nursing, health education, 
maternal and child health, or health administration. In addition, when a 
health procedure

[[Page 193]]

must be performed only by a licensed/certified health professional, the 
agency must assure that the requirement is followed.
    (3) Nutrition services must be supported by staff or consultants who 
are registered dietitians or nutritionists.
    (4) Mental health services must be supported by staff or consultants 
who are licensed or certified mental health professionals with 
experience and expertise in serving young children and their families.
    (5) Family and community partnership services must be supported by 
staff or consultants with training and experience in field(s) related to 
social, human, or family services.
    (6) Parent involvement services must be supported by staff or 
consultants with training, experience, and skills in assisting the 
parents of young children in advocating and decision-making for their 
families.
    (7) Disabilities services must be supported by staff or consultants 
with training and experience in securing and individualizing needed 
services for children with disabilities.
    (8) Grantee and delegate agencies must secure the regularly 
scheduled or ongoing services of a qualified fiscal officer.
    (e) Home visitor qualifications. Home visitors must have knowledge 
and experience in child development and early childhood education; the 
principles of child health, safety, and nutrition; adult learning 
principles; and family dynamics. They must be skilled in communicating 
with and motivating people. In addition, they must have knowledge of 
community resources and the skills to link families with appropriate 
agencies and services.
    (f) Infant and toddler staff qualifications. Early Head Start and 
Head Start staff working as teachers with infants and toddlers must 
obtain a Child Development Associate (CDA) credential for Infant and 
Toddler Caregivers or an equivalent credential that addresses comparable 
competencies within one year of the effective date of the final rule or, 
thereafter, within one year of hire as a teacher of infants and 
toddlers. In addition, infants and toddler teachers must have the 
training and experience necessary to develop consistent, stable, and 
supportive relationships with very young children. The training must 
develop knowledge of infant and toddler development, safety issues in 
infant and toddler care (e.g., reducing the risk of Sudden Infant Death 
Syndrome), and methods for communicating effectively with infants and 
toddlers, their parents, and other staff members.
    (g) Classroom staffing and home visitors. (1) Grantee and delegate 
agencies must meet the requirements of 45 CFR 1306.20 regarding 
classroom staffing.
    (2) When a majority of children speak the same language, at least 
one classroom staff member or home visitor interacting regularly with 
the children must speak their language.
    (3) For center-based programs, the class size requirements specified 
in 45 CFR 1306.32 must be maintained through the provision of 
substitutes when regular classroom staff are absent.
    (4) Grantee and delegate agencies must ensure that each teacher 
working exclusively with infants and toddlers has responsibility for no 
more than four infants and toddlers and that no more than eight infants 
and toddlers are placed in any one group. However, if State, Tribal or 
local regulations specify staff:child ratios and group sizes more 
stringent than this requirement, the State, Tribal or local regulations 
must apply.
    (5) Staff must supervise the outdoor and indoor play areas in such a 
way that children's safety can be easily monitored and ensured.
    (h) Standards of conduct. (1) Grantee and delegate agencies must 
ensure that all staff, consultants, and volunteers abide by the 
program's standards of conduct. These standards must specify that:
    (i) They will respect and promote the unique identity of each child 
and family and refrain from stereotyping on the basis of gender, race, 
ethnicity, culture, religion, or disability;
    (ii) They will follow program confidentiality policies concerning 
information about children, families, and other staff members;
    (iii) No child will be left alone or unsupervised while under their 
care; and

[[Page 194]]

    (iv) They will use positive methods of child guidance and will not 
engage in corporal punishment, emotional or physical abuse, or 
humiliation. In addition, they will not employ methods of discipline 
that involve isolation, the use of food as punishment or reward, or the 
denial of basic needs.
    (2) Grantee and delegate agencies must ensure that all employees 
engaged in the award and administration of contracts or other financial 
awards sign statements that they will not solicit or accept personal 
gratuities, favors, or anything of significant monetary value from 
contractors or potential contractors.
    (3) Personnel policies and procedures must include provision for 
appropriate penalties for violating the standards of conduct.
    (i) Staff performance appraisals. Grantee and delegate agencies 
must, at a minimum, perform annual performance reviews of each Early 
Head Start and Head Start staff member and use the results of these 
reviews to identify staff training and professional development needs, 
modify staff performance agreements, as necessary, and assist each staff 
member in improving his or her skills and professional competencies.
    (j) Staff and volunteer health. (1) Grantee and delegate agencies 
must assure that each staff member has an initial health examination 
(that includes screening for tuberculosis) and a periodic re-examination 
(as recommended by their health care provider or as mandated by State, 
Tribal, or local laws) so as to assure that they do not, because of 
communicable diseases, pose a significant risk to the health or safety 
of others in the Early Head Start or Head Start program that cannot be 
eliminated or reduced by reasonable accommodation. This requirement must 
be implemented consistent with the requirements of the Americans with 
Disabilities Act and section 504 of the Rehabilitation Act.
    (2) Regular volunteers must be screened for tuberculosis in 
accordance with State, Tribal or local laws. In the absence of State, 
Tribal or local law, the Health Services Advisory Committee must be 
consulted regarding the need for such screenings (see 45 CFR 1304.3(20) 
for a definition of volunteer).
    (3) Grantee and delegate agencies must make mental health and 
wellness information available to staff with concerns that may affect 
their job performance.
    (k) Training and development. (1) Grantee and delegate agencies must 
provide an orientation to all new staff, consultants, and volunteers 
that includes, at a minimum, the goals and underlying philosophy of 
Early Head Start and/or Head Start and the ways in which they are 
implemented by the program.
    (2) Grantee and delegate agencies must establish and implement a 
structured approach to staff training and development, attaching 
academic credit whenever possible. This system should be designed to 
help build relationships among staff and to assist staff in acquiring or 
increasing the knowledge and skills needed to fulfill their job 
responsibilities, in accordance with the requirements of 45 CFR 1306.23.
    (3) At a minimum, this system must include ongoing opportunities for 
staff to acquire the knowledge and skills necessary to implement the 
content of the Head Start Program Performance Standards. This program 
must also include:
    (i) Methods for identifying and reporting child abuse and neglect 
that comply with applicable State and local laws using, so far as 
possible, a helpful rather than a punitive attitude toward abusing or 
neglecting parents and other caretakers; and
    (ii) Methods for planning for successful child and family 
transitions to and from the Early Head Start or Head Start program.
    (4) Grantee and delegate agencies must provide training or 
orientation to Early Head Start and Head Start governing body members. 
Agencies must also provide orientation and ongoing training to Early 
Head Start and Head Start Policy Council and Policy Committee members to 
enable them to

[[Page 195]]

carry out their program governance responsibilities effectively.

(Approved by the Office of Management and Budget under control number 
0970-0148 for paragraph (j).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2314, Jan. 15, 1998]



Sec. 1304.53   Facilities, materials, and equipment.

    (a) Head Start physical environment and facilities. (1) Grantee and 
delegate agencies must provide a physical environment and facilities 
conducive to learning and reflective of the different stages of 
development of each child.
    (2) Grantee and delegate agencies must provide appropriate space for 
the conduct of all program activities (see 45 CFR 1308.4 for specific 
access requirements for children with disabilities).
    (3) The center space provided by grantee and delegate agencies must 
be organized into functional areas that can be recognized by the 
children and that allow for individual activities and social 
interactions.
    (4) The indoor and outdoor space in Early Head Start or Head Start 
centers in use by mobile infants and toddlers must be separated from 
general walkways and from areas in use by preschoolers.
    (5) Centers must have at least 35 square feet of usable indoor space 
per child available for the care and use of children (i.e., exclusive of 
bathrooms, halls, kitchen, staff rooms, and storage places) and at least 
75 square feet of usable outdoor play space per child.
    (6) Facilities owned or operated by Early Head Start and Head Start 
grantee or delegate agencies must meet the licensing requirements of 45 
CFR 1306.30.
    (7) Grantee and delegate agencies must provide for the maintenance, 
repair, safety, and security of all Early Head Start and Head Start 
facilities, materials and equipment.
    (8) Grantee and delegate agencies must provide a center-based 
environment free of toxins, such as cigarette smoke, lead, pesticides, 
herbicides, and other air pollutants as well as soil and water 
contaminants. Agencies must ensure that no child is present during the 
spraying of pesticides or herbicides. Children must not return to the 
affected area until it is safe to do so.
    (9) Outdoor play areas at center-based programs must be arranged so 
as to prevent any child from leaving the premises and getting into 
unsafe and unsupervised areas. Enroute to play areas, children must not 
be exposed to vehicular traffic without supervision.
    (10) Grantee and delegate agencies must conduct a safety inspection, 
at least annually, to ensure that each facility's space, light, 
ventilation, heat, and other physical arrangements are consistent with 
the health, safety and developmental needs of children. At a minimum, 
agencies must ensure that:
    (i) In climates where such systems are necessary, there is a safe 
and effective heating and cooling system that is insulated to protect 
children and staff from potential burns;
    (ii) No highly flammable furnishings, decorations, or materials that 
emit highly toxic fumes when burned are used;
    (iii) Flammable and other dangerous materials and potential poisons 
are stored in locked cabinets or storage facilities separate from stored 
medications and food and are accessible only to authorized persons. All 
medications, including those required for staff and volunteers, are 
labeled, stored under lock and key, refrigerated if necessary, and kept 
out of the reach of children;
    (iv) Rooms are well lit and provide emergency lighting in the case 
of power failure;
    (v) Approved, working fire extinguishers are readily available;
    (vi) An appropriate number of smoke detectors are installed and 
tested regularly;
    (vii) Exits are clearly visible and evacuation routes are clearly 
marked and posted so that the path to safety outside is unmistakable 
(see 45 CFR 1304.22 for additional emergency procedures);
    (viii) Indoor and outdoor premises are cleaned daily and kept free 
of undesirable and hazardous materials and conditions;
    (ix) Paint coatings on both interior and exterior premises used for 
the care of children do not contain hazardous quantities of lead;

[[Page 196]]

    (x) The selection, layout, and maintenance of playground equipment 
and surfaces minimize the possibility of injury to children;
    (xi) Electrical outlets accessible to children prevent shock through 
the use of child-resistant covers, the installation of child-protection 
outlets, or the use of safety plugs;
    (xii) Windows and glass doors are constructed, adapted, or adjusted 
to prevent injury to children;
    (xiii) Only sources of water approved by the local or State health 
authority are used;
    (xiv) Toilets and handwashing facilities are adequate, clean, in 
good repair, and easily reached by children. Toileting and diapering 
areas must be separated from areas used for cooking, eating, or 
children's activities;
    (xv) Toilet training equipment is provided for children being toilet 
trained;
    (xvi) All sewage and liquid waste is disposed of through a locally 
approved sewer system, and garbage and trash are stored in a safe and 
sanitary manner; and
    (xvii) Adequate provisions are made for children with disabilities 
to ensure their safety, comfort, and participation.
    (b) Head Start equipment, toys, materials, and furniture.
    (1) Grantee and delegate agencies must provide and arrange 
sufficient equipment, toys, materials, and furniture to meet the needs 
and facilitate the participation of children and adults. Equipment, 
toys, materials, and furniture owned or operated by the grantee or 
delegate agency must be:
    (i) Supportive of the specific educational objectives of the local 
program;
    (ii) Supportive of the cultural and ethnic backgrounds of the 
children;
    (iii) Age-appropriate, safe, and supportive of the abilities and 
developmental level of each child served, with adaptations, if 
necessary, for children with disabilities;
    (iv) Accessible, attractive, and inviting to children;
    (v) Designed to provide a variety of learning experiences and to 
encourage each child to experiment and explore;
    (vi) Safe, durable, and kept in good condition; and
    (vii) Stored in a safe and orderly fashion when not in use.
    (2) Infant and toddler toys must be made of non-toxic materials and 
must be sanitized regularly.
    (3) To reduce the risk of Sudden Infant Death Syndrome (SIDS), all 
sleeping arrangements for infants must use firm mattresses and avoid 
soft bedding materials such as comforters, pillows, fluffy blankets or 
stuffed toys.



                Subpart E--Implementation and Enforcement



Sec. 1304.60   Deficiencies and quality improvement plans.

    (a) Early Head Start and Head Start grantee and delegate agencies 
must comply with the requirements of this part in accordance with the 
effective date set forth in 45 CFR 1304.2.
    (b) If the responsible HHS official, as a result of information 
obtained from a review of an Early Head Start or a Head Start grantee, 
determines that the grantee has one or more deficiencies, as defined in 
Sec. 1304.3(a)(6) of this part, and therefore also is in violation of 
the minimum requirements as defined in Sec. 1304.3(a)(14) of this part, 
he or she will notify the grantee promptly, in writing, of the finding, 
identifying the deficiencies to be corrected and, with respect to each 
identified deficiency, will inform the grantee that it must correct the 
deficiency either immediately or pursuant to a Quality Improvement Plan.
    (c) An Early Head Start or Head Start grantee with one or more 
deficiencies to be corrected under a Quality Improvement Plan must 
submit to the responsible HHS official a Quality Improvement Plan 
specifying, for each identified deficiency, the actions that the grantee 
will take to correct the deficiency and the timeframe within which it 
will be corrected. In no case can the timeframes proposed in the Quality 
Improvement Plan exceed one year from the date that the grantee received 
official notification of the deficiencies to be corrected.
    (d) Within 30 days of the receipt of the Quality Improvement Plan, 
the responsible HHS official will notify the Early Head Start or Head 
Start grantee, in writing, of the Plan's approval or

[[Page 197]]

specify the reasons why the Plan is disapproved.
    (e) If the Quality Improvement Plan is disapproved, the Early Head 
Start or Head Start grantee must submit a revised Quality Improvement 
Plan, making the changes necessary to address the reasons that the 
initial Plan was disapproved.
    (f) If an Early Head Start or Head Start grantee fails to correct a 
deficiency, either immediately, or within the timeframe specified in the 
approved Quality Improvement Plan, the responsible HHS official will 
issue a letter of termination or denial of refunding. Head Start 
grantees may appeal terminations and denials of refunding under 45 CFR 
part 1303, while Early Head Start grantees may appeal terminations and 
denials of refunding only under 45 CFR part 74 or part 92. A deficiency 
that is not timely corrected shall be a material failure of a grantee to 
comply with the terms and conditions of an award within the meaning of 
45 CFR 74.61(a)(1), 45 CFR 74.62 and 45 CFR 92.43(a).

(The information and collection requirements are approved by the Office 
of Management and Budget (OMB) under OMB Control Number 0970-0148 for 
paragraphs (b) and (c).)

[61 FR 57210, Nov. 5, 1996, as amended at 63 FR 2314, Jan. 15, 1998]



Sec. 1304.61  Noncompliance.

    (a) If the responsible HHS official, as a result of information 
obtained from a review of an Early Head Start or Head Start grantee, 
determines that the grantee is not in compliance with Federal or State 
requirements (including, but not limited to, the Head Start Act or one 
or more of the regulations under parts 1301, 1304, 1305, 1306 or 1308 of 
this title) in ways that do not constitute a deficiency, he or she will 
notify the grantee promptly, in writing, of the finding, identifying the 
area or areas of noncompliance to be corrected and specifying the period 
in which they must corrected.
    (b) Early Head Start or Head Start grantees which have received 
written notification of an area of noncompliance to be corrected must 
correct the area of noncompliance within the time period specified by 
the responsible HHS official. A grantee which is unable or unwilling to 
correct the specified areas of noncompliance within the prescribed time 
period will be judged to have a deficiency which must be corrected, 
either immediately or pursuant to a Quality Improvement Plan (see 45 CFR 
1304.3(a)(6)(iii) and 45 CFR 1304.60).



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 strengths and 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. These 
requirements are to be used in conjunction with the Head Start Program 
Performance Standards at 45 CFR part 1304, as applicable.

[57 FR 46725, Oct. 9, 1992, as amended at 61 FR 57226, Nov. 5, 1996]



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 specific learning disabilities who, by 
reason thereof need special education

[[Page 198]]

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. Indian Tribes meeting the conditions specified in 45 CFR 
1305.4(b)(3) are excepted from this limitation.
    (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. Additional examples of gross cash income are listed 
in the definition of ``income'' which appears in U.S. Bureau of the 
Census, Current Population Reports, Series P-60-185.
    (j) Income guidelines means the official poverty line specified in 
section 652 of the Head Start Act.
    (k) Indian Tribe means any Tribe, band, nation, pueblo, or other 
organized group or community of Indians, including any Native village 
described in section 3(c) of the Alaska Native Claims Settlement Act (43 
U.S.C. 1602(c)) or established pursuant to such Act (43 U.S.C. 1601 et 
seq.), that is recognized as eligible for special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    (l) 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.
    (m) Migrant family means, for purposes of Head Start eligibility, a 
family with children under the age of compulsory school attendance who 
changed their residence by moving from one geographic location to 
another, either intrastate or interstate, within the preceding two years 
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.
    (n) 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.
    (o) 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

[[Page 199]]

service area or it can be a smaller area or areas within the service 
area.
    (p) 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.
    (q) 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.
    (r) Service area means the geographic area identified in an approved 
grant application within which a grantee may provide Head Start 
services.
    (s) 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; 63 
FR 12657, Mar. 16, 1998]



Sec. 1305.3  Determining community strengths and needs.

    (a) Each Early Head Start grantee and Head Start 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. With 
regard to Indian Tribes, the service area may include areas designated 
as near-reservation by the Bureau of Indian Affairs (BIA) or, in the 
absence of such a designation, a Tribe may propose to define its service 
area to include nearby areas where Indian children and families native 
to the reservation reside, provided that the service area is approved by 
the Tribe's governing council. Where the service area of a Tribe 
includes a non-reservation area, and that area is also served by another 
Head Start grantee, the Tribe will be authorized to serve children from 
families native to the reservation residing in the non-reservation area 
as well as children from families residing on the reservation.
    (b) The 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, except in situations where a near-reservation 
designation or other expanded service area has been approved for a 
Tribe, does not overlap with that of other Head Start grantees.
    (c) Each Early Head Start and Head Start grantee must conduct a 
Community Assessment within its service area once every three years. The 
Community Assessment must include the collection and analysis of the 
following information about the grantee's Early Head Start or Head Start 
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.
    (d) The Early Head Start and Head Start grantee and delegate agency 
must use information from the Community 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

[[Page 200]]

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.
    (e) In each of the two years following completion of the Community 
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 Assessment must be updated and 
the decisions described in paragraph (c) of this section must be 
reconsidered.
    (f) 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.
    (g) 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 Early Head Start or Head Start services as determined by the 
Community 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 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.

(The information collection requirements are approved by the Office of 
Management and Budget (OMB) under OMB Control Number 0970-0124 for 
paragraphs (b) and (d).)

[57 FR 46725, Oct. 9, 1992, as amended at 61 FR 57226, Nov. 5, 1996; 63 
FR 2314, Jan. 15, 1998; 63 FR 12657, Mar. 16, 1998]



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 Early 
Head Start programs.
    (b)(1) At least 90 percent of the children who are enrolled in each 
Head Start program must be from low-income families.
    (2) Except as provided in paragraph (b)(3) of this section, up to 
ten percent of the children who are enrolled may be children from 
families that exceed the low-income guidelines but who meet the criteria 
that the program has established for selecting such children and who 
would benefit from Head Start services.
    (3) A Head Start program operated by an Indian Tribe may enroll more 
than ten percent of its children from families whose incomes exceed the 
low-income guidelines when the following conditions are met:
    (i) All children from Indian and non-Indian families living on the 
reservation that meet the low-income guidelines who wish to be enrolled 
in Head Start are served by the program;
    (ii) All children from income-eligible Indian families native to the 
reservation living in non-reservation areas, approved as part of the 
Tribe's service area, who wish to be enrolled in Head Start are served 
by the program. In those instances in which the non-reservation area is 
not served by another Head Start program, the Tribe must serve all of 
the income-eligible Indian and non-Indian children whose families wish 
to enroll them in Head Start prior to serving over-income children.
    (iii) The Tribe has the resources within its Head Start grant or 
from other non-Federal sources to enroll children from families whose 
incomes exceed the low-income guidelines without using additional funds 
from HHS intended to expand Head Start services; and
    (iv) At least 51 percent of the children to be served by the program 
are from families that meet the income-eligibility guidelines.
    (4) Programs which meet the conditions of paragraph (b)(3) of this 
section

[[Page 201]]

must annually set criteria that are approved by the Policy Council and 
the Tribal Council for selecting over-income children who would benefit 
from such a program.
    (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.

[57 FR 46725, Oct. 9, 1992, as amended at 63 FR 12658, Mar. 16, 1998]



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). Migrant programs 
must also give priority to children from families whose pursuit of 
agricultural work required them to relocate most frequently within the 
previous two-year period.
    (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 official determines, based on such supporting evidence 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) or 
Individualized Family Service Plans (IFSP), with services provided 
directly by Head Start or Early Head Start 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

[[Page 202]]

criteria to assure that eligible children enter the program as vacancies 
occur.

[57 FR 46725, Oct. 9, 1992, as amended at 63 FR 12658, Mar. 16, 1998]



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. Children 
who are enrolled in a program receiving funds under the authority of 
section 645A of the Head Start Act (programs for families with infants 
and toddlers, or Early Head Start) remain income eligible while they are 
participating in the program. When a child moves from a program serving 
infants and toddlers to a Head Start program serving children age three 
and older, the family income must be reverified. If one agency operates 
both an Early Head Start and a Head Start program, and the parents wish 
to enroll their child who has been enrolled in the agency's Early Head 
Start program, the agency must ensure, whenever possible, that the child 
receives Head Start services until enrolled in school.

[57 FR 46725, Oct. 9, 1992, as amended at 63 FR 12658, Mar. 16, 1998]



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.

[[Page 203]]



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.



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. 9801 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 Early Head Start and Head 
Start program staffing and program options that all Early Head Start and 
Head Start grantee and delegate agencies, with the exception of Parent 
Child Center programs, must meet. The exception for Parent Child Centers 
is for fiscal years 1995, 1996, and 1997 as consistent with section 
645A(e)(2) of the Head Start Act, as amended. 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 Early Head Start and Head Start and to help 
promote lasting benefits to the children and families being served. 
These requirements are to be used in conjunction with the Head Start 
Program Performance Standards at 45 CFR Part 1304, as applicable.

[61 FR 57226, Nov. 5, 1996]



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.

[[Page 204]]

    (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 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 meet the requirements of 45 CFR 1304.52(g), 
Classroom staffing and home visitors, in addition to the requirements of 
this Section.
    (b) Grantees must provide adequate supervision of their staff.
    (c) 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.
    (d) Grantees operating home-based program options must employ home 
visitors responsible for home visits and group socialization activities.
    (e) 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.
    (f) 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.

[57 FR 58092, Dec. 8, 1992, as amended at 61 FR 57226, Nov. 5, 1996]



Sec. 1306.21  Staff qualification requirements.

    Head Start programs must comply with section 648A of the Head Start 
Act and any subsequent amendments regarding the qualifications of 
classroom teachers.

[61 FR 57226, Nov. 5, 1996]



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.

[[Page 205]]

    (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.
    (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 Early Head Start and Head Start grantee 
and delegate agencies for regularly scheduled center-based and 
combination program option classroom activities or home-based group 
socialization activities must comply with State and local requirements 
concerning licensing. In cases where these licensing standards are less 
comprehensive or less stringent than the Head Start regulations, or 
where no State or local licensing standards are applicable, grantee and 
delegate agencies are required to assure that their facilities are in 
compliance with the Head Start Program Performance Standards related to 
health and safety as found in 45 CFR 1304.53(a), Physical environment 
and facilities.
    (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.

[57 FR 58092, Dec. 8, 1992, as amended at 61 FR 57226, Nov. 5, 1996; 63 
FR 2314, Jan. 15, 1998]



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

[[Page 206]]

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 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.

[[Page 207]]

    (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 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

[[Page 208]]

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 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 1304.23(b)(2) and provide appropriate snacks and meals to the 
children during group socialization activities.

[57 FR 58092, Dec. 8, 1992, as amended at 61 FR 57227, Nov. 5, 1996]



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

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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 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.

[[Page 210]]

            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).

               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.

[[Page 211]]

    (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 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.

[[Page 212]]



                  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 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

[[Page 213]]

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
    (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 grantee's service area. If no agreement can be 
reached, the grantee must document its efforts and inform the Regional 
Office. The agreements must address:
    (1) Head Start participation in the public agency's Child Find plan 
under Part B of IDEA;
    (2) Joint training of staff and parents;
    (3) Procedures for referral for evaluations, IEP meetings and 
placement decisions;
    (4) Transition;
    (5) Resource sharing;
    (6) Head Start commitment to provide the number of children 
receiving services under IEPs to the LEA for the LEA Child Count report 
by December 1 annually; and
    (7) Any other items agreed to by both parties. Grantees must make 
efforts to update the agreements annually.
    (m) The disabilities coordinator must work with the director in 
planning and budgeting of grantee funds to assure that the special needs 
identified in the IEP are fully met; that children most in need of an 
integrated placement and of special assistance are served; and that the 
grantee maintains the level of fiscal support to children with 
disabilities consistent with the Congressional mandate to meet their 
special needs.
    (n) The grant application budget form and supplement submitted with 
applications for funding must reflect requests for adequate resources to 
implement the objectives and activities in the disability services plan 
and fulfill the requirements of these Performance Standards.
    (o) The budget request included with the application for funding 
must address the implementation of the disabilities service plan. 
Allowable expenditures include:
    (1) Salaries. Allowable expenditures include salaries of a full or 
part-time coordinator of services for children with disabilities 
(disabilities coordinator), who is essential to assure that programs 
have the core capability to recruit, enroll, arrange for the evaluation 
of children, provide or arrange for services to children with 
disabilities and work with Head Start coordinators and staff of other 
agencies which are

[[Page 214]]

working cooperatively with the grantee. Salaries of special education 
resource teachers who can augment the work of the regular teacher are an 
allowable expenditure.
    (2) Evaluation of children. When warranted by screening or 
rescreening results, teacher observation or parent request, arrangements 
must be made for evaluation of the child's development and functioning. 
If, after referral for evaluation to the LEA, evaluations are not 
provided by the LEA, they are an allowable expenditure.
    (3) Services. Program funds may be used to pay for services which 
include special education, related services, and summer services deemed 
necessary on an individual basis and to prepare for serving children 
with disabilities in advance of the program year.
    (4) Making services accessible. Allowable costs include elimination 
of architectural barriers which affect the participation of children 
with disabilities, in conformance with 45 CFR part 84, Nondiscrimination 
on the Basis of Handicap in Program and Activities Receiving or 
Benefiting from Federal Financial Assistance and with the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101). The Americans with 
Disabilities Act requires that public accommodations including private 
schools and day care centers may not discriminate on the basis of 
disability. Physical barriers in existing facilities must be removed if 
removal is readily achievable (i.e., easily accomplishable and able to 
be carried out without much difficulty or expense). If not, alternative 
methods of providing the services must be offered, if those methods are 
readily achievable. Alterations must be accessible. When alterations to 
primary function areas are made, an accessible path of travel to the 
altered areas (and the bathrooms, telephones and drinking fountains 
serving that area) must be provided to the extent that the added 
accessibility costs are not disproportionate to the overall cost of the 
alterations. Program funds may be used for ramps, remodeling or 
modifications such as grab bars or railings. Grantees must meet new 
statutory and regulatory requirements that are enacted.
    (5) Transportation. Transportation is a related service to be 
provided to children with disabilities. When transportation to the 
program site and to special services can be accessed from other 
agencies, it should be used. When it is not available, program funds are 
to be used to provide it. Special buses or use of taxis are allowable 
expenses if there are no alternatives available and they are necessary 
to enable a child to be served.
    (6) Special Equipment and Materials. Purchase or lease of special 
equipment and materials for use in the program and home is an allowable 
program expense. Grantees must make available assistive devices 
necessary to make it possible for a child to move, communicate, improve 
functioning or address objectives which are listed in the child's IEP.
    (7) Training and Technical Assistance. Increasing the abilities of 
staff to meet the special needs of children with disabilities is an 
allowable expense. Appropriate expenditures may include but are not 
limited to:
    (i) Travel and per diem expenses for disabilities coordinators, 
teachers and parents to attend training and technical assistance events 
related to special services for children with disabilities;
    (ii) The provision of substitute teaching staff to enable staff to 
attend training and technical assistance events;
    (iii) Fees for courses specifically related to the requirements of 
the disabilities service plan, a child's IEP or State certification to 
serve children with disabilities; and
    (iv) Fees and expenses for training/technical assistance consultants 
if such help is not available from another provider at no cost.



            Subpart C--Social Services Performance Standards



Sec. 1308.5  Recruitment and enrollment of children with disabilities.

    (a) The grantee or delegate agency outreach and recruitment 
activities must incorporate specific actions to actively locate and 
recruit children with disabilities.
    (b) A grantee must insure that staff engaged in recruitment and 
enrollment

[[Page 215]]

of children are knowledgable about the provisions of 45 CFR part 84, 
Nondiscrimination on the Basis of Handicap in Programs and Activities 
Receiving or Benefiting from Federal Financial Assistance, and of the 
Americans with Disabilities Act of 1990, (42 U.S.C. 12101).
    (c) A grantee must not deny placement on the basis of a disability 
or its severity to any child when:
    (1) The parents wish to enroll the child,
    (2) The child meets the Head Start age and income eligibility 
criteria,
    (3) Head Start is an appropriate placement according to the child's 
IEP, and
    (4) The program has space to enroll more children, even though the 
program has made ten percent of its enrollment opportunities available 
to children with disabilities. In that case children who have a 
disability and non-disabled children would compete for the available 
enrollment opportunities.
    (d) The grantee must access resources and plan for placement 
options, such as dual placement, use of resource staff and training so 
that a child with a disability for whom Head Start is an appropriate 
placement according to the IEP is not denied enrollment because of:
    (1) Staff attitudes and/or apprehensions;
    (2) Inaccessibility of facilities;
    (3) Need to access additional resources to serve a specific child;
    (4) Unfamiliarity with a disabling condition or special equipment, 
such as a prosthesis; and
    (5) Need for personalized special services such as feeding, 
suctioning, and assistance with toileting, including catheterization, 
diapering, and toilet training.
    (e) The same policies governing Head Start program eligibility for 
other children, such as priority for those most in need of the services, 
apply to children with disabilities. Grantees also must take the 
following factors into account when planning enrollment procedures:
    (1) The number of children with disabilities in the Head Start 
service area including types of disabilities and their severity;
    (2) The services and resources provided by other agencies; and
    (3) State laws regarding immunization of preschool children. 
Grantees must observe applicable State laws which usually require that 
children entering State preschool programs complete immunizations prior 
to or within thirty days after entering to reduce the spread of 
communicable diseases.
    (f) The recruitment effort of a Head Start grantee must include 
recruiting children who have severe disabilities, including children who 
have been previously identified as having disabilities.



            Subpart D--Health Services Performance Standards



Sec. 1308.6  Assessment of children.

    (a) The disabilities coordinator must be involved with other program 
staff throughout the full process of assessment of children, which has 
three steps:
    (1) All children enrolled in Head Start are screened as the first 
step in the assessment process;
    (2) Staff also carry out on-going developmental assessment for all 
enrolled children throughout the year to determine progress and to plan 
program activities;
    (3) Only those children who need further specialized assessment to 
determine whether they have a disability and may require special 
education and related services proceed to the next step, evaluation. The 
disabilities coordinator has primary responsibility for this third step, 
evaluation, only.
    (b) Screening, the first step in the assessment process, consists of 
standardized health screening and developmental screening which includes 
speech, hearing and vision. It is a brief process, which can be 
repeated, and is never used to determine that a child has a disability. 
It only indicates that a child may need further evaluation to determine 
whether the child has a disability. Rescreening must be provided as 
needed.
    (1) Grantees must provide for developmental, hearing and vision 
screenings of all Early Head Start and Head Start children within 45 
days of the child's entry into the program.

[[Page 216]]

This does not preclude starting screening in the spring, before program 
services begin in the fall.
    (2) Grantees must make concerted efforts to reach and include the 
most in need and hardest to reach in the screening effort, providing 
assistance but urging parents to complete screening before the start of 
the program year.
    (3) Developmental screening is a brief check to identify children 
who need further evaluation to determine whether they may have 
disabilities. It provides information in three major developmental 
areas: visual/motor, language and cognition, and gross motor/body 
awareness for use along with observation data, parent reports and home 
visit information. When appropriate standardized developmental screening 
instruments exist, they must be used. The disabilities coordinator must 
coordinate with the health coordinator and staff who have the 
responsibility for implementing health screening and with the education 
staff who have the responsibility for implementing developmental 
screening.
    (c) Staff must inform parents of the types and purposes of the 
screening well in advance of the screening, the results of these 
screenings and the purposes and results of any subsequent evaluations.
    (d) Developmental assessment, the second step, is the collection of 
information on each child's functioning in these areas: gross and fine 
motor skills, perceptual discrimination, cognition, attention skills, 
self-help, social and receptive skills and expressive language. The 
disabilities coordinator must coordinate with the education coordinator 
in the on-going assessment of each Head Start child's functioning in all 
developmental areas by including this developmental information in later 
diagnostic and program planning activities for children with 
disabilities.
    (e) The disabilities coordinator must arrange for further, formal, 
evaluation of a child who has been identified as possibly having a 
disability, the third step. (1) The disabilities coordinator must refer 
a child to the LEA for evaluation as soon as the need is evident, 
starting as early as the child's third birthday.
    (2) If the LEA does not evaluate the child, Head Start is 
responsible for arranging or providing for an evaluation, using its own 
resources and accessing others. In this case, the evaluation must meet 
the following requirements:
    (i) Testing and evaluation procedures must be selected and 
administered so as not to be racially or culturally discriminatory, 
administered in the child's native language or mode of communication, 
unless it clearly is not feasible to do so.
    (ii) Testing and evaluation procedures must be administered by 
trained (State certified or licensed) personnel.
    (iii) No single procedure may be the sole criterion for determining 
an appropriate educational program for a child.
    (iv) The evaluation must be made by a multidisciplinary team or 
group of persons including at least one teacher or specialist with 
knowledge in the area of suspected disability.
    (v) Evaluators must use only assessment materials which have been 
validated for the specific purpose for which they are used.
    (vi) Tests used with children with impaired sensory, manual or 
communication skills must be administered so that they reflect the 
children's aptitudes and achievement levels and not just the 
disabilities.
    (vii) Tests and materials must assess all areas related to the 
suspected disability.
    (viii) In the case of a child whose primary disability appears to be 
a speech or language impairment, the team must assure that enough tests 
are used to determine that the impairment is not a symptom of another 
disability and a speech or language pathologist should be involved in 
the evaluation.
    (3) Parental consent in writing must be obtained before a child can 
have an initial evaluation to determine whether the child has a 
disability.
    (4) Confidentiality must be maintained in accordance with grantee 
and State requirements. Parents must be given the opportunity to review 
their child's records in a timely manner and they must be notified and 
give permission if additional evaluations are proposed. Grantees must 
explain the purpose and results of the evaluation and

[[Page 217]]

make concerted efforts to help the parents understand them.
    (5) The multidisciplinary team provides the results of the 
evaluation, and its professional opinion that the child does or does not 
need special education and related services, to the disabilities 
coordinator. If it is their professional opinion that a child has a 
disability, the team is to state which of the eligibility criteria 
applies and provide recommendations for programming, along with their 
findings. Only children whom the evaluation team determines need special 
education and related services may be counted as children with 
disabilities.

[58 FR 5501, Jan. 21, 1993, as amended at 61 FR 57227, Nov. 5, 1996]



Sec. 1308.7  Eligibility criteria: Health impairment.

    (a) A child is classified as health impaired who has limited 
strength, vitality or alertness due to a chronic or acute health problem 
which adversely affects learning.
    (b) The health impairment classification may include, but is not 
limited to, cancer, some neurological disorders, rheumatic fever, severe 
asthma, uncontrolled seizure disorders, heart conditions, lead 
poisoning, diabetes, AIDS, blood disorders, including hemophilia, sickle 
cell anemia, cystic fibrosis, heart disease and attention deficit 
disorder.
    (c) This category includes medically fragile children such as 
ventilator dependent children who are in need of special education and 
related services.
    (d) A child may be classified as having an attention deficit 
disorder under this category who has chronic and pervasive 
developmentally inappropriate inattention, hyperactivity, or 
impulsivity. To be considered a disorder, this behavior must affect the 
child's functioning severely. To avoid overuse of this category, 
grantees are cautioned to assure that only the enrolled children who 
most severely manifest this behavior must be classified in this 
category.
    (1) The condition must severely affect the performance of a child 
who is trying to carry out a developmentally appropriate activity that 
requires orienting, focusing, or maintaining attention during classroom 
instructions and activities, planning and completing activities, 
following simple directions, organizing materials for play or other 
activities, or participating in group activities. It also may be 
manifested in overactivity or impulsive acts which appear to be or are 
interpreted as physical aggression. The disorder must manifest itself in 
at least two different settings, one of which must be the Head Start 
program site.
    (2) Children must not be classified as having attention deficit 
disorders based on:
    (i) Temporary problems in attention due to events such as a divorce, 
death of a family member or post-traumatic stress reactions to events 
such as sexual abuse or violence in the neighborhood;
    (ii) Problems in attention which occur suddenly and acutely with 
psychiatric disorders such as depression, anxiety and schizophrenia;
    (iii) Behaviors which may be caused by frustration stemming from 
inappropriate programming beyond the child's ability level or by 
developmentally inappropriate demands for long periods of inactive, 
passive activity;
    (iv) Intentional noncompliance or opposition to reasonable requests 
that are typical of good preschool programs; or
    (v) Inattention due to cultural or language differences.
    (3) An attention deficit disorder must have had its onset in early 
childhood and have persisted through the course of child development 
when children normally mature and become able to operate in a socialized 
preschool environment. Because many children younger than four have 
difficulty orienting, maintaining and focussing attention and are highly 
active, when Head Start is responsible for the evaluation, attention 
deficit disorder applies to four and five year old children in Head 
Start but not to three year olds.
    (4) Assessment procedures must include teacher reports which 
document the frequency and nature of indications of possible attention 
deficit disorders and describe the specific situations and events 
occurring just before the problems manifested themselves. Reports

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must indicate how the child's functioning was impaired and must be 
confirmed by independent information from a second observer.



Sec. 1308.8  Eligibility criteria: Emotional/behavioral disorders.

    (a) An emotional/behavioral disorder is a condition in which a 
child's behavioral or emotional responses are so different from those of 
the generally accepted, age-appropriate norms of children with the same 
ethnic or cultural background as to result in significant impairment in 
social relationships, self-care, educational progress or classroom 
behavior. A child is classified as having an emotional/behavioral 
disorder who exhibits one or more of the following characteristics with 
such frequency, intensity, or duration as to require intervention:
    (1) Seriously delayed social development including an inability to 
build or maintain satisfactory (age appropriate) interpersonal 
relationships with peers or adults (e.g., avoids playing with peers);
    (2) Inappropriate behavior (e.g., dangerously aggressive towards 
others, self-destructive, severely withdrawn, non-communicative);
    (3) A general pervasive mood of unhappiness or depression, or 
evidence of excessive anxiety or fears (e.g., frequent crying episodes, 
constant need for reassurance); or
    (4) Has a professional diagnosis of serious emotional disturbance.
    (b) The eligibility decision must be based on multiple sources of 
data, including assessment of the child's behavior or emotional 
functioning in multiple settings.
    (c) The evaluation process must include a review of the child's 
regular Head Start physical examination to eliminate the possibility of 
misdiagnosis due to an underlying physical condition.



Sec. 1308.9  Eligibility criteria: Speech or language impairments.

    (a) A speech or language impairment means a communication disorder 
such as stuttering, impaired articulation, a language impairment, or a 
voice impairment, which adversely affects a child's learning.
    (b) A child is classified as having a speech or language impairment 
whose speech is unintelligible much of the time, or who has been 
professionally diagnosed as having speech impairments which require 
intervention or who is professionally diagnosed as having a delay in 
development in his or her primary language which requires intervention.
    (c) A language disorder may be receptive or expressive. A language 
disorder may be characterized by difficulty in understanding and 
producing language, including word meanings (semantics), the components 
of words (morphology), the components of sentences (syntax), or the 
conventions of conversation (pragmatics).
    (d) A speech disorder occurs in the production of speech sounds 
(articulation), the loudness, pitch or quality of voice (voicing), or 
the rhythm of speech (fluency).
    (e) A child should not be classified as having a speech or language 
impairment whose speech or language differences may be attributed to:
    (1) Cultural, ethnic, bilingual, or dialectical differences or being 
non-English speaking; or
    (2) Disorders of a temporary nature due to conditions such as a 
dental problem; or
    (3) Delays in developing the ability to articulate only the most 
difficult consonants or blends of sounds within the broad general range 
for the child's age.



Sec. 1308.10  Eligibility criteria: Mental retardation.

    (a) A child is classified as mentally retarded who exhibits 
significantly sub-average intellectual functioning and exhibits deficits 
in adaptive behavior which adversely affect learning. Adaptive behavior 
refers to age-appropriate coping with the demands of the environment 
through independent skills in self-care, communication and play.
    (b) Measurement of adaptive behavior must reflect objective 
documentation through the use of an established scale and appropriate 
behavioral/anecdotal records. An assessment of the child's functioning 
must also be made in settings outside the classroom.

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    (c) Valid and reliable instruments appropriate to the age range must 
be used. If they do not exist for the language and cultural group to 
which the child belongs, observation and professional judgement are to 
be used instead.
    (d) Determination that a child is mentally retarded is never to be 
made on the basis of any one test alone.



Sec. 1308.11  Eligibility criteria: Hearing impairment including deafness.

    (a) A child is classified as deaf if a hearing impairment exists 
which is so severe that the child is impaired in processing linguistic 
information through hearing, with or without amplification, and learning 
is affected. A child is classified as hard of hearing who has a 
permanent or fluctuating hearing impairment which adversely affects 
learning; or
    (b) Meets the legal criteria for being hard of hearing established 
by the State of residence; or
    (c) Experiences recurrent temporary or fluctuating hearing loss 
caused by otitis media, allergies, or eardrum perforations and other 
outer or middle ear anomalies over a period of three months or more. 
Problems associated with temporary or fluctuating hearing loss can 
include impaired listening skills, delayed language development, and 
articulation problems. Children meeting these criteria must be referred 
for medical care, have their hearing checked frequently, and receive 
speech, language or hearing services as indicated by the IEPs. As soon 
as special services are no longer needed, these children must no longer 
be classified as having a disability.



Sec. 1308.12  Eligibility criteria: Orthopedic impairment.

    (a) A child is classified as having an orthopedic impairment if the 
condition is severe enough to adversely affect a child's learning. An 
orthopedic impairment involves muscles, bones, or joints and is 
characterized by impaired ability to maneuver in educational or non-
educational settings, to perform fine or gross motor activities, or to 
perform self-help skills and by adversely affected educational 
performance.
    (b) An orthopedic impairment includes, but is not limited to, spina 
bifida, cerebral palsy, loss of or deformed limbs, contractures caused 
by burns, arthritis, or muscular dystrophy.



Sec. 1308.13  Eligibility criteria: Visual impairment including blindness.

    (a) A child is classified as visually impaired when visual 
impairment, with correction, adversely affects a child's learning. The 
term includes both blind and partially seeing children. A child is 
visually impaired if:
    (1) The vision loss meets the definition of legal blindness in the 
State of residence; or
    (2) Central acuity does not exceed 20/200 in the better eye with 
corrective lenses, or visual acuity is greater than 20/200, but is 
accompanied by a limitation in the field of vision such that the widest 
diameter of the visual field subtends an angle no greater than 20 
degrees.
    (b) A child is classified as having a visual impairment if central 
acuity with corrective lenses is between 20/70 and 20/200 in either eye, 
or if visual acuity is undetermined, but there is demonstrated loss of 
visual function that adversely affects the learning process, including 
faulty muscular action, limited field of vision, cataracts, etc.



Sec. 1308.14  Eligibility criteria: Learning disabilities.

    (a) A child is classified as having a learning disability who has a 
disorder in one or more of the basic psychological processes involved in 
understanding or in using language, spoken or written, which may 
manifest itself in imperfect ability to listen, think, speak or, for 
preschool age children, acquire the precursor skills for reading, 
writing, spelling or doing mathematical calculations. The term includes 
such conditions as perceptual disabilities, brain injury, and aphasia.
    (b) An evaluation team may recommend that a child be classified as 
having a learning disability if:
    (1) The child does not achieve commensurate with his or her age and 
ability levels in one or more of the areas listed in (a) above when 
provided with

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appropriate learning experiences for the age and ability; or
    (2) The child has a severe discrepancy between achievement of 
developmental milestones and intellectual ability in one or more of 
these areas: oral expression, listening comprehension, pre-reading, pre-
writing and pre-mathematics; or
    (3) The child shows deficits in such abilities as memory, perceptual 
and perceptual-motor skills, thinking, language and non-verbal 
activities which are not due to visual, motor, hearing or emotional 
disabilities, mental retardation, cultural or language factors, or lack 
of experiences which would help develop these skills.
    (c) This definition for learning disabilities applies to four and 
five year old children in Head Start. It may be used at a program's 
discretion for children younger than four or when a three year old child 
is referred with a professional diagnosis of learning disability. But 
because of the difficulty of diagnosing learning disabilities for three 
year olds, when Head Start is responsible for the evaluation it is not a 
requirement to use this category for three year olds.



Sec. 1308.15  Eligibility criteria: Autism.

    A child is classified as having autism when the child has a 
developmental disability that significantly affects verbal and non-
verbal communication and social interaction, that is generally evident 
before age three and that adversely affects educational performance.



Sec. 1308.16  Eligibility criteria: Traumatic brain injury.

    A child is classified as having traumatic brain injury whose brain 
injuries are caused by an external physical force, or by an internal 
occurrence such as stroke or aneurysm, with resulting impairments that 
adversely affect educational performance. The term includes children 
with open or closed head injuries, but does not include children with 
brain injuries that are congenital or degenerative or caused by birth 
trauma.



Sec. 1308.17  Eligibility criteria: Other impairments.

    (a) The purposes of this classification, ``Other impairments,'' are:
    (1) To further coordination with LEAs and reduce problems of 
recordkeeping;
    (2) To assist parents in making the transition from Head Start to 
other placements; and
    (3) To assure that no child enrolled in Head Start is denied 
services which would be available to other preschool children who are 
considered to have disabilities in their State.
    (b) If the State Education Agency eligibility criteria for preschool 
children include an additional category which is appropriate for a Head 
Start child, children meeting the criteria for that category must 
receive services as children with disabilities in Head Start programs. 
Examples are ``preschool disabled,'' ``in need of special education,'' 
``educationally handicapped,'' and ``non-categorically handicapped.''
    (c) Children ages three to five, inclusive, who are experiencing 
developmental delays, as defined by their 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 may receive services as children with disabilities in 
Head Start programs.
    (d) Children who are classified as deaf-blind, whose concomitant 
hearing and visual impairments cause such severe communication and other 
developmental problems that they cannot be accommodated in special 
education programs solely for deaf or blind children are eligible for 
services under this category.
    (e) Children classified as having multiple disabilities whose 
concomitant impairments (such as mental retardation and blindness), in 
combination, cause such severe educational problems that they cannot be 
accommodated in special education programs solely for one of the 
impairments are eligible for services under this category. The term

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does not include deaf-blind children, for recordkeeping purposes.



Sec. 1308.18  Disabilities/health services coordination.

    (a) The grantee must ensure that the disabilities coordinator and 
the health coordinator work closely together in the assessment process 
and follow up to assure that the special needs of each child with 
disabilities are met.
    (b) The grantee must ensure coordination between the disabilities 
coordinator and the staff person responsible for the mental health 
component to help teachers identify children who show signs of problems 
such as possible serious depression, withdrawal, anxiety or abuse.
    (c) Each Head Start director or designee must supervise the 
administration of all medications, including prescription and over-the-
counter drugs, to children with disabilities in accordance with State 
requirements.
    (d) The health coordinator under the supervision of the Head Start 
director or designee must:
    (1) Obtain the doctor's instructions and parental consent before any 
medication is administered.
    (2) Maintain an individual record of all medications dispensed and 
review the record regularly with the child's parents.
    (3) Record changes in a child's behavior which have implications for 
drug dosage or type and share this information with the staff, parents 
and the physician.
    (4) Assure that all medications, including those required by staff 
and volunteers, are adequately labeled, stored under lock and key and 
out of reach of children, and refrigerated, if necessary.



           Subpart E--Education Services Performance Standards



Sec. 1308.19  Developing individualized education programs (IEPs)

    (a) When Head Start provides for the evaluation, the 
multidisciplinary evaluation team makes the determination whether the 
child meets the Head Start eligibility criteria. The multidisciplinary 
evaluation team must assure that the evaluation findings and 
recommendations, as well as information from developmental assessment, 
observations and parent reports, are considered in making the 
determination whether the child meets Head Start eligibility criteria.
    (b) Every child receiving services in Head Start who has been 
evaluated and found to have a disability and in need of special 
education must have an IEP before special education and related services 
are provided to ensure that comprehensive information is used to develop 
the child's program.
    (c) When the LEA develops the IEP, a representative from Head Start 
must attempt to participate in the IEP meeting and placement decision 
for any child meeting Head Start eligibility requirements.
    (d) If Head Start develops the IEP, the IEP must take into account 
the child's unique needs, strengths, developmental potential and the 
family strengths and circumstances as well as the child's disabilities.
    (e) The IEP must include:
    (1) A statement of the child's present level of functioning in the 
social-emotional, motor, communication, self-help, and cognitive areas 
of development, and the identification of needs in those areas requiring 
specific programming.
    (2) A statement of annual goals, including short term objectives for 
meeting these goals.
    (3) A statement of services to be provided by each Head Start 
component that are in addition to those services provided for all Head 
Start children, including transition services.
    (4) A statement of the specific special education services to be 
provided to the child and those related services necessary for the child 
to participate in a Head Start program. This includes services provided 
by Head Start and services provided by other agencies and non-Head Start 
professionals.
    (5) The identification of the personnel responsible for the planning 
and supervision of services and for the delivery of services.
    (6) The projected dates for initiation of services and the 
anticipated duration of services.
    (7) A statement of objective criteria and evaluation procedures for 
determining at least annually whether the

[[Page 222]]

short-term objectives are being achieved or need to be revised.
    (8) Family goals and objectives related to the child's disabilities 
when they are essential to the child's progress.
    (f) When Head Start develops the IEP, the team must include:
    (1) The Head Start disabilities coordinator or a representative who 
is qualified to provide or supervise the provision of special education 
services;
    (2) The child's teacher or home visitor;
    (3) One or both of the child's parents or guardians; and
    (4) At least one of the professional members of the 
multidisciplinary team which evaluated the child.
    (g) An LEA representative must be invited in writing if Head Start 
is initiating the request for a meeting.
    (h) The grantee may also invite other individuals at the request of 
the parents and other individuals at the discretion of the Head Start 
program, including those component staff particularly involved due to 
the nature of the child's disability.
    (i) A meeting must be held at a time convenient for the parents and 
staff to develop the IEP within 30 calendar days of a determination that 
the child needs special education and related services. Services must 
begin as soon as possible after the development of the IEP.
    (j) Grantees and their delegates must make vigorous efforts to 
involve parents in the IEP process. The grantee must:
    (1) Notify parents in writing and, if necessary, also verbally or by 
other appropriate means of the purpose, attendees, time and location of 
the IEP meeting far enough in advance so that there is opportunity for 
them to participate;
    (2) Make every effort to assure that the parents understand the 
purpose and proceedings and that they are encouraged to provide 
information about their child and their desires for the child's program;
    (3) Provide interpreters, if needed, and offer the parents a copy of 
the IEP in the parents' language of understanding after it has been 
signed;
    (4) Hold the meeting without the parents only if neither parent can 
attend, after repeated attempts to establish a date or facilitate their 
participation. In that case, document its efforts to secure the parents' 
participation, through records of phone calls, letters in the parents' 
native language or visits to parents' homes or places of work, along 
with any responses or results; and arrange an opportunity to meet with 
the parents to review the results of the meeting and secure their input 
and signature.
    (k) Grantees must initiate the implementation of the IEP as soon as 
possible after the IEP meeting by modifying the child's program in 
accordance with the IEP and arranging for the provision of related 
services. If a child enters Head Start with an IEP completed within two 
months prior to entry, services must begin within the first two weeks of 
program attendance.



               Subpart F--Nutrition Performance Standards



Sec. 1308.20  Nutrition services.

    (a) The disabilities coordinator must work with staff to ensure that 
provisions to meet special needs are incorporated into the nutrition 
program.
    (b) Appropriate professionals, such as physical therapists, speech 
therapists, occupational therapists, nutritionists or dietitians must be 
consulted on ways to assist Head Start staff and parents of children 
with severe disabilities with problems of chewing, swallowing and 
feeding themselves.
    (c) The plan for services for children with disabilities must 
include activities to help children with disabilities participate in 
meal and snack times with classmates.
    (d) The plan for services for children with disabilities must 
address prevention of disabilities with a nutrition basis.

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           Subpart G--Parent Involvement Performance Standards



Sec. 1308.21  Parent participation and transition of children into Head Start and from Head Start to public school.

    (a) In addition to the many references to working with parents 
throughout these standards, the staff must carry out the following 
tasks:
    (1) Support parents of children with disabilities entering from 
infant/toddler programs.
    (2) Provide information to parents on how to foster the development 
of their child with disabilities.
    (3) Provide opportunities for parents to observe large group, small 
group and individual activities describe in their child's IEP.
    (4) Provide follow-up assistance and activities to reinforce program 
activities at home.
    (5) Refer parents to groups of parents of children with similar 
disabilities who can provide helpful peer support.
    (6) Inform parents of their rights under IDEA.
    (7) Inform parents of resources which may be available to them from 
the Supplemental Security Income (SSI) Program, the Early and Periodic 
Screening, Diagnosis and Treatment (EPSDT) Program and other sources and 
assist them with initial efforts to access such resources.
    (8) Identify needs (caused by the disability) of siblings and other 
family members.
    (9) Provide information in order to prevent disabilities among 
younger siblings.
    (10) build parent confidence, skill and knowledge in accessing 
resources and advocating to meet the special needs of their children.
    (b) Grantees must plan to assist parents in the transition of 
children from Head Start to public school or other placement, beginning 
early in the program year.
    (c) Head Start grantees, in cooperation with the child's parents, 
must notify the school of the child's planned enrollment prior to the 
date of enrollment.

   Appendix to Part 1308--Head Start Program Performance Standards on 
                 Services to Children With Disabilities

    This appendix sets forth guidance for the implementation of the 
requirements in part 1308. This guidance provides explanatory material 
and includes recommendations and suggestions for meeting the 
requirements. This guidance is not binding on Head Start grantees or 
delegate agencies. It provides assistance and possible strategies which 
a grantee may wish to consider. In instances where a permissible course 
of action is provided, the grantee or delegate agency may rely upon this 
guidance or may take another course of action that meets the applicable 
requirement. This programmatic guidance is included as an aid to 
grantees because of the complexity of providing special services to meet 
the needs of children with various disabilities.

      Section 1308.4 Purpose and scope of disabilities service plan

                       Guidance for Paragraph (a)

    In order to develop an effective disabilities service plan the 
responsible staff members need to understand the context in which a 
grantee operates. The Head Start program has operated under a 
Congressional mandate, since 1972, to make available, at a minimum, ten 
percent of its enrollment opportunities to children with disabilities. 
Head Start has exceeded this mandate and serves children in integrated, 
developmentally appropriate programs. The passage of the Individuals 
With Disabilities Education Act, formerly the Education of the 
Handicapped Act, and its amendments, affects Head Start, causing a shift 
in the nature of Head Start's responsibilities for providing services 
for children with disabilities relative to the responsibilities of State 
Education Agencies (SEA) and Local Education Agencies (LEA).
    Grantees need to be aware that under the IDEA the State Education 
Agency has the responsibility for assuring the availability of a free 
appropriate public education for all children with disabilities within 
the legally required age range in the State. This responsibility 
includes general supervision of educational programs in all agencies, 
including monitoring and evaluating the special education and related 
services to insure that they meet State standards, developing a 
comprehensive State plan for services for children with disabilities 
(including a description of interagency coordination among these 
agencies), and providing a Comprehensive System for Personnel 
Development related to training needs of all special education and 
related service personnel involved in the education of children with 
disabilities

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served by these agencies, including Head Start programs.
    Each State has in effect under IDEA a policy assuring all children 
with disabilities beginning at least at age three, including those in 
public or private institutions or other care facilities, the right to a 
free appropriate education and to an evaluation meeting established 
procedures. Head Start is either:
     The agency through which the Local Education Agency can 
meet its obligation to make a free appropriate public education 
available through a contract, State or local collaborative agreement, or 
other arrangement; or
     The agency in which the family chooses to have the child 
served rather than using LEA services.
    Regardless of how a child is placed in Head Start, the LEA is 
responsible for the identification, evaluation and provision of a free 
appropriate public education for a child found to be in need of special 
education and related services which are mandated in the State. The LEA 
is responsible for ensuring that these services are provided, but not 
for providing them all. IDEA stresses the role of multiple agencies and 
requires their maintenance of effort.
    The Head Start responsibility is to make available directly or in 
cooperation with other agencies services in the least restrictive 
environment in accordance with an individualized education program (IEP) 
for at least ten percent of enrolled children who meet the disabilities 
eligibility criteria. In addition, Head Start continues to provide or 
arrange for the full range of health, dental, nutritional, 
developmental, parent involvement and social services provided to all 
enrolled children. Head Start has a mandate to recruit and enroll 
income-eligible children and children with disabilities who are most in 
need of services and to coordinate with the LEA and other groups to 
benefit children with disabilities and their families. Serving children 
with disabilities has strengthened Head Start's ability to individualize 
for all children. Head Start is fully committed to the maintenance of 
effort as required for all agencies by the IDEA and by the Head Start 
Act (Section 640(a)(2)(A)). Head Start is committed to fiscal support to 
assure that the services which children with disabilities need to meet 
their special needs will be provided in full, either directly or by a 
combination of Head Start funds and other resources.
    These Head Start regulations facilitate coordination with the IDEA 
by utilizing identical terms for eligibility criteria for the most part. 
However, Head Start has elected to use the term ``emotional/behavioral 
disorder'' in lieu of ``serious emotional disturbance,'' which is used 
in the IDEA, in response to comments and concerns of parents and 
professionals. Children who meet State-developed criteria under IDEA 
will be eligible for services from Head Start in that State.
    In order to organize activities and resources to help children with 
disabilities overcome or lessen their disabilities and develop their 
potential, it is essential to involve the education, health, social 
services, parent involvement, mental health and nutrition components of 
Head Start. Parents, staff and policy group members should discuss the 
various strategies for ensuring that the disabilities service plan 
integrates needs and activities which cut across the Head Start 
component areas before the plan is completed.
    Advance planning and scheduling of arrangements with other agencies 
is a key factor in assuring timely, efficient services. Local level 
interagency agreements can greatly facilitate the difficult tasks of 
locating related service providers, for example, and joint community 
screening programs can reduce delays and costs to each of the 
participating agencies.

                       Guidance for Paragraph (b)

    The plan and the annual updates need to be specific, but not 
lengthy. As changes occur in the community, the plan needs to reflect 
the changes which affect services.

                       Guidance for Paragraph (c)

    Grantees should ensure that the practices they use to provide 
special services do not result in undue attention to a child with a 
disability. For example, providing names and schedules of special 
services for children with disabilities in the classroom is useful for 
staff or volunteers coming into that classroom but posting them would 
publicize the disability of the individual children.

                       Guidance for Paragraph (d)

    Staff should work for the children's greater independence by 
encouraging them to try new things and to meet appropriate goals by 
small steps. Grantees should help children with disabilities develop 
initiative by including them in opportunities to explore, to create, and 
to ask rather than to answer questions. The children need opportunities 
to use a wide variety of materials including science tools, art media 
and costumes in order to develop skills, imagination and originality. 
They should be included on field trips, as their experience may have 
been limited, for example, by an orthopedic impairment.
    Just as a program makes available pictures and books showing 
children and adults from representative cultural, ethnic and 
occupational groups, it should provide pictures and books which show 
children and adults with disabilities, including those in active roles.
    Staff should plan to answer questions children and adults may have 
about disabilities.

[[Page 225]]

This promotes acceptance of a child with disabilities for him or herself 
and leads to treating the child more normally. Effective curricula are 
available at low cost for helping children and adults understand 
disabilities and for improving attitudes and increasing knowledge about 
disabilities. Information on these and other materials can be obtained 
from resource access projects contractors, which offer training and 
technical assistance to Head Start programs.
    There are a number of useful guides for including children with 
disabilities in regular group activities while providing successful 
experiences for children who differ widely in developmental levels and 
skills. Some of these describe activities around a unit theme with 
suggestions for activities suitable for children with different skill 
levels. Staff need to help some children with disabilities move into 
developmentally appropriate play with other children.
    Research has shown the effectiveness of work in small groups for 
appropriately selected children with disabilities. This plan allows for 
coordinating efforts to meet the needs of individual children as listed 
in their IEPs and can help focus resources efficiently.
    If a deaf child who uses or needs sign language or another 
communication mode is enrolled, a parent, volunteer or aide who can use 
that mode of communication should be provided to help the child benefit 
from the program.
    In order to build the language and speech capabilities of many 
children with disabilities who have communication problems, it has been 
found helpful to enlist aides, volunteers, cooks, bus drivers and 
parents, showing them how to provide extra repetition and model 
gradually more advanced language as children improve in their ability to 
understand and use language. Small group activities for children with 
similar language development needs should be provided regularly as well 
as large group language and listening games and individual help. Helping 
children with intellectual delays or emotional problems or those whose 
experiences have been limited by other disabilities to express their own 
ideas and to communicate during play and throughout the daily activities 
is motivating and can contribute greatly to their progress.

                       Guidance for Paragraph (e)

    The Disabilities Service Coordinator should possess a basic 
understanding of the scope of the Head Start effort and skills adequate 
to manage the agency to serve children with disabilities including 
coordination with other program components and community agencies and 
work with parents.

                       Guidance for Paragraph (f)

    For non-verbal children, communication boards, computers and other 
assistive technology devices may be helpful. Technical assistance 
providers have information on the Technology Related Assistance for 
Individuals with Disabilities Act of 1988, 29 U.S.C. 2201 et seq. States 
are funded through this legislation to plan Statewide assistive 
technology services, which should include services for young children. 
Parents should be helped to understand the necessity of including 
assistive technology services and devices in their child's IEP in order 
to obtain them.
    The plan should include any renovation of space and facilities which 
may be necessary to ensure the safety of the children or promote 
learning. For example, rugs or other sound-absorbing surfaces make it 
easier for some children to hear stories or conversation. Different 
surfaces on floors and play areas affect some children's mobility.
    45 CFR Part 84, Nondiscrimination on the Basis of Handicap in 
Programs and Activities Receiving or Benefiting from Federal Financial 
Assistance which implements the Rehabilitation Act of 1973 and the 
Americans with Disabilities Act require that all Federally assisted 
programs, including Head Start, be accessible to persons with 
disabilities including staff, parents and children. This does not mean 
that every building or part of a building must be physically accessible, 
but the program services as a whole must be accessible. Structural 
changes to make the program services available are required if 
alternatives such as reassignment of classes or moving to different 
rooms are not possible. Information on the accessibility standards is 
available from RAPs or the U.S. Department of Justice, Civil Rights 
Division, Coordination and Review Section, P.O. Box 66118, Washington, 
DC 20035-6115.
    Staff should ensure that children with physical disabilities have 
chairs and other pieces of furniture of the correct size and type for 
their individual needs as they grow. Agencies such as United Cerebral 
Palsy, Easter Seal Societies or SEAs can provide consultation on 
adapting or purchasing the appropriate furniture. The correct 
positioning of certain children is essential and requires expert advice. 
As the children grow, the furniture and equipment should be checked by 
an expert, such as a physical therapist, because the wrong fit can be 
harmful. Efforts should be made to use furniture sized and shaped to 
place children at the same level as their classmates whenever possible.

                       Guidance for Paragraph (h)

    The plan should specify:
     Overall goals of the disability effort.
     Specific objectives and activities of the disability 
effort.

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     How and when specific activities will be carried out and 
goals attained.
     Who will be responsible for the conduct of each element of 
the plan.
     How individual activities will be evaluated.
    The plan should address:
     Enrollment information, including numbers of children and 
types of disabilities, known and estimated.
     Identification and recruitment of children with 
disabilities. Participation in Child Find and list of major specialized 
agencies approached.
     Screening.
     Developmental Assessment.
     Evaluation.
     The multidisciplinary team and its work.
     The process for developing IEPs.
     The provision of program services and related services.
     Program accessibility.
     Recordkeeping and reporting.
     Confidentiality of information.
     Any special safety needs.
     Medications.
     Transportation.
     The process for identifying and meeting training and 
technical assistance needs.
     Special parent involvement needs.
     Planned actions to increase the ability of staff to serve 
children with more severe disabilities and the number of children with 
more severe disabilities served.
     Transitioning of children in and out to the next program.
    Particular attention should be given to addressing ways to:
     Involve parents throughout the disability effort, and
     Work with other agencies in serving children with 
disabilities. It should be possible for a reader to visualize how and by 
whom services will be delivered. Coordination with other agencies should 
be described, as well as the process for developing local agreements 
with other agencies. The RAPs can provide samples and models for the 
process of developing agreements with LEAs.

                       Guidance for Paragraph (j)

    Children may spend part of the program hours in Head Start for a 
mainstreaming experience and part in a specialized program such as an 
Easter Seal Society or a local mental health center. The amount of time 
spent in either program should be flexible, according to the needs of 
the individual child. All services to be provided, including those 
provided by collaborating agencies, should be described in the IEP. 
Staff of both programs should observe each other's work with the child 
who is enrolled and maintain good communication.
    Individual services such as occupational, physical or speech 
therapy, staff training, transportation, services to families or 
counseling may be shared by Head Start and other agencies. For example, 
Head Start might provide equipment and transportation while a 
development center might provide a facility and physical therapy for a 
Head Start child. Some LEAs provide resource teachers while Head Start 
provides a developmentally appropriate program in an integrated setting.
    Hiring additional staff may be necessary to meet the needs of 
children with severe disabilities. Hiring an aide may be necessary on a 
full-time, part-time, temporary or as needed basis to assist with the 
increased demands of a child with a severe disability. However, aides 
should not be assigned the major responsibility for providing direct 
services. Aides and volunteers should be guided and supervised by the 
disabilities service coordinator or someone with special training. It is 
desirable to have the services of a nurse, physical therapist or 
licensed practical nurse available for children with severe health or 
physical disabilities.
    Volunteers trained by professionals to work specifically with 
children with disabilities can provide valuable individualized support. 
For example, a volunteer might be trained by a physical therapist to 
carry out specific follow-up activities with individual children.

                       Guidance for Paragraph (k)

    State standards for qualifications of staff to provide special 
education and related services affect Head Start's acceptance as a 
placement site for children who have been evaluated by an LEA. Head 
Start grantees, like LEAs, are affected by shortages of staff meeting 
State qualifications and are to work toward the goal of meeting the 
highest State standards for personnel by developing plans to train 
current staff and to hire new staff so that eventually the staff will 
meet the qualifications. Grantees should discuss their needs for pre-
service and in-service training with SEAs during annual updates of 
interagency agreements for use in the planning of joint State level 
conferences and for use in preparation of Comprehensive State Personnel 
Development plans. They should also discuss these needs with LEAs which 
provide in-service training.
    The program should provide training for the regular teachers on how 
to modify large group, small group or individual activities to meet the 
needs of children with disabilities. Specific training for staff should 
be provided when Head Start enrolls a child whose disability or 
condition requires a special skill or knowledge of special techniques or 
equipment. Examples are structuring a language activity, performing 
intermittent nonsterile catheterization, changing collection bags, 
suctioning, or operating leg braces. Joint training with other agencies 
is recommended to stretch resources and exchange expertise.

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    Staff should have access to regular ongoing training events which 
keep them abreast of new materials, equipment and practices related to 
serving children with disabilities and to preventing disabilities. 
Ongoing training and technical assistance in support of the disabilities 
effort should be planned to complement other training available to meet 
staff needs. Each grantee has the responsibility to identify or arrange 
the necessary support to carry out training for parents and staff.
    The best use of training funds has resulted when programs carry out 
a staff training needs assessment and relate current year training plans 
to previous staff training with the goal of building core capability. 
Staff who receive special training should share new knowledge with the 
rest of the staff.
    The core capability of the program is enhanced when speech, language 
and other therapy is provided in the regular site whenever possible. 
This allows for the specialist to demonstrate to regular staff and plan 
for their follow through. It also reduces costs and time spent 
transporting children to clinics and other settings. When university 
graduate students are utilized to provide special services as part of 
their training, it is helpful to arrange for their supervisors to 
monitor their work. Grantees arranging for such assistance are providing 
a valuable internship site and it is to the university's advantage to 
have their students become familiar with programs on-site. Grantees 
should negotiate when developing interagency agreements to have services 
provided on-site to the greatest extent possible.
    The Head Start Act, Section 648 (42 U.S.C. 9843) (a)(2), calls for 
training and technical assistance to be offered to all Head Start 
programs with respect to services for children with disabilities without 
cost through resource access projects which serve each region of the 
country. The technical assistance contractors contact each grantee for a 
needs assessment and offer training. While their staffs are small and 
their budgets limited, they are experienced and committed to meeting as 
many needs as they can and welcome inquiries. A brochure with names and 
addresses of the technical assistance providers is available from ACYF/
HS, P.O. Box 1182, Washington, DC 20013.
    The SEA is responsible for developing a Comprehensive System of 
Personnel Development. It is important that Head Start training needs be 
conveyed to this group for planning purposes so that all available 
resources can be brought to bear for staff training in Head Start. 
Grantees should take advantage of free or low-cost training provided by 
SEAs, LEAs, community colleges and other agencies to augment staff 
training.
    Many agencies offer free training for staff and parents. An example 
is the Epilepsy Foundation of America with trained volunteers throughout 
the country. The Lighthouse of New York City has developed a training 
program on early childhood and vision which was field-tested in Head 
Start and is suitable for community agencies. Head Start and the 
American Optometric Association have signed a memorandum of 
understanding under which member optometrists offer eye health education 
and screening. State-funded adult education and training programs or 
community colleges make available parenting, child development and other 
courses at low or no cost. Grantees should consider the need for 
training in working with parents, in developing working collaborative 
relationships and in networking when planning training.
    The disabilities coordinator needs to work closely with the 
education and health coordinators to provide or arrange training for 
staff and parents early in each program year on the prevention of 
disabilities. This should include the importance of observing signs that 
some children may have mild or fluctuating hearing losses due to middle 
ear infections. Such losses are often undetected and can cause problems 
in learning speech and language. Many children with hearing losses 
benefit from amplification and auditory training in how to use their 
remaining hearing most efficiently.
    The disabilities coordinator should also work with the education 
coordinator to provide timely staff training on recognizing signs that 
some children may be at high risk for later learning problems as well as 
emotional problems resulting from failure and frustration. This training 
should address ways to help children develop the skills necessary for 
later academic learning, such as following directions calling for more 
than one action, sequencing, sustaining attention, and making auditory 
and visual discriminations.

                       Guidance for Paragraph (l)

    The RAPS can provide information on agreements which have been 
developed between Head Start and SEAs and between Head Start and LEAs 
and other agencies. Such agreements offer possibilities to share 
training, equipment and other resources, smoothing the transition from 
Head Start to public or private school for children and their parents. 
Some of these agreements specify cost- and resource-sharing practices. 
Tribal Government Head Start programs should maximize use of Bureau of 
Indian Affairs, LEA and Head Start funds through cooperative agreements. 
Indian grantees should contact ACYF for referral to technical assistance 
in this regard. Grantees should bear in mind that migrant children

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are served in the majority of States and include consideration of their 
special needs, including the necessity for rapid provision of special 
education and related services, in agreements with LEAs and other 
agencies.

                       Guidance for Paragraph (m)

    In developing the plan and the budget which is a part of the grant 
application process, it is important to budget adequately for the number 
of children with disabilities to be served and the types and severity of 
their disabilities. The budget should reflect resources available from 
other agencies as well as the special costs to be paid for from Head 
Start funds. The Head Start legislation requires Head Start to access 
resources to meet the needs of all the children enrolled, including 
those with disabilities.
    An effective plan calls for the careful use of funds. The 
Disabilities Services Coordinator needs to keep current with the 
provisions of Part B of the IDEA and the services which may be available 
for three through five year-old children under this Act. Coordinators 
also need to utilize the expanded services under the Early and Periodic 
Screening, Diagnosis and Treatment (EPSDT) program and Supplemental 
Security Income program.
    To assist in the development of the plan, it may be helpful to 
establish an advisory committee for the disability effort or to expand 
the scope of the health advisory committee.

                       Guidance for Paragraph (o)

    Examples of evaluation costs which can be covered include 
professional assessment by the multidisciplinary evaluation team, 
instruments, professional observation and professional consultation. If 
consultation fees for multidisciplinary evaluation team members to 
participate in IEP meetings are not available from another source, they 
are allowable expenditures and need to be provided to meet the 
performance standards.
    Many children with disabilities enrolled in Head Start already 
receive services from other agencies, and grantees should encourage 
these agencies to continue to provide services. Grantees should use 
other community agencies and resources to supplement services for 
children with disabilities and their families.
    By planning ahead, grantees can pool resources to schedule the 
periodic use of experts and consultants. Grantees can time-share, 
reducing travel charges and assuring the availability of scarce 
expertise. Some LEAs and other agencies have enabling legislation and 
funds to contract for education, health, and developmental services of 
the type Head Start can provide. Grantees can also help increase the 
amount of preschool funding available to their State under the 
Individuals With Disabilities Education Act. The amount of the 
allocation to each SEA and to the public schools is affected by the 
number of three through five year old children with IEPs in place by 
December 1 of each year. By establishing good working relationships with 
State Public Health personnel and including them on advisory committees, 
health resources can be more easily utilized.
    It may be helpful to explore the possibility of a cooperative 
agreement with the public school system to provide transportation. If 
the lack of transportation would prevent a child with disabilities from 
participating in Head Start, program funds are to be used to provide 
this related service before a delay occurs which would have a negative 
effect on the child's progress. The major emphasis is on providing the 
needed special help so that the child can develop to the maximum during 
the brief time in Head Start.
    The Americans with Disabilities Act of 1990 (42 U.S.C. 12101) 
requires that new buses (ordered after August 26, 1990) by public bus 
systems must be accessible to individuals with disabilities. New over-
the-road buses ordered by privately operated bus and van companies (on 
or after July 26, 1996 or July 26, 1997 for small companies) must be 
accessible. Other new vehicles, such as vans, must be accessible, unless 
the transportation company provides service to individuals with 
disabilities that is equivalent to that operated for the general public. 
The Justice Department enforces these requirements.
    Efforts should be made to obtain expensive items such as wheelchairs 
or audiometers through resources such as Title V (formerly Crippled 
Children's Services). Cooperative arrangements can be made with LEAs and 
other agencies to share equipment such as tympanometers. Special 
equipment such as hearing aids may be obtained through EPSDT or from SSI 
funds for those children who have been found eligible. Some States have 
established libraries of assistive technology devices and rosters of 
expert consultants.

Section 1308.5  Recruitment and Enrollment of Children With Disabilities

                       Guidance for Paragraph (a)

    Head Start can play an important role in Child Find by helping to 
locate children in need and hardest to reach, such as immigrants and 
non-English speakers. In cooperation with other community groups and 
agencies serving children with disabilities, Head Start programs should 
incorporate in their outreach and recruitment procedures efforts to 
identify and enroll children with disabilities who meet eligibility 
requirements and whose parents desire the child's participation.
    Integrating children with severe disabilities for whom Head Start is 
an appropriate placement is a goal of ACYF. Grantees

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should bear in mind that 45 CFR part 84, Nondiscrimination on the Basis 
of Handicap in Programs and Activities Receiving or Benefiting from 
Federal Financial Assistance or the Rehabilitation Act of 1973 (20 
U.S.C. 794) states that any program receiving Federal funds may not deny 
admission to a child solely on the basis of the nature or extent of a 
disabling condition and shall take into account the needs of the child 
in determining the aid, benefits, or services to be provided. Many 
children who appear to have serious impairments are nevertheless able to 
make greater gains in an integrated setting than in a segregated 
classroom for children with disabilities.
    The key factor in selecting an appropriate placement is the IEP. The 
need of the individual child and the ability of the child to benefit are 
determining factors. Likewise, the amount of time per day or week to be 
spent in the regular setting and/or in other settings is determined by 
the IEP. The IEP of a child with a severe emotional/behavioral disorder, 
for example, might realistically call for less than full day attendance 
or for dual placement. Another factor to consider is that according to 
the PIR, the majority of children with severe impairments are provided 
special services by both Head State staff and staff of other agencies, 
sharing the responsibility. Many grantees have successfully served 
children with moderate and severe disabilities.
    The disabilities coordinator's responsibility includes providing 
current names of appropriate specialized agencies serving young children 
with disabilities and the names of LEA Child Find contact persons to the 
director to facilitate joint identification of children with 
disabilities. It also includes learning what resources other agencies 
have available and the eligibility criteria for support from State 
agencies, Supplemental Security Income (SSI), Title V, Maternal and 
Child Health Block Grants, Title XIX (EPSDT/Medicaid), Migrant Health 
Centers, Developmental Disabilities programs, Bureau of Indian Affairs, 
third party payers such as insurance companies and other sources.
    Grantees need to develop lists of appropriate referral sources. 
These include hospital child life programs, SSI, early intervention 
programs funded by Part H of the IDEA or other sources, EPSDT providers, 
infant stimulation programs, Easter Seal and United Cerebral Palsy 
agencies, mental health agencies, Association for Retarded Citizens 
chapters, Developmental Disabilities Planning Councils, Protection and 
Advocacy Systems, University Affiliated Programs, the LEA Child Find, 
and the medical community.
    Head Start programs are encouraged to increase the visibility of the 
Head Start mainstreaming effort within the community by:
     Including community child service providers on policy 
council health and disability advisory boards and in other relevant Head 
Start activities.
     Making presentations on Head Start mainstreaming 
experiences at local, State and Regional meetings and conferences, such 
as the National Association for the Education of Young Children, Council 
for Exceptional Children, and the Association for the Care of Children's 
Health.
     Participating in interagency planning activities for 
preschool infant and toddler programs such as the State Interagency 
Coordinating Councils supported under the IDEA.

                       Guidance for Paragraph (b)

    Grantees should maintain records of outreach, recruitment, and 
service activities for children with disabilities and their families.
    Each grantee should develop a policy on what types of information 
are to be included in a comprehensive file for each disabled child. The 
policy should outline the locations where a copy of each record will be 
sent. For example, while a comprehensive file will be maintained at the 
Head Start program central office (where the disability services 
coordinator and component coordinators may be based), a teacher must 
have access to a child's IEP and progress notes in order to plan 
effectively. Confidentiality needs to be maintained in a manner which 
allows for access to information by appropriate staff while meeting 
applicable Head Start and State requirements.

                       Guidance for Paragraph (d)

    Staff should assist families who need help in obtaining 
immunizations before the program year begins, bearing in mind that a 
goal of parent involvement and social service activities is to encourage 
independence and develop skills in meeting timelines when seeking 
services for children. Care should be taken that children are not denied 
enrollment, but that their families receive the necessary assistance to 
meet entrance requirements. ``Healthy Young Children: A Manual for 
Programs,'' (a cooperative effort of the Administration for Children, 
Youth and Families, the American Academy of Pediatrics; the Division of 
Maternal and Child Health, U.S. Department of Health and Human Services; 
Georgetown University Child Development Center; Massachusetts Department 
of Public Health, and the National Association for the Education of 
Young Children, 1988, copyright, NAEYC) contains best practice guidance.

[[Page 230]]

                  Section 1308.6 Assessment of Children

                       Guidance for Paragraph (b)

    Early screening is essential because of the time required for the 
steps necessary before special services can begin. It has been very 
difficult for some grantees to complete health screenings in a timely 
manner for several reasons including the lack of resources, especially 
in rural areas; the need to rely on donated services from agencies whose 
schedules have been especially overloaded during September and October 
after the start of the Head Start program year; lack of summer staff in 
most programs; and the difficulty in reaching some families. Lack of 
coordination among agencies with legislative responsibility for 
identifying children with disabilities has resulted in duplication and 
unacceptable delays in providing required services for many grantees. 
Other grantees, however, have demonstrated the ability to complete 
screenings early in the program year without difficulty. Many programs 
already complete screening by 45 days after the first day of program 
operation. Some participate in spring or summer screening programs in 
their areas before the fall opening. Grantees are encouraged to schedule 
well in advance with clinics and with such providers as EPSDT and the 
Indian Health Service for timely screening and any subsequent 
evaluations that may be needed.
    Recently, a number of legislative and legal requirements have 
increased the resources available for the screening and evaluation of 
children. Title XIX, EPDST/Medicaid, has new requirements for screening 
and evaluation, as well as treatment; the Social Security Administration 
has modified eligibility requirements for children with disabilities so 
that more services will be available; and all States have assured that 
services will be provided from at least age three under IDEA so that 
LEAs in more States will be engaged in identifying and evaluating 
children from birth to age six.
    In response to these changes, the Department of Health and Human 
Services and the Department of Education, through the Federal 
Interagency Coordinating Council, have developed a cooperative agreement 
for coordinated screening. Head Start is one of the participating 
agencies which will work together to plan and implement community 
screenings, assisting the LEAs which have the major responsibility for 
identifying every child with a disability under the IDEA. In addition, 
programs may elect to make some summer staff available for activities to 
close out program work in the spring and prepare for the fall.
    These developments make timely screening feasible. They also make it 
possible to expedite immunizations. State-of-the-art coordinated 
screening programs make immunizations available.
    This coordination can focus staff energy on assisting families to 
have their children immunized during the screening phase rather than 
making repeated follow-up efforts after the program for children has 
begun. Coordinated screening also provides an excellent parent education 
opportunity. Information on child development, realistic expectations 
for preschoolers and such services as WIC can be provided during the 
screening. Some communities have combined screening with well-received 
health fairs.
    The staff should be involved in the planning of screening to assure 
that screening requirements are selected or adapted with the specific 
Head Start population and goals of the screening process in mind. 
Instruments with age-appropriate norms should be used. Children should 
be screened in their native language. Universities, civic organizations 
or organizations to aid recent immigrants may be able to locate native 
speakers to assist. The RAPs can provide information on the 
characteristics of screening instruments.
    Current best practice indicates that individual pure tone audiometry 
be used as the first part of a screening program with children as young 
as three. The purpose is to identify children with hearing impairments 
that interfere with, or have the potential to interfere with 
communication. The recommended procedure is audiometric screening at 20 
dB HL (re ANSI-1969) at the frequencies of 1000, 2000, and 4000 Hz, (and 
at 500 Hz unless acoustic immittance audiometry is included as the 
second part of the screening program and if the noise level in the room 
permits testing at that frequency.) Acoustic immittance audiometry (or 
impedance audiometry) is recommended as the second part of the program 
to identify children who have middle-ear disorders.
    The audiometric screening program should be conducted or supervised 
by an audiologist. Nonprofessional support staff have successfully 
carried out audiometric screening with appropriate training and 
supervision.
    When a child fails the initial screening, an audiometric rescreening 
should be administered the same day or no later than within 2 weeks. A 
child who fails the rescreening should be referred for an evaluation by 
an audiologist.
    Current best practice calls for annual hearing tests. Frequent 
rescreening is needed for children with recurrent ear infections. 
Grantees who contract or arrange for hearing testing should check to 
assure that the testing covers the three specified frequencies and that 
other quality features are present. Speech, hearing and language 
problems are the most widespread disabilities in preschool programs and 
quality testing is vital for early detection and remediation.

[[Page 231]]

    Playing listening games prior to testing and getting use to 
earphones can help children learn to respond to a tone and improve the 
quality of the testing.
    Some grantees have found it strengthens the skills of their staff to 
have all members learn to do developmental screening. This can be a 
valuable in-service activity especially for teachers. State requirements 
for qualifications should be checked and non-professional screeners 
should be trained.
    Some programs have involved trained students from schools of 
nursing, child development or special education graduate students, or 
medical students who must carry out screening work as part of their 
required experience.

                       Guidance for Paragraph (d)

    Parents should be provided assistance if necessary, so that they can 
participate in the developmental assessment.
    Grantees should offer parents assistance in understanding the 
implications of developmental assessments as well as medical, dental or 
other conditions which can affect their child's development and 
learning.
    Development assessment is an ongoing process and information from 
observations in the Head Start center and at home should be recorded 
periodically and updated in each developmental area in order to document 
progress and plan activities.
    Disabilities coordinators, as well as education staff, need to be 
thoroughly familiar with developmental assessment activities such as 
objective observation, time sampling and obtaining parent information 
and the use of formal assessment instruments. Knowledge of normal child 
development and understanding of the culture of the child are also 
important.

                       Guidance for Paragraph (e)

    While the LEA is responsible for assuring that each child who is 
referred is evaluated in accordance with the provisions of IDEA and 
usually provides the evaluation, grantees may sometimes provide for the 
evaluation. In that event, grantees need to assure that evaluation 
specialists in appropriate areas such as psychology, special education, 
speech pathology and physical therapy coordinate their activities so 
that the child's total functioning is considered and the team's findings 
and recommendations are integrated.
    Grantees should select members of the multidisciplinary evaluation 
team who are familiar with the specific Head Start population, taking 
into account the age of the children and their cultural and ethnic 
background as they relate to the overall diagnostic process and the use 
of specific tests.
    Grantees should be certain that team members understand that Head 
Start programs are funded to provide preschool developmental experiences 
for all eligible children, some of whom also need special education and 
related services. The intent of the evaluation procedures is to provide 
information to identify children who have disabling conditions so they 
can receive appropriate assistance. It is also the intent to avoid 
mislabeling children for whom basic Head Start programming is designed 
and who may show developmental delays which can be overcome by a regular 
comprehensive program meeting the Head Start Performance Standards.
    When a grantee provides for the evaluation of a child, it is 
important that the Head Start eligibility criteria be explained to the 
evaluation team members and that they be informed as to how the results 
will be used.
    Grantees should require specific findings in writing from the 
evaluation team, and recommendations for intervention when the team 
believes the child has a disability. The findings will be used in 
developing the child's IEP to ensure that parents, teachers and others 
can best work with the child. Some grantees have obtained useful 
functional information by asking team members to complete a brief form 
describing the child's strengths and weaknesses and the effects of the 
disability along with suggestions for special equipment, treatment or 
services. The evaluators should be asked in advance to provide their 
findings promptly in easily understood terms. They should provide 
separate findings and, when they agree, consensus professional opinions. 
When planning in advance for evaluation services from other agencies, 
grantees should try to obtain agreements on prompt timing for delivery 
of reports which are necessary to plan services.
    To assist the evaluation team, Head Start should provide the child's 
screening results, pertinent observations, and the results of any 
developmental assessment information which may be available.
    It is important that programs ensure that no individual child or 
family is labeled, mislabeled, or stigmatized with reference to a 
disabling condition. Head Start must exercise care to ensure that no 
child is misidentified because of economic circumstances, ethnic or 
cultural factors or developmental lags not caused by a disability, 
bilingual or dialectical differences, or because of being non-English 
speaking.
    If Head Start is arranging for the evaluation, it is important to 
understand that a child whose problem has been corrected (e.g., a child 
wearing glasses whose vision is corrected and who does not need special 
education and related services) does not qualify as a child with a 
disability. A short-term medical problem such as post-operative recovery 
or a problem requiring only medical care and health monitoring when the 
evaluation specialists have not stated that special

[[Page 232]]

education and related services are needed does not qualify as a 
disability.
    The evaluation team should include consideration of the way the 
disability affects the child's ability to function as well as the cause 
of the condition.
    Some children may have a recent evaluation from a clinic, hospital 
or other agency (other than the LEAs) prior to enrolling in Head Start. 
If that evaluation did not include needed functional information or a 
professional opinion as to whether the child meets one of the Head Start 
eligibility criteria, the grantee should contact the agency to try to 
obtain that information.
    Some children, prior to enrolling in Head Start, already have been 
diagnosed as having severe disabilities and a serious need for services. 
Some of these children already may be receiving some special assistance 
from other agencies for their disabilities but lack developmental 
services in a setting with other children. Head Start programs may best 
meet their needs by serving them jointly, i.e., providing developmental 
services while disability services are provided from another source. It 
is important in such situations that regular communication take place 
between the two sites.
    Beginning in 1990, State EPSDT/Medicaid programs must, by law, 
evaluate and provide services for young children whose families meet 
eligibility criteria at 133 percent of the poverty levels. This is a 
resource for Head Start and it is important to become aware of EPSDT 
provisions.

     Section 1308.7 Eligibility Criteria: Health Impairment Guidance

                       Guidance for Paragraph (c)

    Many health impairments manifest themselves in other disabling 
conditions. Because of this, particular care should be taken when 
classifying a health impaired child.

                       Guidance for Paragraph (b)

    Because AIDS is a health impairment, grantees will continue to 
enroll children with AIDS on an individual basis. Staff need to be 
familiar with the Head Start Information Memorandum on Enrollment in 
Head Start Programs of Infants and Young Children with Human 
Immunodeficiency Virus (HIV), AIDS Related Complex (ARC), or Acquired 
Immunodeficiency Syndrome (AIDS) dated June 22, 1988. This guidance 
includes material from the Centers for Disease Control which stresses 
the need for a team, including a physician, to make informed decisions 
on enrollment on an individual basis. It provides guidance in the event 
that a child with disabilities presents a problem involving biting or 
bodily fluids. The guidance also discusses methods for control of all 
infectious diseases through stringent cleanliness standards and includes 
lists of Federal, State and national agencies and organizations that can 
provide additional information as more is learned. Staff should be aware 
that there is a high incidence of visual impairment among children with 
HIV and AIDS.

                       Guidance for Paragraph (c)

    Teachers or others in the program setting are in the best position 
to note the following kinds of indications that a child may need to be 
evaluated to determine whether an attention deficit disorder exists:
    (1) Inability of a child who is trying to participate in classroom 
activities to be able to orient attention, for example to choose an 
activity for free time or to attend to simple instructions;
    (2) Inability to maintain attention, as in trying to complete a 
selected activity, to carry out simple requests or attend to telling of 
an interesting story; or
    (3) Inability to focus attention on recent activities, for example 
on telling the teacher about a selected activity, inability to tell 
about simple requests after carrying them out, or inability to tell 
about a story after hearing it.
    These indicators should only be used after the children have had 
sufficient time to become familiar with preschool procedures and after 
most of the children are able easily to carry out typical preschool 
activities.
    Culturally competent staff recognize and appreciate cultural 
differences, and this awareness needs to include understanding that some 
cultural groups may promote behavior that may be misinterpreted as 
inattention. Care must be taken that any deviations in attention 
behavior which are within the cultural norms of the child's group are 
not used as indicators of possible attention deficit disorder.
    A period of careful observation over three months can assure that 
adequate documentation is available for the difficult task of 
evaluation. It also provides opportunity to provide extra assistance to 
the child, perhaps through an aide or special education student under 
the teacher's direction, which might improve the child's functioning and 
eliminate the behavior taken as evidence of possible attention deficit 
disorder.
    Attention deficit disorders are not the result of learning 
disabilities, emotional/behavioral disabilities, autism or mental 
retardation. A comprehensive psychological evaluation may be carried out 
in some cases to rule out learning disability or mental retardation. It 
is possible, however, in some instances for this disability to coexist 
with another disability. Children who meet the criteria for multiple 
disabilities (e.g., attention deficient disorder and learning 
disability, or emotional/behavioral disorder, or mental retardation) 
would be eligible for services as children with multiple disabilities or 
under their primary disability.

[[Page 233]]

    Teacher and parent reports have been found to provide the most 
useful information for assessment of children suspected of having 
attention deficit disorder. They are also useful in planning and 
providing special education intervention. The most successful approach 
may be a positive behavior modification program in the classroom, 
combined with a carryover program in the home. Prompt and clear response 
should be provided consistently. Positive reinforcement for appropriate 
behavior, based on rewards such as stickers or small items desired by 
the child has been found effective for children with this disorder, 
along with occasional withholding of rewards or postponing of desired 
activities in the face of inappropriate behavior. Effective programs 
suggest that positive interactions with the child after appropriate 
behavior are needed at least three times as often as any negative 
response interactions after inappropriate behavior. Consultants familiar 
with behavior modification should be used to assist teachers in planning 
and carrying out intervention which can maintain this positive to 
negative ratio while shaping behaviors. These behavior interventions can 
be provided in mainstream placements with sufficient personnel.
    Suggested Primary Members of A Head Start Evaluation Team for Health 
Impaired Children:
    Physician.
    Pediatrician.
    Psychologist.
    Other specialists related to specific disabilities.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Family counseling.
    Genetic counseling.
    Nutrition counseling.
    Recreational therapy.
    Supervision of physical activities.
    Transportation.
    Assistive technology devices or services

  Section 1308.8  Eligibility Criteria: Emotional/Behavioral Disorders

                       Guidance for Paragraph (a)

    Staff should insure that behavior which may be typical of some 
cultures or ethnic groups, such as not making eye contact with teachers 
or other adults or not volunteering comments or initiating conversations 
are not misinterpreted.
    The disability, social service and parent involvement coordinators 
should consider providing extra attention to children at-risk for 
emotional/behavioral disorders and their parents to help prevent a 
disability. Members of the Council of One Hundred, Kiwanis, Urban 
League, Jaycees, Rotary, Foster Grandparents, etc. may be able to 
provide mentoring and individual attention.
    Suggested Primary Members of a Head Start Evaluation Team for 
Emotional/behavioral Disorders:
    Psychologist, psychiatrist or other clinically trained and State 
qualified mental health professionals.
    Pediatrician.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Behavior management.
    Environmental adjustments.
    Family counseling.
    Psychotherapy.
    Transportation.
    Assistive technology.

   Section 1308.9  Eligibility Criteria: Speech or Language Impairment

                       Guidance for Paragraph (a)

    Staff familiar with the child should consider whether shyness, lack 
of familiarity with vocabulary which might be used by testers, 
unfamiliar settings, or linguistic or cultural factors are negatively 
influencing screening and assessment results. Whenever possible, 
consultants trained in assessing the speech and language skills of young 
children should be selected. The child's ability to communicate at home, 
on the playground and in the neighborhood should be determined for an 
accurate assessment. Review of the developmentally appropriate age 
ranges for the production of difficult speech sounds can also help 
reduce over-referral for evaluation.
    Suggested Primary Members of a Head Start Evaluation Team for Speech 
or Language Impairment:
    Speech Pathologist.
    Language Pathologist.
    Audiologist.
    Otolaryngologist.
    Psychologist.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Environmental adjustments.
    Family counseling.
    Language therapy.
    Speech therapy.
    Transportation.
    Assistive technology devices or services.

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        Section 1308.10  Eligibility Criteria: Mental Retardation

                       Guidance for Paragraph (a)

    Evaluation instruments with age-appropriate norms should be used. 
These should be administered and interpreted by professionals sensitive 
to racial, ethnic and linguistic differences. The diagnosticians must be 
aware of sensory or perceptual impairments that the child may have 
(e.g., a child who is visually impaired should not be tested with 
instruments that rely heavily on visual information as this could 
produce a depressed score from which erroneous diagnostic conclusions 
might be drawn).
    Suggested primary members of a Head Start evaluation team for mental 
retardation:
    Psychologist.
    Pediatrician.
    Possible related services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Environmental adjustments.
    Family counseling.
    Genetic counseling.
    Language therapy.
    Recreational therapy.
    Speech therapy.
    Transportation.
    Nutrition counseling.

  Section 1308.11  Eligibility Criteria: Hearing Impairment Including 
                                Deafness

                       Guidance for Paragraph (a)

    An audiologist should evaluate a child who has failed rescreening or 
who does not respond to more than one effort to test the child's 
hearing. If the evaluation team determines that the child has a 
disability, the team should make recommendations to meet the child's 
needs for education and medical care or habilitation, including auditory 
training to learn to use hearing more effectively.
    Suggested Primary Members of a Head Start Evaluation Team for 
Hearing Impairment:
    Audiologist.
    Otolaryngologist.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Auditory training.
    Aural habilitation.
    Environmental adjustments.
    Family counseling.
    Genetic counseling.
    Language therapy.
    Medical treatment.
    Speech therapy.
    Total communication, speechreading or manual communication.
    Transportation.
    Use of amplification.
    Assistive technology devices or services.

      Section 1308.12  Eligibility Criteria: Orthopedic Impairment

                       Guidance for Paragraph (a)

    Suggested Primary Members of a Head Start Evaluation Team for 
Orthopedic Impairment:
    Pediatrician.
    Orthopedist.
    Neurologist.
    Occupational Therapist.
    Physical Therapist.
    Rehabilitation professional.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Environmental adjustments.
    Family counseling.
    Language therapy.
    Medical treatment.
    Occupational therapy.
    Physical therapy.
    Assistive technology.
    Recreational therapy.
    Speech therapy.
    Transportation.
    Nutrition counseling.

   Section 1308.13  Eligibility Criteria: Visual Impairment Including 
                                Blindness

                       Guidance for Paragraph (a)

    Primary Members of an Evaluation Team for Visual Impairment 
including Blindness:
    Ophthalmologist.
    Optometrist.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Environmental adjustments.
    Family counseling.
    Occupational therapy.
    Orientation and mobility training.
    Pre-Braille training.
    Recreational therapy.
    Sensory training.
    Transportation.
    Functional vision assessment and therapy.

                  Section 1308.14 Learning Disabilities

                       Guidance for Paragraph (a)

    When a four or five-year-old child shows signs of possible learning 
disabilities, thorough documentation should be gathered. For example, 
specific anecdotal information and

[[Page 235]]

samples of the child's drawings, if appropriate, should be included in 
the material given to the evaluation team.
    A Master's degree level professional with a background in learning 
disabilities should be a member of the evaluation team.
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Vision evaluation.
    Neurology.
    Psychology.
    Motor development.
    Hearing evaluation.
    Child psychiatry.
    Pediatric evaluation.

                         Section 1308.15 Autism

    A child who manifests characteristics of the condition after age 
three can still be diagnosed as having autism. Autism does not include 
children with characteristics of serious emotional disturbance.
    Suggested possible members of a Head Start evaluation team:
    Psychologist.
    Pediatrician.
    Audiologist.
    Psychiatrist.
    Language pathologist.
    Possible related services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Family support services.
    Language therapy.
    Transportation.

                 Section 1308.16 Traumatic Brain Injury

    Traumatic brain injury does not include congenital brain injury.
    Suggested possible members of an evaluation team included:
    Psychologist.
    Physical therapist.
    Speech or language pathologist.
    Possible related services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Rehabilitation professional.
    Occupational therapy.
    Speech or language therapy.
    Assistive technology.

                    Section 1308.17 Other Impairments

    This category was included to ensure that any Head Start child who 
meets the State eligibility criteria as developmentally delayed or 
State-specific criteria for services to preschool children with 
disabilities is eligible for needed special services either within Head 
Start or the State program.
    Suggested primary members of an evaluation team for other 
impairments meeting State eligibility criteria for services to preschool 
children with disabilities.
    Pediatrician.
    Psychologist.
    Other specialists with expertise in the appropriate area(s).
    Possible Related Services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Occupational therapy.
    Speech or language therapy.
    Family Counseling.
    Transportation.

                             Deaf-blindness

    Information on assistance or joint services for deaf-blind children 
can be obtained through SEAs.

                          Multiple Disabilities

    A child who is deaf and has speech and language impairments would 
not be considered to have multiple disabilities, as it could be expected 
that these impairments were caused by the hearing loss.
    Suggested primary members of a Head Start evaluation team:
    Audiologists.
    Special educators.
    Speech, language or physical therapists.
    Psychologists or psychiatrists.
    Rehabilitation professional.
    Possible related services:
    (Related services are determined by individual need. These 
``possible related services'' are merely examples and are not intended 
to be limiting.)
    Speech, language, occupational or physical therapists as needed.
    Assistive technology devices or services.
    Mental health services.
    Transportation.

       Section 1308.18  Disabilities/Health Services Coordination

                       Guidance for Paragraph (a)

    It is important for staff to maintain close communication concerning 
children with health impairments. Health and disability services 
coordinators need to schedule frequent re-tests of children with 
recurrent middle ear infections and to ensure that they receive ongoing 
medical treatment to prevent speech and language delay. They should 
ensure that audiometers are calibrated annually for accurate testing of 
hearing. Speech and hearing centers, the manufacturer, or public school 
education services districts should be able to perform this service. In 
addition, a daily check when an audiometer is

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in use and a check of the acoustics in the testing site are needed for 
accurate testing.
    Approximately 17 percent of Down Syndrome children have a condition 
of the spine (atlanto-axial instability) and should not engage in 
somersaults, trampoline exercises, or other activities which could lead 
to spinal injury without first having a cervical spine x-ray.

                       Guidance for Paragraph (b)

    The disabilities services coordinator needs to assure that best use 
is made of mental health consultants when a child appears to have a 
problem which may be symptomatic of a disability in the social/emotional 
area. Teachers, aides and volunteers should keep anecdotal records of 
the child's activities, tantrums, the events which appear to precipitate 
the tantrums, language use, etc. These can provide valuable information 
to a mental health consultant, who should be used primarily to make 
specific recommendations and assist the staff rather than to document 
the problem.
    The mental health coordinator can cooperate in setting up group 
meetings for parents of children with disabilities which provide needed 
support and a forum for talking over mutual concerns. Parents needing 
community mental health services may need direct assistance in accessing 
services, especially at first.
    The disability services coordinator needs to work closely with staff 
across components to help parents of children who do not have 
disabilities become more understanding and knowledgeable about 
disabilities and ways to lessen their effects. This can help reduce the 
isolation which some families with children with disabilities 
experience.

                   Guidance for Paragraphs (c) and (d)

    Arrangements should be made with the family and the physician to 
schedule the administration of medication during times when the child is 
most likely to be under parental supervision.
    Awareness of possible side effects is of particular importance when 
treatment for a disability requires administration of potentially 
harmful drugs (e.g., anti-convulsants, amphetamines).

     Section 1308.19 Developing Individual Education Programs (IEPs)

                       Guidance for Paragraph (a)

    The IEP determines the type of placement and the specific 
programming which are appropriate for a child. The least restrictive 
environment must be provided and staff need to understand that this 
means the most appropriate placement in a regular program to the maximum 
extent possible based on the IEP. Because it is individually determined, 
the least restrictive environment varies for different children. 
Likewise, the least restrictive environment for a given child can vary 
over time as the disability is remediated or worsens. A mainstreamed 
placement, in a regular program with services delivered by regular or 
special staff, is one type of integrated placement on the continuum of 
possible options. It represents the least restrictive environment for 
many children.
    Following screening, evaluation and the determination that a child 
meets the eligibility criteria and has a disability, a plan to meet the 
child's individual needs for special education and related services is 
developed. In order to facilitate communication with other agencies 
which may cooperate in providing services and especially with LEAs or 
private schools which the children will eventually enter, it is 
recommended that programs become familiar with the format of the IEP 
used by the LEAs and use that format to foster coordination. However, 
the format of the IEP to be developed for children in Head Start can 
vary according to local option. It should be developed to serve as a 
working document for teachers and others providing services for a child.
    It is recommended that the staff review the IEP of each child with a 
disability more frequently than the minimum once a year to keep the 
objectives and activities current.
    It is ideal if a child can be mainstreamed in the full program with 
modifications of some of the small group, large group or individual 
program activities to meet his or her special needs and this should be 
the first option considered. However, this is not possible or realistic 
in some cases on a full-time basis. The IEP team needs to consider the 
findings and recommendations of the multi-disciplinary evaluation team, 
observation and developmental assessment information from the Head Start 
staff and parents, parental information and desires, and the IEP to plan 
for the best situation for each child. Periodic reviews can change the 
degree to which a child can be mainstreamed during the program year. For 
example, a child with autism whose IEP called for part-time services in 
Head Start in the fall might improve so that by spring the hours could 
be extended.
    If Head Start is not an appropriate placement to meet the child's 
needs according to the IEP, referral should be made to another agency.
    Helpful specific information based on experience in Head Start is 
provided in manuals and resource materials on serving children with 
disabilities developed by ACYF and by technical assistance providers. 
They cover such aspects of developing and implementing the IEP as:
     Gathering data needed to develop the IEP;

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     Preparing parents for the IEP conference;
     Writing IEPs useful to teachers; and
     Developing appropriate curriculum activities and home 
follow-up activities.

                       Guidance for Paragraph (j)

    Programs are encouraged to offer parents assistance in noting how 
their child functions at home and in the neighborhood. Parents should be 
encouraged to contribute this valuable information to the staff for use 
in ongoing planning. Care should be taken to put parents at ease and to 
eliminate or explain specialized terminology. Comfortable settings, 
familiar meeting rooms and ample preparation can help lessen anxiety. 
The main purpose is to involve parents actively, not just to obtain 
their signature on the IEP.
    It is important to involve the parents of children with disabilities 
in activities related to their child's unique needs, including the 
procurement and coordination of specialized services and follow-through 
on the child's treatment plan, to the extent possible. It is especially 
helpful for Head Start to assist parents in developing confidence, 
strategies and techniques to become effective advocates for their 
children and to negotiate complicated systems. Under IDEA, a federally-
funded Parent Training and Information Program exists whereby parent 
training centers in each State provide information, support and 
assistance to parents enabling them to advocate for their child. 
Information regarding these centers should be given to parents of a 
child determined to have a disability. Because some parents will need to 
advocate for their children over a number of years, they need to gain 
the confidence and skills to access resources and negotiate systems with 
increasing independence.
    Some parents of children with disabilities are also disabled. Staff 
may need to adjust procedures for assisting parents who have 
disabilities to participate in their children's programs. Materials to 
assist in this effort are available from technical assistance providers.

                   Section 1308.20  Nutrition Services

                       Guidance for Paragraph (a)

    Vocabulary and concept building, counting, learning place settings, 
social skills such as conversation and acceptable manners can be 
naturally developed at meal or snack time, thus enhancing children's 
skills. Children with disabilities often need planned attention to these 
areas.
    The staff person who is responsible for nutrition and the 
disabilities services coordinator should work with the social services 
coordinator to help families access nutrition resources and services for 
children who are not able to learn or develop normally because of 
malnutrition.
    The staff person who is responsible for nutrition and the 
disabilities services coordinator should alert staff to watch for 
practices leading to baby bottle caries. This is severe tooth decay 
caused by putting a baby or toddler to bed with a nursing bottle 
containing milk, juice or sugar water or letting the child carry around 
a bottle for long periods of time. The serious dental and speech 
problems this can cause are completely preventable.
    In cases of severe allergies, staff should work closely with the 
child's physician or a medical consultant.

 Section 1308.21  Parent Participation and Transition of Children From 
                       Head Start to Public School

                       Guidance for Paragraph (a)

    Grantees should help parents understand the value of special early 
assistance for a child with a disability and reassure those parents who 
may fear that if their child receives special education services the 
child may always need them. This is not the experience in Head Start and 
most other preschool programs where the majority of children no longer 
receive special education after the preschool years. The disabilities 
coordinator needs to help parents understand that their active 
participation is of great importance in helping their children overcome 
or lessen the effects of disabilities and develop to their full 
potential.
    The disabilities coordinator should help program staff deal 
realistically with parents of children who have unfamiliar disabilities 
by providing the needed information, training and contact with 
consultants or specialized agencies. The coordinator should ensure that 
staff carrying out family needs assessment or home visits do not 
overlook possible disabilities among younger siblings who should be 
referred for early evaluation and preventive actions.

                   Guidance for Paragraphs (b) and (c)

    As most Head Start children will move into the public school system, 
disabilities coordinators need to work with the Head Start staff for 
early and ongoing activities designed to minimize discontinuity and 
stress for children and families as they move into a different system. 
As the ongoing advocates, parents will need to be informed and confident 
in communicating with school personnel and staff of social service and 
medical agencies. Disabilities coordinators need to ensure that the Head 
Start program:
     Provides information on services available for LEAs and 
other sources of services parents will have to access on their own, such 
as dental treatment;

[[Page 238]]

     Informs parents of the differences between the two systems 
in role, staffing patterns, schedules, and focus;
     Provides opportunities for mutual visits by staff to one 
another's facilities to help plan appropriate placement;
     Familiarizes parents and staff of the receiving program's 
characteristics and expections;
     Provides early and mutually planned transfer of records 
with parent consent at times convenient for both systems;
     Provides information on services available under the 
Individuals With Disabilities Education Act, the federally-funded parent 
training centers and provisions for parent involvement and due process; 
and
     Provides opportunities for parents to confer with staff to 
express their ideas and needs so they have experience in participating 
in IEP and other conferences in an active, confident manner. Role 
playing has been found helpful.
    It is strongly recommended that programs develop activities for 
smooth transition into Head Start from Part H infant/toddler programs 
funded under IDEA and from Head Start to kindergarten or other 
placement. In order to be effective, such plans must be developed 
jointly. They are advantageous for the children, parents, Part H 
programs, Head Start and LEAs. ACYF has developed materials useful for 
transition. American Indian programs whose children move into several 
systems, such as Bureau of Indian Affairs schools and public schools, 
need to prepare children and families in advance for the new situation. 
Plans should be used as working documents and reviewed for annual 
update, so that the foundation laid in Head Start is maintained and 
strengthened.



PART 1309--HEAD START FACILITIES PURCHASE--Table of Contents




                           Subpart A--General

Sec.
1309.1  Purpose and application.
1309.2  Approval of previously purchased facilities.
1309.3  Definitions.

                    Subpart B--Application Procedures

1309.10  Application.
1309.11  Cost comparison.
1309.12  Timely decisions.

                Subpart C--Protection of Federal Interest

1309.20  Title.
1309.21  Recording of Federal interest and other protection of Federal 
          interest.
1309.22  Rights and responsibilities in the event of grantee's default 
          on mortgage, or withdrawal or termination.
1309.23  Insurance, bonding, and maintenance.

                        Subpart D--Modular Units

1309.30  General.
1309.31  Site description.
1309.32  Statement of procurement procedure for modular units.
1309.33  Inspection.
1309.34  Costs of installation of modular unit.

               Subpart E--Other Administrative Provisions

1309.40  Copies of documents.
1309.41  Record retention.
1309.42  Audit of mortgage.
1309.43  Use of grant funds to pay fees.
1309.44  Independent analysis.

    Authority: 42 U.S.C. 9801 et seq.

    Source: 64 FR 5945, Feb. 8, 1999, unless otherwise noted.



                           Subpart A--General



Sec. 1309.1  Purpose and application.

    This part prescribes regulations implementing sections 644(c) and 
644(f) of the Head Start Act, 42 U.S.C. 9801 et seq., as it applies to 
grantees operating Head Start programs under the Act. It describes the 
procedures for applying for Head Start grant funds to purchase 
facilities in which to operate Head Start programs, and the conditions 
under which grant funds may be awarded to purchase facilities. It also 
specifies the measures which must be taken to protect the Federal 
interest in facilities purchased with Head Start grant funds.



Sec. 1309.2  Approval of previously purchased facilities.

    Head Start grantees which purchased facilities after December 31, 
1986, and before October 7, 1992, may request retroactive approval of 
the purchase by submitting an application which conforms to the 
requirements of this Part and the Act. Grant funds may be used to pay 
facility purchase costs incurred only after the responsible HHS official 
approves an application for a previously purchased facility.



Sec. 1309.3  Definitions.

    As used in this part,

[[Page 239]]

    ACF means the Administration for Children and Families in the 
Department of Health and Human Services, and includes the Regional 
Offices.
    Acquire means to purchase in whole or in part with Head Start grant 
funds through payments made in satisfaction of a mortgage agreement 
(both principal and interest), as a down payment, for professional fees, 
for closing costs, and for any other costs associated with the purchase 
of the property that are usual and customary for the locality.
    Act means the Head Start Act, 42 U.S.C. section 9801, et seq.
    ACYF means the Administration on Children, Youth and Families, a 
component of the Administration for Children and Families in the 
Department of Health and Human Services.
    Facility means a structure such as a building or modular unit 
appropriate for use by a Head Start grantee to carry out a Head Start 
program.
    Grant funds means Federal financial assistance received by a grantee 
from ACF to administer a Head Start program pursuant to the Head Start 
Act.
    Grantee means the local public, private non-profit or for-profit 
agency designated to operate a program pursuant to 42 U.S.C. 9836 or 42 
U.S.C. 9840a.
    Head Start center or a direct support facility for a Head Start 
program means a facility used primarily to provide Head Start services 
to children and their families, or for administrative or other 
activities necessary to the conduct of the Head Start program.
    Modular unit means a portable prefabricated structure made at 
another location and moved to a site for use by a Head Start grantee to 
carry out a Head Start program.
    Purchase means to buy an existing facility, either outright or 
through a mortgage. Purchase also refers to an approved purchase of a 
facility, commenced between December 31, 1986 and October 7, 1992, as 
permitted by the Head Start Act, and by Sec. 1309.2 of this part.
    Real property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Responsible HHS official means the official who is authorized to 
make the grant of financial assistance to operate a Head Start program, 
or such official's designee.



                    Subpart B--Application Procedures



Sec. 1309.10  Application.

    A grantee which proposes to use grant funds to purchase a facility 
must submit a written application to the responsible HHS official. The 
application must include the following information:
    (a) A legal description of the site of the facility, and an 
explanation of the appropriateness of the location to the grantee's 
service area, including a statement of the effect that purchase of the 
facility has had or will have on the transportation of children to the 
program, on the grantee's ability to collaborate with other child care, 
social services and health providers, and on all other program 
activities and services.
    (b) Plans and specifications of the facility, including information 
on the size and type of structure, the number and a description of the 
rooms and the lot on which the building is located (including the space 
available for a playground and for parking).
    (c) The cost comparison described in Sec. 1309.11 of this part.
    (d) If minor renovations are necessary to make the facility suitable 
to carry out the Head Start program, a description of the renovations, 
and the plans and specifications required by paragraph (b) of this 
section for the facility as it will be after renovations are complete.
    (e) The intended uses of the facility, including information 
demonstrating that the facility will be used principally as a Head Start 
center or a direct support facility for a Head Start program. If the 
facility is to be used for purposes in addition to the operation of the 
Head Start program, the grantee must state what portion of the facility 
is to be used for such other purposes.
    (f) Assurance that the facility complies (or will comply after 
completion of the renovations described in paragraph (d) of this 
section) with local licensing and code requirements, the access 
requirements of the Americans

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with Disabilities Act (ADA), if applicable, and section 504 of the 
Rehabilitation Act of 1973. The grantee also will assure that it has met 
the requirements of the Flood Disaster Protection Act of 1973, if 
applicable.
    (g) If the grantee is claiming that the lack of alternative 
facilities will prevent or would have prevented operation of the 
program, a statement of how it was determined that there is or was a 
lack of alternative facilities. This statement must be supported, 
whenever possible, by a written statement from a licensed real estate 
professional in the grantee's service area. If a grantee requesting 
approval of the previous purchase of a facility is unable to provide 
such statements based on circumstances which existed at the time of the 
purchase, the grantee and the licensed real estate professional may use 
present conditions as a basis for making the determination.
    (h) The terms of any proposed or existing loan(s) related to the 
purchase of the facility and the repayment plans (detailing balloon 
payments or other unconventional terms, if any) and information on all 
other sources of funding of the purchase, including any restrictions or 
conditions imposed by other funding sources.
    (i) A statement of the effect that the purchase of the facility 
would have on the grantee's meeting of the non-Federal share requirement 
of section 640(b) of the Head Start Act, including whether the grantee 
is seeking a waiver of its non-Federal share obligation under that 
section of the Act.
    (j) Certification by a licensed engineer or architect that the 
building is structurally sound and safe for use as a Head Start 
facility. If minor renovations are necessary to make the facility 
suitable for use to carry out a Head Start program, the application must 
include a certification by a licensed engineer or architect as to the 
cost and technical appropriateness of the proposed renovations.
    (k) A statement of the effect that the purchase of a facility would 
have on the grantee's ability to meet the limitation on development and 
administrative costs in section 644(b) of the Head Start Act. One-time 
fees and expenses necessary to the purchase, such as the down payment, 
the cost of necessary minor renovations, loan fees and related expenses, 
and fees paid to attorneys, engineers, and appraisers, are not 
considered to be administrative costs.
    (l) A proposed schedule for acquisition, renovation and occupancy of 
the facility.
    (m) Reasonable assurances that the applicant will obtain, or in the 
case of a previously purchased facility, has obtained a fee simple or 
such other estate or interest in the site sufficient to assure 
undisturbed use and possession for the purpose of operating the Head 
Start program. If the grantee proposes to purchase a facility without 
also purchasing the land on which the facility is situated, the 
application must describe the easement, right of way or land rental it 
will obtain or has obtained to allow it sufficient access to the 
facility.
    (n) An assessment of the impact of the proposed acquisition on the 
human environment if it involves significant renovation or a significant 
change in land use, including substantial increases in traffic in the 
surrounding area due to the provision of Head Start transportation 
services, pursuant to section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332(2)(C)) and its implementing 
regulations (40 CFR parts 1500-1508), and a report showing the results 
of tests for environmental hazards present in the facility, ground 
water, and soil (or justification why such testing is not necessary). In 
addition, such information as may be necessary to comply with the 
National Historic Preservation Act of 1966 (16 U.S.C. 470f) must be 
included.
    (o) Assurance that the grantee will comply with the requirements of 
the Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended (42 U.S.C. 4601 et seq. and 49 CFR part 24), and 
information about the costs that may be incurred due to compliance with 
this Act.
    (p) A statement of the share of the cost of purchase that will be 
paid with grant funds.
    (q) For a grantee seeking approval of a previous purchase, a 
statement of the extent to which it has attempted to comply and will be 
able to comply with

[[Page 241]]

the provisions of Sec. 1309.22(a) of this part.
    (r) Such additional information as the responsible HHS official may 
require.

    Effective Date Note: At 64 FR 5946, Feb 8, 1999, Sec. 1309.10 was 
added. This section contains information collection requirements and 
will not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 1309.11  Cost comparison.

    (a) A grantee proposing to purchase a facility with grant funds must 
submit a detailed estimate of the cost of the proposed purchase, 
including the cost of any necessary minor renovations, and must compare 
the cost of purchasing the proposed facility to the cost of renting an 
alternative facility.
    (b) All costs of purchase and ownership must be identified, 
including, but not limited to, professional fees, minor renovation 
costs, moving expenses, additional transportation costs, maintenance, 
taxes, insurance, and easements, rights of way or land rentals. An 
independent appraisal of the current value of the facility proposed to 
be purchased or previously purchased, made by a professional appraiser, 
must be included.
    (c) The comparison described in paragraph (a) of this section must 
compare the cost of the proposed facility to the cost of the facility 
currently used by the grantee, unless the grantee has no current 
facility, will lose the use of its current facility, intends to continue 
to use its current facility after it purchases the new facility, or has 
shown to the satisfaction of the responsible HHS official that its 
existing facility is inadequate. Where the grantee's current facility is 
not used as the alternate facility, the grantee must use for comparison 
a facility (or facilities) available for lease in the grantee's service 
area and which are usable as a Head Start facility (meaning a facility 
large enough to meet the foreseeable needs of the Head Start grantee, 
and which complies with local licensing and code requirements and the 
access requirements of the Americans With Disabilities Act, if 
applicable, and section 504 of the Rehabilitation Act of 1973) or which 
can be made useable through minor renovation, the cost of which shall be 
included in the cost comparison. In the case of an application for 
approval of the previous purchase of a facility, the cost of the present 
facility must be compared to the cost of the facility used by the 
grantee before purchase of its current facility. If the facility used by 
the grantee before the purchase of its present facility was deemed 
inadequate by the responsible HHS official, the grantee had no previous 
facility, or if the grantee continued to use its previous facility after 
the current facility was purchased the alternative facility shall be an 
available, appropriate facility (or facilities) of comparable size that 
was available for rent in the grantee's service area at the time of its 
purchase of the current facility.
    (d) The grantee must separately delineate the following expenses in 
the application:
    (1) One-time costs, including, but not limited to, the down payment, 
professional fees, moving expenses, the cost of site preparation and 
installation of a modular unit, and the costs of necessary minor 
renovations; and
    (2) Ongoing costs, including, but not limited to, mortgage payments, 
insurance premiums, maintenance costs, and property taxes. If the 
grantee is exempt from the payment of property taxes, this fact must be 
stated.
    (e) The period of comparison is twenty years, except that for the 
purchase of a modular unit the period of comparison is ten years. For a 
proposed purchase the period of comparison begins on the date on which 
the proposal is made. For approvals of previous purchases, the period of 
comparison begins on the date the purchase of the facility took place.
    (f) If the facility is to be used for purposes in addition to the 
operation of the Head Start program, the cost of use of that part of the 
facility used for such other purposes must be allocated in accordance 
with applicable Office of Management and Budget cost principles.

[[Page 242]]



Sec. 1309.12  Timely decisions.

    The responsible HHS official shall promptly review and make final 
decisions regarding completed applications under this part.



                Subpart C--Protection of Federal Interest



Sec. 1309.20  Title.

    Title to facilities acquired with grant funds vests with the grantee 
upon acquisition, subject to the provisions of this part.



Sec. 1309.21  Recording of Federal interest and other protection of Federal interest.

    (a) The Federal Government has an interest in all real property and 
equipment purchased with grant funds for use as a Head Start facility. 
The responsible HHS official may agree to subordinate the Federal 
interest in such property to that of a lender which finances the 
purchase of the property subject to the conditions set forth in 
paragraph (f) of this section.
    (b) Facilities acquired with grant funds may not be mortgaged or 
used as collateral, or sold or otherwise transferred to another party, 
without the written permission of the responsible HHS official.
    (c) Use of the facility for other than the purpose for which the 
facility was funded, without the express written approval of the 
responsible HHS official, is prohibited.
    (d) Immediately upon purchasing a facility with grant funds, or 
receiving permission to use funds for a previously purchased facility, 
the grantee shall record a Notice of Federal Interest in the appropriate 
official records for the jurisdiction in which the facility is located. 
The Notice shall include the following information:
    (1) The date of the award of grant funds for the purchase of the 
property to be used as a Head Start facility, and the address and legal 
description of the property to be purchased;
    (2) That the grant incorporated conditions which include restriction 
on the use of the property and provide for a Federal interest in the 
property;
    (3) That the property may not be used for any purpose inconsistent 
with that authorized by the Head Start Act and applicable regulations;
    (4) That the property may not be mortgaged or used as collateral, 
sold or otherwise transferred to another party, without the written 
permission of the responsible HHS official;
    (5) That these grant conditions and requirements cannot be altered 
or nullified through a transfer of ownership; and
    (6) The name (including signature) and title of the person who 
completed the Notice for the grantee agency, and the date of the Notice.
    (e) Grantees must meet all of the requirements in 45 CFR parts 74 or 
92 pertaining to the purchase and disposition of real property, or the 
use and disposal of equipment, as appropriate.
    (f) In subordinating its interest in a facility purchased with grant 
funds, the responsible HHS official does not waive application of 
paragraph (d) of this section and Sec. 1309.22. A written agreement by 
the responsible HHS official to subordinate the Federal interest must 
provide:
    (1)(i) The lender shall notify the Office of the Regional 
Administrator, Administration for Children and Families, the Office of 
the Commissioner, Administration on Children, Youth and Families, 
Washington, D.C., and the Office of the General Counsel, Department of 
Health and Human Services, Washington, DC, or their successor agencies, 
immediately, both telephonically and in writing of any default by the 
Head Start grantee;
    (ii) Written notice of default must be sent by registered mail 
return receipt requested; and,
    (iii) The lender will not foreclose on the property until at least 
60 days after the required notice by the lender has been sent.
    (2) Such notice will include:
    (i) The full names, addresses, and telephone numbers of the lender 
and the Head Start grantee;
    (ii) The following statement prominently displayed at the top of the 
first page of the notice: ``The Federal Interest in certain real 
property or equipment used for the Head Start Program may be at risk. 
Immediately give this

[[Page 243]]

notice to the appropriate government official'';
    (iii) The date and nature of the default and the manner in which the 
default may be cured; and
    (iv) In the event that the lender will be exercising its remedy of 
foreclosure or other remedies, the date or expected date of the 
foreclosure or other remedies.
    (3) Head Start grantees which purchase facilities with respect to 
which the responsible HHS official has subordinated the Federal Interest 
to that of the lender must keep the lender informed of the current 
addresses and telephone numbers of the agencies to which the lender is 
obligated under paragraph (b) of this section to give notice in the 
event of a default.



Sec. 1309.22  Rights and responsibilities in the event of grantee's default on mortgage, or withdrawal or termination.

    (a) The mortgage agreement, or security agreement in the case of a 
modular unit which is proposed to be purchased under a chattel mortgage, 
shall provide in the case of default by the grantee or the withdrawal or 
termination of the grantee from the Head Start program that ACF may 
intervene. In the case of a default, the mortgage agreement or security 
agreement must provide that ACF may intervene to ensure that the default 
is cured by the grantee or another agency designated by ACF and that the 
lender shall accept the payment of money or performance of any other 
obligation by ACF's designee, for the grantee, as if such payment of 
money or performance had been made by the grantee. The agreement shall 
also provide that ACF will have a period of 60 days after notification 
by the grantee of default in which to intervene to attempt to cure the 
default. The agreement shall further provide that in the event of a 
default, or the withdrawal or termination of the grantee the mortgage 
may be assumed by an organization designated by ACF. The mortgagee or 
creditor will have the right to approve the organization designated to 
assume the mortgage, but such approval will not be withheld except for 
good reason. The provisions required for inclusion in mortgages must be 
included in the mortgages of previously purchased facilities unless a 
convincing justification for not doing so is shown by the Head Start 
grantee.
    (b) The grantee must immediately provide the responsible HHS 
official with both telephonic and written notification of a default of 
any description on the part of the grantee under a real property or 
chattel mortgage.
    (c) In the event that a default is not cured and foreclosure takes 
place, the mortgagee or creditor shall pay ACF that percentage of the 
proceeds from the foreclosure sale of the property attributable to the 
Federal share as defined in 45 CFR 74.2, or, if part 92 is applicable, 
to ACF's share as defined in 45 CFR 92.3. If ACF and the mortgagee or 
creditor have agreed that ACF's Federal interest will be subordinated to 
the mortgagee's or creditor's interest in the property, that agreement 
must be set forth in a written subordination agreement that is signed by 
the responsible HHS official and that complies with Sec. 1309.21 and any 
other applicable Federal law.



Sec. 1309.23  Insurance, bonding and maintenance.

    (a) At the time of acquiring a facility or receiving approval for 
the previous purchase of a facility, the grantee shall obtain insurance 
coverage for the facility which is of the same type as the coverage it 
has obtained for other real property it owns, which includes student 
liability insurance and which at least meets the requirements of the 
coverage specified in paragraphs (a)(1) and (2) of this section as 
follows:
    (1) A title insurance policy which insures the fee interest in the 
facility for an amount not less than the full appraised value as 
approved by ACF, or the amount of the purchase price, whichever is 
greater, and which contains an endorsement identifying ACF as a loss 
payee to be reimbursed if the title fails. If no endorsement naming ACF 
as loss payee is made, the grantee is required to pay ACF the title 
insurance proceeds it receives in the event of title failure; and
    (2) A physical destruction insurance policy, including flood 
insurance where

[[Page 244]]

appropriate, which insures the full replacement value of the facility 
from risk of partial and total physical destruction. The insurance 
policy is to be maintained for the period of time the facility is owned 
by the grantee.
    (b) The grantee shall submit copies of such insurance policies to 
ACF within five days of acquiring the facility or receiving approval for 
the previous purchase of a facility. If the grantee has not received the 
policies in time to submit copies within this period, it shall submit 
evidence that it has obtained the appropriate insurance policies within 
five days of acquiring the facility or receiving approval for the 
previous purchase of a facility, and it shall submit copies of the 
policies within five days of its receipt of them.
    (c) The grantee must maintain facilities acquired with grant funds 
in a manner consistent with the purposes for which the funds were 
provided and in compliance with State and local government property 
standards and building codes.



                        Subpart D--Modular Units



Sec. 1309.30  General.

    In addition to the special requirements of Secs. 1309.31-1309.34 of 
this part, the proposed purchase or request for approval of a previous 
purchase of a modular unit is subject to all of the requirements of this 
part with the following exceptions:
    (a) Section 1309.10(j) of this part, which requires a certification 
by a licensed engineer or architect of the structural soundness of a 
facility prior to approval of an application for grant funds, is 
replaced by Sec. 1309.33; and
    (b) Section 1309.21(d) of this part does not apply to the proposed 
purchase of modular units if the land on which the unit is installed is 
not owned by the grantee.



Sec. 1309.31  Site description.

    (a) An application for the purchase or approval of a previous 
purchase of a modular unit must state specifically where the modular 
unit will be installed, and whether the land on which the modular unit 
will be installed will be purchased by the grantee. If the grantee does 
not propose to purchase land on which to install the modular unit or if 
the previously purchased modular unit is located on land not owned by 
the grantee, the application must state who owns the land on which the 
modular unit is or will be situated and describe the easement, right-of-
way or land rental it will obtain or has obtained to allow it sufficient 
access to the modular unit.
    (b) Modular units which are purchased with grant funds and which are 
not permanently affixed to land, or which are affixed to land which is 
not owned by the grantee, must have posted in a conspicuous place the 
following notice: ``On (date), the Department of Health and Human 
Services (DHHS) awarded (grant number) to (Name of grantee). The grant 
provided Federal funds for conduct of a Head Start program, including 
purchase of this modular unit. The grant incorporated conditions which 
included restrictions on the use and disposition of this property, and 
provided for a continuing Federal interest in the property. 
Specifically, the property may not be used for any purpose other than 
the purpose for which the facility was funded, without the express 
written approval of the responsible DHHS official, or sold or 
transferred to another party without the written permission of the 
responsible DHHS official. These conditions are in accordance with the 
statutory provisions set forth in 42 U.S.C. 9839; the regulatory 
provisions set forth in 45 CFR part 1309, 45 CFR part 74 and 45 CFR part 
92; and Administration for Children and Families' grants policy.''
    (c) A modular unit which has been approved for purchase and 
installation in one location may not be moved to another location 
without the written permission of the responsible HHS official.



Sec. 1309.32  Statement of procurement procedure for modular units.

    (a) An application for the purchase of a modular unit must include a 
statement describing the procedures which will be used by the grantee to 
purchase the modular unit.
    (b) This statement must include a copy of the specifications for the 
unit which is proposed to be purchased and assurance that the grantee 
will comply

[[Page 245]]

with procurement procedures in 45 CFR parts 74 and 92, including 
assurance that all transactions will be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. A 
grantee requesting approval of a previous purchase of a modular unit 
also must include a copy of the specifications for its unit.



Sec. 1309.33  Inspection.

    A grantee which purchases a modular unit with grant funds or 
receives approval of a previous purchase must have the modular unit 
inspected by a licensed engineer or architect within 15 calendar days of 
its installation or approval of a previous purchase, and must submit to 
the responsible HHS official the engineer's or architect's inspection 
report within 30 calendar days of the inspection.



Sec. 1309.34  Costs of installation of modular unit.

    Consistent with the cost principles referred to in 45 CFR part 74 
and 45 CFR part 92, all reasonable costs necessary to the installation 
of a modular unit the purchase of which has been approved by the 
responsible HHS official are payable with grant funds. Such costs 
include, but are not limited to, payments for public utility hook-ups, 
site surveys and soil investigations.



               Subpart E--Other Administrative Provisions



Sec. 1309.40  Copies of documents.

    Certified copies of the deed, loan instrument, mortgage, and any 
other legal documents related to the purchase of the facility or to the 
discharge of any debt secured by the facility must be submitted to the 
responsible HHS official within ten days of their execution.

    Effective Date Note: At 64 FR 5949, Feb. 8, 1999, Sec. 1309.40 was 
added. This section contains information collection requirements and 
will not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 1309.41  Record retention.

    All records pertinent to the purchase of a facility must be retained 
by the grantee for a period equal to the period of the grantee's 
ownership of the facility plus three years.

    Effective Date Note: At 64 FR 5949, Feb. 8, 1999, Sec. 1309.41 was 
added. This section contains information collection requirements and 
will not be effective until approval has been given by the Office of 
Management and Budget.



Sec. 1309.42  Audit of mortgage.

    Any audit of a grantee which has purchased a facility with grant 
funds shall include an audit of any mortgage or encumbrance on the 
facility. Reasonable and necessary fees for this audit are payable with 
grant funds.



Sec. 1309.43  Use of grant funds to pay fees.

    Consistent with the cost principles referred to in 45 CFR part 74 
and 45 CFR part 92, reasonable fees and costs associated with and 
necessary to the purchase of a facility (including reasonable and 
necessary fees and costs incurred prior to the submission of an 
application under Sec. 1309.10 of this part or prior to the purchase of 
the facility) are payable with grant funds, but require prior, written 
approval of the responsible HHS official.



Sec. 1309.44  Independent analysis.

    (a) The responsible HHS official may direct the grantee applying for 
funds to purchase a facility to obtain an independent analysis of the 
cost comparison submitted by the grantee pursuant to Sec. 1309.11 of 
this part, or the statement under Sec. 1309.10(g) of this part, or both, 
if, in the judgment of the official, such an analysis is necessary to 
adequately review a proposal submitted under this part.
    (b) The analysis shall be in writing and shall be made by a 
qualified, disinterested real estate professional in the community in 
which the property proposed to be purchased is situated.
    (c) Section 1309.43 of this part applies to payment of the cost of 
the analysis.



PART 1311--HEAD START FELLOWS PROGRAM--Table of Contents




Sec.
1311.1  Head Start Fellows Program purpose.
1311.2  Definitions.
1311.3  Application process.

[[Page 246]]

1311.4  Qualifications, selection, and placement.
1311.5  Duration of Fellowships and status of Head Start Fellows.


    Authority: 42 U.S.C. 9801 et seq.

    Source: 62 FR 1400, Jan. 10, 1997, unless otherwise noted.



Sec. 1311.1  Head Start Fellows Program Purpose.

    (a) This part establishes regulations implementing section 648A(d) 
of the Head Start Act, as amended, 42 U.S.C. 9801 et seq., applicable to 
the administration of the Head Start Fellows Program, including 
selection, placement, duration and status of the Head Start Fellows.
    (b) As provided in section 648A(d) of the Act, the Head Start 
Fellows Program is designed to enhance the ability of Head Start Fellows 
to make significant contributions to Head Start and to other child 
development and family services programs.



Sec. 1311.2  Definitions.

    As used in this part:
    Act means the Head Start Act, as amended, 42 U.S.C. 9801 et seq.
    Associate Commissioner means the Associate Commissioner of the Head 
Start Bureau in the Administration on Children, Youth and Families.
    Head Start Fellows means individuals who participate in the Head 
Start Fellows Program, who may be staff in local Head Start programs or 
other individuals working in the field of child development and family 
services.



Sec. 1311.3  Application process.

    An individual who wishes to obtain a Fellowship must submit an 
application to the Associate Commissioner. The Administration for 
Children and Families will publish an annual announcement of the 
availability and number of Fellowships in the Federal Register. Federal 
employees are not eligible to apply. (The information collection 
requirement contained in this section is approved under OMB Control 
Number 0970-0140.)



Sec. 1311.4  Qualifications, selection, and placement.

    (a) The Act specifies that an applicant must be working on the date 
of application in a local Head Start program or otherwise working in the 
field of child development and family services. The qualifications of 
the applicants for Head Start Fellowship positions will be competitively 
reviewed. The Associate Commissioner will make the final selection of 
the Head Start Fellows.
    (b) Head Start Fellows may be placed in:
    (1) The Head Start national and regional offices;
    (2) Local Head Start agencies and programs;
    (3) Institutions of higher education;
    (4) Public or private entities and organizations concerned with 
services to children and families; and
    (5) Other appropriate settings.
    (c) A Head Start Fellow who is not an employee of a local Head Start 
agency or program may only be placed in the national or regional offices 
within the Department of Health and Human Services that administer Head 
Start or local Head Start agencies.
    (d) Head Start Fellows shall not be placed in any agency whose 
primary purpose, or one of whose major purposes is to influence Federal, 
State or local legislation.



Sec. 1311.5  Duration of Fellowships and status of Head Start Fellows.

    (a) Head Start Fellowships will be for terms of one year, and may be 
renewed for a term of one additional year.
    (b) For the purposes of compensation for injuries under chapter 81 
of title 5, United States Code, Head Start Fellows shall be considered 
to be employees, or otherwise in the service or employment, of the 
Federal Government.
    (c) Head Start Fellows assigned to the national or regional offices 
within the Department of Health and Human Services shall be considered 
employees in the Executive Branch of the Federal Government for the 
purposes of chapter 11 of title 18, United States Code, and for the 
purposes of any administrative standards of conduct applicable to the 
employees of the agency to which they are assigned.

[[Page 247]]



   SUBCHAPTER C--THE ADMINISTRATION ON AGING, OLDER AMERICANS PROGRAMS





PART 1321--GRANTS TO STATE AND COMMUNITY PROGRAMS ON AGING--Table of Contents




                         Subpart A--Introduction

Sec.
1321.1  Basis and purpose of this part.
1321.3  Definitions.
1321.5  Applicability of other regulations.

                Subpart B--State Agency Responsibilities

1321.7  Mission of the State agency.
1321.9  Organization and staffing of the State agency.
1321.11  State agency policies.
1321.13  Advocacy responsibilities.
1321.15  Duration, format and effective date of the State plan.
1321.17  Content of State plan.
1321.19  Amendments to the State plan.
1321.21  Submission of the State plan or plan amendment to the 
          Commissioner for approval.
1321.23  Notification of State plan or State plan amendment approval.
1321.25  Restriction of delegation of authority to other agencies.
1321.27  Public participation.
1321.29  Designation of planning and service areas.
1321.31  Appeal to Commissioner.
1321.33  Designation of area agencies.
1321.35  Withdrawal of area agency designation.
1321.37  Intrastate funding formula.
1321.41  Single State planning and service area.
1321.43  Interstate planning and service area.
1321.45  Transfer between congregate and home-delivered nutrition 
          service allotments.
1321.47  Statewide non-Federal share requirements.
1321.49  State agency maintenance of effort.
1321.51  Confidentiality and disclosure of information.
1321.52  Evaluation of unmet need.

                 Subpart C--Area Agency Responsibilities

1321.53  Mission of the area agency.
1321.55  Organization and staffing of the area agency.
1321.57  Area agency advisory council.
1321.59  Submission of an area plan and plan amendments to the State for 
          approval.
1321.61  Advocacy responsibilities of the area agency.

                     Subpart D--Service Requirements

1321.63  Purpose of services allotments under Title III.
1321.65  Responsibilities of service providers under area plans.
1321.67  Service contributions.
1321.69  Service priority for frail, homebound or isolated elderly.
1321.71  Legal assistance.
1321.73  Grant related income under Title III-C.
1321.75  Licenses and safety.

            Subpart E--Hearing Procedures for State Agencies

1321.77  Scope.
1321.79  When a decision is effective.
1321.81  How the State may appeal.
1321.83  How the Commissioner may reallot the State's withheld payments.

    Authority: 42 U.S.C. 3001 et seq.; title III of the Older Americans 
Act, as amended.

    Source: 53 FR 33766, Aug. 31, 1988, unless otherwise noted.



                         Subpart A--Introduction



Sec. 1321.1  Basis and purpose of this part.

    (a) This part prescribes requirements State agencies shall meet to 
receive grants to develop comprehensive and coordinated systems for the 
delivery of supportive and nutrition services under title III of the 
Older Americans Act, as amended (Act). These requirements include:
    (1) Designation and responsibilities of State agencies;
    (2) State plans and amendments;
    (3) Services delivery; and
    (4) Hearing procedures for applicants for planning and services area 
designation.
    (b) The requirements of this part are based on title III of the Act. 
Title III provides for formula grants to State agencies on aging, under 
approved State plans, to stimulate the development or enhancement of 
comprehensive and coordinated community-based systems resulting in a 
continuum of services to older persons with special emphasis on older 
individuals with the greatest economic or social need, with

[[Page 248]]

particular attention to low-income minority individuals. A responsive 
community-based system of services shall include collaboration in 
planning, resource allocation and delivery of a comprehensive array of 
services and opportunities for all older Americans in the community. The 
intent is to use title III funds as a catalyst in bringing together 
public and private resources in the community to assure the provision of 
a full range of efficient, well coordinated and accessible services for 
older persons.
    (c) Each State agency designates planning and service areas in the 
State, and makes a subgrant or contract under an approved area plan to 
one area agency in each planning and service area for the purpose of 
building comprehensive systems for older people throughout the State. 
Area agencies in turn make subgrants or contracts to service providers 
to perform certain specified functions.



Sec. 1321.3  Definitions.

    Act means the Older Americans Act of 1965 as amended.
    Altering or renovating, as used in section 307(a)(14) of the Act 
with respect to multipurpose senior centers, means making modifications 
to or in connection with an existing facility which are necessary for 
its effective use as a center. These may include renovation, repair, or 
expansion which is not in excess of double the square footage of the 
original facility and all physical improvements.
    Constructing, as used in section 307(a)(14) of the Act with respect 
to multipurpose senior centers, means building a new facility, including 
the costs of land acquisition and architectural and engineering fees, or 
making modifications to or in connection with an existing facility which 
are in excess of double the square footage of the original facility and 
all physical improvements.
    Department means the Department of Health and Human Services.
    Direct services, as used in this part, means any activity performed 
to provide services directly to an individual older person by the staff 
of a service provider, an area agency, or a State agency in a single 
planning and service area State.
    Fiscal year, as used in this part, means the Federal Fiscal Year.
    Frail, as used in this part, means having a physical or mental 
disability, including having Alzheimer's disease or a related disorder 
with neurological or organic brain dysfunction, that restricts the 
ability of an individual to perform normal daily tasks or which 
threatens the capacity of an individual to live independently.
    Human services, as used in Sec. 1321.41(a)(1) of this part, with 
respect to criteria for designation of a statewide planning and service 
area, means social, health, or welfare services.
    In-home service, as used in this part, includes: (a) Homemaker and 
home health aides; (b) visiting and telephone reassurance; (c) chore 
maintenance; (d) in-home respite care for families, including adult day 
care as a respite service for families; and (e) minor modification of 
homes that is necessary to facilitate the ability of older individuals 
to remain at home, and that is not available under other programs, 
except that not more than $150 per client may be expended under this 
part for such modification.
    Means test, as used in the provison of services, means the use of an 
older person's income or resource to deny or limit that person's receipt 
of services under this part.
    Official duties, as used in section 307(a)(12)(J) of the Act with 
respect to representatives of the Long-Term Care Ombudsman Program, 
means work pursuant to the Long-Term Care Ombudsman Program authorized 
by the Act or State law and carried out under the auspices and general 
direction of the State Long-Term Care Ombudsman.
    Periodic, as used in sections 306(a)(6) and 307(a)(8) of the Act 
with respect to evaluations of, and public hearings on, activities 
carried out under State and area plans, means, at a minimum, once each 
fiscal year.
    Reservation, as used in section 305(b)(4) of the Act with respect to 
the designation of planning and service areas, means any federally or 
State recognized Indian tribe's reservation, pueblo, or colony, 
including former reservations in Oklahoma, Alaskan Native

[[Page 249]]

regions established pursuant to the Alaska Native Claims Settlement Act 
(85 Stat. 688), and Indian allotments.
    Service provider, as used in section 306(a)(1) of the Act with 
respect to the provison of supportive and nutrition services, means an 
entity that is awarded a subgrant or contract from an area agency to 
provide services under the area plan.
    Severe disability, as used to carry out the provisions of the Act, 
means a severe chronic disability attributable to mental and/or physical 
impairment of an individual that:
    (a) Is likely to continue indefinitely; and
    (b) Results in substantial functional limitation in 3 or more of the 
following major life activities:
    (1) Self-care,
    (2) Receptive and expressive language,
    (3) Learning,
    (4) Mobility,
    (5) Self-direction,
    (6) Capacity for independent living, and
    (7) Economic self-sufficiency.



Sec. 1321.5  Applicability of other regulations.

    Several other regulations apply to all activities under this part. 
These include but are not limited to:
    (a) 45 CFR part 16--Procedures of the Departmental Grant Appeals 
Board;
    (b) 45 CFR part 74--Administration of Grants, except subpart N;
    (c) 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;
    (d) 45 CFR part 81--Practice and Procedures for Hearings Under Part 
80 of this title;
    (e) 45 CFR part 84--Nondiscrimination on the Basis of Handicap in 
Programs and Activities Receiving or Benefiting from Federal Financial 
Participation;
    (f) 45 CFR part 91--Nondiscrimination on the Basis of Age in HHS 
Programs or Activities Receiving Federal Financial Assistance;
    (g) 45 CFR part 92--Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments;
    (h) 45 CFR part 100--Intergovernmental Review of Department of 
Health and Human Services Programs and Activities; and
    (i) 5 CFR part 900, subpart F, Standards for a Merit System of 
Personnel Administration.



                Subpart B--State Agency Responsibilities



Sec. 1321.7  Mission of the State agency.

    (a) The Older Americans Act intends that the State agency on aging 
shall be the leader relative to all aging issues on behalf of all older 
persons in the State. This means that the State agency shall proactively 
carry out a wide range of functions related to advocacy, planning, 
coordination, interagency linkages, information sharing, brokering, 
monitoring and evaluation, designed to lead to the development or 
enhancement of comprehensive and coordinated community based systems in, 
or serving, communities throughout the State. These systems shall be 
designed to assist older persons in leading independent, meaningful and 
dignified lives in their own homes and communities as long as possible.
    (b) The State agency shall designate area agencies on aging for the 
purpose of carrying out the mission described above for the State agency 
at the sub-State level. The State agency shall designate as its area 
agencies on aging only those sub-state agencies having the capacity and 
making the commitment to fully carry out the mission described for area 
agencies in Sec. 1321.53 below.
    (c) The State agency shall assure that the resources made available 
to area agencies on aging under the Older Americans Act are used to 
carry out the mission described for area agencies in Sec. 1321.53 below.



Sec. 1321.9  Organization and staffing of the State agency.

    (a) The State shall designate a sole State agency to develop and 
administer the State plan required under this part and serve as the 
effective visible advocate for the elderly within the State.

[[Page 250]]

    (b) The State agency shall have an adequate number of qualified 
staff to carry out the functions prescribed in this part.
    (c) The State agency shall have within the State agency, or shall 
contract or otherwise arrange with another agency or organization, as 
permitted by section 307(a)(12)(A), an Office of the State Long-Term 
Care Ombudsman, with a full-time State ombudsman and such other staff as 
are appropriate.
    (d) If a State statute establishes a State ombudsman program which 
will perform the functions of section 307(a)(12) of the Act, the State 
agency continues to be responsible to assure that all of the 
requirements of the Act for this program are met regardless of the State 
legislation or source of funds. In such cases, the Governor shall 
confirm this through an assurance in the State plan.



1321.11  State agency policies.

    (a) The State agency on aging shall develop policies governing all 
aspects of programs operated under this part, including the ombudsman 
program whether operated directly by the State agency or under contract. 
These policies shall be developed in consultation with other appropriate 
parties in the State. The State agency is responsible for enforcement of 
these policies.
    (b) The policies developed by the State agency shall address the 
manner in which the State agency will monitor the performance of all 
programs and activities initiated under this part for quality and 
effectiveness. In monitoring the ombudsman program, access to files, 
minus the identity of any complainant or resident of a long-term care 
facility, shall be available only to the director of the State agency on 
aging and one other senior manager of the State agency designated by the 
State director for this purpose. In the conduct of the monitoring of the 
ombudsman program, the confidentiality protections concerning any 
complainant or resident of a long term care facility as prescribed in 
section 307(a)(12) of the Act shall be strictly adhered to.



Sec. 1321.13  Advocacy responsibilities.

    (a) The State agency shall:
    (1) Review, monitor, evaluate and comment on Federal, State and 
local plans, budgets, regulations, programs, laws, levies, hearings, 
policies, and actions which affect or may affect older individuals and 
recommend any changes in these which the State agency considers to be 
appropriate;
    (2) Provide technical assistance to agencies, organizations, 
associations, or individuals representing older persons; and
    (3) Review and comment, upon request, on applications to State and 
Federal agencies for assistance relating to meeting the needs of older 
persons.
    (b) No requirement in this section shall be deemed to supersede a 
prohibition contained in a Federal appropriation on the use of Federal 
funds to lobby the Congress.



Sec. 1321.15  Duration, format and effective date of the State plan.

    (a) A State may use its own judgment as to the format to use for the 
plan, how to collect information for the plan, and whether the plan will 
remain in effect for two, three or four years.
    (b) An approved State plan or amendment, as indentified in 
Sec. 1321.17, becomes effective on the date designated by the 
Commissioner.
    (c) A State agency may not make expenditures under a new plan or 
amendment requiring approval, as identified in Sec. 1321.17 and 
Sec. 1321.19, until it is approved.



Sec. 1321.17  Content of State plan.

    To receive a grant under this part, a State shall have an approved 
State plan as prescribed in section 307 of the Act. In addition to 
meeting the requirements of section 307, a State plan shall include:
    (a) Identification by the State of the sole State agency that has 
been designated to develop and administer the plan.
    (b) Statewide program objectives to implement the requirements under 
Title III of the Act and any objectives established by the Commissioner 
through the rulemaking process.
    (c) A resource allocation plan indicating the proposed use of all 
title III

[[Page 251]]

funds administered by a State agency, and the distribution of title III 
funds to each planning and service area.
    (d) Identification of the geographic boundaries of each planning and 
service area and of area agencies on aging designated for each planning 
and service area, if appropriate.
    (e) Provision of prior Federal fiscal year information related to 
low income minority and rural older individuals as required by sections 
307(a) (23) and (29) of the Act.
    (f) Each of the assurances and provisions required in sections 305 
and 307 of the Act, and provisions that the State meets each of the 
requirements under Secs. 1321.5 through 1321.75 of this part, and the 
following assurances as prescribed by the Commissioner:
    (1) Each area agency engages only in activities which are consistent 
with its statutory mission as prescribed in the Act and as specified in 
State policies under Sec. 1321.11;
    (2) Preference is given to older persons in greatest social or 
economic need in the provision of services under the plan;
    (3) Procedures exist to ensure that all services under this part are 
provided without use of any means tests;
    (4) All services provided under title III meet any existing State 
and local licensing, health and safety requirements for the provision of 
those services;
    (5) Older persons are provided opportunities to voluntarily 
contribute to the cost of services;
    (6) Area plans shall specify as submitted, or be amended annually to 
include, details of the amount of funds expended for each priority 
service during the past fiscal year;
    (7) The State agency on aging shall develop policies governing all 
aspects of programs operated under this part, including the manner in 
which the ombudsman program operates at the State level and the relation 
of the ombudsman program to area agencies where area agencies have been 
designated;
    (8) The State agency will require area agencies on aging to arrange 
for outreach at the community level that identifies individuals eligible 
for assistance under this Act and other programs, both public and 
private, and informs them of the availability of assistance. The 
outreach efforts shall place special emphasis on reaching older 
individuals with the greatest economic or social needs with particular 
attention to low income minority individuals, including outreach to 
identify older Indians in the planning and service area and inform such 
older Indians of the availability of assistance under the Act.
    (9) The State agency shall have and employ appropriate procedures 
for data collection from area agencies on aging to permit the State to 
compile and transmit to the Commissioner accurate and timely statewide 
data requested by the Commissioner in such form as the Commissioner 
directs; and
    (10) If the State agency proposes to use funds received under 
section 303(f) of the Act for services other than those for preventive 
health specified in section 361, the State plan shall demonstrate the 
unmet need for the services and explain how the services are appropriate 
to improve the quality of life of older individuals, particularly those 
with the greatest economic or social need, with special attention to 
low-income minorities.
    (11) Area agencies shall compile available information, with 
necessary supplementation, on courses of post-secondary education 
offered to older individuals with little or no tuition. The assurance 
shall include a commitment by the area agencies to make a summary of the 
information available to older individuals at multipurpose senior 
centers, congregate nutrition sites, and in other appropriate places.
    (12) Individuals with disabilities who reside in a non-institutional 
household with and accompany a person eligible for congregate meals 
under this part shall be provided a meal on the same basis that meals 
are provided to volunteers pursuant to section 307(a)(13)(I) of the Act.
    (13) The services provided under this part will be coordinated, 
where appropriate, with the services provided under title VI of the Act.
    (14)(i) The State agency will not fund program development and 
coordinated activities as a cost of supportive services for the 
administration of area

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plans until it has first spent 10 percent of the total of its combined 
allotments under Title III on the administration of area plans;
    (ii) State and area agencies on aging will, consistent with 
budgeting cycles (annually, biannually, or otherwise), submit the 
details of proposals to pay for program development and coordination as 
a cost of supportive services, to the general public for review and 
comment; and
    (iii) The State agency certifies that any such expenditure by an 
area agency will have a direct and positive impact on the enhancement of 
services for older persons in the planning and service area.
    (15) The State agency will assure that where there is a significant 
population of older Indians in any planning and service area that the 
area agency will provide for outreach as required by section 
306(a)(6)(N) of the Act.



Sec. 1321.19  Amendments to the State plan.

    (a) A State shall amend the State plan whenever necessary to 
reflect:
    (1) New or revised Federal statutes or regulations,
    (2) A material change in any law, organization, policy or State 
agency operation, or
    (3) Information required annually by sections 307(a) (23) and (29) 
of the Act.
    (b) Information required by paragraph (a)(3) of this section shall 
be submitted according to guidelines prescribed by the Commissioner.
    (c) If a State intends to amend provisions of its plan required 
under Secs. 1321.17 (a) or (f), it shall submit its proposed amendment 
to the Commissioner for approval. If the State changes any of the 
provisions of its plan required under Sec. 1321.17 (b) through (d), it 
shall amend the plan and notify the Commissioner. A State need only 
submit the amended portions of the plan.



Sec. 1321.21  Submission of the State plan or plan amendment to the Commissioner for approval.

    Each State plan, or plan amendment which requires approval of the 
Commissioner, shall be signed by the Governor or the Governor's designee 
and submitted to the Commissioner to be considered for approval at least 
45 calendar days before the proposed effective date of the plan or plan 
amendment.



Sec. 1321.23  Notification of State plan or State plan amendment approval.

    (a) The Commissioner approves a State plan or State plan amendment 
by notifying the Governor or the Governor's designee in writing.
    (b) When the Commissioner proposes to disapprove a State plan or 
amendment, the Commissioner notifies the Governor in writing, giving the 
reasons for the proposed disapproval, and informs the State agency that 
it has 60 days to request a hearing on the proposed disapproval 
following the procedures specified in subpart E of this part.



Sec. 1321.25  Restriction of delegation of authority to other agencies.

    A State or area agency may not delegate to another agency the 
authority to award or administer funds under this part.



Sec. 1321.27  Public participation.

    The State agency shall have a mechanism to obtain and shall consider 
the views of older persons and the public in developing and 
administering the State plan.



Sec. 1321.29  Designation of planning and service areas.

    (a) Any unit of general purpose local government, region within a 
State recognized for area wide planning, metropolitan area, or Indian 
reservation may make application to the State agency to be designated as 
a planning and service area, in accordance with State agency procedures.
    (b) A State agency shall approve or disapprove any application 
submitted under paragraph (a) of this section.
    (c) Any applicant under paragraph (a) of this section whose 
application for designation as a planning and service area is denied by 
a State agency may appeal the denial to the State agency, under 
procedures specified by the State agency.

[[Page 253]]

    (d) If the State denies an applicant for designation as a planning 
and service area under paragraph (a) of this section, the State shall 
provide a hearing on the denial of the application, if requested by the 
applicant, as well as issue a written decision.



Sec. 1321.31  Appeal to Commissioner.

    This section sets forth the procedures the Commissioner follows for 
providing hearings to applicants for designation as a planning and 
service area, under Sec. 1321.29(a), whose application is denied by the 
State agency.
    (a) Any applicant for designation as a planning and service area 
under Sec. 1321.29(a) whose application is denied, and who has been 
provided a hearing and a written decision by the State agency, may 
appeal the denial to the Commissioner in writing within 30 days 
following receipt of a State's hearing decision.
    (b) The Commissioner, or the Commissioner's designee, holds a 
hearing, and issues a written decision, within 60 days following receipt 
of an applicant's written request to appeal the State agency hearing 
decision to deny the applicant's request under Sec. 1321.29(a).
    (c) When the Commissioner receives an appeal, the Commissioner 
requests the State Agency to submit:
    (1) A copy of the applicant's application for designation as a 
planning and service area;
    (2) A copy of the written decision of the State; and
    (3) Any other relevant information the Commissioner may require.
    (d) The procedures for the appeal consist of:
    (1) Prior written notice to the applicant and the State agency of 
the date, time and location of the hearing;
    (2) The required attendance of the head of the State agency or 
designated representatives;
    (3) An opportunity for the applicant to be represented by counsel or 
other representative; and
    (4) An opportunity for the applicant to be heard in person and to 
present documentary evidence.
    (e) The Commissioner may:
    (1) Deny the appeal and uphold the decision of a State agency;
    (2) Uphold the appeal and require a State agency to designate the 
applicant as a planning and service area; or
    (3) Take other appropriate action, including negotiating between the 
parties or remanding the appeal to the State agency after initial 
findings.
    (f) The Commissioner will uphold the decision of the State agency if 
it followed the procedures specified in Sec. 1321.29, and the hearing 
decision is not manifestly inconsistent with the purpose of this part.
    (g) The Commissioner's decision to uphold the decision of a State 
agency does not extend beyond the period of the approved State plan.



Sec. 1321.33  Designation of area agencies.

    An area agency may be any of the types of agencies under section 
305(c) of the Act. A State may not designate any regional or local 
office of the State as an area agency. However, when a new area agency 
on aging is designated, the State shall give right of first refusal to a 
unit of general purpose local government as required in section 
305(b)(5)(B) of the Act. If the unit of general purpose local government 
chooses not to exercise this right, the State shall then give preference 
to an established office on aging as required in section 305(c)(5) of 
the Act.



Sec. 1321.35  Withdrawal of area agency designation.

    (a) In carrying out section 305 of the Act, the State agency shall 
withdraw the area agency designation whenever it, after reasonable 
notice and opportunity for a hearing, finds that:
    (1) An area agency does not meet the requirements of this part;
    (2) An area plan or plan amendment is not approved;
    (3) There is substantial failure in the provisions or administration 
of an approved area plan to comply with any provision of the Act or of 
this part or policies and procedures established and published by the 
State agency on aging; or
    (4) Activities of the area agency are inconsistent with the 
statutory mission prescribed in the Act or in conflict with the 
requirement of the Act that it function only as an area agency on aging.

[[Page 254]]

    (b) If a State agency withdraws an area agency's designation under 
paragraph (a) of this section it shall:
    (1) Provide a plan for the continuity of area agency functions and 
services in the affected planning and service area; and
    (2) Designate a new area agency in the planning and service area in 
a timely manner.
    (c) If necessary to ensure continuity of services in a planning and 
service area, the State agency may, for a period of up to 180 days after 
its final decision to withdraw designation of an area agency:
    (1) Perform the responsibilities of the area agency; or
    (2) Assign the responsibilities of the area agency to another agency 
in the planning and service area.
    (d) The Commissioner may extend the 180-day period if a State 
agency:
    (1) Notifies the Commissioner in writing of its action under 
paragraph (c) of this section;
    (2) Requests an extension; and
    (3) Demonstrates to the satisfaction of the Commissioner a need for 
the extension.



Sec. 1321.37  Intrastate funding formula.

    (a) The State agency, after consultation with all area agencies in 
the State, shall develop and use an intrastate funding formula for the 
allocation of funds to area agencies under this part. The State agency 
shall publish the formula for review and comment by older persons, other 
appropriate agencies and organizations and the general public. The 
formula shall reflect the proportion among the planning and service 
areas of persons age 60 and over in greatest economic or social need 
with particular attention to low-income minority individuals. The State 
agency shall review and update its formula as often as a new State plan 
is submitted for approval.
    (b) The intrastate funding formula shall provide for a separate 
allocation of funds received under section 303(f) for preventive health 
services. In the award of such funds to selected planning and service 
areas, the State agency shall give priority to areas of the State:
    (1) Which are medically underserved; and
    (2) In which there are large numbers of individuals who have the 
greatest economic and social need for such services.
    (c) The State agency shall submit its intrastate formula to the 
Commissioner for review and comment. The intrastate formula shall be 
submitted separately from the State plan.



Sec. 1321.41  Single State planning and service area.

    (a) The Commissioner will approve the application of a State which 
was, on or before October 1, 1980, a single planning and service area, 
to continue as a single planning and service area if the State agency 
demonstrates that:
    (1) The State is not already divided for purposes of planning and 
administering human services; or
    (2) The State is so small or rural that the purposes of this part 
would be impeded if the State were divided into planning and services 
areas; and
    (3) The State agency has the capacity to carry out the 
responsibilities of an area agency, as specified in the Act.
    (b) Prior to the Commissioner's approval for a State to continue as 
a single planning and service area, all the requirements and procedures 
in Sec. 1321.29 shall be met.
    (c) If the Commissioner approves a State's application under 
paragraph (a) this section:
    (1) The Commissioner notifies the State agency to develop a single 
State planning and service area plan which meets the requirements of 
section 306 and 307 of the Act.
    (2) A State agency shall meet all the State and area agency function 
requirements specified in the Act.
    (d) If the Commissioner denies the application because a State fails 
to meet the criteria or requirements set forth in paragraphs (a) or (b) 
of this section, the Commissioner notifies the State that it shall 
follow procedures in section 305(A)(1)(E) of the Act to divide the State 
into planning and service areas.

[[Page 255]]



Sec. 1321.43  Interstate planning and service area.

    (a) Before requesting permission of the Commissioner to designate an 
interstate planning and service area, the Governor of each State shall 
execute a written agreement that specifies the State agency proposed to 
have lead responsibility for administering the programs within the 
interstate planning and service area and lists the conditions, agreed 
upon by each State, governing the administration of the interstate 
planning and service area.
    (b) The lead State shall request permission of the Commissioner to 
designate an interstate planning and service area.
    (c) The lead State shall submit the request together with a copy of 
the agreement as part of its State plan or as an amendment to its State 
plan.
    (d) Prior to the Commissioner's approval for States to designate an 
interstate planning and service area, the Commissioner shall determine 
that all applicable requirements and procedures in Sec. 1321.29 and 
Sec. 1321.33 of this part, shall be met.
    (e) If the request is approved, the Commissioner, based on the 
agreement between the States, increases the allotment of the State with 
lead responsibility for administering the programs within the interstate 
area and reduces the allotment(s) of the State(s) without lead 
responsibility by one of these methods:
    (1) Reallotment of funds in proportion to the number of individuals 
age 60 and over for that portion of the interstate planning and service 
area located in the State without lead responsibility; or
    (2) Reallotment of funds based on the intrastate funding formula of 
the State(s) without lead responsibility.



Sec. 1321.45  Transfer between congregate and home-delivered nutrition service allotments.

    (a) A State agency, without the approval of the Commissioner, may 
transfer between allotments up to 30 percent of a State's separate 
allotments for congregate and home-delivered nutrition services.
    (b) A State agency may apply to the Commissioner to transfer from 
one allotment to the other a portion exceeding 30 percent of a State's 
separate allotments for congregate and home-delivered nutrition 
services. A State agency desiring such a transfer of allotment shall:
    (1) Specify the percent which it proposes to transfer from one 
allotment to the other;
    (2) Specify whether the proposed transfer is for the entire period 
of a State plan or a protion of a plan period; and
    (3) Specify the purpose of the proposed transfer.



Sec. 1321.47  Statewide non-Federal share requirements.

    The statewide non-Federal share for State or area plan 
administration shall not be less than 25 percent of the funds usesd 
under this part. All services statewide, including ombudsman services 
and services funded under Title III-B, C, D, E and F, shall be funded on 
a statewide basis with a non-Federal share of not less than 15 percent. 
Matching requirements for individual area agencies are determined by the 
State agency.



Sec. 1321.49  State agency maintenance of effort.

    In order to avoid a penalty, each fiscal year the State agency, to 
meet the required non-federal share applicable to its allotments under 
this part, shall spend under the State plan for both services and 
administration at least the average amount of State funds it spent under 
the plan for the three previous fiscal years. If the State agency spends 
less than this amount, the Commissioner reduces the State's allotments 
for supportive and nutrition services under this part by a percentage 
equal to the percentage by which the State reduced its expenditures.



Sec. 1321.51  Confidentiality and disclosure of information.

    (a) A State agency shall have procedures to protect the 
confidentiality of information about older persons collected in the 
conduct of its responsibilities. The procedures shall ensure that no 
information about an order person, or obtained from an older person by a 
service provider or the State or area

[[Page 256]]

agencies, is disclosed by the provider or agency in a form that 
identifies the person without the informed consent of the person or of 
his or her legal representative, unless the disclosure is required by 
court order, or for program monitoring by authorized Federal, State, or 
local monitoring agencies.
    (b) A State agency is not required to disclose those types of 
information or documents that are exempt from disclosure by a Federal 
agency under the Federal Freedom of Information Act, 5 U.S.C. 552.
    (c) A State or area agency on aging may not require a provider of 
legal assistance under this part to reveal any information that is 
protected by attorney client privilege.



Sec. 1321.52  Evaluation of unmet need.

    Each State shall submit objectively collected and statistically 
valid data with evaluative conclusions concerning the unmet need for 
supportive services, nutrition services, and multipurpose senior centers 
gathered pursuant to section 307(a)(3)(A) of the Act to the 
Commissioner. The evaluations for each State shall consider all services 
in these categories regardless of the source of funding for the 
services. This information shall be submitted not later than June 30, 
1989 and shall conform to guidance issued by the Commissioner.



                 Subpart C--Area Agency Responsibilities



Sec. 1321.53  Mission of the area agency.

    (a) The Older Americans Act intends that the area agency on aging 
shall be the leader relative to all aging issues on behalf of all older 
persons in the planning and service area. This means that the area 
agency shall proactively carry out, under the leadership and direction 
of the State agency, a wide range of functions related to advocacy, 
planning, coordination, inter-agency linkages, information sharing, 
brokering, monitoring and evaluation, designed to lead to the 
development or enhancement of comprehensive and coordinated community 
based systems in, or serving, each community in the planning and service 
area. These systems shall be designed to assist older persons in leading 
independent, meaningful and dignified lives in their own homes and 
communities as long as possible.
    (b) A comprehensive and coordinated community based system described 
in paragraph (a) of this section shall:
    (1) Have a visible focal point of contact where anyone can go or 
call for help, information or referral on any aging issue;
    (2) Provide a range of options:
    (3) Assure that these options are readily accessible to all older 
persons: The independent, semi-dependent and totally dependent, no 
matter what their income;
    (4) Include a commitment of public, private, voluntary and personal 
resources committed to supporting the system;
    (5) Involve collaborative decision-making among public, private, 
voluntary, religious and fraternal organizations and older people in the 
community;
    (6) Offer special help or targetted resources for the most 
vulnerable older persons, those in danger of losing their independence;
    (7) Provide effective referral from agency to agency to assure that 
information or assistance is received, no matter how or where contact is 
made in the community;
    (8) Evidence sufficient flexibility to respond with appropriate 
individualized assistance, especially for the vulnerable older person;
    (9) Have a unique character which is tailored to the specific nature 
of the community;
    (10) Be directed by leaders in the community who have the respect, 
capacity and authority necessary to convene all interested persons, 
assess needs, design solutions, track overall success, stimulate change 
and plan community responses for the present and for the future.
    (c) The resources made available to the area agency on aging under 
the Older Americans Act are to be used to finance those activities 
necessary to achieve elements of a community based system set forth in 
paragraph (b) of this section. For the purpose of assuring access to 
information and services for older persons, the area agency

[[Page 257]]

shall work with elected community officials in the planning and service 
area to designate one or more focal points on aging in each community, 
as appropriate. The area agency shall list designated focal points in 
the area plan. It shall be the responsibility of the area agency, with 
the approval of the State agency, to define ``community'' for the 
purposes of this section. Since the Older Americans Act defines focal 
point as a ``facility'' established to encourage the maximum collocation 
and coordination of services for older individuals, special 
consideration shall be given to developing and/or designating multi-
purpose senior centers as community focal points on aging. The area 
agency on aging shall assure that services financed under the Older 
Americans Act in, or on behalf of, the community will be either based 
at, linked to or coordinated with the focal points designated. The area 
agency on aging shall assure access from the designated focal points to 
services financed under the Older Americans Act. The area agency on 
aging shall work with, or work to assure that community leadership works 
with, other applicable agencies and institutions in the community to 
achieve maximum collocation at, coordination with or access to other 
services and opportunities for the elderly from the designated community 
focal points. The area agency may not engage in any activity which is 
inconsistent with its statutory mission prescribed in the Act or 
policies prescribed by the State under Sec. 1321.11.



Sec. 1321.55  Organization and staffing of the area agency.

    (a) An area agency may be either:
    (1) An agency whose single purpose is to administer programs for 
older persons; or
    (2) A separate organizational unit within a multi-purpose agency 
which functions only for purposes of serving as the area agency on 
aging. Where the State agency on aging designates, as an area agency on 
aging, a separate organizational unit of a multipurpose agency which has 
been serving as an area agency, the State agency action shall not be 
subject to section 305(b)(5)(B) of the Act.
    (b) The area agency, once designated, is responsible for providing 
for adequate and qualified staff to perform all of the functions 
prescribed in this part.
    (c) The designated area agency continues to function in that 
capacity until either:
    (1) The area agency informs the State agency that it no longer 
wishes to carry out the responsibilities of an area agency; or
    (2) The State agency withdraws the designation of the area agency as 
provided in Sec. 1321.35.



Sec. 1321.57  Area agency advisory council.

    (a) Functions of council. The area agency shall establish an 
advisory council. The council shall carry out advisory functions which 
further the area agency's mission of developing and coordinating 
community-based systems of services for all older persons in the 
planning and service area. The council shall advise the agency relative 
to:
    (1) Developing and administering the area plan;
    (2) Conducting public hearings;
    (3) Representing the interest of older persons; and
    (4) Reviewing and commenting on all community policies, progra