July 1, 2001 CODE OF FEDERAL REGULATIONS 34Parts 1 to 299 Revised as of July 1, 2001 Education Containing a codification of documents of general applicability and future effect As of July 1, 2001 With Ancillaries

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 Table of Contents Page Explanation v Title 34: Subtitle A—Office of the Secretary, Department of Education 3 Subtitle B—Regulations of the Offices of the Department of Education: Chapter I—Office for Civil Rights 307 Chapter II—Office of Elementary and Secondary Education 409 Finding Aids: Material Approved for Incorporation by Reference 523 Table of CFR Titles and Chapters 525 Alphabetical List of Agencies Appearing in the CFR 543 List of CFR Sections Affected 553

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To cite the regulations in this volume use title, part and section number. Thus, 34 CFR 3.1 refers to title 34, part 3, section 1. Explanation

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as of January 1

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as of April 1

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as of October 1

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 INCORPORATION BY REFERENCE

What is incorporation by reference? Incorporation by reference was established by statute and allows Federal agencies to meet the requirement to publish regulations in the Federal Register by referring to materials already published elsewhere. For an incorporation to be valid, the Director of the Federal Register must approve it. The legal effect of incorporation by reference is that the material is treated as if it were published in full in the Federal Register (5 U.S.C. 552(a)). This material, like any other properly issued regulation, has the force of law.

What is a proper incorporation by reference? The Director of the Federal Register will approve an incorporation by reference only when the requirements of 1 CFR part 51 are met. Some of the elements on which approval is based are:

(a) The incorporation will substantially reduce the volume of material published in the Federal Register.

(b) The matter incorporated is in fact available to the extent necessary to afford fairness and uniformity in the administrative process.

(c) The incorporating document is drafted and submitted for publication in accordance with 1 CFR part 51.

Properly approved incorporations by reference in this volume are listed in the Finding Aids at the end of this volume.

What if the material incorporated by reference cannot be found? If you have any problem locating or obtaining a copy of material listed in the Finding Aids of this volume as an approved incorporation by reference, please contact the agency that issued the regulation containing that incorporation. If, after contacting the agency, you find the material is not available, please notify the Director of the Federal Register, National Archives and Records Administration, Washington DC 20408, or call (202) 523-4534.

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 Raymond A. Mosley, Director, Office of the Federal Register. July 1, 2001. THIS TITLE

Title 34—Education is presently composed of three volumes (parts 1 to 299, parts 300 to 399, and part 400 to End). The contents of these volumes represent all regulations codified under this title of the CFR as of July 1, 2001.

A redesignation table appears in the Finding Aids section of the last volume.

CFRORDR.FRM <LRH>34 CFR Subtitle A (7-1-01 Edition)</LRH> <RRH>Office of the Secretary, Education</RRH> <CFRTITLE> <TITLEHD> <PRTPAGE P="1"/> <HD SOURCE="HED">Title 34—Education</HD> <P>(This book contains parts 1 to 299) </P> </TITLEHD> <CFRTOC> <PTHD>Part</PTHD> <SUBTI2> <HD SOURCE="HED">SUBTITLE A—<E T="04">Office of the Secretary, Department of Education</E> </HD> <PG>3</PG> </SUBTI2> <SUBTI> <HD SOURCE="HED">SUBTITLE B—<E T="04">Regulations of the Offices of the Department of Education:</E> </HD> </SUBTI> <CHAPTI> <SUBJECT> <E T="04">Chapter I—</E> Office for Civil Rights, Department of Education</SUBJECT> <PG>100</PG> </CHAPTI> <CHAPTI> <SUBJECT> <E T="04">Chapter II—</E> Office of Elementary and Secondary Education, Department of Education</SUBJECT> <PG>200</PG> </CHAPTI> </CFRTOC> </CFRTITLE> <SUBTITLE> <PRTPAGE P="3"/> <HD SOURCE="HED">Subtitle A—Office of the Secretary, Department of Education</HD> <TOC> <PTHD>Part</PTHD> <PGHD>Page</PGHD> <CHAPTI> <PT>3</PT> <SUBJECT>Official seal</SUBJECT> <PG>5</PG> <PT>4</PT> <SUBJECT>Service of process</SUBJECT> <PG>6</PG> <PT>5</PT> <SUBJECT>Availability of information to the public pursuant to Pub. L. 90-23</SUBJECT> <PG>6</PG> <PT>5b</PT> <SUBJECT>Privacy Act regulations</SUBJECT> <PG>15</PG> <PT>6</PT> <SUBJECT>Inventions and patents (general)</SUBJECT> <PG>26</PG> <PT>7</PT> <SUBJECT>Employee inventions</SUBJECT> <PG>27</PG> <PT>8</PT> <SUBJECT>Demands for testimony or records in legal proceedings</SUBJECT> <PG>29</PG> <PT>12</PT> <SUBJECT>Disposal and utilization of surplus Federal real property for educational purposes</SUBJECT> <PG>31</PG> <PT>15</PT> <SUBJECT>Uniform relocation assistance and real property acquisition for federal and federally assisted programs</SUBJECT> <PG>39</PG> <PT>21</PT> <SUBJECT>Equal access to justice</SUBJECT> <PG>40</PG> <PT>30</PT> <SUBJECT>Debt collection</SUBJECT> <PG>49</PG> <PT>31</PT> <SUBJECT>Salary offset for Federal employees who are indebted to the United States under programs administered by the Secretary of Education</SUBJECT> <PG>59</PG> <PT>32</PT> <SUBJECT>Salary offset to recover overpayments of pay or allowances from Department of Education employees</SUBJECT> <PG>66</PG> <PT>33</PT> <SUBJECT>Program Fraud Civil Remedies Act</SUBJECT> <PG>70</PG> <PT>35</PT> <SUBJECT>Tort claims against the Government</SUBJECT> <PG>87</PG> <PT>60</PT> <SUBJECT>Indemnification of Department of Education employees</SUBJECT> <PG>90</PG> <PT>73</PT> <SUBJECT>Standards of conduct</SUBJECT> <PG>91</PG> <PT>74</PT> <SUBJECT>Administration of grants and agreements with institutions of higher education, hospitals, and other non-profit organizations</SUBJECT> <PG>92</PG> <PT>75</PT> <SUBJECT>Direct grant programs</SUBJECT> <PG>120<PRTPAGE P="4"/> </PG> <PT>76</PT> <SUBJECT>State-administered programs</SUBJECT> <PG>151</PG> <PT>77</PT> <SUBJECT>Definitions that apply to Department regulations</SUBJECT> <PG>182</PG> <PT>79</PT> <SUBJECT>Intergovernmental review of Department of Education programs and activities</SUBJECT> <PG>184</PG> <PT>80</PT> <SUBJECT>Uniform administrative requirements for grants and cooperative agreements to state and local governments</SUBJECT> <PG>188</PG> <PT>81</PT> <SUBJECT>General Education Provisions Act—enforcement</SUBJECT> <PG>216</PG> <PT>82</PT> <SUBJECT>New restrictions on lobbying</SUBJECT> <PG>229</PG> <PT>85</PT> <SUBJECT>Governmentwide debarment and suspension (nonprocurement) and governmentwide requirements for drug-free workplace (grants)</SUBJECT> <PG>241</PG> <PT>86</PT> <SUBJECT>Drug and alcohol abuse prevention</SUBJECT> <PG>262</PG> <PT>97</PT> <SUBJECT>Protection of human subjects</SUBJECT> <PG>271</PG> <PT>98</PT> <SUBJECT>Student rights in research, experimental programs, and testing</SUBJECT> <PG>285</PG> <PT>99</PT> <SUBJECT>Family educational rights and privacy</SUBJECT> <PG>288</PG> </CHAPTI> </TOC> <CHAPTER> <LRH>34 CFR Subtitle A (7-1-01 Edition)</LRH> <RRH>Office of the Secretary, Education</RRH> <PART> <PRTPAGE P="5"/> <EAR>Pt. 3</EAR> <HD SOURCE="HED">PART 3—OFFICIAL SEAL</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>3.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>3.2</SECTNO> <SUBJECT>Description.</SUBJECT> <SECTNO>3.3</SECTNO> <SUBJECT>Authority to affix seal.</SUBJECT> <SECTNO>3.4</SECTNO> <SUBJECT>Use of the seal.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 3472 and 3485, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 86491, Dec. 31, 1980, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 3.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>For the purposes of this part:</P> <P>(a) <E T="03">ED</E> means all organizational units of the Department of Education.</P> <P>(b) <E T="03">Embossing Seal</E> means a display of the form and content of the Official Seal made on a die so that the Seal can be embossed on paper or other media.</P> <P>(c) <E T="03">Official Seal</E> means the original(s) of the Seal showing the exact form, content, and colors.</P> <P>(d) <E T="03">Replica</E> means a copy of the Official Seal displaying the identical form, content, and colors.</P> <P>(e) <E T="03">Reproduction</E> means a copy of the Official Seal displaying the form and content, reproduced in only one color.</P> <P>(f) <E T="03">Secretary</E> means the Secretary of Education.</P> </SECTION> <SECTION> <SECTNO>§ 3.2</SECTNO> <SUBJECT>Description.</SUBJECT> <P>The Official Seal of the Department of Education is described as follows: Standing upon a mound, an oak tree with black trunk and limbs and green foliage in front of a gold rising sun, issuing gold rays on a light blue disc, enclosed by a dark blue border with gold edges bearing the inscription “DEPARTMENT OF EDUCATION” above a star at either side of the words “UNITED STATES OF AMERICA” in smaller letters in the base; letters and stars in white. The Offical Seal of the Department is modified when used in reproductions in black and white and when embossed. As so modified, it appears below.</P> <GPH DEEP="124" SPAN="1"> <GID>EC21OC91.062</GID> </GPH> </SECTION> <SECTION> <SECTNO>§ 3.3</SECTNO> <SUBJECT>Authority to affix seal.</SUBJECT> <P>The Secretary and the Secretary's designees are authorized to affix the Official Seal, replicas, reproductions, and embossing seals to appropriate documents, certifications, and other material for all purposes as authorized by this section.</P> <SECAUTH>(Authority: 20 U.S.C. 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 3.4</SECTNO> <SUBJECT>Use of the seal.</SUBJECT> <P>(a) Use by any person or organization outside of the Department may be made only with the Department's prior written approval.</P> <P>(b) Requests by any person or organization outside of the Department for permission to use the Seal must be made in writing to Director of Public Affairs, U.S. Department of Education, 400 Maryland Avenue, SW., Washington, DC 20202, and must specify, in detail, the exact use to be made. Any permission granted applies only to the specific use for which it was granted and is not to be construed as permission for any other use.</P> <P>(c) In regard to internal use, replicas may be used only:</P> <P>(1) For display in or adjacent to ED facilities, in Departmental auditoriums, presentation rooms, hearing rooms, lobbies, and public document rooms;</P> <P>(2) In offices of senior officials;</P> <P>(3) For official awards, certificates, medals, and plaques;<PRTPAGE P="6"/> </P> <P>(4) For electronic media, motion picture film, video tape and other audiovisual media prepared by or for ED and attributed thereto;</P> <P>(5) On official publications which represent the achievements or mission of ED;</P> <P>(6) In non-ED facilities in connection with events and displays sponsored by ED, and public appearances of the Secretary or other senior ED officials; and</P> <P>(7) For other internal purposes as determined by the Director for Management;</P> <P>(d) In regard to internal use, reproductions may be used only—</P> <P>(1) On ED letterhead stationery;</P> <P>(2) On official ED identification cards, security, and other approved credentials;</P> <P>(3) On business cards for ED employees;</P> <P>(4) On official ED signs;</P> <P>(5) On official publications or graphics issued by and attributed to ED, or joint statements of ED with one or more other Federal agencies, State or local governments, or foreign governments;</P> <P>(6) On official awards, certificates, and medals;</P> <P>(7) On electronic media, motion picture film, video tape, and other audiovisual media prepared by or for ED and attributed thereto; and</P> <P>(8) For other internal purposes as determined by the Director for Management.</P> <P>(e) Embossing seals may be used only internally—</P> <P>(1) On ED legal documents, including interagency or intergovernmental agreements, agreements with State or local governments, foreign patent applications, certification(s) of true copies, and similar documents;</P> <P>(2) On official awards and certificates; and</P> <P>(3) For other purposes as determined by the General Counsel or the Director for Management.</P> <P>(f) Falsely making, forging, counterfeiting, mutilating, or altering the Official Seal, replicas, reproductions, or embossing seals, or knowingly using or possessing with fraudulent intent and altered official seal, replica, reproduction or embossing seal is punishable under 18 U.S.C. 506.</P> <P>(g) Any person using the Official Seal, replicas, reproductions, or embossing seals in a manner inconsistent with the provisions of this part is subject to the provisions of 18 U.S.C. 1017, which states penalties for the wrongful use of an Official Seal, and to other provisions of law as applicable.</P> <CITA>[45 FR 86491, Dec. 31, 1980, as amended at 53 FR 4620, Feb. 17, 1988; 56 FR 65388, Dec. 16, 1991; 65 FR 57286, Sept. 22, 2000]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 4</EAR> <HD SOURCE="HED">PART 4—SERVICE OF PROCESS</HD> <SECTION> <SECTNO>§ 4.1</SECTNO> <SUBJECT>Service of process required to be served on or delivered to Secretary.</SUBJECT> <P>Summons, complaints, subpoenas, and other process which are required to be served on or delivered to the Secretary of Education shall be delivered to the General Counsel or a Deputy General Counsel, by mail at 400 Maryland Avenue SW., Washington, DC 20202 or by personal service at that address. The persons above designated are authorized to accept service of such process.</P> <SECAUTH>(Authority: 5 U.S.C. 301)</SECAUTH> <CITA>[47 FR 16780, Apr. 20, 1982]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 5</EAR> <HD SOURCE="HED">PART 5—AVAILABILITY OF INFORMATION TO THE PUBLIC PURSUANT TO PUB. L. 90-23</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Definitions</HD> <SECHD>Sec.</SECHD> <SECTNO>5.1</SECTNO> <SUBJECT>Act.</SUBJECT> <SECTNO>5.2</SECTNO> <SUBJECT>Department.</SUBJECT> <SECTNO>5.5</SECTNO> <SUBJECT>Records.</SUBJECT> <SECTNO>5.6</SECTNO> <SUBJECT>Statutory definitions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—What Records Are Available</HD> <SECTNO>5.11</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>5.12</SECTNO> <SUBJECT>General policy.</SUBJECT> <SECTNO>5.13</SECTNO> <SUBJECT>Records available.</SUBJECT> <SECTNO>5.14</SECTNO> <SUBJECT>Published documents.</SUBJECT> <SECTNO>5.15</SECTNO> <SUBJECT>Creation of records.</SUBJECT> <SECTNO>5.16</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> <SECTNO>5.17</SECTNO> <SUBJECT>Records in record centers.</SUBJECT> <SECTNO>5.18</SECTNO> <SUBJECT>Destroyed records.</SUBJECT> <SECTNO>5.19</SECTNO> <SUBJECT>Records of other departments and agencies.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Freedom of Information Officer</HD> <SECTNO>5.32</SECTNO> <SUBJECT>Freedom of information officer.</SUBJECT> </SUBPART> <SUBPART> <PRTPAGE P="7"/> <HD SOURCE="HED">Subpart D—Procedures for Requesting Access to Records</HD> <SECTNO>5.51</SECTNO> <SUBJECT>Procedure.</SUBJECT> <SECTNO>5.52</SECTNO> <SUBJECT>Copies of records.</SUBJECT> <SECTNO>5.53</SECTNO> <SUBJECT>Denial of requests for records.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Fees and Charges</HD> <SECTNO>5.60</SECTNO> <SUBJECT>Schedule of fees.</SUBJECT> <SECTNO>5.61</SECTNO> <SUBJECT>Notification of estimated fees.</SUBJECT> <SECTNO>5.62</SECTNO> <SUBJECT>Advance payment of fees.</SUBJECT> <SECTNO>5.63</SECTNO> <SUBJECT>Payment of fees and interest.</SUBJECT> <SECTNO>5.64</SECTNO> <SUBJECT>Waiver or reduction of fees.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Availability of Specific Records</HD> <SECTNO>5.70</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>5.71</SECTNO> <SUBJECT>Protection of personal privacy and proprietary information.</SUBJECT> <SECTNO>5.72</SECTNO> <SUBJECT>Records available.</SUBJECT> <SECTNO>5.73</SECTNO> <SUBJECT>Records not available.</SUBJECT> <SECTNO>5.74</SECTNO> <SUBJECT>Further disclosure.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review</HD> <SECTNO>5.80</SECTNO> <SUBJECT>Review of denial of a record.</SUBJECT> <SECTNO>5.81</SECTNO> <SUBJECT>Time for initiation of request for review.</SUBJECT> <SECTNO>5.82</SECTNO> <SUBJECT>By whom review is made.</SUBJECT> <SECTNO>5.83</SECTNO> <SUBJECT>Contents of request for review.</SUBJECT> <SECTNO>5.84</SECTNO> <SUBJECT>Consideration on review.</SUBJECT> <SECTNO>5.85</SECTNO> <SUBJECT>Decisions on review.</SUBJECT> <APP> <E T="04">Appendix to Part</E> 5 </APP> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 552.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 30803, May 9, 1980, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Definitions</HD> <SECTION> <SECTNO>§ 5.1</SECTNO> <SUBJECT>Act.</SUBJECT> <P>As used in this part, <E T="03">Act</E> means section 552 of title 5, United States Code, as amended by Pub. L. 90-23, codifying the Act of July 4, 1966, sometimes referred to as the “Freedom of Information Act”.</P> </SECTION> <SECTION> <SECTNO>§ 5.2</SECTNO> <SUBJECT>Department.</SUBJECT> <P>As used in this part, <E T="03">Department</E> means the Department of Education.</P> </SECTION> <SECTION> <SECTNO>§ 5.5</SECTNO> <SUBJECT>Records.</SUBJECT> <P>As used in this part:</P> <P>(a) <E T="03">Record</E> includes books, brochures, punch cards, magnetic tapes, paper tapes, sound recordings, maps, pamphlets, photographs, slides, motion pictures, or other documentary materials, regardless of physical form or characteristics, made or received by the Department pursuant to Federal law or in connection with the transaction of public business and preserved by the Department as evidence of the organization, functions, policies, decisions, procedures, operations, programs, or other activities.</P> <P>(b) <E T="03">Record</E> does not include: Objects or articles such as tangible exhibits, models, equipment, or processing materials; or formulae, designs, drawings, or other items of valuable property; books, magazines, pamphlets, or other reference material in formally organized and officially designated libraries of the Department, which are available under the rules of the particular library concerned.</P> </SECTION> <SECTION> <SECTNO>§ 5.6</SECTNO> <SUBJECT>Statutory definitions.</SUBJECT> <P>The definitions in the Act and the Office of Management and Budget's “Uniform FOIA Fee Schedule and Guidelines,” 52 FR 10012 (March 27, 1987), apply to this part.</P> <CITA>[52 FR 32525, Aug. 27, 1987]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—What Records Are Available</HD> <SECTION> <SECTNO>§ 5.11</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <P>This part constitutes the regulation of the Department respecting the availability to the public, pursuant to the Act, of records of the Department. It informs the public what records are generally available.</P> </SECTION> <SECTION> <SECTNO>§ 5.12</SECTNO> <SUBJECT>General policy.</SUBJECT> <P>The Department's policy is one of the fullest responsible disclosure limited only by the obligations of confidentiality and the administrative necessities recognized by the Act. Unless otherwise exempted from disclosure pursuant to law, records of the Department shall be available for inspection and copying in accordance with this part.</P> </SECTION> <SECTION> <SECTNO>§ 5.13</SECTNO> <SUBJECT>Records available.</SUBJECT> <P>(a) <E T="03">Publication in the Federal Register.</E> The following shall be published in the <E T="04">Federal Register:</E> </P> <P>(1) Descriptions of the Department's central and field organization and the established places at which, the officers from whom, and the methods <PRTPAGE P="8"/>whereby, the public may secure information, make submittals or requests, or obtain decisions;</P> <P>(2) Statements of the general course and method by which the Department's functions are channeled and determined, including the nature and requirements of all formal and informal procedures available;</P> <P>(3) Rules of procedures, descriptions of forms available or the places at which forms may be obtained, and instructions as to the scope and contents of all papers, reports, or examinations;</P> <P>(4) Substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the Department;</P> <P>(5) Every amendment, revision, or repeal of the foregoing.</P> <P>(b) <E T="03">Agency opinions and orders.</E> The Department shall, in accordance with this part and applicable regulations, make available for public inspection and copying:</P> <P>(1) All final opinions (including concurring and dissenting opinions) and all orders made in the adjudication of cases (initial decisions and reconsiderations thereof in matters that are not the result of administrative proceedings such as hearings or formal appeals are not “opinions and orders in the adjudication of cases”);</P> <P>(2) Those statements of policy and interpretations which have been adopted by the agency and are not published in the <E T="04">Federal Register</E>;</P> <P>(3) Administrative staff manuals and instructions to staff that affect any member of the public;</P> <FP>unless such materials are promptly published and copies offered for sale.</FP> <FP>The Department shall maintain and make available for public inspection and copying current indexes providing identifying information for the public as to any matter which is issued, adopted, or promulgated after July 4, 1967, and which is required by this paragraph (b) to be published or made available.</FP> <P>(c) <E T="03">Availability of records on request.</E> In addition to the records made available pursuant to paragraphs (a) and (b) of this section, the Department shall, upon request for identifiable records made in accordance with this part, make such records available to any person, unless it is determined that such records must be withheld from disclosure and are exempt under subsection (b) of the Act and subpart F of this part.</P> </SECTION> <SECTION> <SECTNO>§ 5.14</SECTNO> <SUBJECT>Published documents.</SUBJECT> <P>Published records of the Department, whether or not available for purchase, shall be made available for examination.</P> </SECTION> <SECTION> <SECTNO>§ 5.15</SECTNO> <SUBJECT>Creation of records.</SUBJECT> <P>Records are not required to be created by compiling selected items from the files, and records are not required to be created to provide the requester with such data as ratios, proportions, percentages, per capitas, frequency distributions, trends, correlations, and comparisons. If such data have been compiled and are available in the form of a record, the record shall be made available as provided in this part.</P> </SECTION> <SECTION> <SECTNO>§ 5.16</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> <P>Whenever any final opinion, order, or other materials required to be made available pursuant to subsection (a)(2) of the Act relates to a private party or parties and the release of the name or names or other identifying details will constitute a clearly unwarranted invasion of personal privacy, the record shall be published or made available with such identifying details left blank, or shall be published or made available with obviously fictitious substitutes and with a notification such as the following as a preamble: </P> <EXTRACT> <P>Names of parties and certain other identifying details have been removed [and fictitious names substituted] in order to prevent a clearly unwarranted invasion of the personal privacy of the individuals involved.</P> </EXTRACT> </SECTION> <SECTION> <SECTNO>§ 5.17</SECTNO> <SUBJECT>Records in record centers.</SUBJECT> <P>When a request is made for identifiable records of the Department which have been stored in the National Archives or other record centers of the General Services Administration, but would otherwise be available under this Act, such records shall be requested by the Department for the requester.</P> </SECTION> <SECTION> <PRTPAGE P="9"/> <SECTNO>§ 5.18</SECTNO> <SUBJECT>Destroyed records.</SUBJECT> <P>Records of specified form or character are destroyed after the lapse of time specified in the Records Disposal Act of 1943 (44 U.S.C. 366-380), the Federal Property Management Regulations (41 CFR parts 101-111), and the Records Control Schedules.</P> </SECTION> <SECTION> <SECTNO>§ 5.19</SECTNO> <SUBJECT>Records of other departments and agencies.</SUBJECT> <P>Requests for records which originated in or concern matters which originated in another Department or Government agency may be forwarded to the Department or agency primarily concerned and the requester so notified.</P> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Freedom of Information Officer</HD> <SECTION> <SECTNO>§ 5.32</SECTNO> <SUBJECT>Freedom of information officer.</SUBJECT> <P>The Freedom of Information Officer shall be responsible for determining whether records of the Department must be withheld from disclosure and shall have authority to deny requests for records of the Department.</P> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Procedures for Requesting Access to Records</HD> <SECTION> <SECTNO>§ 5.51</SECTNO> <SUBJECT>Procedure.</SUBJECT> <P>(a) A request for any information or record may be made at any appropriate office of the Department.</P> <P>(b) If a request is made at any office of the Department and the information or record is not located where the request is made, the requester shall be referred to the proper office, or if the request is put in writing it may be forwarded to the proper office.</P> <P>(c) A request should reasonably identify the requested record by brief description. Requesters who have detailed information which would assist in identifying the records requested are urged to provide such information in order to expedite the handling of the request. Envelopes in which written requests are submitted should be clearly identified as a Freedom of Information request.</P> <P>(d) Determination of whether records will be released or withheld will be made within 10 working days from date of receipt in the office having custody of the records This time may be extended by written notice for no longer than an additional 10 working days, only in unusual circumstances. Unusual circumstances mean:</P> <P>(1) The need to search for and collect the requested records from field facilities or other establishments that are separate from the office processing the request;</P> <P>(2) The need to search for, collect and appropriately examine a voluminous amount of separate and distinct records which are demanded in a single request; or</P> <P>(3) The need for consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the determination of the request or among two or more components of the agency having substantial subject-matter interest therein.</P> <FP>If such extension is made, the requester will be notified in writing with an explanation of why the extension was necessary and the date on which a determination will be made.</FP> </SECTION> <SECTION> <SECTNO>§ 5.52</SECTNO> <SUBJECT>Copies of records.</SUBJECT> <P>Copies of available records shall be produced as promptly as possible upon receipt of the fee therefor. Copying service shall be limited to not more than two copies of any single page, except that additional copies may be made where administrative considerations permit. Records which are published or available for sale need not be copied.</P> </SECTION> <SECTION> <SECTNO>§ 5.53</SECTNO> <SUBJECT>Denial of requests for records.</SUBJECT> <P>Written requests for inspection or copying of records shall be denied only by the Freedom of Information Officer. Denials of requests shall be in writing and shall contain the reasons for the denial and provide the requester with appropriate information on how to exercise the right of appeal under subpart G of this part. Such notification shall also set forth the names and titles or positions of each person responsible for the denial of such request if such person or persons is other than the Freedom of Information Officer.</P> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="10"/> <HD SOURCE="HED">Subpart E—Fees and Charges</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>52 FR 32525, Aug. 27, 1987, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 5.60</SECTNO> <SUBJECT>Schedule of fees.</SUBJECT> <P>(a) Fees and charges are charged under this part as follows:</P> <P>(1) <E T="03">Search for records—</E>(i) <E T="03">General.</E> Full search fees are charged for records requested by commercial use requesters. For records requested by representatives of the news media or educational or noncommercial scientific institutions whose purpose is scholarly or scientific research, no search fee is charged if the records requested are not for commercial use. For other requesters, if the records requested are not for commercial use, the first two hours of search time are provided without charge, except as limited in paragraph (a)(1)(iii) of this section. Search fees are recorded and assessed to the nearest quarter hour.</P> <P>(ii) <E T="03">Manual search.</E> The charge for a manual search is calculated by determining the search time to the nearest quarter hour and multiplying that figure by the sum of the basic rate of pay per hour of the employee conducting the search plus 16 percent of that rate.</P> <P>(iii) <E T="03">Computer search.</E> The charge for a computer search is calculated by determining the search time to the nearest quarter hour and multiplying that figure by the sum of the basic rate of pay per hour of the computer operator plus 16% of that rate plus $287 per hour for computer operation. Two hours of search time on a computer search is deemed to have been spent if the cost of the search equals the equivalent of two hours of the computer operator's basic rate of pay per hour plus 16 percent of that rate.</P> <P>(2) <E T="03">Review of records.</E> Review fees are charged only for commercial use requests and only for the initial review. The review rate is calculated by determining the review time to the nearest quarter hour and multiplying that figure by the sum of the basic rate of pay per hour of the employee conducting the review plus 16% of that rate. If records requested under this part are stored elsewhere than the headquarters of the Department at Washington, DC, the mailing and handling costs of returning those records to the headquarters for review is added to the review costs.</P> <P>(3) <E T="03">Duplication of records.</E> No duplication fee is charged for the first 100 pages, except for commercial use requests. Duplication charges for paper copy reproduction of documents on photocopy machines is $0.10 per page.</P> <P>(4) <E T="03">Certification of records.</E> The charge for certifying records is $5 per record certified.</P> <P>(5) <E T="03">Other.</E> If no specific fee has been established for a service, or the request for a service does not fall under one of the categories in paragraphs (a)(1)-(4) of this section due to the amount or type of service, the Secretary is authorized to establish an appropriate fee, based on direct costs on a case-by-case basis as provided in the FOIA.</P> <P>(b) If the Secretary awards a contract for a search or duplication of records for a FOI request, the fees charged are the actual costs under the contract.</P> <P>(c) Fees are not charged if the total amount of the fee is less than $5. If the total amount of the fee is $5, or more, applicable search and review costs are charged even if no records are located or disclosed. The Secretary does not refund fees paid for services actually rendered.</P> <P>(d) If the FOI Officer reasonably believes that a requester or group of requesters acting in concert is attempting to break down a request into multiple requests for the purpose of avoiding fee assessment, those requests and fees are aggregated and charged accordingly.</P> </SECTION> <SECTION> <SECTNO>§ 5.61</SECTNO> <SUBJECT>Notification of estimated fees.</SUBJECT> <P>If the estimated fees under this section total more than $25, or more than the maximum amount specified in the request if that amount exceeds $25, the requester is:</P> <P>(a) Notified promptly of the amount of the estimated fee or that portion of the fee as can readily be estimated; and</P> <P>(b) Offered the opportunity to reformulate the request.</P> </SECTION> <SECTION> <SECTNO>§ 5.62</SECTNO> <SUBJECT>Advance payment of fees.</SUBJECT> <P>(a) If the estimated fee for processing a request exceeds $250, the FOI Officer:</P> <P>(1) Notifies the requester of the anticipated cost and obtains satisfactory <PRTPAGE P="11"/>assurance of full payment if the requester has a history of prompt payment of FOIA fees; or</P> <P>(2) Requires an advance payment if the requester has no history of payment.</P> <P>(b) If a requester has previously failed to pay a fee in a timely fashion, the FOI Officer does not process any subsequent request until the requester pays the arrears in full, including interest, and makes an advance payment of the estimated fee for the new request.</P> <P>(c) Requests under this section are not deemed to have been received for purposes of § 5.51(d) until the Department receives the satisfactory assurance or advance payment.</P> </SECTION> <SECTION> <SECTNO>§ 5.63</SECTNO> <SUBJECT>Payment of fees and interest.</SUBJECT> <P>(a) If a requester does not pay a fee under this subpart within 30 days after the date the billing was sent, interest is assessed at the rate prescribed under 31 U.S.C. 3717. The Secretary may use the procedures authorized under the Debt Collection Act of 1982 to collect fees due under this subpart, including disclosure to consumer reporting or collection agencies.</P> <P>(b) Fee payments must be in the form either of a personal check or bank draft drawn on a bank in the United States, or a postal money order. Fee payments must be made payable to the U.S. Department of Education and mailed to the FOI Officer, Department of Education, 400 Maryland Avenue, SW., Washington, DC 20202. A receipt for fees paid is given upon request.</P> </SECTION> <SECTION> <SECTNO>§ 5.64</SECTNO> <SUBJECT>Waiver or reduction of fees.</SUBJECT> <P>(a) The Secretary may, in accordance with the FOIA, waive or reduce all or part of any fee provided for in this section if the Secretary determines that it is:</P> <P>(1) In the public interest because furnishing the information can be considered as primarily benefiting the general public and is likely to contribute significantly to public understanding of the operations or activities of the government; and</P> <P>(2) Is not primarily in the commercial interest of the requester.</P> <P>(b) In making the determination to waive or reduce a fee under paragraph (a) of this section, the Secretary considers the following factors:</P> <P>(1) Whether the subject of the requested records concerns the operations or activities of the government.</P> <P>(2) Whether the disclosure is likely to contribute significantly to public understanding of government operations or activities.</P> <P>(3) Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so, whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester.</P> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Availability of Specific Records</HD> <SECTION> <SECTNO>§ 5.70</SECTNO> <SUBJECT>Policy.</SUBJECT> <P>This subpart specifies the types of records which the Department shall, in keeping with its policy of fullest possible disclosure, make available for inspection and copying. For clarity and purposes of guidance, there are also set forth below the kinds or portions of records which generally will not be released, except as may be determined under § 5.74. The appendix to this part contains some examples of the kinds of materials which, in accordance with § 5.72, will generally be released and other materials which, in accordance with § 5.73, are not normally available. In the event that any record contains both information which is disclosable and that which is not disclosable under this regulation, the nondisclosable information will be deleted and the balance of the record disclosed.</P> </SECTION> <SECTION> <SECTNO>§ 5.71</SECTNO> <SUBJECT>Protection of personal privacy and proprietary information.</SUBJECT> <P>As set forth with more particularity below, certain types of information in whatever record or document contained shall not be disclosed where disclosure would be inconsistent with individual rights of personal privacy or would violate obligations of confidentiality.</P> <P>(a) No disclosure will be made of information of a personal and private nature, such as information in personnel <PRTPAGE P="12"/>and medical files, in welfare and social security records and any other information of a private and personal nature.</P> <P>(b) Information having a commercial or financial value and in which the person providing the information has a proprietary interest will not be disclosed if it is in fact confidential. In determining whether such information is in fact confidential, consideration may be given to such factors as (1) the general custom or usage in the occupation or business to which the information relates that it be held confidential, (2) the number and situation of the individuals who have access to such information, (3) the type and degree of risk of financial injury to be expected if disclosure occurs, and (4) the length of time such information should be regarded as retaining the characteristics noted above.</P> <P>(c) Information obtained by the Department from any individual or organization, who furnishes it in reliance upon a provision for confidentiality authorized by applicable statute or regulation, will not be disclosed. This subpart does not itself authorize the giving of any pledge of confidentiality by any officer or employee of the Department.</P> <FP>This section does not preclude use of nondiscloseable records or information from such records for authorized program purposes, including law enforcement purposes and litigation. Release of information of the nature described in this section to the individual or the organization to whom the information pertains or to an authorized representative of either will not be deemed a disclosure within the meaning of this part.</FP> </SECTION> <SECTION> <SECTNO>§ 5.72</SECTNO> <SUBJECT>Records available.</SUBJECT> <P>The following records of the Department shall, subject to the exceptions set forth in §§ 5.71 and 5.73, be available upon request for inspection and copying.</P> <P>(a) <E T="03">Correspondence.</E> Correspondence, relating to or resulting from the conduct of the official business of the Department, between the Department and individuals or organizations which are not agencies within the meaning of 5 U.S.C. 551(1) and 552(e).</P> <P>(b) <E T="03">Records pertaining to grants.</E> (1) Portions of funded initial research grant applications and portions of continuation, renewal or supplemental grant applications, whether funded or not, including interim progress reports and other supporting documents submitted by applicants, which are not otherwise exempted from disclosure by this subpart.</P> <P>(2) Grant award documents.</P> <P>(3) All State plans, amendments, and supplements thereto, including applications for the waiver of any provision thereof whether acted upon by the Department or not.</P> <P>(c) <E T="03">Contracts.</E> (1) Contract instruments.</P> <P>(2) Portions of offers reflecting final prices submitted in negotiated procurements.</P> <P>(d) <E T="03">Reports on grantee, contractor, or provider performance.</E> Final reports of audits, surveys, reviews, or evaluations by, for, or on behalf of the Department, of performance by any grantee, contractor, or provider under any departmentally financed or supported program or activity, which reports have been transmitted to the grantee, contractor, or provider.</P> <P>(e) <E T="03">Research, development, and demonstration project records.</E> The reports of a grantee or a contractor of the performance under any research, development, or demonstration project, records, other than reports, produced in such projects, such as films, computer software, other copyrightable materials and reports of inventions, will be available, except that considerations relating to obtaining copyright and patent protection may require delay in disclosure for such period as necessary to accomplish such protection. Disclosure of records which are copyrightable or which reflect patentable inventions shall not confer upon the requester any license under any copyright or patent without regard to the holder or owner thereof.</P> </SECTION> <SECTION> <SECTNO>§ 5.73</SECTNO> <SUBJECT>Records not available.</SUBJECT> <P>The following types of records or information contained in any record, in addition to those prohibited by law from disclosure, are not available for inspection or copying, any provision of § 5.72 notwithstanding:<PRTPAGE P="13"/> </P> <P>(a) <E T="03">Intra-agency and inter-agency communications.</E> Communications within the Department other than those described in § 5.72(d) or between the Department or any other agency within the meaning of 5 U.S.C. 551(1) and 552(e), to the extent they reflect the views or judgment of the writer or of other individuals. If disclosure of any factual portion of the communication would indicate the views or judgment being withheld from disclosure, then such factual portions will also be withheld.</P> <P>(b) <E T="03">Investigatory files.</E> Investigatory files compiled for law enforcement purposes to the extent that production of such records would (1) interfere with enforcement proceedings, (2) deprive a person of a right to a fair trial or an impartial adjudication, (3) constitute an unwarranted invasion of personal privacy, (4) disclose the identity of a confidential source, and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source, (5) disclose investigative techniques and procedures or (6) endanger the life or physical safety of law enforcement personnel. For the purpose of this section <E T="03">enforcement action</E> means any authorized action intended to abate, prevent, counteract, deter, or terminate violations of law and includes action involving possible civil, criminal, or administrative sanctions whether such sanctions involve adversary proceedings or other procedures, such as termination of benefits, protective measures, etc.</P> </SECTION> <SECTION> <SECTNO>§ 5.74</SECTNO> <SUBJECT>Further disclosure.</SUBJECT> <P>(a) The Secretary may in particular instances, except where prohibited by law, disclose documents or portions of documents described in § 5.73 if he determines that disclosure is in the public interest and is consistent with obligations of confidentiality and administrative necessity.</P> <P>(b) In making such a determination, consideration may be given to the Department's responsibilities under law for dissemination to the public of information relating to education.</P> <P>(c) When such determination has been made, the particular document or portion of document to which it relates shall thereafter be available upon request for inspection and copying: <E T="03">Provided however,</E> That use of nondiscloseable records or information from such records for authorized program purposes, including law enforcement purposes and litigation is not a disclosure within the meaning of this section.</P> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review</HD> <SECTION> <SECTNO>§ 5.80</SECTNO> <SUBJECT>Review of denial of a record.</SUBJECT> <P>This subpart provides for the review of a denial, pursuant to § 5.53, of a written request for inspection or copying of a record.</P> </SECTION> <SECTION> <SECTNO>§ 5.81</SECTNO> <SUBJECT>Time for initiation of request for review.</SUBJECT> <P>A person whose request has been denied may initiate a review by filing a request for review within (a) 30 days of receipt of the determination to deny or (b) within 30 days of receipt of records which are in partial response to his request if a portion of a request is granted and a portion denied, whatever is later.</P> </SECTION> <SECTION> <SECTNO>§ 5.82</SECTNO> <SUBJECT>By whom review is made.</SUBJECT> <P>(a) Requests for review of denials should be addressed to the Secretary.</P> <P>(b) [Reserved]</P> </SECTION> <SECTION> <SECTNO>§ 5.83</SECTNO> <SUBJECT>Contents of request for review.</SUBJECT> <P>The request for review shall include a copy of the written request and the denial.</P> </SECTION> <SECTION> <SECTNO>§ 5.84</SECTNO> <SUBJECT>Consideration on review.</SUBJECT> <P>Review shall be considered on the basis of the written record including any written argument submitted by the requester.</P> </SECTION> <SECTION> <SECTNO>§ 5.85</SECTNO> <SUBJECT>Decisions on review.</SUBJECT> <P>(a) Decisions on review shall be in writing within 20 working days from receipt of the request for review. Extension of the time limit may be granted to the extent that the maximum 10-day limit on extensions has not been exhausted on the initial determination. <PRTPAGE P="14"/>Such extension may only be granted for the reasons enumerated in § 5.51(d).</P> <P>(b) The decision, which constitutes final action of the Department, if adverse to the requester shall be in writing, stating the reasons for the decision, and advising the requester of the right to judicial review of such decision.</P> <P>(c) Failure to comply with time limits set forth in § 5.51 or in this paragraph constitutes an exhaustion of the requester's administrative remedies.</P> </SECTION> <APPENDIX> <EAR>Pt. 5, App.</EAR> <WHED>Appendix to Part 5</WHED> <GPOTABLE CDEF="s130,r160" COLS="2" OPTS="L2"> <TDESC>[The following are some examples of specific records (or specific information relating to personnel, programs, or activities of this Department) listed according to whether or not they are available upon request for inspection and copying]</TDESC> <BOXHD> <CHED H="1">Generally available</CHED> <CHED H="1">Generally not available</CHED> </BOXHD> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">grants</E> </ENT> </ROW> <ROW EXPSTB="00"> <ENT I="22">Funded initial grant applications, subject to provisions of § 5.71.<LI>Reports of grantee.</LI> <LI>Final report of any review or evaluation of grantee performance conducted or caused to be conducted by the Department.</LI> </ENT> <ENT>Research protocol, design, processing, and other technical information to the extent proprietary or of a confidential nature submitted with initial applications not yet funded, or where disclosure would adversely affect patent or other valuable rights.<LI>Confidential financial information of grantee.</LI> <LI>Site visit reports.</LI> </ENT> </ROW> <ROW> <ENT I="01">Applications for continuation, renewal, or supplemental grants, subject to provisions of § 5.71</ENT> <ENT>Initial research or research training grant application on which award is not made.</ENT> </ROW> <ROW RUL="02,s"> <ENT I="11">State plan material.</ENT> </ROW> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">contracts</E> </ENT> </ROW> <ROW EXPSTB="00"> <ENT I="01">Name of contractor, subject matter, date, and amount of contract</ENT> <ENT>Trade secrets.</ENT> </ROW> <ROW> <ENT I="01">Contract performance review report</ENT> <ENT>Confidential pricing data contained in contract proposal if in the Department's judgment it is properly so designated by the offeror.</ENT> </ROW> <ROW> <ENT I="01">Deficiency report</ENT> <ENT>Proprietary technical data contained in a contract proposal if in the Department's judgment it is properly so designated by offeror.</ENT> </ROW> <ROW> <ENT I="01">Final report</ENT> <ENT>Confidential financial information of contractor</ENT> </ROW> <ROW> <ENT I="22"/> <ENT>Draft of proposed final report submitted for comment prior to acceptance.</ENT> </ROW> <ROW> <ENT I="22"/> <ENT>Research protocol, design, processing, and other technical information to the extent proprietary or of a confidential nature, including proprietary contents of unsolicited proposals.</ENT> </ROW> <ROW RUL="02,s"> <ENT I="22"/> <ENT>Proposals on which no award is made.</ENT> </ROW> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">advisory committees</E> </ENT> </ROW> <ROW EXPSTB="00" RUL="02,s"> <ENT I="01">Name of committee <LI>Final report</LI> <LI>Minutes or transcripts of meetings open to the public and not involved with matters exempt from mandatory disclosure under Freedom of Information Act</LI> </ENT> <ENT>Minutes or transcripts of committee meetings or portions thereof which are involved with matters exempt from mandatory disclosure under Freedom of Information Act.</ENT> </ROW> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">personnel information</E> </ENT> </ROW> <ROW EXPSTB="00"> <ENT I="01">Name of employee, title of position, and location of regular duty station</ENT> <ENT>Home addresses of employees.</ENT> </ROW> <ROW RUL="02,s"> <ENT I="01">Grade, position description, and salary of public employees</ENT> </ROW> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">affirmative action plan filed pursuant to executive order 11246</E> </ENT> </ROW> <ROW EXPSTB="00" RUL="02,s"> <ENT I="01">Approved action plan, including analysis, proposed remedial or affirmative steps to be taken with goals and timetables, policies on recruitment, hiring, and promotion, and description of grievance procedures</ENT> </ROW> <ROW EXPSTB="01" RUL="02,s"> <ENT I="21"> <E T="04">miscellaneous</E> </ENT> </ROW> <ROW EXPSTB="00"> <ENT I="22"/> <ENT>Names of individual beneficiaries of departmental programs or a list of the benefits they receive if release would be an unwarranted invasion of privacy.</ENT> </ROW> <ROW> <ENT I="22"/> <ENT>Office for Civil Rights investigatory files in open cases.</ENT> </ROW> </GPOTABLE> </APPENDIX> </SUBPART> </PART> <PART> <PRTPAGE P="15"/> <EAR>Pt. 5b</EAR> <HD SOURCE="HED">PART 5b—PRIVACY ACT REGULATIONS</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>5b.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5b.2</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>5b.3</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>5b.4</SECTNO> <SUBJECT>Maintenance of records.</SUBJECT> <SECTNO>5b.5</SECTNO> <SUBJECT>Notification of or access to records.</SUBJECT> <SECTNO>5b.7</SECTNO> <SUBJECT>Procedures for correction or amendment of records.</SUBJECT> <SECTNO>5b.8</SECTNO> <SUBJECT>Appeals of refusals to correct or amend records.</SUBJECT> <SECTNO>5b.9</SECTNO> <SUBJECT>Disclosure of records.</SUBJECT> <SECTNO>5b.10</SECTNO> <SUBJECT>Parents and guardians.</SUBJECT> <SECTNO>5b.11</SECTNO> <SUBJECT>Exempt systems.</SUBJECT> <SECTNO>5b.12</SECTNO> <SUBJECT>Contractors.</SUBJECT> <SECTNO>5b.13</SECTNO> <SUBJECT>Fees.</SUBJECT> <APP> <E T="04">Appendix A to Part</E> 5b<E T="04">—Employee Standards of Conduct</E> </APP> <APP> <E T="04">Appendix B to Part</E> 5b<E T="04">—Routine Uses Applicable to More Than One System of Records Maintained by ED</E> </APP> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 301, 5 U.S.C. 552a.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 30808, May 9, 1980, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 5b.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>As used in this part:</P> <P>(a) <E T="03">Access</E> means availability of a record to a subject individual.</P> <P>(b) <E T="03">Agency</E> means the Department of Education.</P> <P>(c) <E T="03">Department</E> means the Department of Education.</P> <P>(d) <E T="03">Disclosure</E> means the availability or release of a record to anyone other than the subject individual.</P> <P>(e) <E T="03">Individual</E> means a living person who is a citizen of the United States or an alien lawfully admitted for permanent residence. It does not include persons such as sole proprietorships, partnerships, or corporations. A business firm which is identified by the name of one or more persons is not an individual within the meaning of this part.</P> <P>(f) <E T="03">Maintain</E> means to maintain, collect, use, or disseminate when used in connection with the term “record”; and, to have control over or responsibility for a system of records when used in connection with the term “system of records.”</P> <P>(g) <E T="03">Notification</E> means communication to an individual whether he is a subject individual.</P> <P>(h) <E T="03">Record</E> means any item, collection, or grouping of information about an individual that is maintained by the Department, including but not limited to the individual's education, financial transactions, medical history, and criminal or employment history and that contains his name, or an identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. When used in this part, record means only a record which is in a system of records.</P> <P>(i) <E T="03">Responsible Department official</E> means that officer who is listed in a notice of a system of records as the system manager for a given system of records or another individual listed in the notice of a system of records to whom requests may be made, or the designee of either such officer or individual.</P> <P>(j) <E T="03">Routine use</E> means the disclosure of a record outside the Department, without the consent of the subject individual, for a purpose which is compatible with the purpose for which the record was collected. It includes disclosures required to be made by statute other than the Freedom of Information Act, 5 U.S.C. 552. It does not include disclosures which are permitted to be made without the consent of the subject individual which are not compatible with the purpose for which it was collected such as disclosures to the Bureau of the Census, the General Accounting Office, or to Congress.</P> <P>(k) <E T="03">Secretary</E> means the Secretary of Education.</P> <P>(l) <E T="03">Statistical record</E> means a record maintained for statistical research or reporting purposes only and not maintained to make determinations about a particular subject individual.</P> <P>(m) <E T="03">Subject individual</E> means that individual to whom a record pertains.</P> <P>(n) <E T="03">System of records</E> means any group of records under the control of the Department from which a record is retrieved by personal identifier such as the name of the individual, number, symbol or other unique retriever assigned to the individual. Single records or groups of records which are not retrieved by a personal identifier are not part of a system of records. Papers maintained by individual employees of the Department which are prepared, maintained, or discarded at the discretion of the employee and which are not <PRTPAGE P="16"/>subject to the Federal Records Act, 44 U.S.C. 2901, are not part of a system of records; <E T="03">Provided,</E> That such personal papers are not used by the employee or the Department to determine any rights, benefits, or privileges of individuals.</P> <CITA>[45 FR 30808, May 9, 1980; 45 FR 37426, June 3, 1980]</CITA> </SECTION> <SECTION> <SECTNO>§ 5b.2</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <P>(a) This part implements section 3 of the Privacy Act of 1974, 5 U.S.C. 552a (hereinafter referred to as the Act), by establishing agency policies and procedures for the maintenance of records. This part also establishes agency policies and procedures under which a subject individual may be given notification of or access to a record pertaining to him and policies and procedures under which a subject individual may have his record corrected or amended if he believes that his record is not accurate, timely, complete, or relevant or necessary to accomplish a Department function.</P> <P>(b) All components of the Department are governed by the provisions of this part. Also governed by the provisions of this part are advisory committees and councils within the meaning of the Federal Advisory Committee Act which provide advice to (1) any official or component of the Department or (2) the President and for which the Department has been delegated responsibility for providing services.</P> <P>(c) Employees of the Department governed by this part include all regular and special government employees of the Department; experts and consultants whose temporary (not in excess of 1 year) or intermittent services have been procured by the Department by contract pursuant to 3109 of title 5, United States Code; volunteers where acceptance of their services are authorized by law; those individuals performing gratuitous services as permitted under conditions prescribed by the Office of Personnel Management; and, participants in work-study or training programs.</P> <P>(d) This part does not:</P> <P>(1) Make available to a subject individual records which are not retrieved by that individual's name or other personal identifier.</P> <P>(2) Make available to the general public records which are retrieved by a subject individual's name or other personal identifier or make available to the general public records which would otherwise not be available to the general public under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.</P> <P>(3) Govern the maintenance or disclosure of, notification of or access to, records in the possession of the Department which are subject to regulations of another agency, such as personnel records subject to the regulations of the Office of Personnel Management.</P> <P>(4) Apply to grantees, including State and local governments or subdivisions thereof, administering federally funded programs.</P> <P>(5) Make available records compiled by the Department in reasonable anticipation of court litigation or formal administrative proceedings. The availability of such records to the general public or to any subject individual or party to such litigation or proceedings shall be governed by applicable constitutional principles, rules of discovery, and applicable regulations of the Department.</P> </SECTION> <SECTION> <SECTNO>§ 5b.3</SECTNO> <SUBJECT>Policy.</SUBJECT> <P>It is the policy of the Department to protect the privacy of individuals to the fullest extent possible while nonetheless permitting the exchange of records required to fulfill the administrative and program responsibilities of the Department, and responsibilities of the Department for disclosing records which the general public is entitled to have under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.</P> </SECTION> <SECTION> <SECTNO>§ 5b.4</SECTNO> <SUBJECT>Maintenance of records.</SUBJECT> <P>(a) No record will be maintained by the Department unless:</P> <P>(1) It is relevant and necessary to accomplish a Department function required to be accomplished by statute or Executive Order;</P> <P>(2) It is acquired to the greatest extent practicable from the subject individual when maintenance of the record may result in a determination about the subject individual's rights, benefits or privileges under Federal programs;<PRTPAGE P="17"/> </P> <P>(3) The individual providing the record is informed of the authority for providing the record (including whether the providing of the record is mandatory or voluntary, the principal purpose for maintaining the record, the routine uses for the record, what effect his refusal to provide the record may have on him), and if the record is not required by statute or Executive Order to be provided by the individual, he agrees to provide the record.</P> <P>(b) No record will be maintained by the Department which describes how an individual exercises rights guaranteed by the First Amendment unless expressly authorized (1) by statute, or (2) by the subject individual, or (3) unless pertinent to and within the scope of an authorized law enforcement activity.</P> </SECTION> <SECTION> <SECTNO>§ 5b.5</SECTNO> <SUBJECT>Notification of or access to records.</SUBJECT> <P>(a) <E T="03">Times, places, and manner of requesting notification of or access to a record.</E> (1) Any individual may request notification of a record. He may at the same time request access to any record pertaining to him. An individual may be accompanied by another individual of his choice when he requests access to a record in person; <E T="03">Provided,</E> That he affirmatively authorizes the presence of such other individual during any discussion of a record to which access is requested.</P> <P>(2) An individual making a request for notification of or access to a record shall address his request to the responsible Department official and shall verify his identity when required in accordance with paragraph (b)(2) of this section. At the time the request is made, the individual shall specify which systems of records he wishes to have searched and the records to which he wishes to have access. He may also request that copies be made of all or any such records. An individual shall also provide the responsible Department official with sufficient particulars to enable such official to distinguish between records on subject individuals with the same name. The necessary particulars are set forth in the notices of systems of records.</P> <P>(3) An individual who makes a request in person may leave with any responsible Department official a request for notification of or access to a record under the control of another responsible Department official; <E T="03">Provided,</E> That the request is addressed in writing to the appropriate responsible Department official.</P> <P>(b) <E T="03">Verification of identity</E>—(1) <E T="03">When required.</E> Unless an individual, who is making a request for notification of or access to a record in person, is personally known to the responsible Department official, he shall be required to verify his identity in accordance with paragraph (b)(2) of this section if:</P> <P>(i) He makes a request for notification of a record and the responsible Department official determines that the mere disclosure of the existence of the record would be a clearly unwarranted invasion of privacy if disclosed to someone other than the subject individual; or,</P> <P>(ii) He makes a request for access to a record which is not required to be disclosed to the general public under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.</P> <P>(2) <E T="03">Manner of verifying identity.</E> (i) An individual who makes a request in person shall provide to the responsible Department official at least one piece of tangible identification such as a driver's license, passport, alien or voter registration card, or union card to verify his identity. If an individual does not have identification papers to verify his identity, he shall certify in writing that he is the individual who he claims to be and that he understands that the knowing and willful request for or acquisition of a record pertaining to an individual under false pretenses is a criminal offense under the Act subject to a $5,000 fine.</P> <P>(ii) Except as provided in paragraph (b)(2)(v) of this section, an individual who does not make a request in person shall submit a notarized request to the responsible Department official to verify his identity or shall certify in his request that he is the individual who he claims to be and that he understands that the knowing and willful request for or acquisition of a record pertaining to an individual under false pretenses is a criminal offense under the Act subject to a $5,000 fine.<PRTPAGE P="18"/> </P> <P>(iii) An individual who makes a request on behalf of a minor or legal incompetent as authorized under § 5b.10 of this part shall verify his relationship to the minor or legal incompetent, in addition to verifying his own identity, by providing a copy of the minor's birth certificate, a court order, or other competent evidence of guardianship to the responsible Department official; <E T="03">except that,</E> an individual is not required to verify his relationship to the minor or legal incompetent when he is not required to verify his own identity or when evidence of his relationship to the minor or legal incompetent has been previously given to the responsible Department official.</P> <P>(iv) An individual shall further verify his identity if he is requesting notification of or access to sensitive records. Any further verification shall parallel the record to which notification or access is being sought. Such further verification may include such particulars as the individual's years of attendance at a particular educational institution, rank attained in the uniformed services, date or place of birth, names of parents, or an occupation.</P> <P>(v) An individual who makes a request by telephone shall verify his identity by providing to the responsible Department official identifying particulars which parallel the record to which notification or access is being sought. If the responsible Department official determines that the particulars provided by telephone are insufficient, the requester will be required to submit the request in writing or in person. Telephone requests will not be accepted where an individual is requesting notification of or access to sensitive records.</P> <P>(c) <E T="03">Granting notification of or access to a record.</E> (1) Subject to the provisions governing exempt systems in § 5b.11 of this part, a responsible Department official, who receives a request for notification of or access to a record and, if required, verification of an individual's identity, will review the request and grant notification or access to a record, if the individual requesting access to the record is the subject individual.</P> <P>(2) If the responsible Department official determines that there will be a delay in responding to a request because of the number of requests being processed, a breakdown of equipment, shortage of personnel, storage of records in other locations, etc., he will so inform the individual and indicate when notification or access will be granted.</P> <P>(3) Prior to granting notification of or access to a record, the responsible Department official may at his discretion require an individual making a request in person to reduce his request to writing if the individual has not already done so at the time the request is made.</P> </SECTION> <SECTION> <SECTNO>§ 5b.7</SECTNO> <SUBJECT>Procedures for correction or amendment of records.</SUBJECT> <P>(a) Any subject individual may request that his record be corrected or amended if he believes that the record is not accurate, timely, complete, or relevant or necessary to accomplish a Department function. A subject individual making a request to amend or correct his record shall address his request to the responsible Department official in writing; <E T="03">except that,</E> the request need not be in writing if the subject individual makes his request in person and the responsible Department official corrects or amends the record at that time. The subject individual shall specify in each request:</P> <P>(1) The system of records from which the record is retrieved;</P> <P>(2) The particular record which he is seeking to correct or amend;</P> <P>(3) Whether he is seeking an addition to or a deletion or substitution of the record; and,</P> <P>(4) His reasons for requesting correction or amendment of the record.</P> <P>(b) A request for correction or amendment of a record will be acknowledged within 10 working days of its receipt unless the request can be processed and the subject individual informed of the responsible Department official's decision on the request within that 10 day period.</P> <P>(c) If the responsible Department official agrees that the record is not accurate, timely, or complete based on a preponderance of the evidence, the record will be corrected or amended. The record will be deleted without regard to its accuracy, if the record is <PRTPAGE P="19"/>not relevant or necessary to accomplish the Department function for which the record was provided or is maintained. In either case, the subject individual will be informed in writing of the correction, amendment, or deletion and, if accounting was made of prior disclosures of the record, all previous recipients of the record will be informed of the corrective action taken.</P> <P>(d) If the responsible Department official does not agree that the record should be corrected or amended, the subject individual will be informed in writing of the refusal to correct or amend the record. He will also be informed that he may appeal the refusal to correct or amend his record § 5b.8 of this part.</P> <P>(e) Requests to correct or amend a record governed by the regulation of another government agency, <E T="03">e.g.,</E> Office of Personnel Management, Federal Bureau of Investigation, will be forwarded to such government agency for processing and the subject individual will be informed in writing of the referral.</P> </SECTION> <SECTION> <SECTNO>§ 5b.8</SECTNO> <SUBJECT>Appeals of refusals to correct or amend records.</SUBJECT> <P>(a) <E T="03">Processing the appeal.</E> (1) A subject individual who disagrees with a refusal to correct or amend his record may appeal the refusal in writing. All appeals shall be made to the Secretary.</P> <P>(2) An appeal will be completed within 30 working days from its receipt by the appeal authority; <E T="03">except that,</E> the appeal authority may for good cause extend this period for an additional 30 days. Should the appeal period be extended, the subject individual appealing the refusal to correct or amend the record will be informed in writing of the extension and the circumstances of the delay. The subject individual's request to amend or correct the record, the responsible Department official's refusal to correct or amend, and any other pertinent material relating to the appeal will be reviewed. No hearing will be held.</P> <P>(3) If the appeal authority agrees that the record subject to the appeal should be corrected or amended, the record will be amended and the subject individual will be informed in writing of the correction or amendment. Where an accounting was made of prior disclosures of the record, all previous recipients of the record will be informed of the corrective action taken.</P> <P>(4) If the appeal is denied, the subject individual will be informed in writing:</P> <P>(i) Of the denial and the reasons for the denial;</P> <P>(ii) That he has a right to seek judicial review of the denial; and,</P> <P>(iii) That he may submit to the responsible Department official a concise statement of disagreement to be associated with the disputed record and disclosed whenever the record is disclosed.</P> <P>(b) <E T="03">Notation and disclosure of disputed records.</E> Whenever a subject individual submits a statement of disagreement to the responsible Department official in accordance with paragraph (a)(4)(iii) of this section, the record will be noted to indicate that it is disputed. In any subsequent disclosure, a copy of the subject individual's statement of disagreement, will be disclosed with the record. If the responsible Department official deems it appropriate, a concise statement of the appeal authority's reasons for denying the subject individual's appeal may also be disclosed with the record. While the subject individual will have access to this statement of reasons, such statement will not be subject to correction or amendment. Where an accounting was made of prior disclosures of the record, all previous recipients of the record will be provided a copy of the subject individual's statement of disagreement, as well as the statement, if any, of the appeal authority's reasons for denying the subject individual's appeal.</P> </SECTION> <SECTION> <SECTNO>§ 5b.9</SECTNO> <SUBJECT>Disclosure of records.</SUBJECT> <P>(a) <E T="03">Consent to disclosure by a subject individual.</E> (1) Except as provided in paragraph (b) of this section authorizing disclosures of records without consent, no disclosure of a record will be made without the consent of the subject individual. In each case the consent, whether obtained from the subject individual at the request of the Department or whether provided to the Department by the subject individual on his own initiative, shall be in writing. The consent shall specify the individual, organizational unit or class of individuals or organizational units to <PRTPAGE P="20"/>whom the record may be disclosed, which record may be disclosed and, where applicable, during which time frame the record may be disclosed (<E T="03">e.g.,</E> during the school year, while the subject individual is out of the country, whenever the subject individual is receiving specific services). A blanket consent to disclose all of a subject individual's records to unspecified individuals or organizational units will not be honored. The subject individual's identity and, where applicable (<E T="03">e.g.,</E> where a subject individual gives consent to disclosure of a record to a specific individual), the identity of the individual to whom the record is to be disclosed shall be verified.</P> <P>(2) A parent or guardian of any minor is not authorized to give consent to a disclosure of the minor's medical record.</P> <P>(b) <E T="03">Disclosures without the consent of the subject individual.</E> The disclosures listed in this paragraph may be made without the consent of the subject individual. Such disclosures are:</P> <P>(1) To those officers and employees of the Department who have a need for the record in the performance of their duties. The responsible Department official may upon request of any officer or employee, or on his own initiative, determine what constitutes legitimate need.</P> <P>(2) Required to be disclosed under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.</P> <P>(3) For a routine use as defined in paragraph (j) of § 5b.1. Routine uses will be listed in any notice of a system of records. Routine uses published in Appendix B are applicable to more than one system of records. Where applicable, notices of systems of records may contain references to the routine uses listed in Appendix B. Appendix B will be published with any compendium of notices of systems of records.</P> <P>(4) To the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13 U.S.C.</P> <P>(5) To a recipient who has provided the agency with advance written assurance that the record will be used solely as a statistical research or reporting record; <E T="03">Provided,</E> That, the record is transferred in a form that does not identify the subject individ- -ual.</P> <P>(6) To the National Archives of the United States as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Administrator of General Services or his designee to determine whether the record has such value.</P> <P>(7) To another government agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of such government agency or instrumentality has submitted a written request to the Department specifying the record desired and the law enforcement activity for which the record is sought.</P> <P>(8) To an individual pursuant to a showing of compelling circumstances affecting the health or safety of any individual if a notice of the disclosure is transmitted to the last known address of the subject individual.</P> <P>(9) To either House of Congress, or to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee.</P> <P>(10) To the Comptroller General, or any of the Comptroller General's authorized representatives, in the course of the performance of the duties of the General Accounting Office.</P> <P>(11) Pursuant to the order of a court of competent jurisdiction.</P> <P>(c) <E T="03">Accounting of disclosures.</E> (1) An accounting of all disclosures of a record will be made and maintained by the Department for 5 years or for the life of the record, whichever is longer; <E T="03">except that,</E> such an accounting will not be made:</P> <P>(i) For disclosures under paragraphs (b) (1) and (2) of this section; and,</P> <P>(ii) For disclosures made with the written consent of the subject individual.</P> <P>(2) The accounting will include:</P> <P>(i) The date, nature, and purpose of each disclosure; and<PRTPAGE P="21"/> </P> <P>(ii) The name and address of the person or entity to whom the disclosure is made.</P> <P>(3) Any subject individual may request access to an accounting of disclosures of a record. The subject individual shall make a request for access to an accounting in accordance with the procedures in § 5b.5 of this part. A subject individual will be granted access to an accounting of the disclosures of a record in accordance with the procedures of this part which govern access to the related record. Access to an accounting of a disclosure of a record made under paragraph (b)(7) of this section may be granted at the discretion of the responsible Department official.</P> </SECTION> <SECTION> <SECTNO>§ 5b.10</SECTNO> <SUBJECT>Parents and guardians.</SUBJECT> <P>For the purpose of this part, a parent or guardian of any minor or the legal guardian or any individual who has been declared incompetent due to physical or mental incapacity or age by a court of competent jurisdiction is authorized to act on behalf of an individual or a subject individual. Except as provided in paragraph (b)(2) of § 5b.5, of this part governing procedures for verifying an individual's identity, an individual authorized to act on behalf of a minor or legal incompetent will be viewed as if he were the individual or subject individual.</P> </SECTION> <SECTION> <SECTNO>§ 5b.11</SECTNO> <SUBJECT>Exempt systems.</SUBJECT> <P>(a) <E T="03">General policy.</E> The Act permits an agency to exempt certain types of systems of records from some of the Act's requirements. It is the policy of the Department to exercise authority to exempt systems of records only in compelling cases.</P> <P>(b) <E T="03">Specific systems of records exempted under (j)(2).</E> The Department exempts the Investigative Files of the Inspector General ED/OIG (18-10-0001) and the Hotline Complaint Files of the Inspector General ED/OIG (18-10-0004) systems of records from the following provisions of 5 U.S.C. 552a and this part:</P> <P>(1) 5 U.S.C. 552a(c)(3) and § 5b.9(a)(1) and (c)(3) of this part, regarding access to an accounting of disclosures of a record.</P> <P>(2) 5 U.S.C. 552a(c)(4) and §§ 5b.7(c) and 5b.8(b) of this part, regarding notification to outside parties and agencies of correction or notation of dispute made in accordance with 5 U.S.C. 552a(d).</P> <P>(3) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification or access to records and correction or amendment of records.</P> <P>(4) 5 U.S.C. 552a(e)(1) and § 5b.4(a)(1) of this part, regarding maintaining only relevant and necessary information.</P> <P>(5) 5 U.S.C. 552a(e)(2) and § 5b.4(a)(2) of this part, regarding collection of information from the subject individual.</P> <P>(6) 5 U.S.C. 552a(e)(3) and § 5b.4(a)(3) of this part, regarding notice to individuals asked to provide information to the Department.</P> <P>(7) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of information in the system notice about procedures for notification, access, correction, and source of records.</P> <P>(8) 5 U.S.C. 552a(e)(5), regarding maintaining records with requisite accuracy, relevance, timeliness, and completeness.</P> <P>(9) 5 U.S.C. 552a(e)(8), regarding service of notice on subject individual if a record is made available under compulsory legal process if that process becomes a matter of public record.</P> <P>(10) 5 U.S.C. 552a(g), regarding civil remedies for violation of the Privacy Act.</P> <P>(c) <E T="03">Specific systems of records exempted under (k)(2).</E> (1) The Department exempts the Investigative Files of the Inspector General ED/OIG (18-10-0001) and the Hotline Complaint Files of the Inspector General ED/OIG (18-10-0004) from the following provisions of 5 U.S.C. 552a and this part to the extent that these systems of records consist of investigatory material and complaints that may be included in investigatory material compiled for law enforcement purposes:</P> <P>(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.</P> <P>(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.</P> <P>(iii) 5 U.S.C. 552a(e)(1) and § 5b.4(a)(1) of this part, regarding the requirement to maintain only relevant and necessary information.<PRTPAGE P="22"/> </P> <P>(iv) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of information in the system notice about procedures for notification, access, correction, and source of records.</P> <P>(2) The Department exempts the Complaint Files and Log, Office for Civil Rights (18-08-0002) from the following provisions of 5 U.S.C. 552a and this part:</P> <P>(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.</P> <P>(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.</P> <P>(iii) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of information in the system notice about procedures for notification, access, and correction of records.</P> <P>(d) <E T="03">Specific systems of records exempted under (k)(5).</E> (1) The Department exempts the Investigatory Material Compiled for Personnel Security and Suitability Purposes (18-10-0002) system of records from the following provisions of 5 U.S.C. 552a and this part:</P> <P>(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.</P> <P>(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.</P> <P>(iii) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of information in the system notice about procedures for notification, access, and correction of records.</P> <P>(2) The Department exempts the Suitability for Employment Records (18-11-0020) from the following provisions of 5 U.S.C. 552a and this part:</P> <P>(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.</P> <P>(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.</P> <P>(iii) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of information in the system notice about procedures for notification, access, and correction of records.</P> <P>(e) <E T="03">Basis for exemptions taken under (j)(2), (k)(2), and (k)(5).</E> The reason the Department took each exemption described in this section is stated in the preamble for the final rulemaking document under which the exemption was promulgated. These final rulemaking documents were published in the <E T="04">Federal Register</E> and may be obtained from the Department of Education by mailing a request to the following address: U.S. Department of Education, Privacy Act Officer, Information Management Branch, Washington, DC 20202-4753.</P> <P>(f) <E T="03">Notification of or access to records in exempt systems of records.</E> (1) If a system of records is exempt under this section, an individual may nonetheless request notification of or access to a record in that system. An individual shall make requests for notification of or access to a record in an exempt system or records in accordance with the procedures of § 5b.5 of this part.</P> <P>(2) An individual will be granted notification of or access to a record in an exempt system but only to the extent that notification or access would not reveal the identity of a source who furnished the record to the Department under an express promise, and, prior to September 27, 1975, an implied promise, that his identity would be held in confidence if—</P> <P>(i) The record is in a system of records or that portion of a system of records that is exempt under subsection (k)(2), but not under subsection (j)(2), of the Act and the individual has been, as a result of the maintenance of the record, denied a right, privilege, or benefit to which he or she would otherwise be eligible; or</P> <P>(ii) The record is in a system of records that is exempt under subsection (k)(5) of the Act.</P> <P>(3) If an individual is not granted notification of or access to a record in a system of records exempt under subsections (k)(2) (but not under subsection (j)(2)) and (k)(5) of the Act in accordance with this paragraph, he or she will be informed that the identity of a confidential source would be revealed if notification of or access to <PRTPAGE P="23"/>the record were granted to the individual.</P> <P>(g) <E T="03">Discretionary actions by the responsible Department official.</E> Unless disclosure of a record to the general public is otherwise prohibited by law, the responsible Department official may, in his or her discretion, grant notification of or access to a record in a system of records that is exempt under this section. Discretionary notification of or access to a record in accordance with this paragraph will not be a precedent for discretionary notification of or access to a similar or related record and will not obligate the responsible Department official to exercise his or her discretion to grant notification of or access to any other record in a system of records that is exempt under this section.</P> <CITA>[58 FR 44424, Aug. 20, 1993, as amended at 64 FR 31066, June 9, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 5b.12</SECTNO> <SUBJECT>Contractors.</SUBJECT> <P>(a) All contracts entered into on or after September 27, 1975 which require a contractor to maintain or on behalf of the Department to maintain, a system of records to accomplish a Department function must contain a provision requiring the contractor to comply with the Act and this part.</P> <P>(b) All unexpired contracts entered into prior to September 27, 1975 which require the contractor to maintain or on behalf of the Department to maintain, a system of records to accomplish a Department function will be amended as soon as practicable to include a provision requiring the contractor to comply with the Act and this part. All such contracts must be so amended by July 1, 1976 unless for good cause the appeal authority identified in § 5b.8 of this part authorizes the continuation of the contract without amendment beyond that date.</P> <P>(c) A contractor and any employee of such contractor shall be considered employees of the Department only for the purposes of the criminal penalties of the Act, 5 U.S.C. 552a(i), and the employee standards of conduct listed in appendix A of this part where the contract contains a provision requiring the contractor to comply with the Act and this part.</P> <P>(d) This section does not apply to systems of records maintained by a contractor as a result of his management discretion, <E T="03">e.g.,</E> the contractor's personnel records.</P> </SECTION> <SECTION> <SECTNO>§ 5b.13</SECTNO> <SUBJECT>Fees.</SUBJECT> <P>(a) <E T="03">Policy.</E> Where applicable, fees for copying records will be charged in accordance with the schedule set forth in this section. Fees may only be charged where an individual requests that a copy be made of the record to which he is granted access. No fee may be charged for making a search of the system of records whether the search is manual, mechanical, or electronic. Where a copy of the record must be made in order to provide access to the record (<E T="03">e.g.,</E> computer printout where no screen reading is available), the copy will be made available to the individual without cost.</P> <P>(b) <E T="03">Fee schedule.</E> The fee schedule for the Department is as follows:</P> <P>(1) Copying of records susceptible to photocopying—$.10 per page.</P> <P>(2) Copying records not susceptible to photocopying (<E T="03">e.g.,</E> punch cards or magnetic tapes)—at actual cost to be determined on a case-by-case basis.</P> <P>(3) No charge will be made if the total amount of copying does not exceed $25.</P> </SECTION> <APPENDIX> <EAR>Pt. 5b, App. A</EAR> <HD SOURCE="HED">Appendix A to Part <E T="01">5b</E> <E T="04">—Employee Standards of Conduct</E> </HD> <P>(a) <E T="03">General.</E> All employees are required to be aware of their responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a. Regulations implementing the Act are set forth in 34 CFR 5b. Instruction on the requirements of the Act and regulation shall be provided to all new employees of the Department. In addition, supervisors shall be responsible for assuring that employees who are working with systems of records or who undertake new duties which require the use of systems of records are informed of their responsibilities. Supervisors shall also be responsible for assuring that all employees who work with such systems of records are periodically reminded of the requirements of the Act and are advised of any new provisions or interpretations of the Act.</P> <P>(b) <E T="03">Penalties.</E> (1) All employees must guard against improper disclosure of records which are governed by the Act. Because of the serious consequences of improper invasions of personal privacy, employees may be subject <PRTPAGE P="24"/>to disciplinary action and criminal prosecution for knowing and willful violations of the Act and regulation. In addition, employees may also be subject to disciplinary action for unknowing or unwillful violations, where the employee had notice of the provisions of the Act and regulations and failed to inform himself sufficiently or to conduct himself in accordance with the requirements to avoid violations.</P> <P>(2) The Department may be subjected to civil liability for the following actions undertaken by its employees:</P> <P>(a) Making a determination under the Act and §§ 5b.7 and 5b.8 of the regulation not to amend an individual's record in accordance with his request, or failing to make such review in conformity with those provisions;</P> <P>(b) Refusing to comply with an individual's request for notification of or access to a record pertaining to him;</P> <P>(c) Failing to maintain any record pertaining to any individual with such accuracy, relevance, timeliness, and completeness as is necessary to assure fairness in any determination relating to the qualifications, character, rights, or opportunities of, or benefits to the individual that may be made on the basis of such a record, and consequently a determination is made which is adverse to the individual; or</P> <P>(d) Failing to comply with any other provision of the Act or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual.</P> <P>(3) “An employee may be personally subject to criminal liability as set forth below and in 5 U.S.C. 552a (i):</P> <P>(a) Any officer or employee of an agency, who by virtue of his employment or official position, has possession of, or access to, agency records which contain individually identifiable information the disclosure of which is prohibited by the Act or by rules or regulations established thereunder, and who, knowing that disclosure of the specific material is so prohibited, willfully discloses the material in any manner to any person or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.”</P> <P>(b) “Any officer or employee of any agency who willfully maintains a system of records without meeting the notice requirements [of the Act] shall be guilty of a misdemeanor and fined not more than $5,000.”</P> <P>(c) <E T="03">Rules Governing Employees Not Working With Systems of Records.</E> Employees whose duties do not involve working with systems of records will not generally disclose to any one, without specific authorization from their supervisors, records pertaining to employees or other individuals which by reason of their official duties are available to them. Notwithstanding the above, the following records concerning Federal employees are a matter of public record and no further authorization is necessary for disclosure:</P> <P>(1) Name and title of individual.</P> <P>(2) Grade classification or equivalent and annual rate of salary.</P> <P>(3) Position description.</P> <P>(4) Location of duty station, including room number and telephone number. </P> <FP>In addition, employees shall disclose records which are listed in the Department's Freedom of Information Regulation as being available to the public. Requests for other records will be referred to the responsible Department official. This does not preclude employees from discussing matters which are known to them personally, and without resort to a record, to official investigators of Federal agencies for official purposes such as suitability checks, Equal Employment Opportunity investigations, adverse action proceedings, grievance proceedings, etc.</FP> <P>(d) <E T="03">Rules governing employees whose duties require use or reference to systems of records.</E> Employees whose official duties require that they refer to, maintain, service, or otherwise deal with systems of records (hereinafter referred to as “Systems Employees”) are governed by the general provisions. In addition, extra precautions are required and systems employees are held to higher standards of conduct.</P> <P>(1) Systems Employees shall:</P> <P>(a) Be informed with respect to their responsibilities under the Act;</P> <P>(b) Be alert to possible misuses of the system and report to their supervisors any potential or actual use of the system which they believe is not in compliance with the Act and regulation;</P> <P>(c) Make a disclosure of records within the Department only to an employee who has a legitimate need to know the record in the course of his official duties;</P> <P>(d) Maintain records as accurately as practicable.</P> <P>(e) Consult with a supervisor prior to taking any action where they are in doubt whether such action is in conformance with the Act and regulation.</P> <P>(2) Systems Employees shall not:</P> <P>(a) Disclose in any form records from a system of records except (1) with the consent or at the request of the subject individual; or (2) where its disclosure is permitted under § 5b.9 of the regulation.</P> <P>(b) Permit unauthorized individuals to be present in controlled areas. Any unauthorized individuals observed in controlled areas shall be reported to a supervisor or to the guard force.</P> <P>(c) Knowingly or willfully take action which might subject the Department to civil liability.</P> <P>(d) Make any arrangements for the design development, or operation of any system of records without making reasonable effort to <PRTPAGE P="25"/>provide that the system can be maintained in accordance with the Act and regulation.</P> <P>(e) <E T="03">Contracting officers.</E> In addition to any applicable provisions set forth above, those employees whose official duties involve entering into contracts on behalf of the Department shall also be governed by the following provisions:</P> <P>(1) <E T="03">Contracts for design, or development of systems and equipment.</E> No contract for the design or development of a system of records, or for equipment to store, service or maintain a system of records shall be entered into unless the contracting officer has made reasonable effort to ensure that the product to be purchased is capable of being used without violation of the Act or regulation. Special attention shall be given to provision of physical safeguards.</P> <P>(2) <E T="03">Contracts for the operation of systems and equipment.</E> No contract for the design or development of a system of whom he feels appropriate, of all proposed contracts providing for the operation of systems of records shall be made prior to execution of the contracts to determine whether operation of the system of records is for the purpose of accomplishing a Department function. If a determination is made that the operation of the system is to accomplish a Department function, the contracting officer shall be responsible for including in the contract appropriate provisions to apply the provisions of the Act and regulation to the system, including prohibitions against improper release by the contractor, his employees, agents, or subcontractors.</P> <P>(3) <E T="03">Other service contracts.</E> Contracting officers entering into general service contracts shall be responsible for determining the appropriateness of including provisions in the contract to prevent potential misuse (inadvertent or otherwise) by employees, agents, or subcontractors of the contractor.</P> <P>(f) <E T="03">Rules Governing Responsible Department Officials.</E> In addition to the requirements for Systems Employees, responsible Department officials shall:</P> <P>(1) Respond to all requests for notification of or access, disclosure, or amendment of -records in a timely fashion in accordance with the Act and regulation;</P> <P>(2) Make any amendment of records accurately and in a timely fashion;</P> <P>(3) Inform all persons whom the accounting records show have received copies of the record prior to the amendments of the correction; and</P> <P>(4) Associate any statement of disagreement with the disputed record, and</P> <P>(a) Transmit a copy of the statement to all persons whom the accounting records show have received a copy of the disputed record, and</P> <P>(b) Transmit that statement with any future disclosure.</P> </APPENDIX> <APPENDIX> <EAR>Pt. 5b, App. B</EAR> <HD SOURCE="HED">Appendix B to Part <E T="01">5b</E> <E T="04">—Routine Uses Applicable to More Than One System of Records Maintained by ED</E> </HD> <P>(1) In the event that a system of records maintained by this agency to carry out its functions indicates a violation or potential violation of law, whether civil, criminal or regulatory in nature, and whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, the relevant records in the system of records may be referred, as a routine use, to the appropriate agency, whether federal, or foreign, charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute, or rule, regulation or order issued pursuant thereto.</P> <P>(2) Referrals may be made of assignments of research investigators and project monitors to specific research projects to the Smithsonian Institution to contribute to the Smithsonian Science Information Exchange, Inc.</P> <P>(3) In the event the Department deems it desirable or necessary, in determining whether particular records are required to be disclosed under the Freedom of Information Act, disclosure may be made to the Department of Justice for the purpose of obtaining its advice.</P> <P>(4) A record from this system of records may be disclosed as a “routine use” to a federal, state or local agency maintaining civil, criminal or other relevant enforcement records or other pertinent records, such as current licenses, if necessary to obtain a record relevant to an agency decision concerning the hiring or retention of an employee, the issuance of a security clearance, the letting of a contract, or the issuance of a license, grant or other benefit. </P> <FP>A record from this system of records may be disclosed to a federal agency, in response to its request, in connection with the hiring or retention of an employee, the issuance of a security clearance, the reporting of an investigation of an employee, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the record is relevant and necessary to the requesting agency's decision on the matter.</FP> <P>(5) In the event that a system of records maintained by this agency to carry out its function indicates a violation or potential violation of law, whether civil, criminal or regulatory in nature, and whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, the relevant records in the system of records may be referred, as a routine use, to the appropriate agency, whether state or local charged with the responsibility <PRTPAGE P="26"/>of investigating or prosecuting such violation or charged with enforcing or implementing the statute, or rule, regulation or order issued pursuant thereto.</P> <P>(6) Where federal agencies having the power to subpoena other federal agencies’ records, such as the Internal Revenue Service or the Civil Rights Commission, issue a subpoena to the Department for records in this system of records, the Department will make such records available.</P> <P>(7) Where a contract between a component of the Department and a labor organization recognized under E.O. 11491 provides that the agency will disclose personal records relevant to the organization's mission, records in this system of records may be disclosed to such organization.</P> <P>(8) Where the appropriate official of the Department, pursuant to the Department's Freedom of Information Regulation determines that it is in the public interest to disclose a record which is otherwise exempt from mandatory disclosure, disclosure may be made from this system of records.</P> <P>(9) The Department contemplates that it will contract with a private firm for the purpose of collating, analyzing, aggregating or otherwise refining records in this system. Relevant records will be disclosed to such a contractor. The contractor shall be required to maintain Privacy Act safeguards with respect to such records.</P> <P>(10) To individuals and organizations, deemed qualified by the Secretary to carry out specific research solely for the purpose of carrying out such research.</P> <P>(11) Disclosures in the course of employee discipline or competence determination proceedings.</P> <CITA>[45 FR 30808, May 9, 1980; 45 FR 37426, June 3, 1980]</CITA> </APPENDIX> </PART> <PART> <EAR>Pt. 6</EAR> <HD SOURCE="HED">PART 6—INVENTIONS AND PATENTS (GENERAL)</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>6.0</SECTNO> <SUBJECT>General policy.</SUBJECT> <SECTNO>6.1</SECTNO> <SUBJECT>Publication or patenting of inventions.</SUBJECT> <SECTNO>6.3</SECTNO> <SUBJECT>Licensing of Government-owned patents.</SUBJECT> <SECTNO>6.4</SECTNO> <SUBJECT>Central records; confidentiality. </SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 301.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 30814, May 9, 1980, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 6.0</SECTNO> <SUBJECT>General policy.</SUBJECT> <P>Inventions developed through the resources and activities of the Department are a potential resource of great value to the public. It is the policy of the Department:</P> <P>(a) To safeguard the public interest in inventions developed by Department employees, contractors and grantees with the aid of public funds and facilities;</P> <P>(b) To encourage and recognize individual and cooperative achievement in research and investigations; and</P> <P>(c) To establish a procedure, consistent with pertinent statutes, Executive orders and general Government regulations, for the determination of rights and obligations relating to the patenting of inventions.</P> </SECTION> <SECTION> <SECTNO>§ 6.1</SECTNO> <SUBJECT>Publication or patenting of inventions.</SUBJECT> <P>It is the general policy of the Department that the results of Department research should be made widely, promptly and freely available to other research workers and to the public. This availability can generally be adequately preserved by the dedication of a Government-owned invention to the public. Determinations to file a domestic patent application on inventions in which the Department has an interest will be made where the circumstances indicate that this is desirable in the public interest, and if it is practicable to do so. Department determinations not to apply for a domestic patent on employee inventions are subject to review and approval by the Commissioner of Patents. Except where deemed necessary for protecting the patent claim, the fact that a patent application has been or may be filed will not require any departure from normal policy regarding the dissemination of the results of Department research.</P> </SECTION> <SECTION> <SECTNO>§ 6.3</SECTNO> <SUBJECT>Licensing of Government-owned patents.</SUBJECT> <P>(a) Licenses to practice inventions covered by patents and pending patent applications owned by the U.S. Government as represented by this Department will generally be royalty free, revocable and nonexclusive. They will normally be issued to all applicants and will generally contain no limitations or standards relating to the quality or testing of the products to be manufactured, sold, or distributed thereunder.</P> <P>(b) Where it appears however that the public interest will be served under the circumstances of the particular case by licenses which impose conditions, such <PRTPAGE P="27"/>as those relating to quality or testing of products, requirement of payment of royalties to the Government, etc., or by the issuance of limited exclusive licenses by the Secretary after notice and opportunity for hearing thereon, such licenses may be issued.</P> </SECTION> <SECTION> <SECTNO>§ 6.4</SECTNO> <SUBJECT>Central records; confidentiality.</SUBJECT> <P>Central files and records shall be maintained of all inventions, patents, and licenses in which the Department has an interest, together with a record of all licenses issued by the Department under such patents. Invention reports required from employees or others for the purpose of obtaining determinations of ownership, and documents and information obtained for the purpose of prosecuting patent applications shall be confidential and shall be disclosed only as required for official purposes or with the consent of the inventor.</P> </SECTION> </PART> <PART> <EAR>Pt. 7</EAR> <HD SOURCE="HED">PART 7—EMPLOYEE INVENTIONS</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>7.0</SECTNO> <SUBJECT>Who are employees.</SUBJECT> <SECTNO>7.1</SECTNO> <SUBJECT>Duty of employee to report inventions.</SUBJECT> <SECTNO>7.3</SECTNO> <SUBJECT>Determination as to domestic rights.</SUBJECT> <SECTNO>7.4</SECTNO> <SUBJECT>Option to acquire foreign rights.</SUBJECT> <SECTNO>7.7</SECTNO> <SUBJECT>Notice to employee of determination.</SUBJECT> <SECTNO>7.8</SECTNO> <SUBJECT>Employee's right of appeal. </SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>E.O. 10096, 15 FR 391; 3 CFR 1950 Supp.; E.O. 10930, 26 FR 2583; 3 CFR 1961 Supp.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 30814, May 9, 1980, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 7.0</SECTNO> <SUBJECT>Who are employees.</SUBJECT> <P>As used in this part, the term <E T="03">Government employee</E> means any officer or employee, civilian or military, except such part-time employees or part-time consultants as may be excluded therefrom by a determination made in writing by the head of the employee's office or constituent organization, pursuant to an exemption approved by the Commissioner of Patents that to include him or them would be impracticable or inequitable, given the reasons therefor. A person shall not be considered to be a part-time employee or part-time consultant for this purpose unless the terms of his employment contemplate that he shall work for less than the minimum number of hours per day, or less than a minimum number of days per week, or less than the minimum number of weeks per year, regularly required of full-time employees of his class.</P> </SECTION> <SECTION> <SECTNO>§ 7.1</SECTNO> <SUBJECT>Duty of employee to report inventions.</SUBJECT> <P>Every Department employee is required to report to the Secretary in accordance with the procedures established therefor, every invention made by him (whether or not jointly with others) which bears any relation to his official duties or which was made in whole or in any part during working hours, or with any contribution of Government facilities, equipment, material, funds, or information, or of time or services of other Government employees on official duty.</P> </SECTION> <SECTION> <SECTNO>§ 7.3</SECTNO> <SUBJECT>Determination as to domestic rights.</SUBJECT> <P>The determination of the ownership of the domestic right, title, and interest in and to an invention which is or may be patentable, made by a Government employee while under the administrative jurisdiction of the Department, will be made in writing by the Secretary in accordance with the provisions of Executive Order 10096 and Government-wide regulations issued thereunder by the Commissioner of Patents as follows:</P> <P>(a) The Government as represented by the Secretary shall obtain the entire domestic right, title and interest in and to all inventions made by any Government employee (1) during working hours, or (2) with a contribution by the Government of facilities, equipment, materials, funds, or information, or of time or services of other Government employees on official duty, or (3) which bear a direct relation to or are made in consequence of the official duties of the inventor.</P> <P>(b) In any case where the contribution of the Government, as measured by any one or more of the criteria set forth in paragraph (a) of this section, to the invention is insufficient equitably to justify a requirement of assignment to the Government of the entire domestic right, title and interest in and to such invention, or in any case where the Government has insufficient <PRTPAGE P="28"/>interest in an invention to obtain the entire domestic right, title, and interest therein (although the Government could obtain same under paragraph (a) of this section), the Department, subject to the approval of the Commissioner, shall leave title to such invention in the employee, subject, however, to the reservation to the Government of a nonexclusive, irrevocable, royalty-free license in the invention with power to grant licenses for all governmental purposes, such reservation to appear, where practicable, in any patent, domestic or foreign, which may issue on such invention.</P> <P>(c) In applying the provisions of paragraphs (a) and (b) of this section, to the facts and circumstances relating to the making of any particular invention, it shall be presumed that an invention made by an employee who is employed or assigned (1) to invent or improve or perfect any art, machine, manufacture, or composition of matter, (2) to conduct or perform research, development work, or both, (3) to supervise, direct, coordinate, or review Government financed or conducted research, development work, or both, or (4) to act in a liaison capacity among governmental or nongovernmental agencies or individuals engaged in such work, falls within the provisions of paragraph (a) of this section, and it shall be presumed that any invention made by any other employee falls within the provisions of paragraph (b) of this section. Either presumption may be rebutted by a showing of the facts and circumstances and shall not preclude a determination that these facts and circumstances justify leaving the entire right, title and interest in and to the invention in the Government employee, subject to law.</P> <P>(d) In any case wherein the Government neither (1) obtains the entire domestic right, title and interest in and to an invention pursuant to the provisions of paragraph (a) of this section, nor (2) reserves a nonexclusive, irrevocable, royalty-free license in the invention, with power to grant licenses for all governmental purposes, pursuant to the provisions of paragraph (b) of this section, the Government shall leave the entire right, title and interest in and to the invention in the Government employee, subject to law.</P> </SECTION> <SECTION> <SECTNO>§ 7.4</SECTNO> <SUBJECT>Option to acquire foreign rights.</SUBJECT> <P>In any case where it is determined that all domestic rights should be assigned to the Government, it shall further be determined, pursuant to Executive Order 9865 and Government-wide regulations issued thereunder, that the Government shall reserve an option to require the assignment of such rights in all or in any specified foreign countries. In case where the inventor is not required to assign the patent rights in any foreign country or countries to the Government or the Government fails to exercise its option within such period of time as may be provided by regulations issued by the Commissioner of Patents, any application for a patent which may be filed in such country or countries by the inventor or his assignee shall nevertheless be subject to a nonexclusive, irrevocable, royalty-free license to the Government for all governmental purposes, including the power to issue sublicenses for use in behalf of the Government and/or in furtherance of the foreign policies of the Government.</P> </SECTION> <SECTION> <SECTNO>§ 7.7</SECTNO> <SUBJECT>Notice to employee of determination.</SUBJECT> <P>The employee-inventor shall be notified in writing of the Department's determination of the rights to his invention and of his right of appeal, if any. Notice need not be given if the employee stated in writing that he would agree to the determination of ownership which was in fact made.</P> </SECTION> <SECTION> <SECTNO>§ 7.8</SECTNO> <SUBJECT>Employee's right of appeal.</SUBJECT> <P>An employee who is aggrieved by a determination of the Department may appeal to the Commissioner of Patents, pursuant to section 4(d) of Executive Order 10096, as amended by Executive Order 10930, and regulations issued thereunder, by filing a written appeal with the Commissioner, in duplicate, and a copy of the appeal with the Secretary within 30 days (or such longer period as the Commissioner may, for good cause, fix in any case) after receiving written notice of such determination.</P> </SECTION> </PART> <PART> <PRTPAGE P="29"/> <EAR>Pt. 8</EAR> <HD SOURCE="HED">PART 8—DEMANDS FOR TESTIMONY OR RECORDS IN LEGAL PROCEEDINGS</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>8.1</SECTNO> <SUBJECT>What is the scope and applicability of this part?</SUBJECT> <SECTNO>8.2</SECTNO> <SUBJECT>What definitions apply?</SUBJECT> <SECTNO>8.3</SECTNO> <SUBJECT>What are the requirements for submitting a demand for testimony or records?</SUBJECT> <SECTNO>8.4</SECTNO> <SUBJECT>What procedures are followed in response to a demand for testimony?</SUBJECT> <SECTNO>8.5</SECTNO> <SUBJECT>What procedures are followed in response to a demand for records? </SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 301; 5 U.S.C. 552; 20 U.S.C. 3474, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>57 FR 34646, Aug. 5, 1992, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 8.1</SECTNO> <SUBJECT>What is the scope and applicability of this part?</SUBJECT> <P>(a) Except as provided in paragraph (c) of this section, this part establishes the procedures to be followed if the Department or any departmental employee receives a demand for—</P> <P>(1) Testimony by an employee concerning—</P> <P>(i) Records contained in the files of the Department;</P> <P>(ii) Information relating to records contained in the files of the Department; or</P> <P>(iii) Information or records acquired or produced by the employee in the course of his or her official duties or because of the employee's official status; or</P> <P>(2) The production or disclosure of any information or records referred to in paragraph (a)(1) of this section.</P> <P>(b) This part does not create any right or benefit, substantive or procedural, enforceable by any person against the Department.</P> <P>(c) This part does not apply to—</P> <P>(1) Any proceeding in which the United States is a party before an adjudicative authority;</P> <P>(2) A demand for testimony or records made by either House of Congress or, to the extent of matter within its jurisdiction, any committee or subcommittee of Congress; or</P> <P>(3) An appearance by an employee in his or her private capacity in a legal proceeding in which the employee's testimony does not relate to the mission or functions of the Department.</P> <SECAUTH>(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 8.2</SECTNO> <SUBJECT>What definitions apply?</SUBJECT> <P>The following definitions apply to this part:</P> <P> <E T="03">Adjudicative authority</E> includes, but is not limited to—</P> <P>(1) A court of law or other judicial forums; and</P> <P>(2) Mediation, arbitration, or other forums for dispute resolution.</P> <P> <E T="03">Demand</E> includes a subpoena, subpoena duces tecum, request, order, or other notice for testimony or records arising in a legal proceeding.</P> <P> <E T="03">Department</E> means the U.S. Department of Education.</P> <P> <E T="03">Employee</E> means a current employee or official of the Department or of an advisory committee of the Department, including a special government employee, unless specifically provided otherwise in this part.</P> <P> <E T="03">Legal proceeding</E> means—</P> <P>(1) A proceeding before an adjudicative authority;</P> <P>(2) A legislative proceeding, except for a proceeding before either House of Congress or before any committee or subcommittee of Congress, to the extent of matter within the committee's or subcommittee's jurisdiction; or</P> <P>(3) An administrative proceeding.</P> <P> <E T="03">Secretary</E> means the Secretary of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <P> <E T="03">Testimony</E> means statements made in connection with a legal proceeding, including but not limited to statements in court or other forums, depositions, declarations, affidavits, or responses to interrogatories.</P> <P> <E T="03">United States</E> means the Federal Government of the United States and any of its agencies or instrumentalities.</P> <SECAUTH>(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 8.3</SECTNO> <SUBJECT>What are the requirements for submitting a demand for testimony or records?</SUBJECT> <P>(a) A demand for testimony of an employee or former employee, or a demand for records issued pursuant to the rules governing the legal proceeding in which the demand arises—<PRTPAGE P="30"/> </P> <P>(1) Must be in writing; and</P> <P>(2) Must state the nature of the requested testimony or records and why the information sought is unavailable by any other means.</P> <P>(b) Service of a demand for testimony of an employee or former employee must be made on the employee or former employee whose testimony is demanded, with a copy simultaneously delivered to the General Counsel, U.S. Department of Education, Office of the General Counsel, 400 Maryland Avenue, SW., room 4083, FOB-6, Washington, DC 20202-2100.</P> <P>(c) Service of a demand for records, as described in § 8.5(a)(1), must be made on an employee or former employee who has custody of the records, with a copy simultaneously delivered to the General Counsel at the address listed in paragraph (b) of this section. For assistance in identifying the custodian of the specific records demanded, contact the Records Management Branch Chief, Office of Information Resources Management, U.S. Department of Education, 7th and D Streets, SW., ROB-3, Washington, DC 20202-4753.</P> <SECAUTH>(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)</SECAUTH> <APPRO>(Approved by the Office of Management and Budget under control number 1801-0002)</APPRO> <CITA>[57 FR 34646, Aug. 5, 1992, as amended at 58 FR 7860, Feb. 9, 1993]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.4</SECTNO> <SUBJECT>What procedures are followed in response to a demand for testimony?</SUBJECT> <P>(a) After an employee receives a demand for testimony, the employee shall immediately notify the Secretary and request instructions.</P> <P>(b) An employee may not give testimony without the prior written authorization of the Secretary.</P> <P>(c)(1) The Secretary may allow an employee to testify if the Secretary determines that the demand satisfies the requirements of § 8.3 and that granting permission—</P> <P>(i) Would be appropriate under the rules of procedure governing the matter in which the demand arises and other applicable laws, rules, and regulations; and</P> <P>(ii) Would not be contrary to an interest of the United States, which includes furthering a public interest of the Department and protecting the human and financial resources of the United States.</P> <P>(2) The Secretary may establish conditions under which the employee may testify.</P> <P>(d) If a response to a demand for testimony is required before the Secretary determines whether to allow an employee to testify, the employee or counsel for the employee shall—</P> <P>(1) Inform the court or other authority of the regulations in this part; and</P> <P>(2) Request that the demand be stayed pending the employee's receipt of the Secretary's instructions.</P> <P>(e) If the court or other authority declines the request for a stay, or rules that the employee must comply with the demand regardless of the Secretary's instructions, the employee or counsel for the employee shall respectfully decline to comply with the demand, citing <E T="03">United States ex rel. Touhy</E> v. <E T="03">Ragen,</E> 340 U.S. 462 (1951), and the regulations in this part.</P> <SECAUTH>(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 8.5</SECTNO> <SUBJECT>What procedures are followed in response to a demand for records?</SUBJECT> <P>(a)(1) After an employee receives a demand for records issued pursuant to the rules governing the legal proceeding in which the demand arises, the employee shall immediately notify the Secretary and request instructions.</P> <P>(2) If an employee receives any other demand for records, the Department—</P> <P>(i) Considers the demand to be a request for records under the Freedom of Information Act; and</P> <P>(ii) Handles the demand under rules governing public disclosure, as established in 34 CFR part 5.</P> <P>(b) An employee may not produce records in response to a demand as described in paragraph (a)(1) of this section without the prior written authorization of the Secretary.</P> <P>(c) The Secretary may make these records available if the Secretary determines that the demand satisfies the requirements of § 8.3 and that -disclosure—</P> <P>(1) Would be appropriate under the rules of procedure governing the matter in which the demand arises and other applicable laws, rules, and regulations; and<PRTPAGE P="31"/> </P> <P>(2) Would not be contrary to an interest of the United States, which includes furthering a public interest of the Department and protecting the human and financial resources of the United States.</P> <P>(d) If a response to a demand for records as described in paragraph (a)(1) of this section is required before the Secretary determines whether to allow an employee to produce those records, the employee or counsel for the employee shall—</P> <P>(1) Inform the court or other authority of the regulations in this part; and</P> <P>(2) Request that the demand be stayed pending the employee's receipt of the Secretary's instructions.</P> <P>(e) If the court or other authority declines the request for a stay, or rules that the employee must comply with the demand regardless of the Secretary's instructions, the employee or counsel for the employee shall respectfully decline to comply with the demand, citing <E T="03">United States ex rel. Touhy</E> v. <E T="03">Ragen,</E> 340 U.S. 462 (1951), and the regulations in this part.</P> <SECAUTH>(Authority: 5 U.S.C. 301; 5 U.S.C. 552; 20 U.S.C. 3474)</SECAUTH> </SECTION> </PART> <PART> <EAR>Pt. 12</EAR> <HD SOURCE="HED">PART 12—DISPOSAL AND UTILIZATION OF SURPLUS FEDERAL REAL PROPERTY FOR EDUCATIONAL PURPOSES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>12.1</SECTNO> <SUBJECT>What is the scope of this part?</SUBJECT> <SECTNO>12.2</SECTNO> <SUBJECT>What definitions apply?</SUBJECT> <SECTNO>12.3</SECTNO> <SUBJECT>What other regulations apply to this program?</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Distribution of Surplus Federal Real Property</HD> <SECTNO>12.4</SECTNO> <SUBJECT>How does the Secretary provide notice of availability of surplus Federal real property?</SUBJECT> <SECTNO>12.5</SECTNO> <SUBJECT>Who may apply for surplus Federal real property?</SUBJECT> <SECTNO>12.6</SECTNO> <SUBJECT>What must an application for surplus Federal real property contain?</SUBJECT> <SECTNO>12.7</SECTNO> <SUBJECT>How is surplus Federal real property disposed of when there is more than one applicant?</SUBJECT> <SECTNO>12.8</SECTNO> <SUBJECT>What transfer or lease instruments does the Secretary use?</SUBJECT> <SECTNO>12.9</SECTNO> <SUBJECT>What warranties does the Secretary give?</SUBJECT> <SECTNO>12.10</SECTNO> <SUBJECT>How is a Public Benefit Allowance (PBA) calculated?</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Conditions Applicable to Transfers or Leases</HD> <SECTNO>12.11</SECTNO> <SUBJECT>What statutory provisions and Executive Orders apply to transfers of surplus Federal real property?</SUBJECT> <SECTNO>12.12</SECTNO> <SUBJECT>What are the terms and conditions of transfers or leases of surplus Federal real property?</SUBJECT> <SECTNO>12.13</SECTNO> <SUBJECT>When is use of the transferred surplus Federal real property by entities other than the transferee or lessee permissible?</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTNO>12.14</SECTNO> <SUBJECT>What are the sanctions for noncompliance with a term or condition of a transfer or lease of surplus Federal real property?</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Abrogation</HD> <SECTNO>12.15</SECTNO> <SUBJECT>What are the procedures for securing an abrogation of the conditions and restrictions contained in the conveyance instrument?</SUBJECT> <APP>Appendix A to Part 12—<E T="04">Public Benefit Allowance for Transfer of Surplus Federal Real Property for Educational Purposes</E> </APP> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>40 U.S.C. 471-488; 20 U.S.C. 3401 <E T="03">et seq.</E>; 42 U.S.C. 2000d (1) <E T="03">et seq.</E>; 20 U.S.C. 1681 <E T="03">et seq.</E>; 29 U.S.C. 794 <E T="03">et seq.</E>; 42 U.S.C. 4332.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>57 FR 60394, Dec. 18, 1992, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 12.1</SECTNO> <SUBJECT>What is the scope of this part?</SUBJECT> <P>This part is applicable to surplus Federal real property located within any State that is appropriate for assignment to, or that has been assigned to, the Secretary by the Administrator for transfer for educational purposes, as provided for in section 203(k) of the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 <E T="03">et seq.).</E> </P> <SECAUTH>(Authority: 40 U.S.C. 484(k))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.2</SECTNO> <SUBJECT>What definitions apply?</SUBJECT> <P>(a) <E T="03">Definitions in the Act.</E> The following terms used in this part are defined in section 472 of the Act: </P> <FP SOURCE="FP-1">Administrator</FP> <FP SOURCE="FP-1">Surplus property</FP> <P>(b) <E T="03">Definitions in the Education Department General Administrative Regulations <PRTPAGE P="32"/>(EDGAR).</E> The following terms used in this part are defined in 34 CFR 77.1: </P> <FP SOURCE="FP-1">Department</FP> <FP SOURCE="FP-1">Secretary</FP> <FP SOURCE="FP-1">State</FP> <P>(c) <E T="03">Other definitions:</E> The following definitions also apply to this part:</P> <P> <E T="03">Abrogation</E> means the procedure the Secretary may use to release the transferee of surplus Federal real property from the covenants, conditions, reservations, and restrictions contained in the conveyance instrument before the term of the instrument expires.</P> <P> <E T="03">Act</E> means the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 <E T="03">et seq</E>.).</P> <P> <E T="03">Applicant</E> means an eligible entity as described in §12.5 that formally applies to be a transferee or lessee of surplus Federal real property, using a public benefit allowance (PBA) under the Act.</P> <P> <E T="03">Lessee</E>, except as used in §12.14(a)(5), means an entity that is given temporary possession, but not title, to surplus Federal real property by the Secretary for educational purposes.</P> <P> <E T="03">Nonprofit institution</E> means any institution, organization, or association, whether incorporated or unincorporated—</P> <P>(1) The net earnings of which do not inure or may not lawfully inure to the benefit of any private shareholder or individual; and</P> <P>(2) That has been determined by the Internal Revenue Service to be tax-exempt under section 501(c)(3) of title 26.</P> <P> <E T="03">Off-site property</E> means surplus buildings and improvements—including any related personal property—that are capable of being removed from the underlying land and that are transferred by the Secretary without transferring the underlying real property.</P> <P> <E T="03">On-site property</E> means surplus Federal real property, including any related personal property—other than off-site property.</P> <P> <E T="03">Period of restriction</E> means that period during which the surplus Federal real property transferred for educational purposes must be used by the transferee or lessee in accordance with covenants, conditions, and any other restrictions contained in the conveyance instrument.</P> <P> <E T="03">Program and plan of use</E> means the educational activities to be conducted by the transferee or lessee using the surplus Federal real property, as described in the application for that property.</P> <P> <E T="03">Public benefit allowance</E> (“PBA”) means the credit, calculated in accordance with appendix A to this part, given to a transferee or lessee which is applied against the fair market value of the surplus Federal real property at the time of the transfer or lease of such property in exchange for the proposed educational use of the property by the transferee or lessee.</P> <P> <E T="03">Related personal property</E> means any personal property—</P> <P>(1) That is located on and is an integral part of, or incidental to the operation of, the surplus Federal real property; or</P> <P>(2) That is determined by the Administrator to be otherwise related to the surplus Federal real property.</P> <P> <E T="03">Surplus Federal real property</E> means the property assigned or suitable for assignment to the Secretary by the Administrator for disposal under the Act.</P> <P> <E T="03">Transfer</E> means to sell and convey title to surplus Federal real property for educational purposes as described in this part.</P> <P> <E T="03">Transferee</E> means that entity which has purchased and acquired title to the surplus Federal real property for educational purposes pursuant to section 203(k) of the Act.</P> <SECAUTH>(Authority: 40 U.S.C. 472 and 20 U.S.C. 3401 <E T="03">et seq.</E>)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.3</SECTNO> <SUBJECT>What other regulations apply to this program?</SUBJECT> <P>The following regulations apply to this program:</P> <P>(a) 34 CFR parts 100, 104, and 106.</P> <P>(b) 41 CFR part 101-47.</P> <P>(c) 34 CFR part 85.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k); 42 U.S.C. 2000d-1 <E T="03">et seq</E>.; 29 U.S.C. 794 <E T="03">et seq</E>.; 20 U.S.C. 1681 <E T="03">et seq</E>.; Executive Order 12549; and 20 U.S.C. 3474)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="33"/> <HD SOURCE="HED">Subpart B—Distribution of Surplus Federal Real Property</HD> <SECTION> <SECTNO>§ 12.4</SECTNO> <SUBJECT>How does the Secretary provide notice of availability of surplus Federal real property?</SUBJECT> <P>The Secretary notifies potential applicants of the availability of surplus Federal real property for transfer for educational uses in accordance with 41 CFR 101-47.308-4.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.5</SECTNO> <SUBJECT>Who may apply for surplus Federal real property?</SUBJECT> <P>The following entities may apply for surplus Federal real property:</P> <P>(a) A State.</P> <P>(b) A political subdivision or instrumentality of a State.</P> <P>(c) A tax-supported institution.</P> <P>(d) A nonprofit institution.</P> <P>(e) Any combination of these entities.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(1)(A))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.6</SECTNO> <SUBJECT>What must an application for surplus Federal real property contain?</SUBJECT> <P>An application for surplus Federal real property must—</P> <P>(a) Contain a program and plan of use;</P> <P>(b) Contain a certification from the applicant that the proposed program is not in conflict with State or local zoning restrictions, building codes, or similar limitations;</P> <P>(c) Demonstrate that the proposed program and plan of use of the surplus Federal real property is for a purpose that the applicant is authorized to carry out;</P> <P>(d) Demonstrate that the applicant is able, willing, and authorized to assume immediate custody, use, care, and maintenance of the surplus Federal real property;</P> <P>(e) Demonstrate that the applicant is able, willing, and authorized to pay the administrative expenses incident to the transfer or lease;</P> <P>(f) Demonstrate that the applicant has the necessary funds, or the ability to obtain those funds immediately upon transfer or lease, to carry out the proposed program and plan of use for the surplus Federal real property;</P> <P>(g) Demonstrate that the applicant has an immediate need and ability to use all of the surplus Federal real property for which it is applying;</P> <P>(h) Demonstrate that the surplus Federal real property is needed for educational purposes at the time of application and that it is so needed for the duration of the period of restriction;</P> <P>(i) Demonstrate that the surplus Federal real property is suitable or adaptable to the proposed program and plan of use; and</P> <P>(j) Provide information requested by the Secretary in the notice of availability, including information of the effect of the proposed program and plan of use on the environment.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0524)</APPRO> <SECAUTH>(Authority: 40 U.S.C. 484(k))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.7</SECTNO> <SUBJECT>How is surplus Federal real property disposed of when there is more than one applicant?</SUBJECT> <P>(a) If there is more than one applicant for the same surplus Federal real property, the Secretary transfers or leases the property to the applicant whose proposed program and plan of use the Secretary determines provides the greatest public benefit, using the criteria contained in appendix A to this part that broadly address the weight given to each type of entity applying and its proposed program and plan of use. (See example in § 12.10(d)).</P> <P>(b) If, after applying the criteria described in paragraph (a) of this section, two or more applicants are rated equally, the Secretary transfers or leases the property to one of the applicants after—</P> <P>(1) Determining the need for each applicant's proposed educational use at the site of the surplus Federal real property;</P> <P>(2) Considering the quality of each applicant's proposed program and plan of use; and</P> <P>(3) Considering each applicant's ability to carry out its proposed program and plan of use.</P> <P>(c) If the Secretary determines that the surplus Federal real property is capable of serving more than one applicant, the Secretary may apportion it to fit the needs of as many applicants as is practicable.<PRTPAGE P="34"/> </P> <P>(d)(1) The Secretary generally transfers surplus Federal real property to a selected applicant that meets the requirements of this part.</P> <P>(2) Alternatively, the Secretary may lease surplus Federal real property to a selected applicant that meets the requirements of this part if the Secretary determines that a lease will promote the most effective use of the property consistent with the purposes of this part or if having a lease is otherwise in the best interest of the United States, as determined by the Secretary.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.8</SECTNO> <SUBJECT>What transfer or lease instruments does the Secretary use?</SUBJECT> <P>(a) The Secretary transfers or leases surplus Federal real property using transfer or lease instruments that the Secretary prescribes.</P> <P>(b) The transfer or lease instrument contains the applicable terms and conditions described in this part and any other terms and conditions the Secretary or Administrator determines are appropriate or necessary.</P> <SECAUTH>(Authority: 40 U.S.C. 484(c))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.9</SECTNO> <SUBJECT>What warranties does the Secretary give?</SUBJECT> <P>The Secretary transfers or leases surplus Federal real property on an “as is, where is,” basis without warranty of any kind.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 12.10</SECTNO> <SUBJECT>How is a Public Benefit Allowance (PBA) calculated?</SUBJECT> <P>(a) The Secretary calculates a PBA in accordance with the provisions of appendix A to this part taking into account the nature of the applicant, and the need for, impact of, and type of program and plan of use for the property, as described in that appendix.</P> <P>(b) The following are illustrative examples of how a PBA would be calculated and applied under appendix A:</P> <P>(1) Entity A is a specialized school that has had a building destroyed by fire, and that has existing facilities determined by the Secretary to be between 26 and 50% inadequate. It is proposing to use the surplus Federal real property to add a new physical education program. Entity A would receive a basic PBA of 70%, a 10% hardship organization allowance, a 20% allowance for inadequacy of existing school plant facilities, and a 10% utilization allowance for introduction of new instructional programs. Entity A would have a total PBA of 110%. If Entity A is awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA exceeds 100%.</P> <P>(2) Entity B proposes to use the surplus Federal real property for nature walks. Because this qualifies as an outdoor educational program, Entity B would receive a basic PBA of 40%. If Entity B is awarded the surplus Federal real property, it would be required to pay 60% of the fair market value of the surplus Federal real property in cash at the time of the transfer.</P> <P>(3) Entity C is an accredited university, has an ROTC unit, and proposes to use the surplus Federal real property for a school health clinic and for special education of the physically handicapped. Entity C would receive a basic PBA of 50% (as a college or university), a 20% accreditation organization allowance (accredited college or university), a 10% public service training organization allowance (ROTC), a 10% student health and welfare utilization allowance (school health clinic), and a 10% service to the handicapped utilization allowance (education of the physically handicapped). Entity C would have a total PBA of 100%. If Entity C is awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA is 100%.</P> <P>(4) Entities A, B, and C all submit applications for the same surplus Federal real property. Unless the Secretary decides to apportion it, the Secretary transfers or leases the surplus Federal real property to Entity A, since its proposed program and plan of use has the highest total PBA.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(1)(c))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="35"/> <HD SOURCE="HED">Subpart C—Conditions Applicable to Transfers or Leases</HD> <SECTION> <SECTNO>§ 12.11</SECTNO> <SUBJECT>What statutory provisions and Executive Orders apply to transfers of surplus Federal real property?</SUBJECT> <P>The Secretary directs the transferee or lessee to comply with applicable provisions of the following statutes and Executive Orders prior to, or immediately upon, transfer or lease, as applicable:</P> <P>(a) National Environmental Policy Act of 1969, 42 U.S.C. 4332.</P> <P>(b) National Historic Preservation Act of 1966, 16 U.S.C. 470.</P> <P>(c) National Flood Insurance Act of 1968, 42 U.S.C. 4001 <E T="03">et seq.</E> </P> <P>(d) Floodplain Management, Exec. Order No. 11988, 42 FR 26951 (May 25, 1977).</P> <P>(e) Protection of Wetlands, Exec. Order No. 11990, 42 FR 26961 (May 25, 1977).</P> <P>(f) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000(d)(1) <E T="03">et seq.</E> </P> <P>(g) Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 <E T="03">et seq.</E> </P> <P>(h) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 <E T="03">et seq.</E> </P> <P>(i) Age Discrimination Act of 1975, 42 U.S.C. 1601 <E T="03">et seq.</E> </P> <P>(j) Any other applicable Federal or State laws and Executive Orders.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k))</SECAUTH> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0524)</APPRO> </SECTION> <SECTION> <SECTNO>§ 12.12</SECTNO> <SUBJECT>What are the terms and conditions of transfers or leases of surplus Federal real property?</SUBJECT> <P>(a) <E T="03">General terms and conditions for transfers and leases.</E> The following general terms and conditions apply to transfers and leases of surplus Federal real property under this part:</P> <P>(1) For the period provided in the transfer or lease instrument, the transferee or lessee shall use all of the surplus Federal real property it receives solely and continuously for its approved program and plan of use, in accordance with the Act and these regulations, except that—</P> <P>(i) The transferee or lessee has twelve (12) months from the date of transfer to place this surplus Federal real property into use, if the Secretary did not, at the time of transfer, approve in writing construction of major new facilities or major renovation of the property;</P> <P>(ii) The transferee or lessee has thirty-six (36) months from the date of transfer to place the surplus Federal real property into use, if the transferee or lessee proposes construction of major new facilities or major renovation of the property and the Secretary approves it in writing at the time of transfer; and</P> <P>(iii) The Secretary may permit use of the surplus Federal real property at any time during the period of restriction by an entity other than the transferee or lessee in accordance with § 12.13.</P> <P>(2) The transferee or lessee may not modify its approved program and plan of use without the prior written consent of the Secretary.</P> <P>(3) The transferee or lessee may not sell, lease or sublease, rent, mortgage, encumber, or otherwise dispose of all or a portion of the surplus Federal real property or any interest therein without the prior written consent of the Secretary.</P> <P>(4) A transferee or lessee shall pay all administrative costs incidental to the transfer or lease including, but not limited to—</P> <P>(i) Transfer taxes;</P> <P>(ii) Surveys;</P> <P>(iii) Appraisals;</P> <P>(iv) Inventory costs;</P> <P>(v) Legal fees;</P> <P>(vi) Title search;</P> <P>(vii) Certificate or abstract expenses;</P> <P>(viii) Decontamination costs;</P> <P>(ix) Moving costs;</P> <P>(x) Recordation expenses;</P> <P>(xi) Other closing costs; and</P> <P>(xii) Service charges, if any, provided for by an agreement between the Secretary and the applicable State agency for Federal Property Assistance.</P> <P>(5) The transferee or lessee shall protect the residual financial interest of the United States in the surplus Federal real property by insurance or such other means as the Secretary directs.</P> <P>(6) The transferee or lessee shall file with the Secretary reports on its maintenance and use of the surplus Federal real property and any other reports required by the Secretary in accordance with the transfer or lease instrument.<PRTPAGE P="36"/> </P> <P>(7) Any other term or condition that the Secretary determines appropriate or necessary.</P> <P>(b) <E T="03">Additional terms and conditions for on-site transfers.</E> The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period not to exceed thirty (30) years.</P> <P>(c) <E T="03">Additional terms and conditions for off-site transfers.</E> (1) The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period equivalent to the estimated economic life of the property conveyed for a transfer of off-site surplus Federal real property.</P> <P>(2) In addition to the terms and conditions contained in paragraph (c) of this section, the Secretary may also require the transferee of off-site surplus Federal real property—</P> <P>(i) To post performance bonds;</P> <P>(ii) To post performance guarantee deposits; or</P> <P>(iii) To give such other assurances as may be required by the Secretary or the holding agency to ensure adequate site clearance.</P> <P>(d) <E T="03">Additional terms and conditions for leases.</E> In addition to the terms and conditions contained in paragraph (a) of this section, the Secretary requires, for leases of surplus Federal real property, that all terms and conditions apply to the initial lease agreement, and any renewal periods, unless specifically excluded in writing by the Secretary.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(1))</SECAUTH> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0524)</APPRO> </SECTION> <SECTION> <SECTNO>§ 12.13</SECTNO> <SUBJECT>When is use of the transferred surplus Federal real property by entities other than the transferee or lessee permissible?</SUBJECT> <P>(a) <E T="03">By eligible entities.</E> A transferee or lessee may permit the use of all or a portion of the surplus Federal real property by another eligible entity as described in § 12.5, only upon those terms and conditions the Secretary determines appropriate if—</P> <P>(1) The Secretary determines that the proposed use would not substantially limit the program and plan of use by the transferee or lessee and that the use will not unduly burden the Department;</P> <P>(2) The Secretary's written consent is obtained by the transferee or lessee in advance; and</P> <P>(3) The Secretary approves the use instrument in advance and in writing.</P> <P>(b) <E T="03">By ineligible entities.</E> A transferee or lessee may permit the use of a portion of the surplus Federal real property by an ineligible entity, one not described in § 12.5, only upon those terms and conditions the Secretary determines appropriate if—</P> <P>(1) In accordance with paragraph (a) of this section, the Secretary makes the required determination and approves both the use and the use instrument;</P> <P>(2) The use is confined to a portion of the surplus Federal real property;</P> <P>(3) The use does not interfere with the approved program and plan of use for which the surplus Federal real property was conveyed; and</P> <P>(4) Any rental fees or other compensation for use are either remitted directly to the Secretary or are applied to purposes expressly approved in writing in advance by the Secretary.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(4))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTION> <SECTNO>§ 12.14</SECTNO> <SUBJECT>What are the sanctions for noncompliance with a term or condition of a transfer or lease of surplus Federal real property?</SUBJECT> <P>(a) <E T="03">General sanctions for noncompliance.</E> The Secretary imposes any or all of the following sanctions, as applicable, to all transfers or leases of surplus Federal real property:</P> <P>(1) If all or a portion of, or any interest in, the transferred or leased surplus Federal real property is not used or is sold, leased or subleased, encumbered, disposed of, or used for purposes other than those in the approved program and plan of use, without the prior written consent of the Secretary, the Secretary may require that—</P> <P>(i) All revenues and the reasonable value of other benefits received by the transferee or lessee directly or indirectly from that use, as determined by the Secretary, be held in trust by the transferee or lessee for the United States subject to the direction and control of the Secretary;<PRTPAGE P="37"/> </P> <P>(ii) Title or possession to the transferred or leased surplus Federal real property and the right to immediate possession revert to the United States;</P> <P>(iii) The surplus Federal real property be transferred or leased to another eligible entity as the Secretary directs;</P> <P>(iv) The transferee or lessee abrogate the conditions and restrictions in the transfer or lease instrument in accordance with the provisions of § 12.15;</P> <P>(v) The transferee or lessee place the surplus Federal real property into immediate use for an approved purpose and extend the period of restriction in the transfer or lease instrument for a term equivalent to the period during which the property was not fully and solely used for an approved use; or</P> <P>(vi) The transferee or lessee comply with any combination of the sanctions described in paragraph (a)(1) or (a)(3) of this section.</P> <P>(2) If title or possession reverts to the United States for noncompliance or is voluntarily reconveyed, the Secretary may require the transferee or lessee—</P> <P>(i) To reimburse the United States for the decrease in value of the transferred or leased surplus Federal real property not due to—</P> <P>(A) Reasonable wear and tear;</P> <P>(B) Acts of God; or</P> <P>(C) Reasonable alterations made by the transferee or lessee to adapt the surplus Federal real property to the approved program and plan of use for which it was transferred or leased;</P> <P>(ii) To reimburse the United States for any costs incurred in reverting title or possession;</P> <P>(iii) To forfeit any cash payments made by the transferee or lessee against the purchase or lease price of surplus Federal real property transferred;</P> <P>(iv) To take any other action directed by the Secretary; or</P> <P>(v) To comply with any combination of the provisions of paragraph (a)(3) of this section.</P> <P>(3) If the transferee or lessee does not put the surplus Federal real property into use within the applicable time limitation in § 12.12(a), the Secretary may require the transferee or lessee to make cash payments to the Secretary equivalent to the current fair market rental value of the surplus Federal real property for each month during which the program and plan of use has not been implemented.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(4))</SECAUTH> <P>(4) If the Secretary determines that a lessee of a transferee or a sublessee of a lessee is not complying with a term or condition of the lease, or if the lessee voluntarily surrenders the premises, the Secretary may require termination of the lease.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(4)(A))</SECAUTH> <P>(b) <E T="03">Additional sanction for noncompliance with off-site transfer.</E> In addition to the sanctions in paragraph (a) of this section, if the Secretary determines that a transferee is not complying with a term or condition of a transfer of off-site surplus Federal real property, the Secretary may require that the unearned PBA become immediately due and payable in cash to the United States.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(4)(A))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Abrogation</HD> <SECTION> <SECTNO>§ 12.15</SECTNO> <SUBJECT>What are the procedures for securing an abrogation of the conditions and restrictions contained in the conveyance instrument?</SUBJECT> <P>(a) The Secretary may, in the Secretary's sole discretion, abrogate the conditions and restrictions in the transfer or lease instrument if—</P> <P>(1) The transferee or lessee submits to the Secretary a written request that the Secretary abrogate the conditions and restrictions in the conveyance instrument as to all or any portion of the surplus Federal real property;</P> <P>(2) The Secretary determines that the proposed abrogation is in the best interests of the United States;</P> <P>(3) The Secretary determines the terms and conditions under which the Secretary will consent to the proposed abrogation; and</P> <P>(4) The Secretary transmits the abrogation to the Administrator and there is no disapproval by the Administrator within thirty (30) days after notice to the Administrator.</P> <P>(b) The Secretary abrogates the conditions and restrictions in the transfer <PRTPAGE P="38"/>or lease instrument upon a cash payment to the Secretary based on the formula contained in the transfer or lease instrument and any other terms and conditions the Secretary deems appropriate to protect the interest of the United States.</P> <SECAUTH>(Authority: 40 U.S.C. 484(k)(4)(A)(iii))</SECAUTH> </SECTION> <APPENDIX> <EAR>Pt. 12, App. A</EAR> <WHED>Appendix A to Part 12—Public Benefit Allowance for Transfer of Surplus Federal Real Property for Educational Purposes <SU>1</SU> <FTREF/> </WHED> <FTNT> <P> <SU>1</SU> This Appendix applies to transfers of both on-site and off-site surplus property.</P> </FTNT> <GPOTABLE CDEF="s10,5,5,5,5,5,5,5,5,5,5,5,5,5" COLS="14" OPTS="L2,i1"> <BOXHD> <CHED H="1">Classification</CHED> <CHED H="1">Percent allowed</CHED> <CHED H="2">Basic public benefit allowance</CHED> <CHED H="2">Organization allowances</CHED> <CHED H="3">Accreditation</CHED> <CHED H="3">Federal impact</CHED> <CHED H="3">Public service training</CHED> <CHED H="3">Hardship</CHED> <CHED H="3">Inadequacy of existing school plant facilities</CHED> <CHED H="4">10-25%</CHED> <CHED H="4">26-50%</CHED> <CHED H="4">51-100%</CHED> <CHED H="2">Utilization allowances</CHED> <CHED H="3">Introduction of new instructional programs</CHED> <CHED H="3">Student health and welfare</CHED> <CHED H="3">Research</CHED> <CHED H="3">Service to handicapped</CHED> <CHED H="2">Maximum public benefit allowance <SU>4</SU> </CHED> </BOXHD> <ROW> <ENT I="01">Elementary or high schools</ENT> <ENT>70</ENT> <ENT/> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>20</ENT> <ENT>30</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>100</ENT> </ROW> <ROW> <ENT I="01">Colleges or Universities</ENT> <ENT>50</ENT> <ENT>20</ENT> <ENT/> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>20</ENT> <ENT>30</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>100</ENT> </ROW> <ROW> <ENT I="01">Specialized schools</ENT> <ENT>70</ENT> <ENT/> <ENT/> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>20</ENT> <ENT>30</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>10</ENT> <ENT>100</ENT> </ROW> <ROW> <ENT I="01">Public libraries or educational museums</ENT> <ENT> <SU>2</SU> 100</ENT> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT> <SU>2</SU> 100</ENT> </ROW> <ROW> <ENT I="01">School outdoor education</ENT> <ENT>40</ENT> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT>10</ENT> <ENT> <SU>3</SU> 10</ENT> <ENT>10</ENT> <ENT/> <ENT>70</ENT> </ROW> <ROW> <ENT I="01">Central administrative and/or service centers</ENT> <ENT>80</ENT> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT/> <ENT>80</ENT> </ROW> <ROW> <ENT I="01">Non-profit educational research organizations</ENT> <ENT>50</ENT> <ENT>20</ENT> <ENT/> <ENT>10</ENT> <ENT/> <ENT/> <ENT/> <ENT/> <ENT>10</ENT> <ENT>10</ENT> <ENT/> <ENT>10</ENT> <ENT>100</ENT> </ROW> <TNOTE> <SU>2</SU> Applicable when this is the primary use to be made of the property. The public benefit allowance for the overall program is applicable when such facilities are conveyed as a minor component of other facilities.</TNOTE> <TNOTE> <SU>3</SU> This 10% may include an approvable recreation program which will be accessible to the public and entirely compatible with, but subordinate to, the educational program.</TNOTE> <TNOTE> <SU>4</SU> This column establishes the maximum discount from the fair market value for payment due from the transferee at the time of the transfer. This column does not apply for purposes of ranking applicants to determine to which applicant the property will be transferred. Competitive rankings are based on the absolute total of public benefit allowance points and are not limited to the 100% ceiling.</TNOTE> </GPOTABLE> </APPENDIX> </SUBPART> <EXTRACT> <HD SOURCE="HD1">Description of Terms Used in This Appendix</HD> <P> <E T="03">Elementary or High School</E> means an elementary school (including a kindergarten), high school, junior high school, junior-senior high school or elementary or secondary school system, that provides elementary or secondary education as determined under State law. However, it does not include a nursery school even though it may operate as part of a school system.</P> <P> <E T="03">College or University</E> means a non-profit or public university or college, including a junior college, that provides postsecondary education.</P> <P> <E T="03">Specialized School</E> means a vocational school, area trade school, school for the blind, or similar school.</P> <P> <E T="03">Public Library</E> means a public library or public library service system, not a school library or library operated by non-profit, private organizations or institutions that may be open to the general public. School libraries receive the public benefit allowance in the appropriate school classification.<PRTPAGE P="39"/> </P> <P> <E T="03">Educational Museum</E> means a museum that conducts courses on a continuing, not <E T="03">ad hoc,</E> basis for students who receive credits from accredited postsecondary education institutions or school systems.</P> <P> <E T="03">School Outdoor Education</E> means a separate facility for outdoor education as distinguished from components of a basic school. Components of a school such as playgrounds and athletic fields receive the basic allowance applicable for that type of school. The outdoor education must be located reasonably near the school system and may be open to and used by the general public, but only if the educational program for which the property is conveyed is given priority of use. This category does not include components of the school such as playgrounds and athletic fields, that are utilized during the normal school year, and are available to all students.</P> <P> <E T="03">Central Administrative and/or Service Center</E> means administrative office space, equipment storage areas, and similar facilities.</P> <HD SOURCE="HD1">Description of Allowances</HD> <P> <E T="03">Basic Public Benefit Allowance</E> means an allowance that is earned by an applicant that satisfies the requirements of § 12.10 of this part.</P> <HD SOURCE="HD1">Organization Allowance</HD> <P> <E T="03">Accreditation</E> means an allowance that is earned by any postsecondary educational institution, including a vocational or trade school, that is accredited by an accrediting agency recognized by the Secretary under 34 CFR part 602.</P> <P> <E T="03">Federal Impact</E> means an allowance that is earned by any local educational agency (LEA) qualifying for Federal financial assistance as the result of the impact of certain Federal activities upon a community, such as the following under Public Law 81-874 and Public Law 81-815: to any LEA charged by law with responsibility for education of children who reside on, or whose parents are employed on, Federal property, or both; to any LEA to which the Federal Government has caused a substantial and continuing financial burden as the result of the acquisition of a certain amount of Federal property since 1938; or to any LEA that urgently needs minimum school facilities due to a substantial increase in school membership as the result of new or increased Federal activities.</P> <P> <E T="03">Public Services Training</E> means an allowance that is earned if the applicant has cadet or ROTC units or other personnel training contracts for the Federal or State governments. This is given to a school system only if the particular school receiving the property furnishes that training.</P> <P> <E T="03">Hardship</E> means an allowance earned by an applicant that has suffered a significant facility loss because of fire, storm, flood, other disaster, or condemnation. This allowance is also earned if unusual conditions exist such as isolation or economic factors that require special consideration.</P> <P> <E T="03">Inadequacies of Existing Facilities</E> means an allowance that is earned on a percentage basis depending on the degree of inadequacy considering both public and nonpublic facilities. Overall plant requirements are determined based on the relationship between the maximum enrollment accommodated in the present facilities, excluding double and night sessions and the anticipated enrollment if the facilities are transferred. Inadequacies may be computed for a component school unit such as a school farm, athletic field, facility for home economics, round-out school site, cafeteria, auditorium, teacherages, faculty housing, etc., only if the component is required to meet State standards. In that event, the State Department of Education will be required to provide a certification of the need. Component school unit inadequacies may only be related to a particular school and not to the entire school system.</P> <HD SOURCE="HD1">Utilization Allowances</HD> <P> <E T="03">Introduction of New Instructional Programs</E> means an allowance that is earned if the proposed use of the property indicates that new programs will be added at a particular school. Examples of these new programs include those for vocational education, physical education, libraries, and similar programs.</P> <P> <E T="03">Student Health and Welfare</E> means an allowance that is earned if the proposed program and plan of use of the property provides for cafeteria, clinic, infirmary, bus loading shelters, or other uses providing for the well-being and health of students and eliminating safety and health hazards.</P> <P> <E T="03">Research</E> means an allowance that is earned if the proposed use of the property will be predominantly for research by faculty or graduate students under school auspices, or other primary educational research.</P> <P> <E T="03">Service to Handicapped</E> means an allowance that is earned if the proposed program and plan of use for the property will be for special education for the physically or mentally handicapped.</P> </EXTRACT> </PART> <PART> <EAR>Pt. 15</EAR> <HD SOURCE="HED">PART 15—UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION FOR FEDERAL AND FEDERALLY ASSISTED PROGRAMS</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>Section 213, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, Pub. L. 91-646, 84 Stat. 1894 (42 U.S.C. 4601) as amended by the <PRTPAGE P="40"/>Surface Transportation and Uniform Relocation Assistance Act of 1987, Title IV of Pub. L. 100-17, 101 Stat. 246-256 (42 U.S.C. 4601 note).</P> </AUTH> <SECTION> <SECTNO>§ 15.1</SECTNO> <SUBJECT>Uniform relocation assistance and real property acquisition.</SUBJECT> <P>Regulations and procedures for complying with the Uniform Relocation Assistance Act of 1970 (Pub. L. 91-646, 84 Stat. 1894, 42 U.S.C. 4601) as amended by the SUrface Transportation and Uniform Relocation Assistance Act of 1987 (Title IV of Pub. L. 100-17, 101 Stat. 264-255, 42 U.S.C. 4601 note) are set forth in 49 CFR part 24.</P> <CITA>[52 FR 48021, Dec. 17, 1987]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 21</EAR> <HD SOURCE="HED">PART 21—EQUAL ACCESS TO JUSTICE</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>21.1</SECTNO> <SUBJECT>Equal Access to Justice Act.</SUBJECT> <SECTNO>21.2</SECTNO> <SUBJECT>Time period when the Act applies.</SUBJECT> <SECTNO>21.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Which Adversary Adjudications Are Covered?</HD> <SECTNO>21.10</SECTNO> <SUBJECT>Adversary adjudications covered by the Act.</SUBJECT> <SECTNO>21.11</SECTNO> <SUBJECT>Effect of judicial review of adversary adjudication.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How Is Eligibility Determined?</HD> <SECTNO>21.20</SECTNO> <SUBJECT>Types of eligible applicants.</SUBJECT> <SECTNO>21.21</SECTNO> <SUBJECT>Determination of net worth and number of employees.</SUBJECT> <SECTNO>21.22</SECTNO> <SUBJECT>Applicants representing others.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—How Does One Apply for an Award?</HD> <SECTNO>21.30</SECTNO> <SUBJECT>Time for filing application.</SUBJECT> <SECTNO>21.31</SECTNO> <SUBJECT>Contents of application.</SUBJECT> <SECTNO>21.32</SECTNO> <SUBJECT>Confidentiality of information about net worth.</SUBJECT> <SECTNO>21.33</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Procedures Are Used in Considering Applications?</HD> <SECTNO>21.40</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> <SECTNO>21.41</SECTNO> <SUBJECT>Answer to application.</SUBJECT> <SECTNO>21.42</SECTNO> <SUBJECT>Reply.</SUBJECT> <SECTNO>21.43</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> <SECTNO>21.44</SECTNO> <SUBJECT>Further proceedings.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—How Are Awards Determined?</HD> <SECTNO>21.50</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> <SECTNO>21.51</SECTNO> <SUBJECT>Initial decision in applications not subject to the CRRA.</SUBJECT> <SECTNO>21.52</SECTNO> <SUBJECT>Initial decision by an adjudicative officer in applications subject to CRRA jurisdiction.</SUBJECT> <SECTNO>21.53</SECTNO> <SUBJECT>Final decision of the CRRA.</SUBJECT> <SECTNO>21.54</SECTNO> <SUBJECT>Review by the Secretary.</SUBJECT> <SECTNO>21.55</SECTNO> <SUBJECT>Final decision if the Secretary does not review.</SUBJECT> <SECTNO>21.56</SECTNO> <SUBJECT>Judicial review.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—How Are Awards Paid?</HD> <SECTNO>21.60</SECTNO> <SUBJECT>Payment of awards.</SUBJECT> <SECTNO>21.61</SECTNO> <SUBJECT>Release.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 504, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>58 FR 47192, Sept. 7, 1993, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 21.1</SECTNO> <SUBJECT>Equal Access to Justice Act.</SUBJECT> <P>(a) The Equal Access to Justice Act (the Act) provides for the award of fees and other expenses to applicants that—</P> <P>(1) Are prevailing parties in adversary adjudications before the Department of Education; and</P> <P>(2) Meet all other conditions of eligibility contained in this part.</P> <P>(b) An eligible applicant, as described in paragraph (a) of this section, is entitled to receive an award unless—</P> <P>(1) The adjudicative officer, the Civil Rights Reviewing Authority (CRRA), or the Secretary on review, determines that—</P> <P>(i) The Department's position was substantially justified; or</P> <P>(ii) Special circumstances make an award unjust; or</P> <P>(2) The adversary adjudication is under judicial review, in which case the applicant may receive an award only as described in § 21.11.</P> <P>(c) The determination under paragraph (b)(1)(i) of this section is based on the administrative record, as a whole, made during the adversary adjudication for which fees and other expenses are sought.</P> <SECAUTH>(Authority: 5 U.S.C. 504(a)(1) and (c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.2</SECTNO> <SUBJECT>Time period when the Act applies.</SUBJECT> <P>The Act applies to any adversary adjudication covered under this part <PRTPAGE P="41"/>pending or commenced before the Department on or after August 5, 1985.</P> <SECAUTH>(Authority: 5 U.S.C. 504(note))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>The following definitions apply to this part:</P> <P> <E T="03">Act</E> means the Equal Access to Justice Act.</P> <P> <E T="03">Adjudicative officer</E> means the Administrative Law Judge, hearing examiner, or other deciding official who presided at the underlying adversary adjudication.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(D))</SECAUTH> <P> <E T="03">Adversary adjudication</E> means a proceeding—</P> <P>(1) Conducted by the Department for the formulation of an order or decision arising from a hearing on the record under the Administrative Procedure Act (5 U.S.C. 554);</P> <P>(2) Listed in § 21.10; and</P> <P>(3) In which the position of the Department was represented by counsel or other representative who entered an appearance and participated in the proceeding.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(C))</SECAUTH> <P> <E T="03">Application subject to the jurisdiction of the CRRA</E> means an application for fees and expenses based on an underlying proceeding conducted under 34 CFR parts 100, 101, 104, 106, or 110.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42 U.S.C. 2000d-1 <E T="03">et seq.</E> and 6101 <E T="03">et seq.</E>)</SECAUTH> <P> <E T="03">CRRA</E> means the Civil Rights Reviewing Authority, the reviewing authority established by the Secretary to consider applications under 34 CFR parts 100, 101, 104, 106, and 110.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42 U.S.C. 2000d-1 <E T="03">et seq.</E> and 6101 <E T="03">et seq.</E>)</SECAUTH> <P> <E T="03">Department</E> means the U.S. Department of Education.</P> <P> <E T="03">Department's counsel</E> means counsel for the Department of Education or another Federal agency.</P> <P> <E T="03">Employee</E> means:</P> <P>(1) A person who regularly performs services for an applicant—</P> <P>(i) For remuneration; and</P> <P>(ii) Under the applicant's direction and control.</P> <P>(2) A part-time or seasonal employee who performs services for an applicant—</P> <P>(i) For renumeration; and</P> <P>(ii) Under the applicant's direction and control.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> <P> <E T="03">Fees and other expenses</E> means an eligible applicant's reasonable fees and expenses—</P> <P>(1) Related to the issues on which it was the prevailing party in the adversary adjudication; and</P> <P>(2) Further described in §§ 21.33 and 21.50.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (a)(1), (b)(1)(A), and (c)(1))</SECAUTH> <P> <E T="03">Party</E> means a “person” or a “party” as those terms are defined in the Administrative Procedure Act (5 U.S.C. 551(3)), including an individual, partnership, corporation, association, unit of local government, or public or private organization that meets the requirements in § 21.20. The term does not include an agency of the Federal Government.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(B))</SECAUTH> <P> <E T="03">Position of the Department</E> means, in addition to the position taken by the Department in the adversary adjudication, the action or failure to act by the Department upon which the adversary adjudication is based.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (a)(1) and (b)(1)(E))</SECAUTH> <P> <E T="03">Secretary</E> means the Secretary of the U.S. Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (b)(2) and (c)(1))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Which Adversary Adjudications Are Covered?</HD> <SECTION> <SECTNO>§ 21.10</SECTNO> <SUBJECT>Adversary adjudications covered by the Act.</SUBJECT> <P>The Act covers adversary adjudications under section 554 of title 5 of the United States Code. These include the following:</P> <P>(a) Compliance proceedings under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d <E T="03">et seq.</E>).<PRTPAGE P="42"/> </P> <P>(b) Compliance and enforcement proceedings under the Age Discrimination Act of 1975 (42 U.S.C. 6101 <E T="03">et seq.</E>).</P> <P>(c) Compliance proceedings under title IX of the Education Amendments of 1972 (20 U.S.C. 1681 <E T="03">et seq</E>.).</P> <P>(d) Compliance proceedings under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).</P> <P>(e) Withholding proceedings under section 1001 of Pub. L. 100-297 (Hawkins-Stafford) (20 U.S.C. 2833).</P> <P>(f) Proceedings under any of the following:</P> <P>(1) Section 5(g) of Pub. L. 81-874 (Financial Assistance for Local Educational Agencies in Areas Affected by Federal Activity) (20 U.S.C. 240(g)).</P> <P>(2) Sections 6(c) or 11(a) of Pub. L. 81-815 (an act relating to the construction of school facilities in areas affected by Federal activities and for other purposes) (20 U.S.C. 636(c) or 641(a)).</P> <P>(3) Section 6 of Pub. L. 95-563 (Contract Disputes Act of 1978) (41 U.S.C. 605).</P> <P>(4) Part E of the General Education Provisions Act (20 U.S.C. 1234 <E T="03">et seq</E>.).</P> <P>(g) Other adversary adjudications that fall within the coverage of the Act.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c) and 554; 20 U.S.C. 1234(f)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.11</SECTNO> <SUBJECT>Effect of judicial review of adversary adjudication.</SUBJECT> <P>If a court reviews the underlying decision of an adversary adjudication covered under this part, an award of fees and other expenses may be made only under 28 U.S.C. 2412 (awards in certain judicial proceedings).</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1); 28 U.S.C. 2412(d)(3))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How Is Eligibility Determined?</HD> <SECTION> <SECTNO>§ 21.20</SECTNO> <SUBJECT>Types of eligible applicants.</SUBJECT> <P>The following types of parties that prevail in adversary adjudications are eligible to apply under the Act for an award of fees and other expenses:</P> <P>(a) An individual who has a net worth of not more than $2 million.</P> <P>(b) Any owner of an unincorporated business who has—</P> <P>(1) A net worth of not more than $7 million, including both personal and business interests; and</P> <P>(2) Not more than 500 employees.</P> <P>(c) A charitable or other tax-exempt organization—</P> <P>(1) As described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)(3)); and</P> <P>(2) Having not more than 500 employees.</P> <P>(d) A cooperative association—</P> <P>(1) As defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141(a)); and</P> <P>(2) Having not more than 500 employees.</P> <P>(e) Any other partnership, corporation, association, unit of local government, or organization that has—</P> <P>(1) A net worth of not more than $7 million; and</P> <P>(2) Not more than 500 employees.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(B))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.21</SECTNO> <SUBJECT>Determination of net worth and number of employees.</SUBJECT> <P>(a) The adjudicative officer shall determine an applicant's net worth and number of employees as of the date the adversary adjudication was initiated.</P> <P>(b) In determining eligibility, the adjudicative officer shall include the net worth and number of employees of the applicant and all of the affiliates of the applicant.</P> <P>(c) For the purposes of paragraph (b) of this section, the adjudicative officer shall consider the following as an affiliate:</P> <P>(1) Any individual, corporation, or other entity that directly or indirectly owns or controls a majority of the voting shares or other interest of the applicant;</P> <P>(2) Any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest; and</P> <P>(3) Any entity with a financial relationship to the applicant that, in the determination of the adjudicative officer, constitutes an affiliation for the purposes of paragraph (b) of this section.</P> <P>(d) In determining the number of employees of an applicant and its affiliates, the adjudicative officer shall <PRTPAGE P="43"/>count part-time employees on a proportional basis.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.22</SECTNO> <SUBJECT>Applicants representing others.</SUBJECT> <P>If an applicant is a party in an adversary adjudication primarily on behalf of one or more persons or entities that are ineligible under this part, then the applicant is not eligible for an award.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (b)(1)(B) and (c)(1))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—How Does One Apply for an Award?</HD> <SECTION> <SECTNO>§ 21.30</SECTNO> <SUBJECT>Time for filing application.</SUBJECT> <P>(a) In order to be considered for an award under this part, an applicant may file its application when it prevails in an adversary adjudication—or in a significant and discrete substantive portion of an adversary adjudication—but no later than 30 days after the Department's final disposition of the adversary adjudication.</P> <P>(b) In the case of a review or reconsideration of a decision in which an applicant has prevailed or believes it has prevailed, the adjudicative officer shall stay the proceedings on the application pending final disposition of the underlying issue.</P> <P>(c) For purposes of this part, final disposition of the adversary adjudication means the latest of—</P> <P>(1) The date on which an initial decision or other recommended disposition of the merits of the proceeding by an adjudicative officer becomes administratively final;</P> <P>(2) The date of an order disposing of any petitions for reconsideration of the final order in the adversary adjudication;</P> <P>(3) If no petition for reconsideration is filed, the last date on which that type of petition could have been filed; or</P> <P>(4) The date of a final order or any other final resolution of a proceeding—such as a settlement or voluntary dismissal—that is not subject to a petition for reconsideration.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (a)(2) and (c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.31</SECTNO> <SUBJECT>Contents of application.</SUBJECT> <P>(a) In its application for an award of fees and other expenses, an applicant shall include the following:</P> <P>(1) Information adequate to show that the applicant is a prevailing party in an adversary adjudication or in a significant and discrete substantive portion of an adversary adjudication.</P> <P>(2) A statement that the adversary adjudication is covered by the Act according to § 21.10.</P> <P>(3) An allegation that the position of the Department was not substantially justified, including a description of the specific position.</P> <P>(4) Unless the applicant is a qualified tax-exempt organization or a qualified agricultural cooperative association, information adequate to show that the applicant qualifies under the requirements of §§ 21.20 and 21.21 regarding net worth. The information, if applicable, shall include a detailed exhibit of the net worth of the applicant—and its affiliates as described in § 21.21—as of the date the proceeding was initiated.</P> <P>(5)(i) The total amount of fees and expenses sought in the award; and</P> <P>(ii) An itemized statement of—</P> <P>(A) Each expense; and</P> <P>(B) Each fee, including the actual time expended for this fee and the rate at which the fee was computed.</P> <P>(6) A written verification under oath or affirmation or under penalty of perjury from each attorney representing the applicant stating—</P> <P>(i) The rate at which the fee submitted by the attorney was computed; and</P> <P>(ii) The actual time expended for the fee.</P> <P>(7) A written verification under oath, affirmation, or under penalty of perjury that the information contained in the application and any accompanying material is true and complete to the best of the applicant's information and belief.</P> <P>(b) The adjudicative officer may require the applicant to submit additional information.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (a)(2) and (c)(1))</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="44"/> <SECTNO>§ 21.32</SECTNO> <SUBJECT>Confidentiality of information about net worth.</SUBJECT> <P>(a) In a proceeding on an application, the public record ordinarily includes the information showing the net worth of the applicant.</P> <P>(b) However, if an applicant objects to public disclosure of any portion of the information and believes there are legal grounds for withholding it from disclosure, the applicant may submit directly to the adjudicative officer—</P> <P>(1) The information the applicant wishes withheld in a sealed envelope labeled “Confidential Financial Information;” and</P> <P>(2) A motion to withhold the information from public disclosure.</P> <P>(c) The motion must—</P> <P>(1) Describe the information the applicant is requesting be withheld; and</P> <P>(2) Explain in detail—</P> <P>(i) Why that information falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act;</P> <P>(ii) Why public disclosure of the information would adversely affect the applicant; and</P> <P>(iii) Why disclosure is not required in the public interest.</P> <P>(d)(1) The applicant shall serve on Department's counsel a copy of the material referred to in paragraph (c) of this section.</P> <P>(2) The applicant is not required to give a copy of that material to any other party to the proceeding.</P> <P>(e)(1) If the adjudicative officer finds that the information should not be withheld from public disclosure, the information is placed in the public record of the proceeding.</P> <P>(2) If the adjudicative officer finds that the information should be withheld from public disclosure, any request to inspect or copy the information is treated in accordance with the Department's established procedures under the Freedom of Information Act (34 CFR part 5).</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.33</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> <P>(a) A prevailing party may apply for an award of fees and other expenses incurred by the party in connection with—</P> <P>(1) An adversary adjudication; or</P> <P>(2) A significant and discrete substantive portion of an adversary adjudication.</P> <P>(b) If a proceeding includes issues covered by the Act and issues excluded from coverage, the applicant may apply only for an award of fees and other expenses related to covered issues.</P> <P>(c) Allowable fees and expenses include the following, as applicable:</P> <P>(1) An award of fees based on rates customarily charged by attorneys, agents, and expert witnesses.</P> <P>(2) An award for the reasonable expenses of the attorney, agent, or expert witness as a separate item if the attorney, agent, or expert witness ordinarily charges clients separately for those expenses.</P> <P>(3) The cost of any study, analysis, engineering report, test, or project related to the preparation of the applicant's case in the adversary adjudication.</P> <P>(d) The calculation of fees and expenses as provided for under paragraph (c) of this section shall be in accordance with the standards for awards as described in § 21.50(a) through (c).</P> <SECAUTH>(Authority: 5 U.S.C. 504(a)(1), (b)(1)(A) and (c)(1))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Procedures Are Used in Considering Applications?</HD> <SECTION> <SECTNO>§ 21.40</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> <P>(a) Except as provided in § 21.32 and in applications subject to the jurisdiction of the CRRA, an applicant shall—</P> <P>(1) File with the adjudicative officer its application and any related documents; and</P> <P>(2) Serve on all parties to the adversary adjudication copies of its application and any related documents.</P> <P>(b)(1) In an application subject to the jurisdiction of the CRRA, the applicant shall—</P> <P>(i) File with the CRRA its application and any other related documents; and</P> <P>(ii) Serve on all parties to the adversary adjudication copies of its application and any related documents.</P> <P>(2) In applications subject to § 21.40(b)(1), the CRRA shall direct the <PRTPAGE P="45"/>adjudicative officer to issue an initial decision within 30 days of the completion of the proceedings on the application. The adjudicative officer shall conduct proceedings under the procedures of §§ 21.41-21.44.</P> <SECAUTH>(Authority: 5 U.S.C. 504(a)(2) and (c)(1); 20 U.S.C. 1681; 29 U.S.C. 794; 42 U.S.C. 2000d-1 <E T="03">et seq.</E> and 6101 <E T="03">et seq.</E>)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.41</SECTNO> <SUBJECT>Answer to application.</SUBJECT> <P>(a)(1) Within 30 days after receiving an application for an award under this part, the Department's counsel may file an answer to the application.</P> <P>(2) The Department's counsel may request an extension of time for filing the Department's answer.</P> <P>(3) The adjudicative officer shall grant the request for an extension if the Department's counsel shows good cause for the request.</P> <P>(b)(1) The Department's answer must—</P> <P>(i) Explain any objections to the award requested; and</P> <P>(ii) Identify the facts relied on in support of the position of the Department.</P> <P>(2) If the answer is based on any alleged facts not in the record of the adversary adjudication, the Department's counsel shall include with the answer either—</P> <P>(i) Supporting affidavits; or</P> <P>(ii) A request for further proceedings under § 21.44.</P> <P>(c)(1) If the Department's counsel and the applicant believe that the issues in the application can be settled, they may jointly file a statement of their intent to negotiate a settlement.</P> <P>(2)(i) The filing of a statement of an intent to negotiate extends the time for filing an answer for 30 days.</P> <P>(ii) The adjudicative officer shall grant further extensions if the Department's counsel and the applicant jointly request those extensions.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.42</SECTNO> <SUBJECT>Reply.</SUBJECT> <P>(a) Within 15 days after receiving an answer, an applicant may file a reply.</P> <P>(b) If the applicant's reply is based on any alleged facts not in the record of the adversary adjudication, the applicant shall include with the reply either—</P> <P>(1) Supporting affidavits; or</P> <P>(2) A request for further proceedings under § 21.44.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.43</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> <P>(a) Any party to a proceeding, other than an applicant or the Department's counsel, may file comments on—</P> <P>(1) The application within 30 days after the applicant files the application;</P> <P>(2) The answer within 30 days after the counsel files the answer; or</P> <P>(3) Both, if the comments are filed within the time period specified in paragraphs (a)(1) and (a)(2) of this section.</P> <P>(b) The commenting party may not participate further in proceedings on the application unless the adjudicative officer determines that further participation is necessary to permit full exploration of matters raised in the comments.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.44</SECTNO> <SUBJECT>Further proceedings.</SUBJECT> <P>(a) The adjudicative officer shall make the determination of an award on the basis of the written record.</P> <P>(b)(1) However, the adjudicative officer may order further proceedings on his or her own initiative or at the request of the applicant or the Department's counsel.</P> <P>(2) The adjudicative officer may order further proceedings only if he or she determines that those proceedings are necessary for full and fair resolution of issues arising from the application.</P> <P>(3) If further proceedings are ordered, the adjudicative officer shall determine the scope of those proceedings, which may include such proceedings as informal conferences, oral arguments, additional written submissions, discovery, or an evidentiary hearing.</P> <P>(4) An adjudicative officer may not order discovery or an evidentiary hearing for the issue of whether or not the Department's position was substantially justified.</P> <P>(c) If the applicant or the Department's counsel requests the adjudicative officer to order further proceedings, the request must—<PRTPAGE P="46"/> </P> <P>(1) Specify the information sought or the disputed issues; and</P> <P>(2) Explain why the additional proceedings are necessary to obtain that information or resolve those issues.</P> <SECAUTH>(Authority: 5 U.S.C. 504(a)(3) and (c)(1))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—How Are Awards Determined?</HD> <SECTION> <SECTNO>§ 21.50</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> <P>(a) In determining the reasonableness of the amount sought as an award of fees and expenses for an attorney, agent, or expert witness, the adjudicative officer shall consider one or more of the following:</P> <P>(1)(i) If the attorney, agent, or expert witness is in private practice, his or her customary fee for similar services; or</P> <P>(ii) If the attorney, agent, or expert witness is an employee of the applicant, the fully allocated cost of the services.</P> <P>(2) The prevailing rate for similar services in the community in which the attorney, agent, or expert witness ordinarily performs services.</P> <P>(3) The time the attorney, agent, or expert witness actually spent on the applicant's behalf with respect to the adversary adjudication.</P> <P>(4) The time the attorney, agent, or expert witness reasonably spent in light of the difficulty or complexity of the covered issues in the adversary adjudication.</P> <P>(5) Any other factors that may bear on the value of the services provided by the attorney, agent, or expert witness.</P> <P>(b) The adjudicative officer may not grant—</P> <P>(1) An award for the fee of an attorney or agent in excess of $75.00 per hour; or</P> <P>(2) An award to compensate an expert witness in excess of the highest rate at which the Department pays expert witnesses.</P> <P>(c) The adjudicative officer may also determine whether—</P> <P>(1) Any study, analysis, engineering report, text, or project for which the applicant seeks an award was necessary for the preparation of the applicant's case in the adversary adjudication; and</P> <P>(2) The costs claimed by the applicant for this item or items are reasonable.</P> <P>(d) The adjudicative officer may not make an award to an eligible party if the adjudicative officer, the CRRA, or the Secretary on review finds that, based on a review of the administrative record as a whole—</P> <P>(1) The position of the Department, as defined in § 21.3, was substantially justified; or</P> <P>(2) Special circumstances make an award unjust.</P> <P>(e) The adjudicative officer may reduce or deny an award to the extent that the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication.</P> <P>(f) If an applicant is entitled to an award because the applicant prevailed over another agency of the United States that participated in a proceeding before the Department and that agency's position was not substantially justified, the adjudicative officer shall determine whether to make the award, or an appropriate portion of the award, against that agency. For the purpose of this determination, the requirements of this subpart apply.</P> <SECAUTH>(Authority: 5 U.S.C. 504(a), (b)(1)(A), and (b)(1)(E))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.51</SECTNO> <SUBJECT>Initial decision in applications not subject to the CRRA.</SUBJECT> <P>(a) In applications not subject to the jurisdiction of the CRRA, the adjudicative officer shall issue an initial decision on an application within 30 days after completion of proceedings on the application.</P> <P>(b) The initial decision must include the following:</P> <P>(1) Written findings, including sufficient supporting explanation, on—</P> <P>(i) The applicant's status as a prevailing party;</P> <P>(ii) The applicant's eligibility;</P> <P>(iii) Whether the position of the Department was substantially justified;</P> <P>(iv) Whether special circumstances make an award unjust;</P> <P>(v) If applicable, whether the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication; and</P> <P>(vi) Other factual issues raised in the adversary adjudication.<PRTPAGE P="47"/> </P> <P>(2) A statement of the amount awarded, including an explanation—with supporting information—for any difference between the amount requested by the applicant and the amount awarded.</P> <P>(3) A statement of the applicant's right to request review by the Secretary under § 21.54.</P> <P>(4) A statement of the applicant's right under § 21.56 to seek judicial review of the final award determination.</P> <P>(c) The explanation referred to in paragraph (b)(2) of this section may include—</P> <P>(1) Whether the amount requested was reasonable; and</P> <P>(2) The extent to which the applicant unduly or unreasonably protracted the adversary adjudication.</P> <SECAUTH>(Authority: 5 U.S.C. 504 (a)(3) and (c))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.52</SECTNO> <SUBJECT>Initial decision by an adjudicative officer in applications subject to CRRA jurisdiction.</SUBJECT> <P>(a) If the application is subject to the jurisdiction of the CRRA, the adjudicative officer shall issue the initial decision within 30 days after completion of the proceedings.</P> <P>(b) The initial decision must include the information required under § 21.51(b). However, instead of the information required under § 21.51(b)(3), the initial decision must inform the applicant of—</P> <P>(1) Its right to request review by the CRRA; and</P> <P>(2) Its right to request review by the Secretary of the CRRA's final decision.</P> <P>(c) If the applicant or the Department's counsel appeals the adjudicative officer's initial decision, the appeal must be submitted to the CRRA, in writing, within 30 days after the initial decision is issued.</P> <P>(d) If the applicant or the Department's counsel does not appeal the adjudicative officer's initial decision to the CRRA and the Secretary does not decide to review the initial decision under § 21.54(a), the initial decision becomes the Department's final decision 60 days after it is issued by the officer.</P> <SECAUTH>(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42 U.S.C. 2000d-1 <E T="03">et seq.</E> and 6101 <E T="03">et seq.</E>)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.53</SECTNO> <SUBJECT>Final decision of the CRRA.</SUBJECT> <P>(a) In an application subject to the jurisdiction of the CRRA, the CRRA shall, within 30 days after receipt of the written appeal—</P> <P>(1) Issue a final decision on the appeal of the adjudicative officer's initial decision; or</P> <P>(2) Remand the application to the adjudicative officer for further proceedings.</P> <P>(b) The CRRA shall review the initial decision on the basis of the written record of the proceedings on the application. This includes but is not limited to—</P> <P>(1) The written request; and</P> <P>(2) The adjudicative officer's findings as described in § 21.51(b).</P> <P>(c) The CRRA shall act on the review by either—</P> <P>(1) Issuing a final decision on the application; or</P> <P>(2) Remanding the application to the adjudicative officer for further proceedings.</P> <P>(d) If the CRRA issues a final decision, the CRRA's decision must include—</P> <P>(1) Written findings, including supporting explanation, on—</P> <P>(i) The applicant's status as a prevailing party;</P> <P>(ii) The applicant's eligibility;</P> <P>(iii) Whether the position of the Department was substantially justified;</P> <P>(iv) Whether special circumstances make an award unjust;</P> <P>(v) Whether the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication; and</P> <P>(vi) Other factual issues raised in the adversary adjudication.</P> <P>(2) A statement of the amount awarded, including an explanation—with supporting information—for any difference between the amount requested by the applicant and the amount awarded.</P> <P>(3) A statement of the applicant's right to request review by the Secretary under § 21.54.</P> <P>(4) A statement of the applicant's right under § 21.56 to seek judicial review of the final award determination.</P> <P>(e) The explanation referred to in paragraph (d)(2) of this section may include—<PRTPAGE P="48"/> </P> <P>(1) Whether the amount requested was reasonable; and</P> <P>(2) The extent to which the applicant unduly or unreasonably protracted the adversary adjudication.</P> <SECAUTH>(Authority: 5 U.S.C. 301, 557 (b) and (c); 20 U.S.C. 1681 and 3401 <E T="03">et seq.</E>; 29 U.S.C. 794; 42 U.S.C. 2000d-1 et seq. and 6101 <E T="03">et seq.</E>)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.54</SECTNO> <SUBJECT>Review by the Secretary.</SUBJECT> <P>(a) The Secretary may decide to review—</P> <P>(1) An initial decision made by an adjudicative officer in a proceeding not subject to CRRA review;</P> <P>(2) An initial decision made by an adjudicative officer in a proceeding subject to CRRA review that was not appealed to the CRRA; or</P> <P>(3) A final decision made by the CRRA under § 21.53.</P> <P>(b)(1) The Secretary does not review a final decision made by an adjudicative officer of the General Services Administration Board of Contract Appeals.</P> <P>(2) The Secretary or a party to the proceedings may seek reconsideration of the final decision by an adjudicative officer of the General Services Administration Board of Contract Appeals on the fee application in accordance with 48 CFR 6101.32.</P> <P>(c) The Secretary decides to review a decision under § 21.54(a) either—</P> <P>(1) Upon receipt of a written request for review by an applicant or Department's counsel; or</P> <P>(2) Upon the Secretary's own motion.</P> <P>(d) If the applicant or the Department's counsel seeks a review, the request must be submitted to the Secretary, in writing, within 30 days of—</P> <P>(1) An initial decision in a proceeding not subject to CRRA review; or</P> <P>(2) A final decision of the CRRA.</P> <P>(e) The Secretary decides whether to accept or reject a request for review of an initial decision made by the adjudicative officer in a proceeding not subject to CRRA review or a final decision of the CRRA within 30 days after receipt of a request for review.</P> <P>(f) The Secretary may decide on his own motion to review a decision made under § 21.54(a) within 60 days of the initial decision by the adjudicative officer or a final decision of the CRRA.</P> <P>(g) If the Secretary decides to review the adjudicative officer's initial decision or the CRRA's final decision—</P> <P>(1) The Secretary reviews the adjudicative officer's initial decision or the CRRA's final decision on the basis of the written record of the proceedings on the application. This includes, but is not restricted to—</P> <P>(i) The written request for review;</P> <P>(ii) The adjudicative officer's findings as described in § 21.51(b); and</P> <P>(iii) If applicable, the final decision of the CRRA, if any; and</P> <P>(2) The Secretary either—</P> <P>(i) Issues a final decision; or</P> <P>(ii) Remands the application to the adjudicative officer or the CRRA for further proceedings.</P> <P>(h) If the Secretary issues a final decision, the Secretary's decision—</P> <P>(1) Is in writing;</P> <P>(2) States the reasons for the decision; and</P> <P>(3) If the decision is adverse to the applicant, advises the applicant of its right to petition for judicial review under § 21.56.</P> <SECAUTH>(Authority: 5 U.S.C. 557 (b) and (c))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.55</SECTNO> <SUBJECT>Final decision if the Secretary does not review.</SUBJECT> <P>If the Secretary takes no action under § 21.54—</P> <P>(a) The adjudicative officer's initial decision on the application becomes the Department's final decision 60 days after it is issued by the adjudicative officer; or</P> <P>(b) The CRRA's decision on the application becomes the Department's final decision 60 days after it is issued by the CRRA.</P> <SECAUTH>(Authority: 5 U.S.C. 301)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.56</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <P>If the applicant is dissatisfied with the award determination in the final decision under §§ 21.52-21.55, the applicant may seek judicial review of that determination under 5 U.S.C. 504(c)(2) within 30 days after that determination was made.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(2))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="49"/> <HD SOURCE="HED">Subpart G—How Are Awards Paid?</HD> <SECTION> <SECTNO>§ 21.60</SECTNO> <SUBJECT>Payment of awards.</SUBJECT> <P>To receive payment, an applicant granted an award under the Act must submit to the Financial Management Service of the Department—</P> <P>(a) A request for payment signed by the applicant or its duly authorized agent;</P> <P>(b) A copy of the final decision granting the award; and</P> <P>(c) A statement that—</P> <P>(1) The applicant will not seek review of the decision in the United States courts; or</P> <P>(2) The process for seeking review of the award has been completed.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1) and (d))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 21.61</SECTNO> <SUBJECT>Release.</SUBJECT> <P>If an applicant, its agent, or its attorney accepts payment of any award or settlement in conjunction with an application under this part, that acceptance—</P> <P>(a) Is final and conclusive with respect to that application; and</P> <P>(b) Constitutes a complete release of any further claim against the United States with respect to that application.</P> <SECAUTH>(Authority: 5 U.S.C. 504(c)(1))</SECAUTH> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 30</EAR> <HD SOURCE="HED">PART 30—DEBT COLLECTION</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>30.1</SECTNO> <SUBJECT>What administrative actions may the Secretary take to collect a debt?</SUBJECT> <SECTNO>30.2</SECTNO> <SUBJECT>On what authority does the Secretary rely to collect a debt under this part?</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart B[Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—What Provisions Apply to Administrative Offset?</HD> <SUBJGRP> <HD SOURCE="HED">General Offset Procedures</HD> <SECTNO>30.20</SECTNO> <SUBJECT>To what do §§ 30.20-30.31 apply?</SUBJECT> <SECTNO>30.21</SECTNO> <SUBJECT>When may the Secretary offset a debt?</SUBJECT> <SECTNO>30.22</SECTNO> <SUBJECT>What notice does the debtor receive before the commencement of offset?</SUBJECT> <SECTNO>30.23</SECTNO> <SUBJECT>How must a debtor request an opportunity to inspect and copy records relating to a debt?</SUBJECT> <SECTNO>30.24</SECTNO> <SUBJECT>What opportunity does the debtor receive to obtain a review of the existence or amount of a debt?</SUBJECT> <SECTNO>30.25</SECTNO> <SUBJECT>How may a debtor obtain an oral hearing?</SUBJECT> <SECTNO>30.26</SECTNO> <SUBJECT>What special rules apply to an oral hearing?</SUBJECT> <SECTNO>30.27</SECTNO> <SUBJECT>When does the Secretary enter into a repayment agreement rather than offset?</SUBJECT> <SECTNO>30.28</SECTNO> <SUBJECT>When may the Secretary offset before completing the procedures under §§ 30.22-30.27?</SUBJECT> <SECTNO>30.29</SECTNO> <SUBJECT>What procedures apply when the Secretary offsets to collect a debt owed another agency?</SUBJECT> <SECTNO>30.30</SECTNO> <SUBJECT>What procedures apply when the Secretary requests another agency to offset a debt owed under a program or activity of the Department?</SUBJECT> <SECTNO>30.31</SECTNO> <SUBJECT>How does the Secretary apply funds recovered by offset if multiple debts are involved?</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Procedures</HD> <SECTNO>30.33</SECTNO> <SUBJECT>What procedures does the Secretary follow for IRS tax refund offsets?</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Reporting Debts to Consumer Reporting Agencies</HD> <SECTNO>30.35</SECTNO> <SUBJECT>What procedures does the Secretary follow to report debts to consumer reporting agencies?</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <RESERVED>Subpart D[Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Costs and Penalties Does the Secretary Impose on Delinquent Debtors?</HD> <SECTNO>30.60</SECTNO> <SUBJECT>What costs does the Secretary impose on delinquent debtors?</SUBJECT> <SECTNO>30.61</SECTNO> <SUBJECT>What penalties does the Secretary impose on delinquent debtors?</SUBJECT> <SECTNO>30.62</SECTNO> <SUBJECT>When does the Secretary forego interest, administrative costs, or penalties?</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Requirements Apply to the Compromise of a Debt or the Suspension or Termination of Collection Action?</HD> <SECTNO>30.70</SECTNO> <SUBJECT>How does the Secretary exercise discretion to compromise a debt or to suspend or terminate collection of a debt?</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart G[Reserved]</RESERVED> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 1221e-3(a)(1), and 1226a-1, 31 U.S.C. 3711(e), 31 U.S.C. 3716(b) and 3720A, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>51 FR 24099, July 1, 1986, unless otherwise noted.</P> </SOURCE> <SUBPART> <PRTPAGE P="50"/> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 30.1</SECTNO> <SUBJECT>What administrative actions may the Secretary take to collect a debt?</SUBJECT> <P>(a) The Secretary may take one or more of the following actions to collect a debt owed to the United States:</P> <P>(1) Collect the debt under the procedures authorized in the regulations in this part.</P> <P>(2) Refer the debt to the General Accounting Office for collection.</P> <P>(3) Refer the debt to the Department of Justice for compromise, collection, or litigation.</P> <P>(4) Take any other action authorized by law.</P> <P>(b) In taking any of the actions listed in paragraph (a) of this section, the Secretary complies with the requirements of the Federal Claims Collection Standards (FCCS) at 4 CFR parts 101-105 that are not inconsistent with the requirements of this part.</P> <P>(c) The Secretary may—</P> <P>(1) Collect the debt under the offset procedures in subpart C of this part;</P> <P>(2) Report a debt to a consumer reporting agency under the procedures in subpart C of this part;</P> <P>(3) Charge interest on the debt as provided in the FCCS;</P> <P>(4) Impose upon a debtor a charge based on the costs of collection as determined under subpart E of this part;</P> <P>(5) Impose upon a debtor a penalty for failure to pay a debt when due under subpart E of this part;</P> <P>(6) Compromise a debt, or suspend or terminate collection of a debt, under subpart F of this part;</P> <P>(7) Take any other actions under the procedures of the FCCS in order to protect the United States Government's interests; or</P> <P>(8) Use any combination of the procedures listed in this paragraph (c) as may be appropriate in a particular case.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))</SECAUTH> <CITA>[53 FR 33425, Aug. 30, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.2</SECTNO> <SUBJECT>On what authority does the Secretary rely to collect a debt under this part?</SUBJECT> <P>(a)(1) The Secretary takes an action referred to under § 30.1(a) in accordance with—</P> <P>(i) 31 U.S.C. chapter 37, subchapters I and II;</P> <P>(ii) Other applicable statutory authority; or</P> <P>(iii) The common law.</P> <P>(2) If collection of a debt in a particular case is not authorized under one of the authorities described in paragraph (a)(1) of this section, the Secretary may collect the debt under any other available authority under which collection is authorized.</P> <P>(b) The Secretary does not use a procedure listed in § 30.1(c) to collect a debt, or a certain type of debt, if—</P> <P>(1) The procedure is specifically prohibited under a Federal statute; or</P> <P>(2) A separate procedure other than the procedure described under § 30.1(c) is specifically required under—</P> <P>(i) A contract, grant, or other agreement;</P> <P>(ii) A statute other than 31 U.S.C. 3716; or</P> <P>(iii) Other regulations.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))</SECAUTH> <CITA>[53 FR 33425, Aug. 30, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart B[Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—What Provisions Apply to Administrative Offset?</HD> <SUBJGRP> <HD SOURCE="HED">General Offset Procedures</HD> <SECTION> <SECTNO>§ 30.20</SECTNO> <SUBJECT>To what do §§ 30.20-30.31 apply?</SUBJECT> <P>(a)(1)(i) Sections 30.20-30.31 establish the general procedures used by the Secretary to collect debts by administrative offset.</P> <P>(ii) The Secretary uses the procedures established under other regulations, including § 30.33, What procedures does the Secretary follow for IRS tax refund offsets?, 34 CFR part 31, Salary Offset for Federal Employees Who Are Indebted to the United States Under Programs Administrated by the Secretary of Education, and 34 CFR part 32, Salary Offset to Recover Overpayments of Pay or Allowances from <PRTPAGE P="51"/>Department of Education Employees, if the conditions requiring application of those special procedures exists.</P> <P>(2) The word “offset” is used in this subpart to refer to the collection of a debt by administrative offset.</P> <P>(b) The Secretary does not rely on 31 U.S.C. 3716 as authority for offset if:</P> <P>(1) The debt is owed by a State or local government;</P> <P>(2) The debt, or the payment against which offset would be taken, arises under the Social Security Act;</P> <P>(3) The debt is owed under:</P> <P>(i) The Internal Revenue Code of 1954; or</P> <P>(ii) The tariff laws of the United States; or</P> <P>(4) The right to collect the debt first accrued more than ten years before initiation of the offset.</P> <P>(c)(1) The Secretary may rely on 31 U.S.C. 3716 as authority for offset of a debt to which paragraph (b)(4) of this section would otherwise apply if facts material to the Government's right to collect the debt were not known and could not reasonably have been known by the official or officials of the Government who are charged with the responsibility to discover and collect the debt.</P> <P>(2) If paragraph (c)(1) of this section applies, the Secretary may rely on 31 U.S.C. 3716 as authority for offset up to 10 years after the date that the official or officials described in that paragraph first knew or reasonably should have known of the right of the United States to collect the debt.</P> <P>(d) The Secretary determines when the right to collect a debt first accrued under the existing law regarding accrual of debts such as 28 U.S.C. 2415.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> <CITA>[51 FR 24099, July 1, 1986, as amended at 51 FR 35646, Oct. 7, 1986; 53 FR 33425, Aug. 30, 1988; 54 FR 43583, Oct. 26, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.21</SECTNO> <SUBJECT>When may the Secretary offset a debt?</SUBJECT> <P>(a) The Secretary may offset a debt if:</P> <P>(1) The debt is liquidated or certain in amount; and</P> <P>(2) Offset is feasible and not otherwise prohibited.</P> <P>(b)(1) Whether offset is feasible is determined by the Secretary in the exercise of sound discretion on a case-by-case basis, either:</P> <P>(i) For each individual debt or offset; or</P> <P>(ii) For each class of similar debts or offsets.</P> <P>(2) The Secretary considers the following factors in making this determination:</P> <P>(i) Whether offset can be practically and legally accomplished.</P> <P>(ii) Whether offset will further and protect the interests of the United States.</P> <P>(c) The Secretary may switch advance funded grantees to a reimbursement payment system before initiating an offset.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.22</SECTNO> <SUBJECT>What notice does the debtor receive before the commencement of offset?</SUBJECT> <P>(a)(1) Except as provided in §§ 30.28 and 30.29, the Secretary provides a debtor with written notice of the Secretary's intent to offset before initiating the offset.</P> <P>(2) The Secretary mails the notice to the debtor at the current address of the debtor, as determined by the Secretary from information regarding the debt maintained by the Department.</P> <P>(b) The written notice informs the debtor regarding:</P> <P>(1) The nature and amount of the debt;</P> <P>(2) The Secretary's intent to collect the debt by offset;</P> <P>(3) The debtor's opportunity to:</P> <P>(i) Inspect and copy Department records pertaining to the debt;</P> <P>(ii) Obtain a review within the Department of the existence or amount of the debt; and</P> <P>(iii) Enter into a written agreement with the Secretary to repay the debt;</P> <P>(4) The date by which the debtor must request an opportunity set forth under paragraph (b)(3) of this section; and</P> <P>(5) The Secretary's decision, in appropriate cases, to switch the debtor from advance funding to a reimbursement payment system.<PRTPAGE P="52"/> </P> <P>(c)(1) In determining whether a debtor has requested an opportunity set forth under paragraph (b)(3) of this section in a timely manner, the Secretary relies on:</P> <P>(i) A legibly dated U.S. Postal Service postmark for the debtor's request; or</P> <P>(ii) A legibly stamped U.S. Postal service mail receipt for debtor's request.</P> <P>(2) The Secretary does not rely on either of the following as proof of mailing;</P> <P>(i) A private metered postmark.</P> <P>(ii) A mail receipt that is not dated by the U.S. Postal Service.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method for proof of mailing, a debtor should check with its local post office.</P> </NOTE> <P>(d) If a debtor previously has been notified of the Secretary's intent to offset or offered an opportunity to take any of the actions set forth in paragraph (b)(3) of this section in connection with the same debt, the Secretary may offset without providing the debtor with an additional notice of intent or opportunity to take any of those actions under these offset procedures.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.23</SECTNO> <SUBJECT>How must a debtor request an opportunity to inspect and copy records relating to a debt?</SUBJECT> <P>(a) If a debtor wants to inspect and copy Department documents relating to the debt, the debtor must:</P> <P>(1) File a written request to inspect and copy the documents within 20 days after the date of the notice provided under § 30.22; and</P> <P>(2) File the request at the address specified in that notice.</P> <P>(b) A request filed under paragraph (a) of this section must contain:</P> <P>(1) All information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and</P> <P>(2) A reasonably specific identification of the records the debtor wishes to have available for inspection and copying.</P> <P>(c) The Secretary may decline to provide an opportunity to inspect and copy records if the debtor fails to request inspection and copying in accordance with this section.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0515)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> <CITA>[51 FR 24099, July 1, 1986, as amended at 51 FR 35646, Oct. 7, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.24</SECTNO> <SUBJECT>What opportunity does the debtor receive to obtain a review of the existence or amount of a debt?</SUBJECT> <P>(a) If a debtor wants a review within the Department of the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii), the debtor must:</P> <P>(1) File a request for review within 20 days after the date of the notice provided under § 30.22; and</P> <P>(2) File a request at the address specified in that notice.</P> <P>(b) A request filed under paragraph (a) of this section must contain:</P> <P>(1) All information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the particular debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and</P> <P>(2) An explanation of the reasons the debtor believes that the notice the debtor received under § 30.22 or § 30.33(b) inaccurately states any facts or conclusions relating to the debt.</P> <P>(c) The Secretary may decline to provide an opportunity for review of a debt if the debtor fails to request the review in accordance with this section.</P> <P>(d)(1) The debtor shall:</P> <P>(i) File copies of any documents relating to the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) that the debtor wishes the Secretary to consider in the review;</P> <P>(ii) File the documents at the address specified in that notice, and</P> <P>(iii) File the documents no later than:</P> <P>(A) 20 days after the date of the notice provided under § 30.22; or<PRTPAGE P="53"/> </P> <P>(B) If the debtor has requested an opportunity to inspect and copy records under § 30.23 within the time period specified in that section, 15 days after the date on which the Secretary makes available to the debtor the relevant, requested records.</P> <P>(2) The Secretary may decline to consider any reasons or documents that the debtor fails to provide in accordance with paragraphs (b) and (d) of this section.</P> <P>(e) If the Secretary bases the review on only the documentary evidence, the Secretary:</P> <P>(1) Reviews the documents submitted by the debtor and other relevant evidence; and</P> <P>(2) Notifies the debtor in writing of the Secretary's decision regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) and, if appropriate, the question of waiver of the debt.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0515)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> <CITA>[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.25</SECTNO> <SUBJECT>How may a debtor obtain an oral hearing?</SUBJECT> <P>(a) If a debtor wants the Secretary to conduct the review requested under § 30.24 as an oral hearing, the debtor must file a written request for an oral hearing together with the request for review filed under § 30.24(a).</P> <P>(b) A request filed under paragraph (a) of this section must contain the following in addition to the information filed under § 30.24(b):</P> <P>(1) An explanation of reason(s) why the debtor believes the Secretary cannot resolve the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) through a review of the documentary evidence.</P> <P>(2) An identification of:</P> <P>(i) The individuals that the debtor wishes to have testify at the oral hearing;</P> <P>(ii) The specific issues identified in the notice regarding which each individual is prepared to testify; and</P> <P>(iii) The reasons why each individual's testimony is necessary to resolve the issue.</P> <P>(c) The Secretary grants a debtor's request for an oral hearing regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) only if:</P> <P>(1)(i) A statute authorizes or requires the Secretary to consider waiver of the indebtedness involved;</P> <P>(ii) The debtor files a request for waiver of the indebtedness with the request for review filed under paragraph (a)(1) of this section; and</P> <P>(iii) The question of waiver of the indebtedness turns on an issue of credibility or veracity; or</P> <P>(2) The Secretary determines that the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) cannot be resolved by review of only the documentary evidence.</P> <P>(d) Notwithstanding paragraph (b) of this section, the Secretary may deny oral hearings for a class of similar debts if:</P> <P>(1) The issues identified in the notice under § 30.22(b)(3)(ii) or 30.33(b)(3)(ii) for which an oral hearing was requested, or the issue of waiver, rarely involve issues of credibility or veracity; and</P> <P>(2) The Secretary determines that review of the documentary evidence is ordinarily an adequate means to correct mistakes.</P> <P>(e) The Secretary may decline to consider any reasons that the debtor fails to provide in accordance with paragraph (b)(1) of this section.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0515)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> <CITA>[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.26</SECTNO> <SUBJECT>What special rules apply to an oral hearing?</SUBJECT> <P>(a) The oral hearing under § 30.25 is not a formal evidentiary hearing subject to 5 U.S.C. 554, unless required by law.</P> <P>(b) If the Secretary grants an oral hearing, the Secretary notifies the debtor in writing of:</P> <P>(1) The time and place for the hearing;</P> <P>(2) The debtor's right to representation; and</P> <P>(3) The debtor's right to present and cross examine witnesses.<PRTPAGE P="54"/> </P> <P>(c) If the Secretary grants an oral hearing, the Secretary designates an official to:</P> <P>(1) Govern the conduct of the hearing;</P> <P>(2) Take all necessary action to avoid unreasonable delay in the proceedings;</P> <P>(3) Review the evidence presented at the hearing, the documents submitted by the debtor, and other relevant evidence; and</P> <P>(4) After considering the evidence, notify the debtor in writing of the official's decision regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) and, if appropriate, the question of waiver of the debt.</P> <P>(d) The official designated under paragraph (c) of this section may decline to hear any witnesses or testimony not identified by the debtor in accordance with § 30.25(b)(2).</P> <P>(e) The decision of the designated official under paragraph (c) of this section constitutes the final decision of the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.27</SECTNO> <SUBJECT>When does the Secretary enter into a repayment agreement rather than offset?</SUBJECT> <P>(a) If a debtor wants an opportunity to enter into a written agreement to repay a debt on terms acceptable to the Secretary, the debtor must:</P> <P>(1) File a request to enter into such agreement within 20 days after the date of the notice provided under § 30.22; and</P> <P>(2) File the request at the address specified in the notice.</P> <P>(b) A request filed under paragraph (a) of this section must contain all information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information.</P> <P>(c) If the Secretary receives a request filed in accordance with this section, the Secretary may enter into a written agreement requiring repayment in accordance with 4 CFR 102.11, instead of offsetting the debt.</P> <P>(d) In deciding whether to enter into the agreement, the Secretary may consider:</P> <P>(1) The Government's interest in collecting the debt; and</P> <P>(2) Fairness to the debtor.</P> <P>(e)(1) A debtor that enters into a repayment agreement with the Secretary under this section waives any right to further review by the Secretary of the issues relating to the original debt identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii).</P> <P>(2) If a debtor breaches a repayment agreement, the Secretary may offset, or, under § 30.30, refer to another agency for offset:</P> <P>(i) The amount owing under the agreement; or</P> <P>(ii) The entire original debt, to the extent not repaid.</P> <SECAUTH>(Authority: 20 U.S.C. 1221-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> <CITA>[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 30.28</SECTNO> <SUBJECT>When may the Secretary offset before completing the procedures under §§ 30.22-30.27?</SUBJECT> <P>(a) The Secretary may offset before completing the procedures otherwise required by §§ 30.22-30.27 if:</P> <P>(1) Failure to offset would substantially prejudice the Government's ability to collect the debt; and</P> <P>(2) The amount of time remaining before the payment by the United States which is subject to offset does not reasonably permit completion of the procedures under §§ 30.22-30.27.</P> <P>(b) If the Secretary offsets under paragraph (a) of this section, the Secretary:</P> <P>(1) Promptly completes the procedures under §§ 30.22-30.27 after initiating the offset; and</P> <P>(2) Refunds any amounts recovered under the offset that are later found not to be owed to the United States.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.29</SECTNO> <SUBJECT>What procedures apply when the Secretary offsets to collect a debt owed another agency?</SUBJECT> <P>The Secretary may initiate offset to collect a debt owed another Federal agency if:<PRTPAGE P="55"/> </P> <P>(a) An official of that agency certifies in writing:</P> <P>(1) That the debtor owes a debt to the United States;</P> <P>(2) The amount of the debt; and</P> <P>(3) That the agency has complied with 4 CFR 102.3; and</P> <P>(b) For offsets under 31 U.S.C. 3716, the Secretary makes an independent determination that the offset meets the standards under § 30.21(a)(2).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.30</SECTNO> <SUBJECT>What procedures apply when the Secretary requests another agency to offset a debt owed under a program or activity of the Department?</SUBJECT> <P>(a) The Secretary may request another Federal agency to offset a debt owed under a program or activity of the Department if the Secretary certifies in writing to the other Federal agency:</P> <P>(1) That the debtor owes a debt to the United States;</P> <P>(2) The amount of the debt; and</P> <P>(3) That the Secretary has complied with 4 CFR 102.3.</P> <P>(b) Before providing the certification required under paragraph (a) of this section, the Secretary complies with the procedures in §§ 30.20-30.27.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.31</SECTNO> <SUBJECT>How does the Secretary apply funds recovered by offset if multiple debts are involved?</SUBJECT> <P>If the Secretary collects more than one debt of a debtor by administrative offset, the Secretary applies the recovered funds to satisfy those debts based on the Secretary's determination of the best interests of the United States, determined by the facts and circumstances of the particular case.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Procedures</HD> <SECTION> <SECTNO>§ 30.33</SECTNO> <SUBJECT>What procedures does the Secretary follow for IRS tax refund offsets?</SUBJECT> <P>(a) If a named person owes a debt under a program or activity of the Department, the Secretary may refer the debt for offset to the Secretary of the Treasury after complying with the procedures in §§ 30.20-30.28, as modified by this section.</P> <P>(b) Notwithstanding § 30.22(b), the notice sent to a debtor under § 30.22 informs the debtor that:</P> <P>(1) The debt is past due;</P> <P>(2) The Secretary intends to refer the debt for offset to the Secretary of Treasury;</P> <P>(3) The debtor has an opportunity to:</P> <P>(i) Inspect and copy Department records regarding the existence, amount, enforceability, or past-due status of the debt;</P> <P>(ii) Obtain a review within the Department of the existence, amount, enforceability, or past-due status of the debt;</P> <P>(iii) Enter into a written agreement with the Secretary to repay the debt; and</P> <P>(4) The debtor must take an action set forth under paragraph (b)(3) by a date specified in the notice.</P> <P>(c) Notwithstanding § 30.23(a), if a debtor wants to inspect and copy Department records regarding the existence, amount, enforceability, or past-due status of the debt, the debtor must:</P> <P>(1) File a written request to inspect and copy the records within 20 days after the date of the notice provided under § 30.22; and</P> <P>(2) File the request at the address specified in that notice.</P> <P>(d) Notwithstanding the time frame under § 30.24(a), if a debtor wants a review under that paragraph, the debtor must file a request for review at the address specified in the notice by the later of:</P> <P>(1) Sixty-five days after the date of the notice provided under § 30.22;</P> <P>(2) If the debtor has requested an opportunity to inspect and copy records within the time period specified in paragraph (c) of this section, 15 days after the date on which the Secretary makes available to the debtor the relevant, requested records; or</P> <P>(3) If the debtor has requested a review within the appropriate time frame under paragraph (d) (1) or (2) of this section and the Secretary has provided <PRTPAGE P="56"/>an initial review by a guarantee agency, seven days after the date of the initial determination by the guarantee agency.</P> <P>(e) Notwithstanding the time frames under § 30.24(d), a debtor shall file the documents specified under that paragraph with the request for review.</P> <P>(f) Notwithstanding the time frame under § 30.27(a), a debtor must agree to repay the debt under terms acceptable to the Secretary and make the first payment due under the agreement by the latest of:</P> <P>(1) The seventh day after the date of decision of the Secretary if the debtor requested a review under § 30.24;</P> <P>(2) The sixty-fifth day after the date of the notice under § 30.22(b), if the debtor did not request a review under § 30.24, or an opportunity to inspect and copy records of the Department under § 30.23; or</P> <P>(3) The fifteenth day after the date on which the Secretary made available relevant records regarding the debt, if the debtor filed a timely request under § 30.23(a).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3720A)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Reporting Debts to Consumer Reporting Agencies</HD> <SECTION> <SECTNO>§ 30.35</SECTNO> <SUBJECT>What procedures does the Secretary follow to report debts to consumer reporting agencies?</SUBJECT> <P>(a)(1) The Secretary reports information regarding debts arising under a program or activity of the Department and held by the Department to consumer reporting agencies, in accordance with the procedures described in this section.</P> <P>(2) The term <E T="03">consumer reporting agency</E>, as used in this section, has the same meaning as provided in 31 U.S.C. 3701(a)(3).</P> <P>(b) Before reporting information on a debt to a consumer reporting agency, the Secretary follows the procedures set forth in § 30.33.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711, § 16023, 16029, Pub. L. 99-272)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <RESERVED>Subpart D[Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Costs and Penalties Does the Secretary Impose on Delinquent Debtors?</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>53 FR 33425, Aug. 30, 1988, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 30.60</SECTNO> <SUBJECT>What costs does the Secretary impose on delinquent debtors?</SUBJECT> <P>(a) The Secretary may charge a debtor for the costs associated with the collection of a particular debt. These costs include, but are not limited to—</P> <P>(1) Salaries of employees performing Federal loan servicing and debt collection activities;</P> <P>(2) Telephone and mailing costs;</P> <P>(3) Costs for reporting debts to credit bureaus;</P> <P>(4) Costs for purchase of credit bureau reports;</P> <P>(5) Costs associated with computer operations and other costs associated with the maintenance of records;</P> <P>(6) Bank charges;</P> <P>(7) Collection agency costs;</P> <P>(8) Court costs and attorney fees; and</P> <P>(9) Costs charged by other Governmental agencies.</P> <P>(b) Notwithstanding any provision of State law, if the Secretary uses a collection agency to collect a debt on a contingent fee basis, the Secretary charges the debtor, and collects through the agency, an amount sufficient to recover—</P> <P>(1) The entire amount of the debt; and</P> <P>(2) The amount that the Secretary is required to pay the agency for its collection services.</P> <P>(c)(1) The amount recovered under paragraph (b) of this section is the entire amount of the debt, multiplied by the following fraction:</P> <MATH DEEP="24" SPAN="1"> <MID>EC15NO91.009</MID> </MATH> <P>(2) In paragraph (c)(1) of this section, cr equals the commission rate the Department pays to the collection agency.</P> <P>(d) If the Secretary uses more than one collection agency to collect similar debts, the commission rate (cr) described in paragraph (c)(2) of this section is calculated as a weighted average of the commission rates charged by <PRTPAGE P="57"/>all collection agencies collecting similar debts, computed for each fiscal year based on the formula</P> <MATH DEEP="29" SPAN="1"> <MID>EC15NO91.010</MID> </MATH> <FP>where—</FP> <P>(1) Xi equals the dollar amount of similar debts placed by the Department with an individual collection agency as of the end of the preceding fiscal year;</P> <P>(2) Yi equals the commission rate the Department pays to that collection agency for the collection of the similar debts;</P> <P>(3) Z equals the dollar amount of similar debts placed by the Department with all collection agencies as of the end of the preceding fiscal year; and</P> <P>(4) N equals the number of collection agencies with which the Secretary has placed similar debts as of the end of the preceding fiscal year.</P> <P>(e) If a debtor has agreed under a repayment or settlement agreement with the Secretary to pay costs associated with the collection of a debt at a specified amount or rate, the Secretary collects those costs in accordance with the agreement.</P> <P>(f) The Secretary does not impose collection costs against State or local governments under paragraphs (a) through (d) of this section.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e), 3717(e)(1), 3718))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.61</SECTNO> <SUBJECT>What penalties does the Secretary impose on delinquent debtors?</SUBJECT> <P>(a) If a debtor does not make a payment on a debt, or portion of a debt, within 90 days after the date specified in the first demand for payment sent to the debtor, the Secretary imposes a penalty on the debtor.</P> <P>(b)(1) The amount of the penalty imposed under paragraph (a) of this section is 6 percent per year of the amount of the delinquent debt.</P> <P>(2) The penalty imposed under this section runs from the date specified in the first demand for payment to the date the debt (including the penalty) is paid.</P> <P>(c) If a debtor has agreed under a repayment or settlement agreement with the Secretary to pay a penalty for failure to pay a debt when due, or has such an agreement under a grant or contract under which the debt arose, the Secretary collects the penalty in accordance with the agreement, grant, or contract.</P> <P>(d) The Secretary does not impose a penalty against State or local governments under paragraphs (a) and (b) of this section.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 30.62</SECTNO> <SUBJECT>When does the Secretary forego interest, administrative costs, or penalties?</SUBJECT> <P>(a) For a debt of any amount based on a loan, the Secretary may refrain from collecting interest or charging administrative costs or penalties to the extent that compromise of these amounts is appropriate under the standards for compromise of a debt contained in 4 CFR part 103.</P> <P>(b) For a debt not based on a loan the Secretary may waive, or partially waive, the charging of interest, or the collection of administrative costs or penalties, if—</P> <P>(1) Compromise of these amounts is appropriate under the standards for compromise of a debt contained in 4 CFR part 103; or</P> <P>(2) The Secretary determines that the charging of interest or the collection of administrative costs or penalties is—</P> <P>(i) Against equity and good conscience; or</P> <P>(ii) Not in the best interests of the United States.</P> <P>(c) The Secretary may exercise waiver under paragraph (b)(1) of this section without regard to the amount of the debt.</P> <P>(d) The Secretary may exercise waiver under paragraph (b)(2) of this section if—</P> <P>(1) The Secretary has accepted an installment plan under 4 CFR 102.11;</P> <P>(2) There is no indication of fault or lack of good faith on the part of the debtor; and</P> <P>(3) The amount of interest, administrative costs, and penalties is such a large portion of the installments that the debt may never be repaid if that amount is collected.<PRTPAGE P="58"/> </P> <P>(e)(1) The Secretary does not charge interest on any portion of a debt, other than a loan, owed by a person subject to 31 U.S.C. 3717 if the debt is paid within 30 days after the date of the first demand for payment.</P> <P>(2) The Secretary may extend the period under paragraph (e)(1) of this section if the Secretary determines that the extension is appropriate.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Requirements Apply to the Compromise of a Debt or the Suspension or Termination of Collection Action?</HD> <SECTION> <SECTNO>§ 30.70</SECTNO> <SUBJECT>How does the Secretary exercise discretion to compromise a debt or to suspend or terminate collection of a debt?</SUBJECT> <P>(a) The Secretary uses the standards in the FCCS, 4 CFR part 103, to determine whether compromise of a debt is appropriate if—</P> <P>(1) The debt must be referred to the Department of Justice under this section; or</P> <P>(2) The amount of the debt is less than or equal to $20,000 and the Secretary does not follow the procedures in paragraph (e) of this section.</P> <P>(b) The Secretary refers a debt to the Department of Justice to decide whether to compromise a debt if—</P> <P>(1) The debt was incurred under a program or activity subject to section 452(f) of the General Education Provisions Act and the initial determination of the debt was more than $50,000; or</P> <P>(2) The debt was incurred under a program or activity not subject to section 452(f) of the General Education Provisions Act and the amount of the debt is more than $20,000.</P> <P>(c) The Secretary may compromise the debt under the procedures in paragraph (e) of this section if—</P> <P>(1) The debt was incurred under a program or activity subject to section 452(f) of the General Education Provisions Act; and</P> <P>(2) The initial determination of the debt was less than or equal to $50,000.</P> <P>(d) The Secretary may compromise a debt without following the procedure in paragraph (e) of this section if the amount of the debt is less than or equal to $20,000.</P> <P>(e) The Secretary may compromise the debt pursuant to paragraph (c) of this section if—</P> <P>(1) The Secretary determines that—</P> <P>(i) Collection of any or all of the debt would not be practical or in the public interest; and</P> <P>(ii) The practice that resulted in the debt has been corrected and will not recur;</P> <P>(2) At least 45 days before compromising the debt, the Secretary publishes a notice in the <E T="04">Federal Register</E> stating—</P> <P>(i) The Secretary's intent to compromise the debt; and</P> <P>(ii) That interested persons may comment on the proposed compromise; and</P> <P>(3) The Secretary considers any comments received in response to the <E T="04">Federal Register</E> notice before finally compromising the debt.</P> <P>(f)(1) The Secretary uses the standards in the FCCS, 4 CFR part 104, to determine whether suspension or termination of collection action is appropriate.</P> <P>(2) The Secretary—</P> <P>(i) Refers the debt to the Department of Justice to decide whether to suspend or terminate collection action if the amount of the debt at the time of the referral is more than $20,000; or</P> <P>(ii) May decide to suspend or terminate collection action if the amount of the debt at the time of the Secretary's decision is less than or equal to $20,000.</P> <P>(g) In determining the amount of a debt under paragraphs (a) through (f) of this section, the Secretary excludes interest, penalties, and administrative costs.</P> <P>(h) Notwithstanding paragraphs (b) through (f) of this section, the Secretary may compromise a debt, or suspend or terminate collection of a debt, in any amount if the debt arises under the Guaranteed Student Loan Program authorized under title IV, part B, of the Higher Education Act of 1965, as amended, or the Perkins Loan Program authorized under title IV, part E, of the Higher Education Act of 1965, as amended.</P> <P>(i) The Secretary refers a debt to the General Accounting Office (GAO) for review and approval before referring <PRTPAGE P="59"/>the debt to the Department of Justice for litigation if—</P> <P>(1) The debt arose from an audit exception taken by GAO to a payment made by the Department; and</P> <P>(2) The GAO has not granted an exception from the GAO referral requirement.</P> <P>(j) Nothing in this section precludes—</P> <P>(1) A contracting officer from exercising his authority under applicable statutes, regulations, or common law to settle disputed claims relating to a contract; or</P> <P>(2) The Secretary from redetermining a claim.</P> <SECAUTH>(Authority: 20 U.S.C. 1082(a) (5) and (6), 1087hh, 1221e-3(a)(1), 1226a-1, and 1234a(f), 31 U.S.C. 3711(e))</SECAUTH> <CITA>[53 FR 33425, Aug. 30, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart G[Reserved]</RESERVED> </SUBPART> </PART> <PART> <EAR>Pt. 31</EAR> <HD SOURCE="HED">PART 31—SALARY OFFSET FOR FEDERAL EMPLOYEES WHO ARE INDEBTED TO THE UNITED STATES UNDER PROGRAMS ADMINISTERED BY THE SECRETARY OF EDUCATION</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>31.1</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>31.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>31.3</SECTNO> <SUBJECT>Pre-offset notice.</SUBJECT> <SECTNO>31.4</SECTNO> <SUBJECT>Request to inspect and copy documents relating to a debt.</SUBJECT> <SECTNO>31.5</SECTNO> <SUBJECT>Request for hearing on the debt or the proposed offset.</SUBJECT> <SECTNO>31.6</SECTNO> <SUBJECT>Location and timing of oral hearing.</SUBJECT> <SECTNO>31.7</SECTNO> <SUBJECT>Hearing procedures.</SUBJECT> <SECTNO>31.8</SECTNO> <SUBJECT>Rules of decision.</SUBJECT> <SECTNO>31.9</SECTNO> <SUBJECT>Decision of the hearing official.</SUBJECT> <SECTNO>31.10</SECTNO> <SUBJECT>Request for repayment agreement.</SUBJECT> <SECTNO>31.11</SECTNO> <SUBJECT>Offset process.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 5514; 31 U.S.C. 3716.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>54 FR 31821, Aug. 19, 1989, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 31.1</SECTNO> <SUBJECT>Scope.</SUBJECT> <P>(a) <E T="03">General.</E> The Secretary establishes the standards and procedures in this part that apply to the offset from disposable pay of a current or former Federal employee or from amounts payable from the Federal retirement account of a former Federal employee to recover a debt owed the United States under a program adminstered by the Secretary of Education.</P> <P>(b) <E T="03">Exclusions.</E> This part does not apply to—</P> <P>(1) Offsets under 34 CFR part 32 to recover for overpayments of pay or allowances to an employee of the Department;</P> <P>(2) Offsets under 34 CFR part 30; or</P> <P>(3) Offsets under section 124 of Pub. L. 97-276 to collect debts owed to the United States on judgments.</P> <P>(c) <E T="03">Reports to consumer reporting agency.</E> The Secretary may report a debt to a consumer reporting agency after notifying the employee, in accordance with 34 CFR 30.35, of the intention to report the debt, and after providing the employee an opportunity to inspect documents, receive a hearing, and enter into a repayment agreement under this part.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3711; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>As used in this part:</P> <P> <E T="03">Agency</E> means—</P> <P>(1) An Executive agency as defined in 5 U.S.C. 105, including the U.S. Postal Service and the U.S. Postal Rate Commission;</P> <P>(2) A military department as defined in 5 U.S.C. 102;</P> <P>(3) An agency or court in the judicial branch, including a court as defined in 28 U.S.C. 610, the District Court for the Northern Mariana Islands, and the Judicial Panel on Multidistrict Litigation;</P> <P>(4) An agency of the legislative branch, including the U.S. Senate and the U.S. House of Representatives; and</P> <P>(5) Any other independent establishment that is an entity of the Federal Government.</P> <P> <E T="03">Days</E> refer to calendar days.</P> <P> <E T="03">Department</E> means the Education Department.</P> <P> <E T="03">Disposable pay</E> means the amount that remains from an employee's pay after required deductions for Federal, State, and local income taxes; Social Security taxes, including Medicare taxes; Federal retirement programs; premiums for basic life insurance and health insurance benefits; and such other deductions that are required by law to be withheld.<PRTPAGE P="60"/> </P> <P> <E T="03">Employee</E> means a current or former employee of an agency. In the case of an offset proposed to collect a debt owed by a deceased employee, the references in this part to the employee shall be read to refer to the payee of benefits from the Federal retirement account or other pay of the employee.</P> <P> <E T="03">Federal retirement account</E> means an account of an employee under the Civil Service Retirement System or the Federal Employee Retirement System.</P> <P> <E T="03">Offset</E> means a deduction from the pay of an employee, or a payment due from the Federal retirement account of an employee, to satisfy a debt.</P> <P> <E T="03">Pay</E> means basic pay, special pay, incentive pay, retired pay, retainer pay, or, in the case of an individual not entitled to basic pay, other authorized pay, including severance pay or lump sum payments for accrued annual leave, and amounts payable from the Federal retirement account of an employee.</P> <P> <E T="03">Secretary</E> means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.3</SECTNO> <SUBJECT>Pre-offset notice.</SUBJECT> <P>(a) At least 65 days before initiating an offset against the pay of an employee, the Secretary sends a written notice to the employee stating—</P> <P>(1) The nature and amount of the debt;</P> <P>(2) A demand for payment of the debt;</P> <P>(3) The manner in which the Secretary charges interest, administrative costs, and penalties on the debt;</P> <P>(4) The Secretary's intention to collect the debt by offset against—</P> <P>(i) 15 percent of the employee's current disposable pay; and</P> <P>(ii) If the debt cannot be satisfied by offset against current disposable pay, a specified amount of severance pay, a lump sum annual leave payment, a final salary check, or payments from the Federal retirement account of the employee;</P> <P>(5) The amount, frequency, approximate beginning date and duration of the proposed offset;</P> <P>(6) The employee's opportunity to—</P> <P>(i) Inspect and copy Department records pertaining to the debt;</P> <P>(ii) Obtain a pre-offset hearing before a hearing official who is not under the control or supervision of the Secretary regarding the existence or amount of the debt, or the proposed offset schedule; and</P> <P>(iii) Enter into a written agreement with the Secretary to repay the debt;</P> <P>(7) The date by which the employee must request an opportunity set forth under paragraph (a)(6) of this section;</P> <P>(8) The grounds for objecting to collection of the debt by offset;</P> <P>(9) The applicable hearing procedures and requirements;</P> <P>(10) That the Secretary grants any request for access to records, for a hearing, or for a satisfactory repayment agreement made by an employee;</P> <P>(11) That the Secretary does not delay the start of the proposed offset, or suspend an offset already commenced, unless—</P> <P>(i) An employee makes the request for access to records or for a hearing, or enters into a repayment agreement that is acceptable to the Secretary, before the deadlines described in this part; or</P> <P>(ii) An employee requests a hearing after the deadlines established in § 31.5(a), but submits evidence satisfactory to the Secretary that the request was not made in a timely manner because the employee did not have notice of the proposed offset, or was prevented from making the request by factors beyond his or her control, until after the deadlines had passed;</P> <P>(12) That a final decision on the hearing will be issued not later than 60 days after the date on which the employee files a request for a hearing under § 31.5, unless a delay in the proceedings is granted at the request of the employee;</P> <P>(13) That submission by the employee of knowingly false statements, representations or evidence may subject the employee to applicable disciplinary procedures, or civil or criminal penalties; and</P> <P>(14) That any amounts paid or collected by offset on a debt later determined to be unenforceable or canceled will be refunded to the employee.<PRTPAGE P="61"/> </P> <P>(b)(1) In determining whether an employee has requested an opportunity set forth under paragraph (a)(6) of this section in a timely manner, the Secretary relies on—</P> <P>(i) A legibly dated U.S. Postal Service postmark for the employee's request; or</P> <P>(ii) A legibly stamped U.S. Postal Service mail receipt for the employee's request.</P> <P>(2) The Secretary does not rely on either of the following as proof of mailing:</P> <P>(i) A private metered postmark.</P> <P>(ii) A mail receipt that is not dated by the U.S. Postal Service.</P> <P>(c) Payment by offset under this part of all or part of a debt does not constitute an acknowledgment of the debt or a waiver of rights available to the employee under this part or other applicable law if the employee has not agreed in writing to the offset.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.4</SECTNO> <SUBJECT>Request to inspect and copy documents relating to a debt.</SUBJECT> <P>(a) The Secretary makes available for inspection and copying before offset under this part those Department documents that relate to the debt, if the employee—</P> <P>(1) Files a written request to inspect and copy the documents within 20 days of the date of the pre-offset notice under § 31.3, and</P> <P>(2) Files the request at the address specified in that notice.</P> <P>(b) A request filed under paragraph (a)(1) of this section must contain—</P> <P>(1) All information provided to the employee in the pre-offset notice under § 31.3 that identifies the employee and the debt, including the employee's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and</P> <P>(2) A reasonably specific identification of the documents that the employee wishes to have available for inspection and copying.</P> <P>(c) The Secretary makes available documents for inspection and copying upon request by the employee. However, the Secretary may initiate an offset before making the requested documents available if the employee fails to request inspection and copying in accordance with this section.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.5</SECTNO> <SUBJECT>Request for hearing on the debt or the proposed offset.</SUBJECT> <P>(a) <E T="03">Deadlines.</E> (1) The Secretary provides a hearing before offset on the existence, amount, or enforceability of the debt described in the pre-offset notice provided under § 31.3, or on the amount or frequency of the offsets as proposed in that notice, if the employee—</P> <P>(i) Files a request for the hearing within the later of—</P> <P>(A) 65 days after the date of the pre-offset notice provided under § 31.3; or</P> <P>(B) 15 days after the date on which the Secretary makes available to the employee the relevant, requested documents if the employee had requested an opportunity to inspect and copy documents within 20 days of the date of the pre-offset notice provided under § 31.3; and</P> <P>(ii) Files a request at the address specified in that notice.</P> <P>(2) The Secretary provides a hearing upon request by the employee. However, if the employee does not submit, within the deadlines in paragraph (a)(1) of this section, a request that meets the requirements of paragraphs (b) and (c) of this section, the Secretary does not delay the start of an offset, or suspend an offset already commenced, unless the employee submits evidence satisfactory to the Secretary that the request was not made in a timely manner because the employee did not have notice of the proposed offset, or was otherwise prevented from making the request by factors beyond his or her control, until after the deadlines had passed.</P> <P>(b) <E T="03">Contents of request for a hearing.</E> A request for a hearing must contain—</P> <P>(1) All information provided to the employee in the pre-offset notice under § 31.3 that identifies the employee and the particular debt, including the employee's Social Security number and the program under which the debt arose, together with any corrections needed with regard to that identifying information;</P> <P>(2) An explanation of the reasons why the employee believes that—<PRTPAGE P="62"/> </P> <P>(i) The debt as stated in the pre-offset notice is not owing or is not enforceable by offset; or</P> <P>(ii) The amount of the proposed offset described in the pre-offset notice will cause extreme financial hardship to the employee;</P> <P>(3) If the employee contends that the amount of the proposed offset will cause extreme financial hardship under the standards set forth in § 31.8(b)—</P> <P>(i) An alternative offset proposal;</P> <P>(ii) An explanation, in writing, showing why the offset proposed in the notice would cause an extreme financial hardship for the employee; and</P> <P>(iii) Documents that show for the employee and for the spouse and dependents of the employee, for the one-year period preceding the Secretary's notice and for the repayment period proposed by the employee in his or her offset schedule—</P> <P>(A) Income from all sources,</P> <P>(B) Assets,</P> <P>(C) Liabilities,</P> <P>(D) Number of dependents,</P> <P>(E) Expenses for food, housing, clothing, and transportation,</P> <P>(F) Medical expenses, and</P> <P>(G) Exceptional expenses, if any; and</P> <P>(4) Copies of all documents that the employee wishes to have considered to support the objections raised by the employee regarding the enforceability of the debt or the claim of extreme financial hardship.</P> <P>(c) <E T="03">Request for oral hearing.</E> (1) If the employee wants the hearing to be conducted as an oral hearing, the employee must submit a request that contains the information listed in paragraph (b) and must include with the request—</P> <P>(i) An explanation of reasons why the employee believes that the issues raised regarding the enforceability of the debt or a claim of extreme financial hardship cannot be resolved adequately by a review of the written statements and documents provided with the request for a hearing;</P> <P>(ii) An identification of—</P> <P>(A) The individuals that the employee wishes to have testify at the oral hearing;</P> <P>(B) The specific issues about which each individual is prepared to testify; and</P> <P>(C) The reasons why each individual's testimony is necessary to resolve the issue.</P> <P>(2) The Secretary grants a request for an oral hearing if—</P> <P>(i) The employee files a request for an oral hearing that meets the requirements of paragraphs (b) and (c) of this section; and</P> <P>(ii) The Secretary determines that the issues raised by the employee require a determination of the credibility of testimony and cannot be adequately resolved by a review of the written statements and documents submitted by the employee and documents contained in the Department's records relating to the debt.</P> <P>(3) The Secretary may decline a request for an oral hearing if the Secretary accepts the employee's proffer of testimomy made in the request for an oral hearing under paragraph (c)(1) of this section, and considers the facts at issue to be established as stated by the employee in the request.</P> <P>(4) If the Secretary grants a request for an oral hearing, the Secretary—</P> <P>(i) Notifies the employee in writing of—</P> <P>(A) The date, time, and place of the hearing;</P> <P>(B) The name and address of the hearing official;</P> <P>(C) The employee's right to be represented at the hearing by counsel or other representatives;</P> <P>(D) The employee's right to present and cross-examine witnesses; and</P> <P>(E) The employee's right to waive the requested oral hearing and receive a hearing in the written record; and</P> <P>(ii) Provides the hearing official with a copy of all written statements submitted by the employee with the request for a hearing, and all documents pertaining to the debt or the amount of the offset contained in the Department's files on the debt or submitted with the request for a hearing.</P> <P>(d) <E T="03">Employee choice of oral hearing or hearing on written submissions.</E> An employee who has been sent notice under paragraph (c)(4) that an oral hearing will be provided must, within 15 days of the date of that notice, state in writing to the hearing official and the Secretary—<PRTPAGE P="63"/> </P> <P>(1) Whether the employee intends to proceed with the oral hearing, or wishes a decision based on the written record; and</P> <P>(2) Any changes in the list of the witnesses the employee proposes to produce for the hearing, or the facts about which a witness will testify.</P> <P>(e) <E T="03">Dismissal of request for hearing.</E> The Secretary considers the employee to have waived the request for a hearing of any kind—</P> <P>(1) If an employee does not provide the hearing official in a timely manner the written statement required under paragraph (d) of this section; or</P> <P>(2) If the employee does not appear for a scheduled oral hearing.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.6</SECTNO> <SUBJECT>Location and timing of oral hearing.</SUBJECT> <P>(a) If the Secretary grants a request for an oral hearing, the Secretary selects the time, date, and location of the hearing. The Secretary selects, to the extent feasible, the location that is most convenient for the employee.</P> <P>(b) For a current military employee, the Secretary selects the time, date, and location of the hearing after consultation with the Secretary of Defense.</P> <P>(c) For a current Coast Guard employee, the Secretary selects the time, date, and location of the hearing after consultation with the Secretary of Transportation.</P> <P>(d) For an employee not described in paragraph (a) or (b) of this section, the hearing will be held in Washington, DC, or in one of the following cities: Boston, Philadelphia, New York, Atlanta, Chicago, Dallas, Kansas City, Denver, San Francisco, or Seattle.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.7</SECTNO> <SUBJECT>Hearing procedures.</SUBJECT> <P>(a) <E T="03">Independence of hearing official.</E> A hearing provided under this part is conducted by a hearing official who is neither an employee of the Department nor otherwise under the supervision or control of the Secretary.</P> <P>(b) <E T="03">Lack of subpoena authority or formal discovery.</E> (1) Neither the hearing official nor the Secretary has authority to issue subpoenas to compel the production of documents or to compel the attendance of witnesses at an oral hearing under this part. The Secretary will attempt to make available during an oral hearing the testimony of a current official of the Department if—</P> <P>(i) The employee had identified the official in the request for a hearing under § 31.5(b) and demonstrated that the testimony of the official is necessary to resolve adequately an issue of fact raised by the employee in the request for a hearing; and</P> <P>(ii) The Secretary determines that the responsibilities of the official permit his or her attendance at the hearing.</P> <P>(2) If the Secretary determines that the testimony of a Department official is necessary, but that the official cannot attend an oral hearing to testify, the Secretary attempts to make the official available for testimony at the hearing by means of a telephone conference call.</P> <P>(3) No discovery is available in a proceeding under this part except as provided in § 31.4.</P> <P>(c) <E T="03">Hearing on written submissions.</E> If a hearing is conducted on the written submissions, the hearing official reviews documents and responses submitted by the Secretary and the employee under § 31.5.</P> <P>(d) <E T="03">Conduct of oral hearing</E>. (1) The hearing official conducts an oral hearing as an informal proceeding. The official—</P> <P>(i) Administers oaths to witnesses;</P> <P>(ii) Regulates the course of the hearing;</P> <P>(iii) Considers the introduction of evidence without regard to the rules of evidence applicable to judicial proceedings; and</P> <P>(iv) May exclude evidence that is redundant, or that is not relevant to those issues raised by the employee in the request for hearing under § 31.5 that remain in dispute.</P> <P>(2) An oral hearing is generally open to the public. However, the hearing official may close all or any portion of the hearing if doing so is in the best interest of the employee or the public.</P> <P>(3) The hearing official may conduct an oral hearing by telephone conference call—<PRTPAGE P="64"/> </P> <P>(i) If the employee is located in a city outside the Washington, DC Metropolitan area.</P> <P>(ii) At the request of the employee.</P> <P>(iii) At the discretion of the hearing official.</P> <P>(4) No written record is created or maintained of an oral hearing provided under this part.</P> <P>(e) <E T="03">Burden of proof</E>. In any hearing under this part—</P> <P>(1) The Secretary bears the burden of proving, by a preponderance of the evidence, the existence and amount of the debt, and the failure of the employee to repay the debt, as the debt is described in the pre-offset notice provided under § 31.3; and</P> <P>(2) The employee bears the burden of proving, by a preponderance of the evidence—</P> <P>(i) The existence of any fact that would establish that the debt described in the pre-offset notice is not enforceable by offset; and</P> <P>(ii) The existence of any fact that would establish that the amount of the proposed offset would cause an extreme financial hardship for the employee.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.8</SECTNO> <SUBJECT>Rules of decision.</SUBJECT> <P>(a) <E T="03">Enforceability of debt by offset</E>. In deciding whether the Secretary has established that the debt described in the pre-offset under § 31.3 is owed by the employee, or whether the employee has established that the debt is not enforceable by offset, the hearing official shall apply the principles in this paragraph.</P> <P>(1) The statutes and Department regulations authorizing and implementing the program under which the debt arose must be applied in accordance with official written interpretations by the Department.</P> <P>(2) The principles of res judicata and collateral estoppel apply to resolution of disputed facts in those instances in which the debt or material facts in dispute have been the subject of prior judicial decision.</P> <P>(3) The act or omission of an institution of higher education at which the employee was enrolled does not constitute a defense to repayment of an obligation with regard to a grant or loan under a program authorized under Title IV of the Higher Education Act or similar authority, except to the extent that—</P> <P>(i) The act or omission constitutes a defense to the debt under applicable Federal or State law;</P> <P>(ii) The institution owed the employee a refund under its refund policy and failed to pay that refund to the employee or to a lender holding a loan made to the employee; or</P> <P>(iii) The institution ceased teaching activity while the employee was in attendance and during the academic period for which the grant or loan was made, and failed to refund to the employee or holder of a loan to the employee a proportionate amount of the grant or loan funds used to pay tuition and other institutional charges for that academic period.</P> <P>(4)(i) A debt otherwise established as owed by the employee is enforceable by offset under this part if the Secretary sends the pre-offset notice for the debt within the ten year period following the later of—</P> <P>(A) The date on which the Secretary acquired the debt by assignment or referral, or</P> <P>(B) The date of a subsequent partial payment reaffirming the debt.</P> <P>(ii) Periods during which the statute of limitations applicable to a lawsuit to collect the debt has been tolled under 11 U.S.C. 108, 28 U.S.C. 2416, 50 U.S.C. App. 525, or other authority are excluded from the calculation of the ten year period described in paragraph (a)(4)(i) of this section.</P> <P>(b) <E T="03">Extreme financial hardship.</E> (1) In deciding whether an employee has established that the amount of the proposed offset would cause extreme financial hardship to the employee, the hearing official shall determine whether the credible, relevant evidence submitted demonstrates that the proposed offset would prevent the employee from meeting the costs necessarily incurred for essential subsistence expenses of the employee and his or her spouse and dependents.</P> <P>(2) For purposes of this determination, essential subsistence expenses include costs incurred only for food, housing, clothing, essential transportation and medical care.<PRTPAGE P="65"/> </P> <P>(3) In making this determination, the hearing official shall consider—</P> <P>(i) The income from all sources of the employee, and his or her spouse and dependents;</P> <P>(ii) The extent to which the assets of the employee and his or her spouse and dependents are available to meet the offset and the essential subsistence expenses;</P> <P>(iii) Whether these essential subsistence expenses have been minimized to the greatest extent possible;</P> <P>(iv) The extent to which the employee and his or her spouse and dependents can borrow to satisfy the debt to be collected by offset or to meet essential expenses; and</P> <P>(v) The extent to which the employee and his or her spouse and dependents have other exceptional expenses that should be taken into account, and whether these expenses have been minimized.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.9</SECTNO> <SUBJECT>Decision of the hearing official.</SUBJECT> <P>(a) The hearing official issues a written opinion within sixty days of the date on which the employee filed a request for a hearing under § 31.5, unless a delay in the proceedings has been granted at the request of the employee. In the opinion, the hearing official states his or her decision and the findings of fact and conclusions of law on which the decision is based.</P> <P>(b) If the hearing official finds that a portion of the debt described in the pre-offset notice under § 31.3 is not enforceable by offset, the official shall state in the opinion that portion which is enforceable by offset.</P> <P>(c) If the hearing official finds that the amount of the offset proposed in the pre-offset notice will cause an extreme financial hardship for the employee, the hearing official shall establish an offset schedule that will result in the repayment of the debt in the shortest period of time without producing an extreme financial hardship for the employee.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.10</SECTNO> <SUBJECT>Request for repayment agreement.</SUBJECT> <P>(a) The Secretary does not initiate an offset under this part if the employee agrees in writing to repay the debt under terms acceptable to the Secretary and makes the first payment due under the agreement on or before the latest of—</P> <P>(1) The seventh day after the date of the decision of the hearing official, if the employee timely requested a hearing under § 31.5 (a) and (d);</P> <P>(2) The sixty-fifth day after the date of the pre-offset notice under § 31.3 if the employee did not timely request either a hearing in accordance with § 31.5 (a) and (d) or an opportunity to inspect and copy documents related to the debt under § 31.4; or</P> <P>(3) The fifteenth day after the date on which the Secretary made available documents related to the debt, if the employee filed a timely request for documents under § 31.4.</P> <P>(b) In the agreement, the Secretary and the employee may agree to satisfaction of the debt from sources other than an offset under this part, or may modify the amount proposed to be offset in the pre-offset notice or estimated in the decision of the hearing official.</P> <P>(c) If the employee does not enter into a repayment agreement acceptable to the Secretary within the deadlines in this section, the Secretary may initiate an offset under this part. The Secretary continues to collect by offset until an employee enters in a satisfactory repayment agreement for the debt. The Secretary suspends an offset already commenced under circumstances described in § 31.5(a)(2).</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 31.11</SECTNO> <SUBJECT>Offset process.</SUBJECT> <P>(a) The Secretary attempts to collect debts under this part within the shortest time authorized under—</P> <P>(1) The offset schedule proposed in the pre-offset notice, unless modified by agreement or by the decision of a hearing official;</P> <P>(2) A written repayment agreement with the employee; or<PRTPAGE P="66"/> </P> <P>(3) The offset schedule established in the decision of the hearing official.</P> <P>(b) In proposing an offset schedule under § 31.3 or establishing a repayment agreement under § 31.10, the Secretary also considers the expected period of Federal employment of the employee.</P> <P>(c) Unless the Secretary determines, in his discretion, to delay or suspend collection, the Secretary effects an offset under this part—</P> <P>(1) According to the terms agreed to by the employee pursuant to a timely request under § 31.10 to enter into a repayment agreement; or,</P> <P>(2) After the deadlines in § 31.10(b) for requesting a repayment agreement with the Secretary.</P> <P>(d) If the employee retires, resigns, or leaves Federal employment before the debt is satisfied, the Secretary collects the amount necessary to satisfy the debt by offset from subsequent payments of any kind, including a final salary payment or a lump sum annual leave payment, due the employee on the date of separation. If the debt cannot be satisfied by offset from any such final payment due the employee on the date of separation, the Secretary collects the debt from later payments of any kind due the employee in accordance with the provisions of 4 CFR 102.4.</P> <P>(e) The Secretary effects an offset under this part against payments owing to an employee of another Federal agency after completion of the requirements of this part, in accordance with the provisions of 5 CFR 550.1108.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> </PART> <PART> <EAR>Pt. 32</EAR> <HD SOURCE="HED">PART 32—SALARY OFFSET TO RECOVER OVERPAYMENTS OF PAY OR ALLOWANCES FROM DEPARTMENT OF EDUCATION EMPLOYEES</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>32.1</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>32.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>32.3</SECTNO> <SUBJECT>Pre-offset notice.</SUBJECT> <SECTNO>32.4</SECTNO> <SUBJECT>Employee response.</SUBJECT> <SECTNO>32.5</SECTNO> <SUBJECT>Pre-offset hearing—general.</SUBJECT> <SECTNO>32.6</SECTNO> <SUBJECT>Request for a pre-offset hearing.</SUBJECT> <SECTNO>32.7</SECTNO> <SUBJECT>Pre-offset oral hearing.</SUBJECT> <SECTNO>32.8</SECTNO> <SUBJECT>Pre-offset hearing on the written submissions.</SUBJECT> <SECTNO>32.9</SECTNO> <SUBJECT>Written decision.</SUBJECT> <SECTNO>32.10</SECTNO> <SUBJECT>Deductions process.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 5514; 31 U.S.C. 3716.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>52 FR 24957, July 1, 1987, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 32.1</SECTNO> <SUBJECT>Scope.</SUBJECT> <P>(a) The Secretary establishes the standards and procedures in this part that apply to the deductions through offset from disposable pay of a current or former employee of the Department of Education to recover overpayments of pay or allowances.</P> <P>(b) This part does not apply to—</P> <P>(1) Recovery through offset of an indebtedness to the United States by an employee of the Department under a program administered by the Secretary of Education covered under 34 CFR part 31;</P> <P>(2) The offset of an indebtedness to the United States by a Federal employee to satisfy a judgment obtained by the United States against that employee in a court of the United States;</P> <P>(3) The offset of any payment to an employee of the Department of Education which is expressly allowed under statutes other than 5 U.S.C. 5514, except as to offsets of severance pay and/or lump sum annual leave payments as authorized under 31 U.S.C. 3716;</P> <P>(4) Offsets under 34 CFR part 30; or</P> <P>(5) An employee election of coverage or of a change of coverage under a Federal benefits program which requires periodic deductions from pay if the amount to be recovered was accumulated over four pay periods or less.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>The following definitions apply to this part:</P> <P> <E T="03">Department</E> means the Department of Education.</P> <P> <E T="03">Disposable pay</E> means the amount that remains from an employee's pay after required deductions for Federal, State, and local income taxes; Social Security taxes, including Medicare taxes; Federal retirement programs; premiums for health and basic life insurance benefits; and such other deductions that are required by law to be withheld.</P> <P> <E T="03">Employee</E> means a current or former employee of the Department.<PRTPAGE P="67"/> </P> <P> <E T="03">Former employee</E> means a former employee of the Department who is entitled to pay from the Department or another agency.</P> <P> <E T="03">Pay</E> means basic pay, special pay, incentive pay, retired pay, retainer pay, or, in the case of an individual not entitled to basic pay, other authorized pay, including severance pay and/or lump sum payments for accrued annual leave.</P> <P> <E T="03">Paying agency</E> means a Federal agency currently employing an individual and authorizing the payment of his or her current pay.</P> <P> <E T="03">Secretary</E> means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.3</SECTNO> <SUBJECT>Pre-offset notice.</SUBJECT> <P>At least 30 days before initiating a deduction from the disposable pay of an employee to recover an overpayment of pay or allowances, the Secretary sends a written notice to the employee stating—</P> <P>(a) The origin, nature and amount of the overpayment;</P> <P>(b) How interest is charged and administrative costs and penalties will be assessed, unless excused under 31 U.S.C. 3716;</P> <P>(c) A demand for repayment, providing for an opportunity for the employee to enter into a written repayment agreement with the Department;</P> <P>(d) Where a waiver of repayment is authorized by law, the employee's right to request a waiver;</P> <P>(e) The Department's intention to deduct 15 percent of the employee's disposable pay, or a specified amount if the disposable pay is severance pay and/or a lump sum annual leave payment, to recover the overpayment if a waiver is not granted by the Secretary and the employee fails to repay the overpayment or enter into a written repayment agreement;</P> <P>(f) The amount, frequency, approximate beginning date and duration of the intended deduction;</P> <P>(g) If Government records on which the determination of overpayment are not attached, how those records will be made available to the employee for inspection and copying;</P> <P>(h) The employee's right to request a pre-offset hearing concerning the existence or amount of the overpayment or an involuntary repayment schedule;</P> <P>(i) The applicable hearing procedures and requirements, including a statement that a timely petition for hearing will stay commencement of collection proceedings and that a final decision on the hearing will be issued not later than 60 days after the hearing petition is filed, unless a delay is requested and granted;</P> <P>(j) That any knowingly false or frivolous statements, representations or evidence may subject the employee to applicable disciplinary procedures, civil or criminal penalties; and</P> <P>(k) That where amounts paid or deducted are later waived or found not owed, unless otherwise provided by law, they will be promptly refunded to the employee.</P> <SECAUTH>(Authority: 5 U.S.C. 5514, 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.4</SECTNO> <SUBJECT>Employee response.</SUBJECT> <P>(a) <E T="03">Voluntary repayment agreement.</E> Within 7 days of receipt of the written notice under § 32.3, the employee may submit a request to the Secretary to arrange for a voluntary repayment schedule. To arrange for a voluntary repayment schedule, the employee shall submit a financial statement and sign a written repayment agreement approved by the Secretary. An employee who arranges for a voluntary repayment schedule may nonetheless request a waiver of the overpayment under paragraph (b) of this section.</P> <P>(b) <E T="03">Waiver.</E> An employee seeking a waiver of collection of the debt that is authorized by law must request the waiver in writing to the Secretary within 10 days of receipt of the written notice under § 32.3. The employee must state why he or she believes a waiver should be granted.</P> <P>(c) <E T="03">Involuntary repayment schedule.</E> If the employee claims that the amount of the involuntary deduction will cause extreme financial hardship and should be reduced, he or she must submit a written explanation and a financial statement signed under oath or affirmation to the Secretary within 10 days of receipt of the written notice under <PRTPAGE P="68"/>§ 32.3. An employee who fails to submit this financial information in a timely manner waives the right to object to the involuntary repayment schedule at a hearing under § 32.5. The Secretary notifies the employee, in writing, whether the Secretary will reduce the rate of the involuntary deduction.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.5</SECTNO> <SUBJECT>Pre-offset hearing—general.</SUBJECT> <P>(a) An employee who wishes a review of the existence or amount of the overpayment or an involuntary repayment schedule may request a pre-offset hearing. The pre-offset hearing does not review:</P> <P>(1) The denial of a waiver of repayment under 5 U.S.C. 5584;</P> <P>(2) The involuntary repayment schedule or financial hardship caused by the amount of the involuntary deduction from the employee's disposable pay, unless the employee has submitted the financial statement and written explanation required under § 32.4(c); and</P> <P>(3) The determination under paragraph (b) of this section that the pre-offset hearing is on the written submissions.</P> <P>(b) Unless the Secretary determines that a matter reviewable under paragraph (a) of this section turns on an issue of credibility or veracity or cannot be resolved by a review of the documentary evidence, the pre-offset hearing is on the written submissions.</P> <P>(c) A pre-offset hearing is based on the written submissions for overpayments arising from:</P> <P>(1) A termination of a temporary promotion;</P> <P>(2) A cash award;</P> <P>(3) An erroneous salary rate;</P> <P>(4) Premature granting of a within-grade increase;</P> <P>(5) A lump sum payment for annual leave;</P> <P>(6) Unauthorized appointment to a position;</P> <P>(7) An error on time and attendance records; or</P> <P>(8) Other circumstances where the Secretary determines that an oral hearing is not required.</P> <P>(d) The hearing is conducted by a hearing official who is not an employee of the Department or under the supervision or control of the Secretary.</P> <P>(e) Formal discovery between the parties is not provided.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.6</SECTNO> <SUBJECT>Request for a pre-offset hearing.</SUBJECT> <P>(a) Except for an employee who has requested a waiver of collection of the debt under § 32.4(b), an employee who wishes a pre-offset hearing must request the hearing within 15 days of receipt of the written notice given under § 32.3. The Secretary waives the 15-day requirement if the employee shows that the delay was because of circumstances beyond his or her control or because of failure to receive notice and lack of knowledge of the time limit.</P> <P>(b) An employee who has requested a waiver under § 32.4(b) may request a hearing within 10 days of receipt of a determination by the Secretary denying a waiver.</P> <P>(c) The request for a hearing must:</P> <P>(1) Be in writing;</P> <P>(2) State why the employee:</P> <P>(i) Contests the existence or amount of the overpayment; or</P> <P>(ii) Claims that the involuntary repayment schedule will cause extreme financial hardship;</P> <P>(3) Include all documents on which the employee is relying, other than those provided by the Secretary under § 32.3; any document which is a statement of an individual must be in the form of an affidavit; and</P> <P>(4) Be submitted to the designated hearing official with a copy to the Secretary.</P> <P>(d) If the employee timely requests a pre-offset hearing or the timelines are waived under paragraph (a) of this section, the Secretary:</P> <P>(1) Notifies the employee whether the employee may elect an oral hearing; and</P> <P>(2) Provides the hearing official with a copy of all records on which the determination of the overpayment and any involuntary repayment schedule are based.</P> <P>(e) An employee who has been given the opportunity to elect an oral hearing and who does elect an oral hearing must notify the hearing official and the Secretary of his or her election in writing within 7 days of receipt of the notice under paragraph (d)(1) of this <PRTPAGE P="69"/>section and must identify all proposed witnesses and all facts and evidence about which they will testify.</P> <P>(f) Where an employee requests an oral hearing, the hearing official notifies the Secretary and the employee of the date, time, and location of the hearing. However:</P> <P>(1) The employee subsequently may elect to have the hearing based only on the written submissions by notifying the hearing official and the Secretary at least 3 calendar days before the date of the oral hearing. The hearing official may waive the 3-day requirement for good cause when the employee notifies the hearing official before the date of the hearing; and</P> <P>(2) The request for a hearing of an employee who fails to appear at the oral hearing must be dismissed and the Secretary's decision affirmed.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.7</SECTNO> <SUBJECT>Pre-offset oral hearing.</SUBJECT> <P>(a) Oral hearings are informal in nature. The Secretary and the employee, through their representatives, and by reference to the documentation submitted, explain their case. The employee may testify on his or her own behalf, subject to cross examination. Other witnesses may be called to testify only where the hearing official determines that their testimony is relevant and not redundant.</P> <P>(b) The hearing official shall:</P> <P>(1) Conduct a fair and impartial hearing; and</P> <P>(2) Preside over the course of the hearing, maintain decorum, and avoid delay in the disposition of the hearing.</P> <P>(c) The employee may represent himself or herself or may be represented by another person at the hearing. The employee may not be represented by a person whose representation creates an actual or apparent conflict of interest.</P> <P>(d) Oral hearings are open to the public. However, the hearing official may close all or any portion of the hearing where to do so is in the best interests of the employee or the public.</P> <P>(e) Oral hearings may be conducted by conference call—</P> <P>(1) If the employee is located in a city outside the Washington, DC Metropolitan area;</P> <P>(2) At the request of the employee; or</P> <P>(3) At the discretion of the hearing official.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.8</SECTNO> <SUBJECT>Pre-offset hearing on the written submissions.</SUBJECT> <P>If a hearing is to be held on the written submissions, the hearing official reviews the records and responses submitted by the Secretary and the employee under § 32.6.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 32.9</SECTNO> <SUBJECT>Written decision.</SUBJECT> <P>(a) The hearing official issues a written decision stating the facts supporting the nature and origin of the debt and the hearing official's analysis, findings and conclusions as to the amount of the debt and the repayment schedule within 60 days of filing of the employee's request for a pre-offset hearing, unless the employee requests, and the hearing official grants, a delay in the proceedings.</P> <P>(b) The hearing official decides whether the Secretary's determination of the existence and the amount of the overpayment or the extreme financial hardship caused by the involuntary repayment schedule is clearly erroneous. A determination is clearly erroneous if although there is evidence to support the determination, the hearing official, considering the record as a whole, is left with a definite and firm conviction that a mistake was made.</P> <P>(c) In making the decision, the hearing official is governed by applicable Federal statutes, rules and regulations.</P> <P>(d) The hearing official decides the issue of extreme financial hardship caused by the involuntary repayment schedule only where the employee has submitted the financial statement and written explanation required under § 32.4(c). Where the hearing official determines that the involuntary repayment schedule creates extreme financial hardship, he or she must establish a schedule that alleviates the financial hardship but may not reduce the involuntary repayment schedule to a deduction of zero percent.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="70"/> <SECTNO>§ 32.10</SECTNO> <SUBJECT>Deductions process.</SUBJECT> <P>(a) Debts must be collected in one lump sum where possible. If the employee does not agree to a lump sum that exceeds 15 percent of disposable pay, the debt must be collected in installment deductions at officially established pay intervals in the amount established under:</P> <P>(1) A voluntary repayment agreement;</P> <P>(2) An involuntary repayment schedule where no hearing is requested; or</P> <P>(3) The schedule established under the written hearing decision.</P> <P>(b) Installment deductions must be made over a period not greater than the anticipated period of employment, except as provided under paragraph (d) of this section. If possible, the installment payment must be sufficient in size and frequency to liquidate the debt in, at most, three years. Installment payments of less than $25 may be accepted only in the most unusual circumstances.</P> <P>(c) Deductions must begin:</P> <P>(1) After the employee has entered a voluntary repayment schedule;</P> <P>(2) If a waiver is requested under § 32.4(b), after the employee has been denied a waiver by the Secretary; or</P> <P>(3) If a hearing is requested under § 32.5, after a written decision.</P> <P>(d) If the employee retires or resigns or his or her employment ends before collection of the debt is completed, the amount necessary to liquidate the debt must be offset from subsequent payments of any nature (for example, final salary payment and/or lump sum annual leave payment) due the employee on the date of separation. If the debt cannot be liquidated by offset from any such final payment due the employee on the date of separation, the debt must be liquidated by administrative offset pursuant to 31 U.S.C. 3716 from later payments of any kind due the employee, where appropriate. After the Secretary has complied with the procedures in this part, the Secretary may refer the debt to a paying agency for collection by offset under 5 CFR 550.1108.</P> <P>(e) Interest, penalties and administrative costs on debts collected under this part must be assessed, in accordance with the provisions of 4 CFR 102.13.</P> <P>(f) An employee's payment, whether voluntary or involuntary, of all or any portion of an alleged debt collected pursuant to this part may not be construed as a waiver of any rights which the employee may have under this part or any other provision of law, except as otherwise provided by law.</P> <P>(g) Amounts paid or deducted pursuant to this part by an employee for a debt that is waived or otherwise found not owing to the United States or which the Secretary is ordered to refund must be promptly refunded to the employee.</P> <SECAUTH>(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)</SECAUTH> </SECTION> </PART> <PART> <EAR>Pt. 33</EAR> <HD SOURCE="HED">PART 33—PROGRAM FRAUD CIVIL REMEDIES ACT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>33.1</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <SECTNO>33.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>33.3</SECTNO> <SUBJECT>Basis for civil penalties and assessments.</SUBJECT> <SECTNO>33.4</SECTNO> <SUBJECT>Investigation.</SUBJECT> <SECTNO>33.5</SECTNO> <SUBJECT>Review by the reviewing official.</SUBJECT> <SECTNO>33.6</SECTNO> <SUBJECT>Prerequisites for issuing a complaint.</SUBJECT> <SECTNO>33.7</SECTNO> <SUBJECT>Complaint.</SUBJECT> <SECTNO>33.8</SECTNO> <SUBJECT>Service of complaint.</SUBJECT> <SECTNO>33.9</SECTNO> <SUBJECT>Answer.</SUBJECT> <SECTNO>33.10</SECTNO> <SUBJECT>Default upon failure to file an answer.</SUBJECT> <SECTNO>33.11</SECTNO> <SUBJECT>Referral of complaint and answer to the ALJ.</SUBJECT> <SECTNO>33.12</SECTNO> <SUBJECT>Notice of hearing.</SUBJECT> <SECTNO>33.13</SECTNO> <SUBJECT>Parties to the hearing.</SUBJECT> <SECTNO>33.14</SECTNO> <SUBJECT>Separation of functions.</SUBJECT> <SECTNO>33.15</SECTNO> <SUBJECT>Ex parte contacts.</SUBJECT> <SECTNO>33.16</SECTNO> <SUBJECT>Disqualification of reviewing official or ALJ.</SUBJECT> <SECTNO>33.17</SECTNO> <SUBJECT>Rights of parties.</SUBJECT> <SECTNO>33.18</SECTNO> <SUBJECT>Authority of the ALJ.</SUBJECT> <SECTNO>33.19</SECTNO> <SUBJECT>Prehearing conferences.</SUBJECT> <SECTNO>33.20</SECTNO> <SUBJECT>Disclosure of documents.</SUBJECT> <SECTNO>33.21</SECTNO> <SUBJECT>Discovery.</SUBJECT> <SECTNO>33.22</SECTNO> <SUBJECT>Exchange of witness lists, statements and exhibits.</SUBJECT> <SECTNO>33.23</SECTNO> <SUBJECT>Subpoenas for attendance at hearing.</SUBJECT> <SECTNO>33.24</SECTNO> <SUBJECT>Protective order.</SUBJECT> <SECTNO>33.25</SECTNO> <SUBJECT>Fees.</SUBJECT> <SECTNO>33.26</SECTNO> <SUBJECT>Form, filing and service of papers.</SUBJECT> <SECTNO>33.27</SECTNO> <SUBJECT>Computation of time.</SUBJECT> <SECTNO>33.28</SECTNO> <SUBJECT>Motions.</SUBJECT> <SECTNO>33.29</SECTNO> <SUBJECT>Sanctions.</SUBJECT> <SECTNO>33.30</SECTNO> <SUBJECT>The hearing and burden of proof.</SUBJECT> <SECTNO>33.31</SECTNO> <SUBJECT>Determining the amount of penalties and assessments.</SUBJECT> <SECTNO>33.32</SECTNO> <SUBJECT>Location of hearing.</SUBJECT> <SECTNO>33.33</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <SECTNO>33.34</SECTNO> <SUBJECT>Evidence.</SUBJECT> <SECTNO>33.35</SECTNO> <SUBJECT>The record.<PRTPAGE P="71"/> </SUBJECT> <SECTNO>33.36</SECTNO> <SUBJECT>Post-hearing briefs.</SUBJECT> <SECTNO>33.37</SECTNO> <SUBJECT>Initial decision.</SUBJECT> <SECTNO>33.38</SECTNO> <SUBJECT>Reconsideration of initial decision.</SUBJECT> <SECTNO>33.39</SECTNO> <SUBJECT>Appeal to Department head.</SUBJECT> <SECTNO>33.40</SECTNO> <SUBJECT>Stays ordered by the Department of Justice.</SUBJECT> <SECTNO>33.41</SECTNO> <SUBJECT>Stay pending appeal.</SUBJECT> <SECTNO>33.42</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>33.43</SECTNO> <SUBJECT>Collection of civil penalties and assessments.</SUBJECT> <SECTNO>33.44</SECTNO> <SUBJECT>Right to administrative offset.</SUBJECT> <SECTNO>33.45</SECTNO> <SUBJECT>Deposit in Treasury of United States.</SUBJECT> <SECTNO>33.46</SECTNO> <SUBJECT>Compromise or settlement.</SUBJECT> <SECTNO>33.47</SECTNO> <SUBJECT>Limitations.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>31 U.S.C. 3801-3812.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>53 FR 15675, May 3, 1988, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 33.1</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <P>(a) <E T="03">Basis.</E> This part implements the Program Fraud Civil Remedies Act of 1986, Pub. L. No. 99-509, 6101 through 6104, 100 Stat. 16674 (October 21, 1986), to be codified at 31 U.S.C. 3801 through 3812. This law (31 U.S.C. 3809) requires each Federal department head to promulgate regulations necessary to implement the provisions of the statute.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P>(b) <E T="03">Purpose.</E> This part:</P> <P>(1) Establishes administrative procedures for imposing civil penalties and assessments against persons who make, submit, or present, or cause to be made, submitted, or presented, false, fictitious, or fraudulent claims or written statements to the Department or to its agents; and</P> <P>(2) Specifies the hearing and appeal rights of persons subject to allegations of liability for those penalties and assessments.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>As used in this part:</P> <P> <E T="03">ALJ</E> means an Administrative Law Judge in the Department appointed pursuant to 5 U.S.C. 3105 or detailed to the Department pursuant to 5 U.S.C. 3344.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(a)(7)(A))</SECAUTH> <P> <E T="03">Benefits</E>, as used in the definition of “statement,” means anything of value, including but no limited to any advantage, preference, privilege, license, permit, favorable decision, ruling, status, or loan guarantee.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P> <E T="03">Claim</E> means any request, demand, or submission:</P> <P>(a) Made to the Department for property, services, or money (including money representing grants, cooperative agreements, loans, insurance, or benefits);</P> <P>(b) Made to a recipient of property, services, or money from the Department or to a party to a contract or agreement with the Department:</P> <P>(1) For property or services if the United States:</P> <P>(i) Provided the property or services;</P> <P>(ii) Provided any portion of the funds for the purchase of the property or services; or</P> <P>(iii) Will reimburse the recipient or party for the purchase of the property or services; or</P> <P>(2) For the payment of money (including money representing grants, cooperative agreements, loans, insurance, or benefits) if the United States:</P> <P>(i) Provided any portion of the money requested or demanded;</P> <P>(ii) Will reimburse the recipient or party for any portion of the money paid on that request or demand; or</P> <P>(iii) Will guarantee or reinsure any portion of a loan made by the party; or</P> <P>(c) Made to the Department which has the effect of decreasing an obligation to pay or account for property, services, or money.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(a)(3))</SECAUTH> <P> <E T="03">Complaint</E> means the administrative complaint served by the reviewing official on the defendant under § 33.7.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P> <E T="03">Defendant</E> means any person alleged in a complaint under § 33.7 to be liable for a civil penalty or assessment under § 33.3.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P> <E T="03">Department</E> means the United States Department of Education.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <PRTPAGE P="72"/> <P> <E T="03">Department head</E> means the Secretary or Under Secretary of the United States Department of Education.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(a)(2))</SECAUTH> <P> <E T="03">Government</E> means the United States Government.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P> <E T="03">Individual</E> means a natural person.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P> <E T="03">Initial decision</E> means the written decision of the ALJ required by § 33.10 or § 33.37, and includes a revised initial decision issued following a remand or a motion for reconsideration.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(h))</SECAUTH> <P> <E T="03">Investigating official</E> means the Inspector General of the Department or an officer or employee of the Office of the Inspector General designated by the Inspector General and serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(4)(A)(i))</SECAUTH> <P> <E T="03">Knows or has reason to know</E>, means that a person, with respect to a claim or statement:</P> <P>(a) Has actual knowledge that the claim or statement is false, fictitious, or fraudulent;</P> <P>(b) Acts in deliberate ignorance of the truth or falsity of the claim or statement; or</P> <P>(c) Acts in reckless disregard of the truth or falsity of the claim or statement.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(5))</SECAUTH> <P> <E T="03">Makes</E> includes the terms presents, submits, and causes to be made, presented, or submitted.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(a))</SECAUTH> <P> <E T="03">Person</E> means any individual, partnership, corporation, association, or private organization.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(a)(6))</SECAUTH> <P> <E T="03">Representative</E> means:</P> <P>(a) An attorney who is a member in good standing of the bar of any State, territory, possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or</P> <P>(b) Any other person designated by a party in writing, provided that the designation includes a certification that the party understands the nature and consequences of an administrative enforcement action under this part, and that he or she has the right to representation by counsel or to self-representation.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2)(F))</SECAUTH> <P> <E T="03">Reviewing official</E> means the General Counsel of the Department or his or her designee who is:</P> <P>(a) Not subject to supervision by, or required to report to, the investigating official; and</P> <P>(b) Not employed in the organizational unit of the Department in which the investigating official is employed; and</P> <P>(c) Serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(8))</SECAUTH> <P> <E T="03">Statement</E> means any representation, certification, affirmation, document, record, or accounting or bookkeeping entry made:</P> <P>(a) With respect to a claim or to obtain the approval or payment of a claim (including relating to eligibility to make a claim); or</P> <P>(b) With respect to (including relating to eligibility for):</P> <P>(1) A contract with, or a bid or proposal for a contract with; or</P> <P>(2) A grant, cooperative agreement, loan, or benefit from;</P> <FP>The Department, or any State, political subdivision of a State, or other party, if the United States Government provides any portion of the money or property under the contract or for the grant, loan, cooperative agreement, or benefit, or if the Government will reimburse or reinsure the State, political subdivision, or party for any portion of the money or property under the contract or for the grant, cooperative agreement, loan, or benefit.</FP> <SECAUTH>(Authority: 31 U.S.C. 3801(9))</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="73"/> <SECTNO>§ 33.3</SECTNO> <SUBJECT>Basis for civil penalties and assessments.</SUBJECT> <P>(a) <E T="03">Claims.</E> (1) Any person who makes a claim that the person knows or has reason to know:</P> <P>(i) Is false, fictitious, or fraudulent;</P> <P>(ii) Includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent;</P> <P>(iii) Includes or is supported by any written statement that:</P> <P>(A) Omits a material fact;</P> <P>(B) Is false, fictitious, or fraudulent as a result of such omission; and</P> <P>(C) Is a statement in which the person making such statement has a duty to include such material fact; or</P> <P>(iv) Is for payment for the provision of property or services which the person has not provided as claimed;</P> <FP>shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $5,000 for each claim.</FP> <P>(2) Each voucher, invoice, claim form, or other individual request or demand for property, services, or money constitutes a separate claim.</P> <P>(3) A claim is considered made to the Department, a recipient, or party when that claim is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision thereof, acting for or on behalf of the Department, a recipient, or party.</P> <P>(4) Each claim for property, services, or money is subject to a civil penalty regardless of whether the property, services, or money is actually delivered or paid.</P> <P>(5) If the Government has made any payment (including transferred property or provided services) on a claim, a person subject to a civil penalty under paragraph (a)(1) of this section is also subject to an assessment of not more than twice the amount of that claim or that portion thereof that is determined to be in violation of paragraph (a)(1) of this section. The assessment is in lieu of damages sustained by the Government because of that claim.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(a)(1))</SECAUTH> <P>(b) <E T="03">Statements.</E> (1) Any person who makes a written statement that:</P> <P>(i) The person knows or has reason to know:</P> <P>(A) Asserts a material fact which is false, fictitious, or fraudulent; or</P> <P>(B) Is false, fictitious, or fraudulent because it omits a material fact that the person making the statement has a duty to include in the statement; and</P> <P>(ii) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement;</P> <FP>shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $5,000 for each statement.</FP> <P>(2) Each written representation, certification, or affirmation constitutes a separate statement.</P> <P>(3) A statement is considered made to the Department when the statement is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision thereof, acting for or on behalf of the Department.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(a)(2))</SECAUTH> <P>(c) No proof of specific intent to defraud is required to establish liability under this section.</P> <SECAUTH>(Authority: 31 U.S.C. 3801(5))</SECAUTH> <P>(d) In any case in which it is determined that more than one person is liable for making a claim or statement under this section, each of those persons may be held liable for a civil penalty under this section.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(a))</SECAUTH> <P>(e) In any case in which it is determined that more than one person is liable for making a claim under this section of which the Government has made payment (including transferred property or provided services), an assessment may be imposed against any of those persons or jointly and severally against any combination of those persons.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(a)(1); 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.4</SECTNO> <SUBJECT>Investigation.</SUBJECT> <P>(a) If an investigating official concludes that a subpoena pursuant to the authority conferred by 31 U.S.C. 3604(a) is warranted:<PRTPAGE P="74"/> </P> <P>(1) The subpoena so issued must notify the person to whom it is addressed of the authority under which the subpoena is issued and must identify the records or documents sought;</P> <P>(2) The investigating official may designate a person to act on his or her behalf to receive the documents sought; and</P> <P>(3) The person receiving the subpoena is required to tender to the investigating official or the person designated to receive the documents a certification that the documents sought have been produced, or that the documents are not available and the reasons therefore, or that the documents, suitably identified, have been withheld based upon the assertion of an identified privilege.</P> <SECAUTH>(Authority: 31 U.S.C. 3804(a))</SECAUTH> <P>(b) If the investigating official concludes that an action under the Program Fraud Civil Remedies Act may be warranted, the investigating official shall submit a report containing the findings and conclusions of the investigation to the reviewing official.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a)(1))</SECAUTH> <P>(c) Nothing in this section precludes or limits an investigating official's discretion to refer allegations directly to the Department of Justice for suit under the False Claims Act or other civil relief, or to defer or postpone a report or referral to the reviewing official to avoid interference with a criminal investigation or prosecution.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P>(d) Nothing in this section modifies any responsibility of an investigating official to report violations of criminal law to the Attorney General.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a)(1))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.5</SECTNO> <SUBJECT>Review by the reviewing official.</SUBJECT> <P>(a) If, based on the report of the investigating official under § 33.4(b), the reviewing official determines that there is adequate evidence to believe that a person is liable under § 33.3 of this part, the reviewing official transmits to the Attorney General a written notice of the reviewing official's intention to issue a complaint under § 33.7.</P> <P>(b) The notice must include—</P> <P>(1) A statement of the reviewing official's reasons for issuing a complaint;</P> <P>(2) A statement specifying the evidence that supports the allegations of liability;</P> <P>(3) A description of the claims or statements upon which the allegations of liability are based;</P> <P>(4) An estimate of the amount of money or the value of property, services, or other benefits requested or demanded in violation of § 33.3;</P> <P>(5) A statement of any exculpatory or mitigating circumstances that may relate to the claims or statements known by the reviewing official or the investigating official; and</P> <P>(6) A statement that there is a reasonable prospect of collecting an appropriate amount of penalties and assessments. Such a statement may be based upon information then known or an absence of any information indicating that the person may be unable to pay such an amount.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a)(2); 3809(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.6</SECTNO> <SUBJECT>Prerequisites for issuing a complaint.</SUBJECT> <P>(a) The reviewing official may issue a complaint under § 33.7 only if—</P> <P>(1) The Department of Justice approves the issuance of a complaint in a written statement described in 31 U.S.C. 3803(b)(1); and</P> <P>(2) In the case of allegations of liability under § 33.3(a) with respect to a claim, the reviewing official determines that, with respect to that claim or a group of related claims submitted at the same time the claim is submitted (as defined in paragraph (b) of this section), the amount of money or the value of property or services demanded or requested in violation of § 33.3(a) does not exceed $150,000.</P> <P>(b) For the purposes of this section, a related group of claims submitted at the same time includes only those claims arising from the same transaction (<E T="03">e.g.,</E> grant, cooperative agreement, loan, application, or contract) that are submitted simultaneously as part of a single request, demand, or submission.</P> <P>(c) Nothing in this section may be construed to limit the reviewing official's authority to join in a single complaint against a person claims that are <PRTPAGE P="75"/>unrelated or were not submitted simultaneously, regardless of the amount of money, or the value of property or services, demanded or requested.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(b), (c))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.7</SECTNO> <SUBJECT>Complaint.</SUBJECT> <P>(a) On or after the date the Department of Justice approves the issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the reviewing official may serve a complaint on the defendant, as provided in § 33.8.</P> <P>(b) The complaint must state:</P> <P>(1) The allegations of liability against the defendant, including the statutory basis for liability, an identification of the claims or statements that are the basis for the alleged liability, and the reasons why liability allegedly arises from those claims or statements;</P> <P>(2) The maximum amount of penalties and assessments for which the defendant may be held liable;</P> <P>(3) Instructions for filing an answer to request a hearing, including a specific statement of the defendant's right to request a hearing by filing an answer and to be represented by a representative; and</P> <P>(4) That failure to file an answer within 30 days of service of the complaint will result in the imposition of the maximum amount of penalties and assessments without right to appeal, as provided in § 33.10.</P> <P>(c) At the same time the reviewing official serves the complaint, he or she shall serve the defendant with a copy of the regulations in this part.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.8</SECTNO> <SUBJECT>Service of complaint.</SUBJECT> <P>(a) Service of a complaint must be made by certified or registered mail or by delivery in any manner authorized by Rule 4(d) of the Federal Rules of Civil Procedure. Service is complete upon receipt.</P> <P>(b) Proof of service, stating the name and address of the person on whom the complaint was served, and the manner and date of service, may be made by:</P> <P>(1) Affidavit of the individual serving the complaint by delivery;</P> <P>(2) An acknowledged United States Postal Service return receipt card; or</P> <P>(3) Written acknowledgment of receipt by the defendant or his representative.</P> <SECAUTH>(Authority: 31 U.S.C. 3802(d))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.9</SECTNO> <SUBJECT>Answer.</SUBJECT> <P>(a) The defendant may request a hearing by filing an answer with the reviewing official within 30 days of service of the complaint. An answer is deemed to be a request for hearing.</P> <P>(b) In the answer, the defendant:</P> <P>(1) Shall admit or deny each of the allegations of liability made in the complaint;</P> <P>(2) Shall state any defense on which the defendant intends to rely;</P> <P>(3) May state any reasons why the defendant contends that the penalties and assessments should be less than the statutory maximum; and</P> <P>(4) Shall state the name, address, and telephone number of the person authorized by the defendant to act as defendant's representative, if any.</P> <P>(c) If the defendant is unable to file an answer meeting the requirements of paragraph (b) of this section within the time provided, the defendant may, before the expiration of 30 days from service of the complaint, file with the reviewing official a general answer denying liability and requesting a hearing, and a request for an extension of time within which to file an answer meeting the requirements of paragraph (b) of this section. The reviewing official shall file promptly with the ALJ the complaint, the general answer denying liability, and the request for an extension of time as provided in § 33.11 for good cause shown, the ALJ may grant the defendant up to 30 additional days within which to file an answer meeting the requirements of paragraph (b) of this section.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(d)(2), 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.10</SECTNO> <SUBJECT>Default upon failure to file an answer.</SUBJECT> <P>(a) If the defendant does not file an answer within the time prescribed in § 33.9(a), the reviewing official may refer the complaint to the ALJ.</P> <P>(b) Upon the referral of the complaint, the ALJ shall promptly serve on defendant in the manner prescribed <PRTPAGE P="76"/>in § 33.8, a notice that an initial decision will be issued under this section.</P> <P>(c) The ALJ shall assume the facts alleged in the complaint to be true and, if those facts establish liability under § 33.3, the ALJ shall issue an initial decision imposing the maximum amount of penalties and assessments allowed under the statute.</P> <P>(d) Except as otherwise provided in this section, by failing to file a timely answer the defendant waives any right to further review of the penalties and assessments imposed under paragraph (c) of this section, and the initial decision becomes final and binding upon the parties 30 days after it is issued.</P> <P>(e) If, before such an initial decision becomes final, the defendant files a motion with the ALJ seeking to reopen on the grounds that extraordinary circumstances prevented the defendant from filing an answer, the initial decision must be stayed pending the ALJ's decision on the motion.</P> <P>(f) If, on such a motion, the defendant can demonstrate extraordinary circumstances excusing the failure to file a timely answer, the ALJ shall withdraw the initial decision under paragraph (c) of this section, if such a decision has been issued, and shall grant the defendant an opportunity to answer the complaint.</P> <P>(g) A decision of the ALJ denying a defendant's motion under paragraph (e) of this section is not subject to reconsideration under § 33.38.</P> <P>(h) The defendant may appeal to the Department head the decision denying a motion to reopen by filing a notice of appeal with the Department head within 15 days after the ALJ denies the motion. The timely filing of a notice of appeal stays the initial decision until the Department head decides the issue.</P> <P>(i) If the defendant files a timely notice of appeal with the Department head, the ALJ shall forward the record of the proceeding to the Department head.</P> <P>(j) The Department head decides expeditiously whether extraordinary circumstances excuse the defendant's failure to file a timely answer based solely on the record before the ALJ.</P> <P>(k) If the Department head decides that extraordinary circumstances excuse the defendant's failure to file a timely answer, the Department head remands the case to the ALJ with instructions to grant the defendant an opportunity to answer.</P> <P>(l) If the Department head decides that the defendant's failure to file a timely answer is not excused, the Department head reinstates the initial decision of the ALJ, which becomes final and binding upon the parties 30 days after the Department head issues that decision.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.11</SECTNO> <SUBJECT>Referral of complaint and answer to the ALJ.</SUBJECT> <P>Upon receipt of an answer, the reviewing official shall file the complaint and answer with the ALJ.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(d)(2); 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.12</SECTNO> <SUBJECT>Notice of hearing.</SUBJECT> <P>(a) When the ALJ receives the complaint and answer, the ALJ shall promptly serve a notice of hearing upon the defendant in the manner prescribed by § 33.8. At the same time, the ALJ shall send a copy of the notice to the representative for the Government.</P> <P>(b) The notice must include:</P> <P>(1) The tentative time and place, and the nature of the hearing;</P> <P>(2) The legal authority and jurisdiction under which the hearing is to be held;</P> <P>(3) The matters of fact and law to be asserted;</P> <P>(4) A description of the procedures for the conduct of the hearing;</P> <P>(5) The name, address, and telephone number of the representative of the Government and of the defendant, if any; and</P> <P>(6) Such other matters as the ALJ deems appropriate.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2)(A))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.13</SECTNO> <SUBJECT>Parties to the hearing.</SUBJECT> <P>(a) The parties to the hearing are the defendant and the Department.</P> <P>(b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the False Claims Act may participate in these proceedings to the extent authorized by the provisions of that Act.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2))</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="77"/> <SECTNO>§ 33.14</SECTNO> <SUBJECT>Separation of functions.</SUBJECT> <P>(a) The investigating official, the reviewing official, and any employee or agent of the Department who takes part in investigating, preparing, or presenting a particular case may not, in that case or a factually related case:</P> <P>(1) Participate in the hearing as the ALJ;</P> <P>(2) Participate or advise in the initial decision or the review of the initial decision by the Department head, except as a witness or a representative in public proceedings; or</P> <P>(3) Make the collection of penalties and assessments under 31 U.S.C. 3806.</P> <P>(b) The ALJ may not be responsible to, or subject to the supervision or direction of, the investigating official or the reviewing official.</P> <P>(c) Except as provided in paragraph (a) of this section, the representative for the Government may be employed anywhere in the Department, including in the offices of either the investigating official or the reviewing official.</P> <SECAUTH>(Authority: 31 U.S.C. 3809(l)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.15</SECTNO> <SUBJECT>Ex parte contacts.</SUBJECT> <P>No party or person (except employees of the ALJ's office) may communicate in any way with the ALJ on any matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(1)(A))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.16</SECTNO> <SUBJECT>Disqualification of reviewing official or ALJ.</SUBJECT> <P>(a) A reviewing official or ALJ in a particular case may disqualify himself or herself at any time.</P> <P>(b) A party may file with the ALJ a motion for disqualification of a reviewing official or an ALJ. That motion must be accompanied by an affidavit alleging personal bias or other reason for disqualification.</P> <P>(c) The motion and affidavit must be filed promptly upon the party's discovery of reasons requiring disqualification, or the objections are deemed waived.</P> <P>(d) The affidavit must state specific facts that support the party's belief that personal bias or other reason for disqualification exists and the time and circumstances of the party's discovery of those facts. It must be accompanied by a certificate of the representative of record that it is made in good faith.</P> <P>(e) Upon the filing of the motion and affidavit, the ALJ shall not proceed further in the case until he or she resolves the matter of disqualification in accordance with paragraph (f) of this section.</P> <P>(f)(1) If the ALJ determines that a reviewing official is disqualified, the ALJ shall dismiss the complaint without prejudice.</P> <P>(2) If the ALJ disqualifies himself or herself, the case must be reassigned promptly to another ALJ.</P> <P>(3) If the ALJ denies a motion to disqualify, the Department head may determine the matter only as part of his or her review of the initial decision upon appeal, if any.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2)(G))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.17</SECTNO> <SUBJECT>Rights of parties.</SUBJECT> <P>Except as otherwise limited by this part, all parties may:</P> <P>(a) Be accompanied, represented, and advised by a representative (as defined in § 33.2);</P> <P>(b) Participate in any conference held by the ALJ:</P> <P>(c) Conduct discovery under § 33.21;</P> <P>(d) Agree to stipulations of fact or law, which must be made part of the record;</P> <P>(e) Present evidence relevant to the issues at the hearing;</P> <P>(f) Present and cross-examine witnesses;</P> <P>(g) Present oral arguments at the hearing as permitted by the ALJ; and</P> <P>(h) Submit written briefs and proposed findings of fact and conclusions of law after the hearing.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g) (2) (E), (F), (3)(B)(ii))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.18</SECTNO> <SUBJECT>Authority of the ALJ.</SUBJECT> <P>(a) The ALJ shall conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made.<PRTPAGE P="78"/> </P> <P>(b) The ALJ has the authority to:</P> <P>(1) Set and change the date, time, and place of the hearing upon reasonable notice to the parties;</P> <P>(2) Disqualify a non-attorney representative (designated as described in the § 33.2 definitions of “representative”) if the ALJ determines that the representative is incapable of rendering reasonably effective assistance;</P> <P>(3) Continue or recess the hearing in whole or in part for a reasonable period of time;</P> <P>(4) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding;</P> <P>(5) Administer oaths and affirmations;</P> <P>(6) Issue subpoenas requiring the attendance of witnesses and the production of documents at depositions or at hearings;</P> <P>(7) Rule on motions and other procedural matters;</P> <P>(8) Regulate the scope and timing of discovery;</P> <P>(9) Regulate the course of the hearing and the conduct of representatives and parties;</P> <P>(10) Examine witnesses;</P> <P>(11) Receive, rule on, exclude, or limit evidence;</P> <P>(12) Upon motion of a party, take official notice of facts;</P> <P>(13) Upon motion of a party, decide cases, in whole or in part, by summary judgment if there is no disputed issue of material fact;</P> <P>(14) Conduct any conference, argument, or hearing on motions in person or by telephone; and</P> <P>(15) Exercise such other authority as is necessary to carry out the responsibilities of the ALJ under this part.</P> <P>(c) The ALJ does not have the authority to find Federal statutes or regulations invalid.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.19</SECTNO> <SUBJECT>Prehearing conferences.</SUBJECT> <P>(a) The ALJ may schedule perhearing conferences as appropriate.</P> <P>(b) Upon the motion of any party, the ALJ shall schedule at least one perhearing conference at a reasonable time in advance of the hearing.</P> <P>(c) The ALJ may use prehearing conferences to discuss the following:</P> <P>(1) Simplification of the issues.</P> <P>(2) The necessity or desirability of amendments to the pleadings, including the need for a more definite statement.</P> <P>(3) Stipulations, admissions of fact or as to the contents and authenticity of documents.</P> <P>(4) Whether the parties can agree to submission of the case on a stipulated record.</P> <P>(5) Whether a party chooses to waive appearance at an oral hearing and to submit only documentary evidence (subject to the objection of other parties) and written argument.</P> <P>(6) Limitation of the number of witnesses.</P> <P>(7) Scheduling dates for the exchange of witness lists and of proposed exhibits.</P> <P>(8) Discovery.</P> <P>(9) The time and place for the hearing.</P> <P>(10) Such other matters as may tend to expedite the fair and just disposition of the proceedings.</P> <P>(d) The ALJ may issue an order containing all matters agreed upon by the parties or ordered by the ALJ at a prehearing conference.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.20</SECTNO> <SUBJECT>Disclosure of documents.</SUBJECT> <P>(a) Upon written request to the reviewing official, the defendant may review any relevant and material documents, transcripts, records, and other materials that relate to the allegations set out in the complaint and upon which the findings and conclusions of the investigating official under § 33.4(b) are based, unless those documents are subject to a privilege under Federal law. Upon payment of fees for duplication, the defendant may obtain copies of the documents.</P> <P>(b) Upon written request to the reviewing official, the defendant also may obtain a copy of all exculpatory information in the possession of the reviewing official or investigating official relating to the allegations in the complaint, even if it is contained in a document that would otherwise be privileged. If the document would otherwise be privileged, only that portion containing exculpatory information must be disclosed.<PRTPAGE P="79"/> </P> <P>(c) The notice sent to the Attorney General from the reviewing official as described in § 33.5 is not discoverable under any circumstances.</P> <P>(d) The defendant may file a motion to compel disclosure of the documents subject to the provisions of this section. Such a motion may only be filed with the ALJ following the filing of an answer pursuant to § 33.9.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(3)(B)(ii), 3803(e))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.21</SECTNO> <SUBJECT>Discovery.</SUBJECT> <P>(a) The following types of discovery are authorized:</P> <P>(1) Requests for production of documents for inspection and copying.</P> <P>(2) Requests for admissions of the authenticity of any relevant document or of the truth of any relevant fact.</P> <P>(3) Written interrogatories.</P> <P>(4) Depositions.</P> <P>(b) For the purpose of this section and §§ 33.22 and 33.23, the term “documents” includes information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence. Nothing contained in this part may be interpreted to require the creation of a document.</P> <P>(c) Unless mutually agreed to by the parties, discovery is available only as ordered by the ALJ. The ALJ shall regulate the timing of discovery.</P> <P>(d) <E T="03">Motions for discovery.</E> (1) A party seeking discovery may file a motion with the ALJ. Such a motion shall be accompanied by a copy of the requested discovery, or in the case of depositions, a summary of the scope of the proposed deposition.</P> <P>(2) Within ten days of service, a party may file an opposition to the motion or a motion for protective order, or both, as provided in § 33.24.</P> <P>(3) The ALJ may grant a motion for discovery only if he finds that the discovery sought:</P> <P>(i) Is necessary for the expeditious, fair, and reasonable determination of the issues;</P> <P>(ii) Is not unduly costly or burdensome;</P> <P>(iii) Will not unduly delay the proceeding; and</P> <P>(iv) Does not seek privileged information.</P> <P>(4) The burden of showing that discovery should be allowed is on the party seeking discovery.</P> <P>(5) The ALJ may grant discovery subject to a protective order under § 33.24.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a)(3)(B)(ii))</SECAUTH> <P>(e) <E T="03">Depositions.</E> (1) If a motion for deposition is granted, the ALJ shall issue a subpoena for the deponent, which may require the deponent to produce documents. The subpoena must specify the time and place at which the deposition will be held.</P> <P>(2) The party seeking to depose shall serve the subpoena in the manner prescribed in § 33.8.</P> <P>(3) The deponent may file with the ALJ a motion to quash the subpoena or a motion for a protective order within ten days of service.</P> <P>(4) The party seeking to depose shall provide for the taking a verbatim transcript of the deposition, which the party shall make available to all other parties for inspection and copying.</P> <P>(f) Each party shall bear its own costs of discovery.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(3)(B)(ii))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.22</SECTNO> <SUBJECT>Exchange of witness lists, statements and exhibits.</SUBJECT> <P>(a) At least 15 days before the hearing or at such other time as may be ordered by the ALJ, the parties shall exchange witness lists, copies of prior statements of proposed witnesses, and copies of proposed hearing exhibits, including copies of any written statements that the party intends to offer in lieu of live testimony in accordance with § 33.33(b). At the time these documents are exchanged, any party that is permitted by the ALJ to rely on the transcript of deposition testimony in lieu of live testimony at the hearing, shall provide each other party with a copy of the specific pages of the transcript it intends to introduce.</P> <P>(b) If a party objects, the ALJ shall not admit into evidence the testimony of any witness whose name does not appear on the witness list or any exhibit not provided to the opposing party as provided in paragraph (a) of this Section unless the ALJ finds good cause for the failure or that there is no prejudice to the objecting party.<PRTPAGE P="80"/> </P> <P>(c) Unless another party objects within the time set by the ALJ, documents exchanged in accordance with paragraph (a) of this section are deemed to be authentic for the purpose of admissibility at the hearing.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.23</SECTNO> <SUBJECT>Subpoenas for attendance at hearing.</SUBJECT> <P>(a) A party wishing to procure the appearance and testimony of any individual at the hearing may request that the ALJ issue a subpoena.</P> <P>(b) A subpoena requiring the attendance and testimony of an individual may also require the individual to produce documents at the hearing.</P> <P>(c) A party seeking a subpoena shall file a written request therefor not less than 15 days before the date fixed for the hearing unless otherwise allowed by the ALJ for good cause shown. The request must specify any documents to be produced and must designate the witnesses and describe their address and location with sufficient particularity to permit the witnesses to be found.</P> <P>(d) The subpoena must specify the time and place at which a witness is to appear and any documents the witness is to produce.</P> <P>(e) The party seeking the subpoena shall serve it in the manner prescribed in § 33.8. A subpoena on a party or upon an individual under the control of a party may be served by first class mail.</P> <P>(f) A party or the individual to whom the subpoena is directed may file with the ALJ a motion to quash the subpoena within ten days after service or on or before the time specified in the subpoena for compliance if is is less then ten days after service.</P> <SECAUTH>(Authority: 31 U.S.C. 3804(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.24</SECTNO> <SUBJECT>Protective order.</SUBJECT> <P>(a) A party or a prospective witness or deponent may file a motion for a protective order with respect to discovery sought by an opposing party or with respect to the hearing, seeking to limit the availability or disclosure of evidence.</P> <P>(b) In issuing a protective order, the ALJ may take any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:</P> <P>(1) That the discovery not be had.</P> <P>(2) That the discovery may be had only on specified terms and conditions, including a designation of the time or place.</P> <P>(3) That the discovery may be had only through a method of discovery other than that requested.</P> <P>(4) That certain matters not be inquired into, or that the scope of discovery be limited to certain matters.</P> <P>(5) That the discovery be conducted with no one present except persons designated by the ALJ.</P> <P>(6) That the contents of discovery or evidence be sealed.</P> <P>(7) That a deposition after being sealed be opened only by order of the ALJ.</P> <P>(8) That a trade secret or other confidential research, development, commercial information, or facts pertaining to any criminal investigation, proceeding, or other administrative investigation not be disclosed or be disclosed only in a designated way.</P> <P>(9) That the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the ALJ.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(3)(B)(ii))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.25</SECTNO> <SUBJECT>Fees.</SUBJECT> <P>The party requesting a subpoena shall pay the cost of the fees and mileage of any witness subpoenaed in the amounts that would be payable to a witness in a proceeding in United States District Court. A check for witness fees and mileage must accompany the subpoena when served, except that if a subpoena is issued on behalf of the authority, a check for witness fees and mileage need not accompany the subpoena.</P> <SECAUTH>(Authority: 31 U.S.C. 3804(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.26</SECTNO> <SUBJECT>Form, filing and service of papers.</SUBJECT> <P>(a) <E T="03">Form.</E> (1) Documents filed with the ALJ must include an original and two copies.</P> <P>(2) Every pleading and paper filed in the proceeding must contain a caption setting for the title of the action, the <PRTPAGE P="81"/>case number assigned by the ALJ, and a designation of the paper (<E T="03">e.g</E>., motion to quash subpoena).</P> <P>(3) Every pleading and paper must be signed by, and must contain the address and telephone number of the party or the person on whose behalf the paper was filed, or his or her representative.</P> <P>(4) Papers are considered filed when they are mailed. Date of mailing may be established by a certificate from the party or its representative or by proof that the document was sent by certified or registered mail.</P> <P>(b) <E T="03">Service.</E> A party filing a document with the ALJ shall, at the time of filing, serve a copy of the document on every other party. Service upon any party of any document other than those required to be served as prescribed in § 33.8 shall be made by delivering a copy, or by placing a copy of the document in the United States mail, postage prepaid and addressed, to the party's last known address. If a party is represented by a representative, service must be made upon the representative in lieu of the actual party.</P> <P>(c) <E T="03">Proof of service.</E> A certificate of the individual serving the document by personal delivery or by mail, setting forth the manner of service, is proof of service.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(b)(3)(A))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.27</SECTNO> <SUBJECT>Computation of time.</SUBJECT> <P>(a) In computing any period of time under this part or in an order issued under this part, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday observed by the Federal Government, in which event it includes the next business day.</P> <P>(b) If the period of time allowed is less than seven days, intermediate Saturdays, Sundays, and legal holidays observed by the Federal Government are excluded from the computation.</P> <P>(c) If a document has been served or issued by placing it in the mail, an additional five days is added to the time permitted for any response.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.28</SECTNO> <SUBJECT>Motions.</SUBJECT> <P>(a) Any application to the ALJ for an order or ruling must be by motion. Motions must state the relief sought, the authority relied upon, and the facts alleged, and must be filed with the ALJ and served on all other parties.</P> <P>(b) Except for motions made during a prehearing conference or at the hearing, all motions must be in writing. The ALJ may require that oral motions be reduced to writing.</P> <P>(c) Within 15 days after a written motion is served, or such other time as may be fixed by the ALJ, any party may file a response to the motion.</P> <P>(d) The ALJ may not grant a written motion before the time for filing responses to the motion has expired, except upon consent of the parties or following a hearing on the motion, but may overrule or deny the motion without awaiting a response.</P> <P>(e) The ALJ shall make a reasonable effort to dispose of all outstanding motions prior to the beginning of the hearing.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(3)(A))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.29</SECTNO> <SUBJECT>Sanctions.</SUBJECT> <P>(a) The ALJ may sanction a person, including any party or representative for—</P> <P>(1) Failing to comply with an order, rule, or procedure governing the proceeding;</P> <P>(2) Failing to prosecute or defend an action; or</P> <P>(3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.</P> <P>(b) Any sanction, including but not limited to those listed in paragraphs (c), (d), and (e) of this section must reasonably relate to the severity and nature of the failure or misconduct.</P> <P>(c) If a party fails to comply with an order, including an order for taking a deposition, the production of evidence within the party's control, or a request for admission, the ALJ may—</P> <P>(1) Draw an inference in favor of the requesting party with regard to the information sought;</P> <P>(2) In the case of requests for admission, deem each matter of which an admission is requested to be admitted;<PRTPAGE P="82"/> </P> <P>(3) Prohibit the party failing to comply with the order from introducing evidence concerning, or otherwise relying upon testimony relating to, the information sought; and</P> <P>(4) Strike any part of the pleadings or other submissions of the party failing to comply with the request.</P> <P>(d) If a party fails to prosecute or defend an action under this part commenced by service of a notice of hearing, the ALJ may dismiss the action or may issue an initial decision imposing penalties and assessments.</P> <P>(e) The ALJ may refuse to consider any motion, request, response, brief, or other document that is not filed in a timely fashion.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.30</SECTNO> <SUBJECT>The hearing and burden of proof.</SUBJECT> <P>(a) The ALJ shall conduct a hearing on the record in order to determine whether the defendant is liable for a civil penalty or assessment under § 33.3 and, if so, the appropriate amount of the civil penalty or assessment considering any aggravating or mitigating factors.</P> <P>(b) The Department shall prove a defendant's liability and any aggravating factors by a preponderance of the evidence.</P> <P>(c) The defendant shall prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.</P> <P>(d) The hearing must be open to the public unless otherwise ordered by the ALJ for good cause shown.</P> <SECAUTH>(Authority: 31 U.S.C. 3803 (f), (g)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.31</SECTNO> <SUBJECT>Determining the amount of penalties and assessments.</SUBJECT> <P>(a) In determining an appropriate amount of civil penalties and assessments, the ALJ and the Department head, upon appeal, evaluate any circumstances that mitigate or aggravate the violation and articulate in their opinions the reasons that support the penalties and assessments they impose. Because of the intangible costs of fraud, the expense of investigating fraudulent conduct, and the need to deter others who might be similarly tempted, ordinarily double damages and a significant civil penalty is imposed.</P> <P>(b) Although not exhaustive, the following factors are among those that may influence the ALJ and the Department head in determining the amount of penalties and assessments to impose with respect to the misconduct (<E T="03">i.e.</E>, the false, fictitious, or fraudulent claims or statements) charged in the complaint:</P> <P>(1) The number of false, fictitious, or fraudulent claims or statements.</P> <P>(2) The time period over which such claims or statements were made.</P> <P>(3) The degree of the defendent's culpability with respect to the misconduct.</P> <P>(4) The amount of money or the value of the property, services, or benefit falsely claimed.</P> <P>(5) The value of the Government's actual loss as a result of the misconduct, including foreseeable consequential damages and the costs of investigation.</P> <P>(6) The relationship of the amount imposed as civil penalties to the amount of the Government's loss.</P> <P>(7) The potential or actual impact of the misconduct upon national defense, public health or safety, or public confidence in the management of Government programs and operations, including particularly the impact on the intended beneficiaries of such programs.</P> <P>(8) Whether the defendant has engaged in a pattern of the same or similar misconduct.</P> <P>(9) Whether the defendant attempted to conceal the misconduct.</P> <P>(10) The degree to which the defendant has involved others in the misconduct or in concealing it.</P> <P>(11) If the misconduct of employees or agents is imputed to the defendant, the extent to which the defendant's practices fostered or attempted to preclude the misconduct.</P> <P>(12) Whether the defendant cooperated in or obstructed an investigation of the misconduct.</P> <P>(13) Whether the defendant assisted in identifying and prosecuting other wrongdoers.</P> <P>(14) The complexity of the program or transaction, and the degree of the defendant's sophistication with respect <PRTPAGE P="83"/>to it, including the extent of the defendant's prior participation in the program or in similar transactions.</P> <P>(15) Whether the defendant has been found, in any criminal, civil, or administrative proceeding to have engaged in similar misconduct or to have dealt dishonestly with the Government of the United States or of a State, directly or indirectly.</P> <P>(16) The need to deter the defendant and others from engaging in the same or similar misconduct.</P> <P>(c) Nothing in this section may be construed to limit the ALJ or the Department head from considering any other factors that in any given case may mitigate or aggravate the offense for which penalties and assessments are imposed.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(a)(2) (e), (f))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.32</SECTNO> <SUBJECT>Location of hearing.</SUBJECT> <P>(a) The hearing may be held:</P> <P>(1) In any judicial district of the United States in which the defendant resides or transacts business;</P> <P>(2) In any judicial district of the United States in which the claim or statement in issue was made; or</P> <P>(3) In such other place as may be agreed upon by the defendant and the ALJ.</P> <P>(b) Each party must have the opportunity to present argument with respect to the location of the hearing.</P> <P>(c) The hearing must be held at the place and at the time ordered by the ALJ.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(4))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.33</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <P>(a) Except as provided in paragraph (b) of this section, testimony at the hearing must be given orally by witnesses under oath or affirmation.</P> <P>(b) At the discretion of the ALJ, testimony may be admitted in the form of a written statement or deposition. Any such written statement must be provided to all other parties along with the last known address of the witness, in a manner that allows sufficient time for other parties to subpoena the witness for cross-examination at the hearing. Prior written statements of witnesses proposed to testify at the hearing and deposition transcripts must be exchanged as provided in § 33.22(a).</P> <P>(c) The ALJ shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to:</P> <P>(1) Make the interrogation and presentation effective for the ascertainment of the truth;</P> <P>(2) Avoid needless consumption of time; and</P> <P>(3) Protect witnesses from harassment or undue embarrassment.</P> <P>(d) The ALJ shall permit the parties to conduct such cross-examination as may be required for a full and true disclosure of the facts.</P> <P>(e) At the discretion of the ALJ, a witness may be cross-examined on matters relevant to the proceeding without regard to the scope of his or her direct examination. To the extent permitted by the ALJ, cross-examination on matters outside the scope of direct examination must be conducted in the manner of direct examination and may proceed by leading questions only if the witness is a hostile witness, an adverse party, or a witness identified with an adverse party.</P> <P>(f) Upon motion of any party, the ALJ shall order witnesses excluded so that they cannot hear the testimony of other witnesses. This rule does not authorize exclusion of—</P> <P>(1) A party who is an individual;</P> <P>(2) In the case of a party that is not an individual, an officer or employee of the party appearing for the party <E T="03">pro se</E> or designated by the party's representative; or</P> <P>(3) An individual whose presence is shown by a party to be essential to the presentation of its case, including an individual employed by the Government engaged in assisting the representative for the Government.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(g)(2)(E); 3809))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.34</SECTNO> <SUBJECT>Evidence.</SUBJECT> <P>(a) The ALJ shall determine the admissibility of evidence.</P> <P>(b) Except as provided in this part, the ALJ is not bound by the Federal Rules of Evidence. However, the ALJ may apply the Federal Rules of Evidence if appropriate, <E T="03">e.g.,</E> to exclude unreliable evidence.<PRTPAGE P="84"/> </P> <P>(c) The ALJ shall exclude irrelevant and immaterial evidence.</P> <P>(d) Although relevant, evidence may be excluded if its probative value is substantially outweighted by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence.</P> <P>(e) Although relevant, evidence may be excluded if it is privileged under Federal law.</P> <P>(f) Evidence concerning offers of compromise or settlement are inadmissible to the extend provided in Rule 408 of the Federal Rules of Evidence.</P> <P>(g) The ALJ shall permit the parties to introduce rebuttal witnesses and evidence.</P> <P>(h) All Documents and other evidence offered or taken for the record must be open to examination by all parties, unless otherwise ordered by the ALJ pursuant to § 33.24.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(f)(g)(2)(E))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.35</SECTNO> <SUBJECT>The record.</SUBJECT> <P>(a) The hearing must be recorded and transcribed. Transcripts may be obtained following the hearing from the ALJ at a cost not to exceed the actual cost of duplication.</P> <SECAUTH>(Authority: 31 U.S.C. 3803 (f))</SECAUTH> <P>(b) The transcript of testimony, exhibits and other evidence admitted at the hearing, and all papers and requests filed in the proceeding constitute the record for the decision by the ALJ and the Department head.</P> <P>(c) The record may be inspected and copied (upon payment of a reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant to § 33.24.</P> <SECAUTH>(Authority: 5 U.S.C. App. 2, section 11)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.36</SECTNO> <SUBJECT>Post-hearing briefs.</SUBJECT> <P>The ALJ may require the parties to file post-hearing briefs. In any event, any party may file a post-hearing brief. The ALJ shall fix the time for filing these briefs, not to exceed 60 days from the date the parties receive the transcript of the hearing or, if applicable, the stipulated record. The briefs may be accompanied by proposed findings of fact and conclusions of law. The ALJ may permit the parties to file reply briefs.</P> <SECAUTH>(Authority: 31 U.S.C. 3803 (g)(1)(2)(E))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.37</SECTNO> <SUBJECT>Initial decision.</SUBJECT> <P>(a) The ALJ shall issue an initial decision, based only on the record, that contains findings of fact, conclusions of law, and the amount of any penalties and assessments imposed.</P> <P>(b) The findings of fact must include a finding on each of the following issues:</P> <P>(1) Whether the claims or statements identified in the complaint, or any portions of the complaint, violate § 33.3.</P> <P>(2) If the person is liable for penalties or assessments, the appropriate amount of any such penalties or assessments considering any mitigating or aggravating factors that the ALJ finds in the case, such as those described in § 33.31.</P> <P>(c) The ALJ shall promptly serve the initial decision on all parties within 90 days after the time for submission of post-hearing briefs and reply briefs (if permitted) has expired. The ALJ shall at the same time serve all parties with a statement describing the right of any defendant determined to be liable for a civil penalty or assessment to file a motion for reconsideration with the ALJ or a notice of appeal with the Department head. If the ALJ fails to meet the deadline contained in this paragraph, he or she shall notify the parties of the reasons for the delay and shall set a new deadline.</P> <P>(d) Unless the initial decision of the ALJ is timely appealed to the Department head, or a motion for reconsideration of the initial decision is timely filed, the initial decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after it is issued by the ALJ.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(h)(i))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.38</SECTNO> <SUBJECT>Reconsideration of initial decision.</SUBJECT> <P>(a) Except as provided in paragraph (d) of this section, any party may file a motion for reconsideration of the initial decision within 20 days of receipt of the initial decision. If service was made by mail, receipt is presumed to <PRTPAGE P="85"/>be five days from the date of mailing in the absence of contrary proof.</P> <P>(b) Every motion under paragraph (a) of this section must set forth the matters claimed to have been erroneously decided and the nature of the alleged errors. The motion must be accompanied by a supporting brief.</P> <P>(c) Responses to the motion are allowed only upon request to the ALJ.</P> <P>(d) No party may file a motion for reconsideration of an initial decision that has been revised in response to a previous motion for reconsideration.</P> <P>(e) The ALJ may dispose of a motion for reconsideration by denying it or by issuing a revised initial decision.</P> <P>(f) If the ALJ denies a motion for reconsideration, the initial decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after the ALJ denies the motion, unless the initial decision is timely appealed to the Department head in accordance with § 33.39.</P> <P>(g) If the ALJ issues a revised initial decision, that decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after it is issued, unless it is timely appealed to the Department head in accordance with § 33.39.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.39</SECTNO> <SUBJECT>Appeal to Department head.</SUBJECT> <P>(a) Any defendant who has filed a timely answer and who is determined in an initial decision to be liable for a civil penalty or assessment may appeal the decision to the Department head by filing a notice of appeal with the Department head in accordance with this section.</P> <P>(b)(1) A notice of appeal may be filed at any time within 30 days after the ALJ issues a final decision. However, if another party files a motion for reconsideration under § 33.38, consideration of the appeal shall be stayed automatically pending resolution of the motion for reconsideration.</P> <P>(2) If a motion for reconsideration is timely filed, a notice of appeal may be filed within 30 days after the ALJ denies the motion or issues a revised initial decision, whichever applies.</P> <P>(3) The Department head may extend the initial 30-day period for an additional 30 days if the defendant files with the Department head a request for an extension within the initial 30-day period and shows good cause.</P> <P>(c) If the defendant files a timely notice of appeal with the Department head, and the time for filing motions for reconsideration under § 33.38 has expired, the ALJ shall forward the record of the proceeding to the Department head.</P> <P>(d) A notice of appeal must be accompanied by a written brief specifying exceptions to the initial decision and reasons supporting the exceptions.</P> <P>(e) The representative for the Government may file a brief in opposition to exceptions within 30 days of receiving the notice of appeal and accompanying brief.</P> <P>(f) There is no right to appear personally before the Department head.</P> <P>(g) There is no right to appeal any interlocutory ruling by the ALJ.</P> <P>(h) In reviewing the initial decision, the Department head does not consider any objection that was not raised before the ALJ unless a demonstration is made of extraordinary circumstances causing the failure to raise the objection.</P> <P>(i) If any party demonstrates to the satisfaction of the Department head that additional evidence not presented at such hearing is material and that there were reasonable grounds for the failure to present that evidence at the hearing, the Department head shall remand the matter to the ALJ for consideration of the additional evidence.</P> <P>(j) The Department head affirms, reduces, reverses, compromises, remands, or settles any penalty or assessment, determined by the ALJ in any initial decision.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(i))</SECAUTH> <P>(k) The Department head promptly serves each party to the appeal with a copy of the decision of the Department head and a statement describing the right of any person determined to be liable for a penalty or assessment to seek judicial review.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(i)(2))</SECAUTH> <PRTPAGE P="86"/> <P>(l) Unless a petition for review is filed as provided in 31 U.S.C. 3805, after a defendant has exhausted all administrative remedies under this part and within 60 days after the date on which the Department head serves the defendant with a copy of the Department head's decision, a determination that a defendant is liable under § 33.3 is final and is not subject to judicial review.</P> <SECAUTH>(Authority: 31 U.S.C. 3805(a)(2))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.40</SECTNO> <SUBJECT>Stays ordered by the Department of Justice.</SUBJECT> <P>If at any time the Attorney General or an Assistant Attorney General designated by the Attorney General transmits to the Department head a written finding that continuation of the administrative process described in this part with respect to a claim or statement may adversely affect any pending or potential criminal or civil action related to such claim or statement, the Department head stays the process immediately. The Department head orders the process resumed only upon receipt of the written authorization of the Attorney General.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(b)(3))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.41</SECTNO> <SUBJECT>Stay pending appeal.</SUBJECT> <P>(a) An initial decision is stayed automatically pending disposition of a motion for reconsideration or of an appeal to the Department head.</P> <P>(b) No administrative stay is available following a final decision of the Department head.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.42</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <P>Section 3805 of title 31, United States Code, authorizes judicial review by an appropriate United States District Court of a final decision of the Department head imposing penalties or assessments under this part and specifies the procedures for the review.</P> <SECAUTH>(Authority: 31 U.S.C. 3805)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.43</SECTNO> <SUBJECT>Collection of civil penalties and assessments.</SUBJECT> <P>Section 3806 and 3808(b) of title 31, United States Code, authorize actions for collection of civil penalties and assessments imposed under this part and specify the procedures for those actions.</P> <SECAUTH>(Authority: 31 U.S.C. 3808(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.44</SECTNO> <SUBJECT>Right to administrative offset.</SUBJECT> <P>The amount of any penalty or assessment that has become final, or for which a judgment has been entered under § 33.42 or § 33.43, or any amount agreed upon in a compromise or settlement under § 33.46, may be collected by administrative offset under 31 U.S.C. 3716, except that an administrative offset may not be under this section against a refund of an overpayment of Federal taxes, then or later owing by the United States to the defendant.</P> <SECAUTH>(Authority: 31 U.S.C. 3806)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.45</SECTNO> <SUBJECT>Deposit in Treasury of United States.</SUBJECT> <P>All amounts collected pursuant to this part are deposited as miscellaneous receipts in the Treasury of the United States, except as provided in 31 U.S.C. 3806(g).</P> <SECAUTH>(Authority: 31 U.S.C. 3807(b))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.46</SECTNO> <SUBJECT>Compromise or settlement.</SUBJECT> <P>(a) Parties may make offers of compromise or settlement at any time.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P>(b) The reviewing official has the exclusive authority to compromise or settle a case under this part at any time after the date on which the reviewing official is permitted to issue a complaint and before the date on which the ALJ issues an initial decision.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(j))</SECAUTH> <P>(c) The Department head has exclusive authority to compromise or settle a case under this part at any time after the date on which the ALJ issues an initial decision, except during the pendency of any review under § 33.42 or during the pendency of any action to collect penalties and assessments under § 33.43.</P> <SECAUTH>(Authority: 31 U.S.C. 3803(i)(2)(C))</SECAUTH> <P>(d) The Attorney General has exclusive authority to compromise or settle a case under this part during the pendency of any review under § 33.42 or of <PRTPAGE P="87"/>any action to recover penalties and assessments under 31 U.S.C. 3806.</P> <SECAUTH>(Authority: 31 U.S.C. 3806(f))</SECAUTH> <P>(e) The investigating official may recommend settlement terms to the reviewing official, the Department head, or the Attorney General, as appropriate. The reviewing official may recommend settlement terms to the Department head, or the Attorney General, as appropriate.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> <P>(f) Any compromise or settlement must be in writing.</P> <SECAUTH>(Authority: 31 U.S.C. 3809)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 33.47</SECTNO> <SUBJECT>Limitations.</SUBJECT> <P>(a) The notice of hearing with respect to a claim or statement must be served in the manner specified in § 33.8 within six years after the date on which the claim or statement is made.</P> <P>(b) If the defendant fails to file a timely answer, service of a notice under § 33.10(b) is deemed a notice of hearing for purposes of this section.</P> <P>(c) The statute of limitations may be extended by agreement of the parties.</P> <SECAUTH>(Authority: 31 U.S.C. 3808)</SECAUTH> </SECTION> </PART> <PART> <EAR>Pt. 35</EAR> <HD SOURCE="HED">PART 35—TORT CLAIMS AGAINST THE GOVERNMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>35.1</SECTNO> <SUBJECT>Scope of regulations.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTNO>35.2</SECTNO> <SUBJECT>Administrative claim; when presented; place of filing.</SUBJECT> <SECTNO>35.3</SECTNO> <SUBJECT>Administrative claim; who may file.</SUBJECT> <SECTNO>35.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> <SECTNO>35.5</SECTNO> <SUBJECT>Investigation of claims.</SUBJECT> <SECTNO>35.6</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> <SECTNO>35.7</SECTNO> <SUBJECT>Payment of approved claims.</SUBJECT> <SECTNO>35.8</SECTNO> <SUBJECT>Release.</SUBJECT> <SECTNO>35.9</SECTNO> <SUBJECT>Penalties.</SUBJECT> <SECTNO>35.10</SECTNO> <SUBJECT>Limitation on Department's authority.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>Sec. 1(a), 80 Stat. 306; 28 U.S.C. 2672; 28 CFR, part 14.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 30834, May 9, 1980, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 35.1</SECTNO> <SUBJECT>Scope of regulations.</SUBJECT> <P>The regulations in this part shall apply only to claims asserted under the Federal Tort Claims Act, as amended, 28 U.S.C. 2671-2680, for money damages against the United States for damage to or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Department of Education while acting within the scope of his office or employment.</P> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTION> <SECTNO>§ 35.2</SECTNO> <SUBJECT>Administrative claim; when presented; place of filing.</SUBJECT> <P>(a) For purposes of the regulations in this part, a claim shall be deemed to have been presented when the Department of Education receives, at a place designated in paragraph (b) of this section, an executed Standard Form 95 or other written notification of an incident accompanied by a claim for money damages in a sum certain for damage to or loss of property, for personal injury, or for death, alleged to have occurred by reason of the incident. A claim which should have been presented to the Department but which was mistakenly addressed to or filed with another Federal agency, shall be deemed to be presented to the Department as of the date that the claim is received by the Department. A claim mistakenly addressed to or filed with the Department shall forthwith be transferred to the appropriate Federal agency, if ascertainable, or returned to the claimant.</P> <P>(b) A claim presented in compliance with paragraph (a) of this section may be amended by the claimant at any time prior to final action by the Secretary or prior to the exercise of the claimant's option to bring suit under 28 U.S.C. 2675(a). Amendments shall be submitted in writing and signed by the claimant or his duly authorized agent or legal representative. Upon the timely filing of an amendment to a pending claim, the Department shall have 6 months in which to make a final disposition of the claim as amended and the claimant's option under 28 U.S.C. <PRTPAGE P="88"/>2675(a) shall not accrue until 6 months after the filing of an amendment.</P> <P>(c) Forms may be obtained and claims may be filed, with the Department of Education Claims Officer, Washington, DC 20202.</P> </SECTION> <SECTION> <SECTNO>§ 35.3</SECTNO> <SUBJECT>Administrative claim; who may file.</SUBJECT> <P>(a) A claim for injury to or loss of property may be presented by the owner of the property interest which is the subject of the claim, his duly authorized agent, or his legal representative.</P> <P>(b) A claim for personal injury may be presented by the injured person, his duly authorized agent, or his legal representative.</P> <P>(c) A claim based on death may be presented by the executor or administrator of the decedent's estate or by any other person legally entitled to assert such a claim under applicable state law.</P> <P>(d) A claim for loss wholly compensated by an insurer with the rights of a subrogee may be presented by the insurer. A claim for loss partially compensated by an insurer with the rights of a subrogee may be presented by the insurer or the insured individually, as their respective interests appear, or jointly. Whenever an insurer presents a claim asserting the rights of a subrogee, he shall present with his claim appropriate evidence that he has the rights of a subrogee.</P> <P>(e) A claim presented by an agent or legal representative shall be presented in the name of the claimant, be signed by the agent or legal representative, show the title or legal capacity of the person signing, and be accompanied by evidence of his authority to present a claim on behalf of the claimant as agent, executor, administrator, parent, guardian, or other representative.</P> </SECTION> <SECTION> <SECTNO>§ 35.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> <P>(a) <E T="03">Death.</E> In support of a claim based on death, the claimant may be required to submit the following evidence or information:</P> <P>(1) An authenticated death certificate or other competent evidence showing cause of death, date of death, and age of the decedent.</P> <P>(2) Decedent's employment or occupation at time of death, including his monthly or yearly salary or earnings (if any), and the duration of his last employment or occupation.</P> <P>(3) Full names, addresses, birth dates, kinship, and marital status of the decedent's survivors, including identification of those survivors who were dependent for support upon the decedent at the time of his death.</P> <P>(4) Degree of support afforded by the decedent to each survivor dependent upon him for support at the time of his death.</P> <P>(5) Decedent's general physical and mental condition before death.</P> <P>(6) Itemized bills for medical and burial expenses incurred by reason of the incident causing death, or itemized receipts of payments for such expenses.</P> <P>(7) If damages for pain and suffering prior to death are claimed, a physician's detailed statement specifying the injuries suffered, duration of pain and suffering, any drugs administered for pain and the decedent's physical condition in the interval between injury and death.</P> <P>(8) Any other evidence or information which may have a bearing on either the responsibility of the United States for the death or the damages claimed.</P> <P>(b) <E T="03">Personal injury.</E> In support of a claim for personal injury, including pain and suffering, the claimant may be required to submit the following evidence or information:</P> <P>(1) A written report by his attending physician or dentist setting forth the nature and extent of the injury, nature and extent of treatment, any degree of temporary or permanent disability, the prognosis, period of hospitalization, and any diminished earning capacity. In addition, the claimant may be required to submit to a physical or mental examination by a physician employed or designated by the Department. A copy of the report of the examining physician shall be made available to the claimant upon the claimant's written request provided that claimant has, upon request, furnished the report referred to in the first sentence of this paragraph and has made or agrees to make available to the Department any other physician's reports previously or thereafter made of the physical or <PRTPAGE P="89"/>mental condition which is the subject matter of his claim.</P> <P>(2) Itemized bills for medical, dental, and hospital expenses incurred, or itemized receipts of payment for such expenses.</P> <P>(3) If the prognosis reveals the necessity for future treatment, a statement of expected duration of and expenses for such treatment.</P> <P>(4) If a claim is made for loss of time from employment, a written statement from his employer showing actual time lost from employment, whether he is a full or part-time employee, and wages or salary actually lost.</P> <P>(5) If a claim is made for loss of income and the claimant is self-employed, documentary evidence showing the amount of earnings actually lost.</P> <P>(6) Any other evidence or information which may have a bearing on either the responsibility of the United States for the personal injury or the damages claimed.</P> <P>(c) <E T="03">Property damage.</E> In support of a claim for damage to or loss of property, real or personal, the claimant may be required to submit the following evidence or information:</P> <P>(1) Proof of ownership.</P> <P>(2) A detailed statement of the amount claimed with respect to each item of property.</P> <P>(3) An itemized receipt of payment for necessary repairs or itemized written estimates of the cost of such repairs.</P> <P>(4) A statement listing date of purchase, purchase price, market value of the property as of date of damage, and salvage value, where repair is not economical.</P> <P>(5) Any other evidence or information which may have a bearing either on the responsibility of the United States for the injury to or loss of property or the damages claimed.</P> <P>(d) <E T="03">Time limit.</E> All evidence required to be submitted by this section shall be furnished by the claimant within a reasonable time. Failure of a claimant to furnish evidence necessary to a determination of his claim within three months after a request therefor has been mailed to his last known address may be deemed an abandonment of the claim. The claim may be thereupon disallowed.</P> </SECTION> <SECTION> <SECTNO>§ 35.5</SECTNO> <SUBJECT>Investigation of claims.</SUBJECT> <P>When a claim is received, the Department will make such investigation as may be necessary or appropriate for a determination of the validity of the claim.</P> </SECTION> <SECTION> <SECTNO>§ 35.6</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> <P>(a) Final denial of an administrative claim shall be in writing and sent to the claimant, his attorney, or legal representative by certified or registered mail. The notification of final denial may include a statement of the reasons for the denial and shall include a statement that, if the claimant is dissatisfied with the Department's action, he may file suit in an appropriate U.S. District Court not later than 6 months after the date of mailing of the notification.</P> <P>(b) Prior to the commencement of suit and prior to the expiration of the 6-month period after the date of mailing, by certified or registered mail of notice of final denial of the claim as provided in 28 U.S.C. 2401(b), a claimant, his duly authorized agent, or legal representative, may file a written request with the Department for reconsideration of a final denial of a claim under paragraph (a) of this section. Upon the timely filing of a request for reconsideration the Department shall have 6 months from the date of filing in which to make a final disposition of the claim and the claimant's option under 28 U.S.C. 2675(a) to bring suit shall not accrue until 6 months after the filing of a request for reconsideration. Final Department action on a request for reconsideration shall be effected in accordance with the provisions of paragraph (a) of this section.</P> </SECTION> <SECTION> <SECTNO>§ 35.7</SECTNO> <SUBJECT>Payment of approved claims.</SUBJECT> <P>(a) Upon allowance of his claim, claimant or his duly authorized agent shall sign the voucher for payment, Standard Form 1145, before payment is made.</P> <P>(b) When the claimant is represented by an attorney, the voucher for payment (SF 1145) shall designate both the claimant and his attorney as “payees.” The check shall be delivered to the attorney whose address shall appear on the voucher.</P> </SECTION> <SECTION> <PRTPAGE P="90"/> <SECTNO>§ 35.8</SECTNO> <SUBJECT>Release.</SUBJECT> <P>Acceptance by the claimant, his agent or legal representative, of any award, compromise or settlement made hereunder, shall be final and conclusive on the claimant, his agent or legal representative and any other person on whose behalf or for whose benefit the claim has been presented, and shall constitute a complete release of any claim against the United States and against any employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.</P> </SECTION> <SECTION> <SECTNO>§ 35.9</SECTNO> <SUBJECT>Penalties.</SUBJECT> <P>A person who files a false claim or makes a false or fraudulent statement in a claim against the United States may be liable to a fine of not more than $10,000 or to imprisonment of not more than 5 years, or both (18 U.S.C. 287.1001), and, in addition, to a forfeiture of $2,000 and a penalty of double the loss or damage sustained by the United States (31 U.S.C. 231).</P> </SECTION> <SECTION> <SECTNO>§ 35.10</SECTNO> <SUBJECT>Limitation on Department's authority.</SUBJECT> <P>(a) An award, compromise or settlement of a claim hereunder in excess of $25,000 shall be effected only with the prior written approval of the Attorney General or his designee. For the purposes of this paragraph, a principal claim and any derivative or subrogated claim shall be treated as a single claim.</P> <P>(b) An administrative claim may be adjusted, determined, compromised or settled hereunder only after consultation with the Department of Justice when, in the opinion of the Department:</P> <P>(1) A new precedent or a new point of law is involved; or</P> <P>(2) A question of policy is or may be involved; or</P> <P>(3) The United States is or may be entitled to indemnity or contribution from a third party and the Department is unable to adjust the third party claim; or</P> <P>(4) The compromise of a particular claim, as a practical matter, will or may control the disposition of a related claim in which the amount to be paid may exceed $25,000.</P> <P>(c) An administrative claim may be adjusted, determined, compromised or settled only after consultation with the Department of Justice when it is learned that the United States or an employee, agent or cost plus contractor of the United States is involved in litigation based on a claim arising out of the same incident or transaction.</P> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 60</EAR> <HD SOURCE="HED">PART 60—INDEMNIFICATION OF DEPARTMENT OF EDUCATION EMPLOYEES</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>60.1</SECTNO> <SUBJECT>What are the policies of the Department regarding indemnification?</SUBJECT> <SECTNO>60.2</SECTNO> <SUBJECT>What procedures apply to requests for indemnification?</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 3411, 3461, 3471, and 3474.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>54 FR 7148, Feb. 16, 1989, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 60.1</SECTNO> <SUBJECT>What are the policies of the Department regarding indemnification?</SUBJECT> <P>(a)(1) The Department of Education may indemnify, in whole or in part, an employee for any verdict, judgment, or other monetary award rendered against the employee if—</P> <P>(i) The conduct giving rise to the verdict, judgment, or award occurred within the scope of his or her employment with the Department; and</P> <P>(ii) The indemnification is in the interest of the United States, as determined by the Secretary.</P> <P>(2) The regulations in this part apply to an action pending against an ED employee as of March 30, 1989, as well as to any action commenced after that date.</P> <P>(3) As used in this part, the term <E T="03">employee</E> includes—</P> <P>(i) A present or former officer or employee of the Department or of an advisory committee to the Department, including a special Government employee;</P> <P>(ii) An employee of another Federal agency on detail to the Department; or</P> <P>(iii) A student volunteer under 5 U.S.C. 3111.</P> <P>(4) As used in this part the term <E T="03">Secretary</E> means the Secretary of the Department of Education or an official or <PRTPAGE P="91"/>employee of the Department acting for the Secretary under a delegation of authority.</P> <P>(b)(1) The Department may pay, in whole or in part, to settle or compromise a personal damage claim against an employee if—</P> <P>(i) The alleged conduct giving rise to the personal damage claim occurred within the scope of employment; and</P> <P>(ii) The settlement or compromise is in the interest of the United States, as determined by the Secretary.</P> <P>(2) Payment under paragraph (b)(1) of this section may include reimbursement, in whole or in part, of an employee for prior payment made by the employee under a settlement or compromise that meets the requirements of this section.</P> <P>(c) The Department does not indemnify or settle a personal damage claim before entry of an adverse verdict, judgment, or monetary award unless the Secretary determines that exceptional circumstances justify the earlier indemnification or settlement.</P> <P>(d) Any payment under this part, either to indemnify a Department of Education employee or to settle a personal damage claim, is contingent upon the availability of appropriated funds.</P> <SECAUTH>(Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 60.2</SECTNO> <SUBJECT>What procedures apply to requests for indemnification?</SUBJECT> <P>(a) When an employee of the Department of Education becomes aware that an action has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee shall immediately notify the head of his or her principal operating component and shall cooperate with appropriate officials of the Department in the defense of the action.</P> <P>(b) As part of the notification in paragraph (a) of this section or at a later time, the employee may request—</P> <P>(1) Indemnification to satisfy a verdict, judgment, or award entered against the employee; or</P> <P>(2) Payment to satisfy the requirements of a settlement proposal.</P> <P>(c)(1) The employee's request must be in writing to the head of his or her principal operating component and must be accompanied by copies of the complaint and other documents filed in the action, including the verdict, judgment, award, settlement, or settlement proposal, as appropriate.</P> <P>(2)(i) As used in this section, the term <E T="03">principal operating component</E> means an office in the Department headed by an Assistant Secretary, a Deputy Under Secretary, or an equivalent departmental officer who reports directly to the Secretary.</P> <P>(ii) The term also includes the Office of the Secretary and the Office of the Under Secretary.</P> <P>(d) The head of the employee's principal operating component submits to the General Counsel, in a timely manner, the request, together with a recommended disposition of the request.</P> <P>(e) The General Counsel forwards to the Secretary for decision—</P> <P>(1) The employee's request;</P> <P>(2) The recommendation of the head of the employee's principal operating component; and</P> <P>(3) The General Counsel's recommendation.</P> <SECAUTH>(Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)</SECAUTH> </SECTION> </PART> <PART> <EAR>Pt. 73</EAR> <HD SOURCE="HED">PART 73—STANDARDS OF CONDUCT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>73.1</SECTNO> <SUBJECT>Cross-reference to employee ethical conduct standards and financial disclosure regulations.</SUBJECT> <SECTNO>73.2</SECTNO> <SUBJECT>Conflict of interest waiver.</SUBJECT> <APP>Appendix to Part 73—Code of Ethics for Government Service </APP> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>5 U.S.C. 301, 7301; 18 U.S.C. 208; and E.O. 12674, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p. 306.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>60 FR 5818, Jan. 30, 1995, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 73.1</SECTNO> <SUBJECT>Cross-reference to employee ethical conduct standards and financial disclosure regulations.</SUBJECT> <P>Employees of the Department of Education are subject to the executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635 and to the Department of Education regulation at 5 CFR part 6301 which supplements the executive branch-wide standards with a requirement for employees to obtain prior approval to participate in certain <PRTPAGE P="92"/>outside activities. In addition, employees are subject to the executive branch-wide financial disclosure regulations at 5 CFR part 2634.</P> </SECTION> <SECTION> <SECTNO>§ 73.2</SECTNO> <SUBJECT>Conflict of interest waiver.</SUBJECT> <P>If a financial interest arises from ownership by an employee—or other person or enterprise referred to in 5 CFR 2635.402(b)(2)—of stock in a widely diversified mutual fund or other regulated investment company that in turn owns stock in another enterprise, that financial interest is exempt from the prohibition in 5 CFR 2635.402(a).</P> </SECTION> <APPENDIX> <EAR>Pt. 73, App. </EAR> <HD SOURCE="HED">Appendix to Part <E T="01">73</E> <E T="04">—Code of Ethics for Government Service</E> </HD> <P>Any person in Government service should:</P> <P>Put loyalty to the highest moral principles and to country above loyalty to persons, party, or Government department.</P> <P>Uphold the Constitution, laws, and regulations of the United States and of all governments therein and never be a party to their evasion.</P> <P>Give a full day's labor for a full day's pay; giving earnest effort and best thought to the performance of duties.</P> <P>Seek to find and employ more efficient and economical ways of getting tasks accomplished.</P> <P>Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept, for himself or herself or for family members, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties.</P> <P>Make no private promises of any kind binding upon the duties of office, since a Government employee has no private word which can be binding on public duty.</P> <P>Engage in no business with the Government, either directly or indirectly, which is inconsistent with the conscientious performance of governmental duties.</P> <P>Never use any information gained confidentially in the performance of governmental duties as a means of making private profit.</P> <P>Expose corruption wherever discovered.</P> <P>Uphold these principles, ever conscious that public office is a public trust. </P> <FP>(This Code of Ethics was unanimously passed by the United States Congress on June 27, 1980, and signed into law as Public Law 96-303 by the President on July 3, 1980.)</FP> </APPENDIX> </PART> <PART> <EAR>Pt. 74</EAR> <HD SOURCE="HED">PART 74—ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>74.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>74.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>74.3</SECTNO> <SUBJECT>Effect on other issuances.</SUBJECT> <SECTNO>74.4</SECTNO> <SUBJECT>Deviations.</SUBJECT> <SECTNO>74.5</SECTNO> <SUBJECT>Subawards.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Pre-Award Requirements</HD> <SECTNO>74.10</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>74.11</SECTNO> <SUBJECT>Pre-award policies.</SUBJECT> <SECTNO>74.12</SECTNO> <SUBJECT>Forms for applying for Federal assistance.</SUBJECT> <SECTNO>74.13</SECTNO> <SUBJECT>Debarment and suspension.</SUBJECT> <SECTNO>74.14</SECTNO> <SUBJECT>Special award conditions.</SUBJECT> <SECTNO>74.15</SECTNO> <SUBJECT>Metric system of measurement.</SUBJECT> <SECTNO>74.16</SECTNO> <SUBJECT>Resource Conservation and Recovery Act.</SUBJECT> <SECTNO>74.17</SECTNO> <SUBJECT>Certifications and representations.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Post-Award Requirements</HD> <SUBJGRP> <HD SOURCE="HED">Financial and Program Management</HD> <SECTNO>74.20</SECTNO> <SUBJECT>Purpose of financial and program management.</SUBJECT> <SECTNO>74.21</SECTNO> <SUBJECT>Standards for financial management systems.</SUBJECT> <SECTNO>74.22</SECTNO> <SUBJECT>Payment.</SUBJECT> <SECTNO>74.23</SECTNO> <SUBJECT>Cost sharing or matching.</SUBJECT> <SECTNO>74.24</SECTNO> <SUBJECT>Program income.</SUBJECT> <SECTNO>74.25</SECTNO> <SUBJECT>Revision of budget and program plans.</SUBJECT> <SECTNO>74.26</SECTNO> <SUBJECT>Non-Federal audits.</SUBJECT> <SECTNO>74.27</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <SECTNO>74.28</SECTNO> <SUBJECT>Period of availability of funds.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Property Standards</HD> <SECTNO>74.30</SECTNO> <SUBJECT>Purpose of property standards.</SUBJECT> <SECTNO>74.31</SECTNO> <SUBJECT>Insurance coverage.</SUBJECT> <SECTNO>74.32</SECTNO> <SUBJECT>Real property.</SUBJECT> <SECTNO>74.33</SECTNO> <SUBJECT>Federally-owned and exempt property.</SUBJECT> <SECTNO>74.34</SECTNO> <SUBJECT>Equipment.</SUBJECT> <SECTNO>74.35</SECTNO> <SUBJECT>Supplies and other expendable property.</SUBJECT> <SECTNO>74.36</SECTNO> <SUBJECT>Intangible property.</SUBJECT> <SECTNO>74.37</SECTNO> <SUBJECT>Property trust relationship.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procurement Standards</HD> <SECTNO>74.40</SECTNO> <SUBJECT>Purpose of procurement standards.</SUBJECT> <SECTNO>74.41</SECTNO> <SUBJECT>Recipient responsibilities.</SUBJECT> <SECTNO>74.42</SECTNO> <SUBJECT>Codes of conduct.</SUBJECT> <SECTNO>74.43</SECTNO> <SUBJECT>Competition.</SUBJECT> <SECTNO>74.44</SECTNO> <SUBJECT>Procurement procedures.</SUBJECT> <SECTNO>74.45</SECTNO> <SUBJECT>Cost and price analysis.</SUBJECT> <SECTNO>74.46</SECTNO> <SUBJECT>Procurement records.</SUBJECT> <SECTNO>74.47</SECTNO> <SUBJECT>Contract administration.</SUBJECT> <SECTNO>74.48</SECTNO> <SUBJECT>Contract provisions.</SUBJECT> </SUBJGRP> <SUBJGRP> <PRTPAGE P="93"/> <HD SOURCE="HED">Reports and Records</HD> <SECTNO>74.50</SECTNO> <SUBJECT>Purpose of reports and records.</SUBJECT> <SECTNO>74.51</SECTNO> <SUBJECT>Monitoring and reporting program performance.</SUBJECT> <SECTNO>74.52</SECTNO> <SUBJECT>Financial reporting.</SUBJECT> <SECTNO>74.53</SECTNO> <SUBJECT>Retention and access requirements for records.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Termination and Enforcement</HD> <SECTNO>74.60</SECTNO> <SUBJECT>Purpose of termination and enforcement.</SUBJECT> <SECTNO>74.61</SECTNO> <SUBJECT>Termination.</SUBJECT> <SECTNO>74.62</SECTNO> <SUBJECT>Enforcement.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—After-the-Award Requirements</HD> <SECTNO>74.70</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>74.71</SECTNO> <SUBJECT>Closeout procedures.</SUBJECT> <SECTNO>74.72</SECTNO> <SUBJECT>Subsequent adjustments and continuing responsibilities.</SUBJECT> <SECTNO>74.73</SECTNO> <SUBJECT>Collection of amounts due.</SUBJECT> <APP>Appendix A to Part 74<E T="04">—Contract Provisions</E> </APP> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 1221e-3 and 3474; OMB Circular A-110, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>59 FR 34724, July 6, 1994, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 74.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <P>(a) This part establishes uniform administrative requirements for Federal grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations.</P> <P>(b) The Secretary does not impose additional or inconsistent requirements, except as provided in §§ 74.4 and 74.14 or unless specifically required by Federal statute or executive order.</P> <P>(c) This part applies to all recipients other than State and local governments and Indian tribal organizations. Uniform requirements for State and local governments and tribal organizations are in 34 CFR Part 80—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.</P> <P>(d) Non-profit organizations that implement Federal programs for the States are also subject to State requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>The following definitions apply to this part:</P> <P> <E T="03">Accrued expenditures</E> means the charges incurred by the recipient during a given period requiring the provision of funds for—</P> <P>(1) Goods and other tangible property received;</P> <P>(2) Services performed by employees, contractors, subrecipients, and other payees; and</P> <P>(3) Other amounts becoming owed under programs for which no current services or performance is required.</P> <P> <E T="03">Accrued income</E> means the sum of—</P> <P>(1) Earnings during a given period from—</P> <P>(i) Services performed by the recipient; and</P> <P>(ii) Goods and other tangible property delivered to purchasers; and</P> <P>(2) Amounts becoming owed to the recipient for which no current services or performance is required by the recipient.</P> <P> <E T="03">Acquisition cost of equipment</E> means the net invoice price of the equipment, 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 recipient's regular accounting practices.</P> <P> <E T="03">Advance</E> means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the use of predetermined payment schedules.</P> <P> <E T="03">Award</E> means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property, in lieu of money, by the Federal Government to an eligible recipient. The term does not include—</P> <P>(1) Technical assistance, which provides services instead of money;</P> <P>(2) Other assistance in the form of loans, loan guarantees, interest subsidies, or insurance;<PRTPAGE P="94"/> </P> <P>(3) Direct payments of any kind to individuals; and</P> <P>(4) Contracts which are required to be entered into and administered under procurement laws and regulations.</P> <P> <E T="03">Cash contributions</E> means the recipient's cash outlay, including the outlay of money contributed to the recipient by third parties.</P> <P> <E T="03">Closeout</E> means the process by which the Secretary determines that all applicable administrative actions and all required work of the award have been completed by the recipient and Department of Education (ED).</P> <P> <E T="03">Contract</E> means a procurement contract under an award or subaward, and a procurement subcontract under a recipient's or subrecipient's contract.</P> <P> <E T="03">Cost sharing or matching</E> means that portion of project or program costs not borne by the Federal Government.</P> <P> <E T="03">Date of completion</E> means the date on which all work under an award is completed or the date on the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.</P> <P> <E T="03">Disallowed costs</E> means those charges to an award that the Secretary determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.</P> <P> <E T="03">Equipment</E> means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, consistent with recipient policy, lower limits may be established.</P> <P> <E T="03">Excess property</E> means property under the control of ED that is no longer required for its needs or the discharge of its responsibilities.</P> <P> <E T="03">Exempt property</E> means tangible personal property acquired in whole or in part with Federal funds, where the Secretary has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306) for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.</P> <P> <E T="03">Federal awarding agency</E> means the Federal agency that provides an award to the recipient.</P> <P> <E T="03">Federal funds authorized</E> means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior funding periods when permitted by ED regulations or ED implementing instructions.</P> <P> <E T="03">Federal share</E> of real property, equipment, or supplies means that percentage of the property's acquisition costs and any improvement expenditures paid with Federal funds.</P> <P> <E T="03">Funding period</E> means the period of time when Federal funding is available for obligation by the recipient.</P> <P> <E T="03">Intangible property and debt instruments</E> means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock, and other instruments of property ownership, whether considered tangible or intangible.</P> <P> <E T="03">Obligations</E> means the amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period that require payment by the recipient during the same or a future period.</P> <P> <E T="03">Outlays or expenditures</E> means 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 cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied, and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees, and other amounts becoming owed under programs for which <PRTPAGE P="95"/>no current services or performance are required.</P> <P> <E T="03">Personal property</E> means property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.</P> <P> <E T="03">Prior approval</E> means written approval by an authorized official evidencing prior consent.</P> <P> <E T="03">Program income</E> means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in § 74.24(e) and (h)). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in ED regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.</P> <P> <E T="03">Project costs</E> means all allowable costs, as established in the applicable Federal cost principles, incurred by a recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.</P> <P> <E T="03">Project period</E> means the period established in the award document during which Federal sponsorship begins and ends.</P> <P> <E T="03">Property</E> means, unless otherwise stated, real property, equipment, intangible property and debt instruments.</P> <P> <E T="03">Real property</E> means land, including land improvements, structures and appurtenances thereto, but excludes movable machinery and equipment.</P> <P> <E T="03">Recipient</E> means an organization receiving financial assistance directly from ED to carry out a project or program. The term includes public and private institutions of higher education, public and private hospitals, and other quasi-public and private non-profit organizations such as, but not limited to, community action agencies, research institutes, educational associations, and health centers. The term may include commercial organizations, foreign or international organizations (such as agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of recipients or subrecipients at the discretion of the Secretary. The term does not include government-owned contractor-operated facilities or research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers.</P> <P> <E T="03">Research and development</E> means all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other non-profit institutions. “Research” is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. “Development” is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The term “research” also includes activities involving the training of individuals in research techniques where these activities utilize the same facilities as other pesearch and development activities and where these activities are not included in the instruction function.</P> <P> <E T="03">Small awards</E> means a grant or cooperative agreement not exceeding the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000).</P> <P> <E T="03">Subaward</E> means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services nor does it include any form of assistance which is excluded from the definition of “award” as defined in this section.<PRTPAGE P="96"/> </P> <P> <E T="03">Subrecipient</E> means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided. The term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Secretary.</P> <P> <E T="03">Supplies</E> means all personal property excluding equipment, intangible property, and debt instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement (“subject inventions”), as defined in 37 CFR Part 401—Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements.</P> <P> <E T="03">Suspension</E> means an action by the Secretary that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the award by the Secretary. Suspension of an award is a separate action from suspension under 34 CFR Part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).</P> <P> <E T="03">Termination</E> means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion.</P> <P> <E T="03">Third party in-kind contributions</E> means the value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.</P> <P> <E T="03">Unliquidated obligations,</E> for financial reports prepared on a cash basis, means the amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been recorded.</P> <P> <E T="03">Unobligated balance</E> means the portion of the funds authorized by the Secretary that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.</P> <P> <E T="03">Unrecovered indirect cost</E> means the difference between the amount awarded and the amount which could have been awarded under the recipient's approved negotiated indirect cost rate.</P> <P> <E T="03">Working capital advance</E> means a procedure whereby funds are advanced to the recipient to cover its estimated disbursement needs for a given initial period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.3</SECTNO> <SUBJECT>Effect on other issuances.</SUBJECT> <P>For awards subject to this part, all administrative requirements of codified program regulations, program manuals, handbooks, and other nonregulatory materials which are inconsistent with the requirements of this part are superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in § 74.4.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.4</SECTNO> <SUBJECT>Deviations.</SUBJECT> <P>The Secretary, after consultation with the Office of Management and Budget (OMB), may grant exceptions for classes of grants or recipients subject to the requirements of this part when exceptions are not prohibited by statute. However, in the interest of maximum uniformity, exceptions from the requirements of this part are permitted only in unusual circumstances. The Secretary may apply more restrictive requirements to a class of recipients when approved by OMB. The Secretary may apply less restrictive requirements when awarding small awards, except for those requirements which are statutory. Exceptions on a case-by-case basis may also be made by the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.5</SECTNO> <SUBJECT>Subawards.</SUBJECT> <P>Unless sections of this part specifically exclude subrecipients from coverage, the provisions of this part shall be applied to subrecipients performing <PRTPAGE P="97"/>work under awards if the subrecipients are institutions of higher education, hospitals, or other non-profit organizations. State and local government subrecipients are subject to the provisions of 34 CFR Part 80—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Pre-Award Requirements</HD> <SECTION> <SECTNO>§ 74.10</SECTNO> <SUBJECT>Purpose.</SUBJECT> <P>Sections 74.11 through 74.17 prescribes forms and instructions and other pre-award matters to be used in applying for awards.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.11</SECTNO> <SUBJECT>Pre-award policies.</SUBJECT> <P>(a) <E T="03">Use of grants and cooperative agreements, and contracts.</E> In each instance, the Secretary decides on the appropriate award instrument (i.e., grant, cooperative agreement, or contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants, cooperative agreements, and contracts. A grant or cooperative agreement shall be used only when the principal purpose of a transaction is to accomplish a public purpose of support or stimulation authorized by Federal statute. The statutory criterion for choosing between grants and cooperative agreements is that for the latter, substantial involvement is expected between ED and the recipient when carrying out the activity contemplated in the agreement. Contracts shall be used when the principal purpose is acquisition of property or services for the direct benefit or use of the Federal Government.</P> <P>(b) <E T="03">Public notice and priority setting.</E> The Secretary notifies the public of intended funding priorities for discretionary grant programs, unless funding priorities are established by Federal statute.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.12</SECTNO> <SUBJECT>Forms for applying for Federal assistance.</SUBJECT> <P>(a) The Secretary complies with the applicable report clearance requirements of 5 CFR Part 1320—Controlling Paperwork Burdens on the Public—with regard to all forms used by ED in place of or as a supplement to the Standard Form 424 (SF-424) series.</P> <P>(b) Applicants shall use the SF-424 series or those forms and instructions prescribed by the Secretary.</P> <P>(c) For Federal programs covered by E.O. 12372—Intergovernmental Review of Federal Programs (implemented by the Secretary in 34 CFR Part 79—Intergovernmental Review of Department of Education Programs and Activities)—the applicant shall complete the appropriate sections of the SF-424 (Application for Federal Assistance) indicating whether the application was subject to review by the State Single Point of Contact (SPOC). The name and address of the SPOC for a particular State can be obtained from the Secretary or the <E T="03">Catalog of Federal Domestic Assistance</E> (available from the Superintendent of Documents, Government Printing Office). The SPOC shall advise the applicant whether the program for which application is made has been selected by that State for review.</P> <P>(d) If ED does not use the SF-424 form, the Secretary may indicate whether the application is subject to review by the State under E.O. 12372.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.13</SECTNO> <SUBJECT>Debarment and suspension.</SUBJECT> <P>The Secretary and recipients shall comply with the nonprocurement debarment and suspension common rule (implemented by the Secretary in 34 CFR part 85). This common rule restricts subawards and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="98"/> <SECTNO>§ 74.14</SECTNO> <SUBJECT>Special award conditions.</SUBJECT> <P>(a) The Secretary may impose special award conditions, if an applicant or recipient—</P> <P>(1) Has a history of poor performance;</P> <P>(2) Is not financially stable;</P> <P>(3) Has a management system that does not meet the standards prescribed in this part;</P> <P>(4) Has not conformed to the terms and conditions of a previous award; or</P> <P>(5) Is not otherwise responsible.</P> <P>(b) If special award conditions are established under paragraph (a) of this section, the Secretary notifies the applicant or recipient of—</P> <P>(1) The nature of the additional requirements;</P> <P>(2) The reason why the additional requirements are being imposed;</P> <P>(3) The nature of the corrective action needed;</P> <P>(4) The time allowed for completing the corrective actions; and</P> <P>(5) The method for requesting reconsideration of the additional requirements imposed.</P> <P>(c) Any special conditions are promptly removed once the conditions that prompted them have been corrected.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.15</SECTNO> <SUBJECT>Metric system of measurement.</SUBJECT> <P>The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205) declares that the metric system is the preferred measurement system for U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates in consultation with the Secretary of Commerce, when the metric system of measurement will be used in the agency's procurements, grants, and other business-related activities. Metric implementation may take longer where the use of the system is initially impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities. The Secretary follows the provisions of E.O. 12770—Metric Usage in Federal Government Programs.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.16</SECTNO> <SUBJECT>Resource Conservation and Recovery Act.</SUBJECT> <P>Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-580 codified at 42 U.S.C. 6962), any State agency or agency of a political subdivision of a State which is using appropriated Federal funds must comply with section 6002 of the RCRA. Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials identified in guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247-254). Accordingly, recipients that receive direct Federal awards or other Federal funds shall give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA guidelines.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.17</SECTNO> <SUBJECT>Certifications and representations.</SUBJECT> <P>Unless prohibited by statute or codified regulation, the Secretary allows recipients to submit certifications and representations required by statute, executive order, or regulation on an annual basis, if the recipients have ongoing and continuing relationships with ED. Annual certifications and representations shall be signed by responsible officials with the authority to ensure recipients’ compliance with the pertinent requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Post-Award Requirements</HD> <SUBJGRP> <HD SOURCE="HED">Financial and Program Management</HD> <SECTION> <SECTNO>§ 74.20</SECTNO> <SUBJECT>Purpose of financial and program management.</SUBJECT> <P>Sections 74.21 through 74.28 prescribe standards for financial management systems, methods for making payments and rules for—</P> <P>(a) Satisfying cost sharing and matching requirements;</P> <P>(b) Accounting for program income;</P> <P>(c) Approving budget revisions;</P> <P>(d) Making audits;<PRTPAGE P="99"/> </P> <P>(e) Determining allowability of cost; and</P> <P>(f) Establishing fund availability.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.21</SECTNO> <SUBJECT>Standards for financial management systems.</SUBJECT> <P>(a) Recipients shall relate financial data to performance data and develop unit cost information whenever practical.</P> <P>(b) Recipients’ financial management systems shall provide for the following:</P> <P>(1) Accurate, current, and complete disclosure of the financial results of each federally-sponsored project in accordance with the reporting requirements established in § 74.52. If the Secretary requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient shall not be required to establish an accrual accounting system. These recipients may develop accrual data for its reports on the basis of an analysis of the documentation on hand.</P> <P>(2) Records that identify adequately the source and application of funds for federally-sponsored activities. These records shall contain information pertaining to awards, authorizations, obligations, unobligated balances, assets, outlays, income, and interest.</P> <P>(3) Effective control over and accountability for all funds, property, and other assets. Recipients shall adequately safeguard all assets and assure they are used solely for authorized purposes.</P> <P>(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial information should be related to performance and unit cost data.</P> <P>(5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, warrants or payments by other means for program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, payment methods of State agencies, instrumentalities, and fiscal agents shall be consistent with CMIA Treasury-State Agreements or the CMIA default procedures codified at 31 CFR Part 205—Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other Programs.</P> <P>(6) Written procedures for determining the reasonableness, allocability, and allowability of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.</P> <P>(7) Accounting records including cost accounting records that are supported by source documentation.</P> <P>(c) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the Secretary may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government.</P> <P>(d) The Secretary may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.</P> <P>(e) Where bonds are required under paragraphs (a) and (b) of this section, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR Part 223—Surety Companies Doing Business with the United States.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.22</SECTNO> <SUBJECT>Payment.</SUBJECT> <P>(a) Payment methods shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA agreements or default procedures codified at 31 CFR part 205.</P> <P>(b)(1) Recipients are paid in advance, provided they maintain or demonstrate the willingness to maintain—<PRTPAGE P="100"/> </P> <P>(i) Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient; and</P> <P>(ii) Financial management systems that meet the standards for fund control and accountability as established in § 74.21.</P> <P>(2) Cash advances to a recipient organization are limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project.</P> <P>(3) The timing and amount of cash advances are as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs.</P> <P>(c) Whenever possible, advances are consolidated to cover anticipated cash needs for all awards made by the Secretary.</P> <P>(1) Advance payment mechanisms include, but are not limited to, Treasury check, and electronic funds transfer.</P> <P>(2) Advance payment mechanisms are subject to 31 CFR part 205.</P> <P>(3) Recipients are authorized to submit requests for advances and reimbursements at least monthly when electronic fund transfers are not used.</P> <P>(d) Requests for Treasury check advance payment shall be submitted on SF-270—Request for Advance or Reimbursement—or other forms as may be authorized by OMB. This form is not to be used when Treasury check advance payments are made to the recipient automatically through the use of a predetermined payment schedule or if precluded by ED instructions for electronic funds transfer.</P> <P>(e) Reimbursement is the preferred method when the requirements in paragraph (b) of this section cannot be met. The Secretary may also use this method on any construction agreement, or if the major portion of the construction project is accomplished through private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.</P> <P>(1) When the reimbursement method is used, the Secretary makes payment within 30 days after receipt of the billing, unless the billing is improper.</P> <P>(2) Recipients are authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used.</P> <P>(f) If a recipient cannot meet the criteria for advance payments and the Secretary has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the Secretary may provide cash on a working capital advance basis. Under this procedure, the Secretary advances cash to the recipient to cover its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle. Thereafter, the Secretary reimburses the recipient for its actual cash disbursements. The working capital advance method of payment is not used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.</P> <P>(g) To the extent available, recipients shall disburse funds available from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries, and interest earned on these funds before requesting additional cash payments.</P> <P>(h) Unless otherwise required by statute, the Secretary does not withhold payments for proper charges made by recipients at any time during the project period unless—</P> <P>(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requirements; or</P> <P>(2) The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129—Managing Federal Credit Programs. Under these conditions, the Secretary may, upon reasonable notice, inform the recipient that ED does not make payments for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.</P> <P>(i) The standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows:<PRTPAGE P="101"/> </P> <P>(1) Except for situations described in paragraph (i)(2) of this section, the Secretary does not require separate depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the receipt, obligation, and expenditure of funds.</P> <P>(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.</P> <P>(j) Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises, recipients shall be encouraged to use women-owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members).</P> <P>(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless—</P> <P>(1) The recipient receives less than $120,000 in Federal awards per year;</P> <P>(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances; or</P> <P>(3) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.</P> <P>(l) For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts shall be remitted annually to Department of Health and Human Services, Payment Management System, Rockville, MD 20852. Interest amounts up to $250 per year may be retained by the recipient for administrative expense. State universities and hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay pre-award costs for discretionary awards without prior written approval from the Secretary, it waives its right to recover the interest under CMIA.</P> <P>(m) Except as noted elsewhere in this part, only the following forms are authorized for the recipients in requesting advances and reimbursements. The Secretary does not require more than an original and two copies of the following:</P> <P>(1) SF-270—Request for Advance or Reimbursement. The Secretary adopts the SF-270 as a standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. The Secretary may, however, use this form for construction programs in lieu of the SF-271—Outlay Report and Request for Reimbursement for Construction Programs.</P> <P>(2) SF-271—Outlay Report and Request for Reimbursement for Construction Programs. The Secretary adopts the SF-271 as the standard form to be used for requesting reimbursement for construction programs. However, the Secretary may substitute the SF-270 when the Secretary determines that it provides adequate information to meet Federal needs.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.23</SECTNO> <SUBJECT>Cost sharing or matching.</SUBJECT> <P>(a) All contributions, including cash and third party in-kind, are accepted as part of the recipient's cost sharing or matching when contributions meet the following criteria:</P> <P>(1) Are verifiable from the recipient's records.</P> <P>(2) Are not included as contributions for any other federally-assisted project or program.</P> <P>(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.</P> <P>(4) Are allowable under the applicable cost principles.</P> <P>(5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.</P> <P>(6) Are provided for in the approved budget when required by the Secretary.</P> <P>(7) Conform to other provisions of this part, as applicable.</P> <P>(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Secretary.</P> <P>(c) Values for recipient contributions of services and property shall be established in accordance with the applicable cost principles. If the Secretary authorizes recipients to donate buildings <PRTPAGE P="102"/>or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching shall be the lesser of—</P> <P>(1) The certified value of the remaining life of the property recorded in the recipient's accounting records at the time of donation; or</P> <P>(2) The current fair market value. However, if there is sufficient justification, the Secretary may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project.</P> <P>(d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services must be consistent with those paid for similar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates must be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.</P> <P>(e) When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits that are reasonable, allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for which the employee is normally paid.</P> <P>(f) Donated supplies may include such items as expendable equipment, office supplies, laboratory supplies, or workshop and classroom supplies. Value assessed to donated supplies included in the cost sharing or matching share shall be reasonable and shall not exceed the fair market value of the property at the time of the donation.</P> <P>(g) The method used for determining cost sharing or matching for donated equipment, buildings, and land for which title passes to the recipient may differ according to the purpose of the award.</P> <P>(1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.</P> <P>(2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the Secretary has approved the charges.</P> <P>(h) The value of donated property must be determined in accordance with the usual accounting policies of the recipient, with the following qualifications:</P> <P>(1) The value of donated land and buildings may not exceed its fair market value at the time of donation to the recipient as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the recipient.</P> <P>(2) The value of donated equipment may not exceed the fair market value of equipment of the same age and condition at the time of donation.</P> <P>(3) The value of donated space may not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.</P> <P>(4) The value of loaned equipment shall not exceed its fair rental value.</P> <P>(5) The following requirements pertain to the recipient's supporting records for in-kind contributions from third parties:</P> <P>(i) Volunteer services must be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees.</P> <P>(ii) The basis for determining the valuation for personal service, material, equipment, buildings, and land must be documented.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="103"/> <SECTNO>§ 74.24</SECTNO> <SUBJECT>Program income.</SUBJECT> <P>(a) The Secretary applies the standards contained in this section in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds.</P> <P>(b) Except as provided in paragraph (h) of this section, program income earned during the project period must be retained by the recipient and, in accordance with ED regulations or the terms and conditions of the award, must be used in one or more of the following ways:</P> <P>(1) Added to funds committed to the project by the Secretary and recipient and used to further eligible project or program objectives.</P> <P>(2) Used to finance the non-Federal share of the project or program.</P> <P>(3) Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based.</P> <P>(c) When the Secretary authorizes the disposition of program income as described in paragraphs (b)(1) or (b)(2) of this section, program income in excess of any limits stipulated shall be used in accordance with paragraph (b)(3) of this section.</P> <P>(d) In the event that the Secretary does not specify in program regulations or the terms and conditions of the award how program income is to be used, paragraph (b)(3) of this section applies automatically to all projects or programs except research. For awards that support research, paragraph (b)(1) of this section applies automatically unless the Secretary indicates in the terms and conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in § 74.14.</P> <P>(e) Unless ED regulations or the terms and conditions of the award provide otherwise, recipients have no obligation to the Federal Government regarding program income earned after the end of the project period.</P> <P>(f) If authorized by ED or the terms and conditions of the award, costs incident to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the award.</P> <P>(g) Proceeds from the sale of property shall be handled in accordance with the requirements of the Property Standards (See §§ 74.30 through 74.37).</P> <P>(h) Unless ED regulations or the terms and condition of the award provide otherwise, recipients have no obligation to the Federal Government with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to inventions made under an experimental, developmental, or research award.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.25</SECTNO> <SUBJECT>Revision of budget and program plans.</SUBJECT> <P>(a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon ED requirements. It shall be related to performance for program evaluation purposes whenever appropriate.</P> <P>(b) Recipients are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.</P> <P>(c) For nonconstruction awards, recipients shall request prior approvals from ED for one or more of the following program or budget related reasons:</P> <P>(1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).</P> <P>(2) Change in a key person specified in the application or award document.</P> <P>(3) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.</P> <P>(4) The need for additional Federal funding.</P> <P>(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Secretary.<PRTPAGE P="104"/> </P> <P>(6) The inclusion, unless waived by the Secretary, of costs that require prior approval in accordance with OMB Circular A-21—Cost Principles for Institutions of Higher Education, OMB Circular A-122—Cost Principles for Non-Profit Organizations, or 45 CFR part 74, appendix E—Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals, or 48 CFR part 31—Contract Cost Principles and Procedures, as applicable.</P> <P>(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.</P> <P>(8) Unless described in the application and funded in the approved awards, the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies, material, equipment, or general support services.</P> <P>(d) No other prior approval requirements for specific items are imposed unless a deviation has been approved by OMB.</P> <P>(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, the Secretary may waive cost-related and administrative prior written approvals required by this part and OMB Circulars A-21 and A-122. These waivers may authorize recipients to do any one or more of the following:</P> <P>(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of the Secretary. All pre-award costs are incurred at the recipient's risk (i.e., the Secretary is under no obligation to reimburse these costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover these costs).</P> <P>(2)(i) Initiate a one-time extension of the expiration date of the award of up to 12 months unless one or more of the following conditions apply:</P> <P>(A) The terms and conditions of award prohibit the extension.</P> <P>(B) The extension requires additional Federal funds.</P> <P>(C) The extension involves any change in the approved objectives or scope of the project.</P> <P>(ii) For one-time extensions, the recipient shall notify the Secretary in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award. This one-time extension may not be exercised merely for the purpose of using unobligated balances.</P> <P>(3) Carry forward unobligated balances to subsequent funding periods.</P> <P>(4) For awards that support research, unless the Secretary provides otherwise in the award or in ED's regulations, the prior approval requirements described in paragraph (e) of this section are automatically waived (i.e., recipients need not obtain prior approvals) unless one of the conditions included in paragraph (e)(2)(i) of this section applies.</P> <P>(f) The Secretary may restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100,000 and the cumulative amount of the transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Secretary. The Secretary does not permit a transfer that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.</P> <P>(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.</P> <P>(h) For construction awards, recipients shall request prior written approval promptly from the Secretary for budget revisions whenever—</P> <P>(1) The revision results from changes in the scope or the objective of the project or program;</P> <P>(2) The need arises for additional Federal funds to complete the project; or</P> <P>(3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in § 74.27.</P> <P>(i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.<PRTPAGE P="105"/> </P> <P>(j) When the Secretary makes an award that provides support for both construction and nonconstruction work, the Secretary may require the recipient to request prior approval from the Secretary before making any fund or budget transfers between the two types of work supported.</P> <P>(k) For both construction and nonconstruction awards, recipients shall notify the Secretary in writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient for the project period by more than $5,000 or five percent of the Federal award, whichever is greater. This notification shall not be required if an application for additional funding is submitted for a continuation award.</P> <P>(l) When requesting approval for budget revisions, recipients shall use the budget forms that were used in the application unless the Secretary indicates a letter of request suffices.</P> <P>(m) Within 30 calendar days from the date of receipt of the request for budget revisions, the Secretary shall review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the Secretary informs the recipient in writing of the date when the recipient may expect the decision.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.26</SECTNO> <SUBJECT>Non-Federal audits.</SUBJECT> <P>(a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations (including hospitals) shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.”</P> <P>(b) State and local governments shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.”</P> <P>(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular A-133 shall be subject to the audit requirements of the Federal awarding agencies.</P> <P>(d) Commercial organizations are subject to the audit requirements established by the Secretary or the prime recipient as incorporated into the award document.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 62 FR 45939, 45943, Aug. 29, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.27</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <P>(a) For each kind of recipient, there is a set of cost principles for determining allowable costs. Allowability of costs are determined in accordance with the cost principles applicable to the entity incurring the costs, as specified in the following chart.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>OMB circulars are available from the Office of Management and Budget, Publication Office, Room 2200, New Executive Office Building, Washington, DC 20503 (202) 395-7332.)</P> </NOTE> <GPOTABLE CDEF="s100,r150" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">For the cost of a—</CHED> <CHED H="1">Use the principles in—</CHED> </BOXHD> <ROW> <ENT I="01">Private nonprofit organization other than (1) An institution of higher education; (2) a hospital; or (3) an organization named in OMB Circular A-122 as not subject to that circular</ENT> <ENT>OMB Circular A-122.</ENT> </ROW> <ROW> <ENT I="01">Educational institution</ENT> <ENT>OMB Circular A-21.</ENT> </ROW> <ROW> <ENT I="01">Hospital</ENT> <ENT>Appendix E to 45 CFR part 74.</ENT> </ROW> <ROW> <ENT I="01">Commercial for-profit organization other than a hospital and an educational institution</ENT> <ENT>48 CFR part 31 Contract Cost Principles and Procedures or uniform cost accounting standards that comply with cost principles acceptable to ED. </ENT> </ROW> </GPOTABLE> <PRTPAGE P="106"/> <P>(b) The cost principles applicable to a State, a local government, or Federally recognized Indian tribal government are specified at 34 CFR § 80.22.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.28</SECTNO> <SUBJECT>Period of availability of funds.</SUBJECT> <P>Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Property Standards</HD> <SECTION> <SECTNO>§ 74.30</SECTNO> <SUBJECT>Purpose of property standards.</SUBJECT> <P>Sections 74.31 through 74.37 establish uniform standards governing management and disposition of property furnished by ED whose cost was charged to a project supported by a Federal award. Recipients shall observe these standards under awards. The Secretary does not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of §§ 74.31 through 74.37.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.31</SECTNO> <SUBJECT>Insurance coverage.</SUBJECT> <P>Recipients shall, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need not be insured unless required by the terms and conditions of the award.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.32</SECTNO> <SUBJECT>Real property.</SUBJECT> <P>The Secretary prescribes requirements for recipients concerning the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided by statute, the minimum requirements provide the following:</P> <P>(a) Title to real property must vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval of the Secretary.</P> <P>(b) The recipient shall obtain written approval by the Secretary for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects shall be limited to those under federally-sponsored projects (i.e., awards) that have purposes consistent with those authorized for support by the Secretary.</P> <P>(c) When the real property is no longer needed as provided in paragraphs (a) and (b) of this section, the recipient shall request disposition instructions from ED or its successor Federal awarding agency. The Secretary observes one or more of the following disposition instructions:</P> <P>(1) The recipient may be permitted to retain title without further obligation to the Federal Government after it compensates the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project.</P> <P>(2) The recipient may be directed to sell the property under guidelines provided by the Secretary and pay the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures must be established that provide for competition to the extent practicable and result in the highest possible return.</P> <P>(3) The recipient may be directed to transfer title to the property to the Federal Government or to an eligible third party. The recipient is entitled to compensation for its attributable percentage of the current fair market value of the property.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="107"/> <SECTNO>§ 74.33</SECTNO> <SUBJECT>Federally-owned and exempt property.</SUBJECT> <P>(a) <E T="03">Federally-owned property.</E> (1) Title to federally-owned property remains vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Secretary. Upon completion of the award or when the property is no longer needed, the recipient shall report the property to the Secretary for further ED utilization.</P> <P>(2) If ED has no further need for the property, it shall be declared excess and reported to the General Services Administration, unless the Secretary has statutory authority to dispose of the property by alternative methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research equipment to educational and non-profit organizations in accordance with E.O. 12821—Improving Mathematics and Science Education in Support of the National Education Goals. Appropriate instructions shall be issued to the recipient by the Secretary.</P> <P>(b) <E T="03">Exempt property.</E> When statutory authority exists, the Secretary may vest title to property acquired with Federal funds in the recipient without further obligation to the Federal Government and under conditions the Secretary considers appropriate. This property is “exempt property.” Should the Secretary not establish conditions, title to exempt property upon acquisition vests in the recipient without further obligation to the Federal Government.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.34</SECTNO> <SUBJECT>Equipment.</SUBJECT> <P>(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to conditions of this section.</P> <P>(b) The recipient may not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.</P> <P>(c) The recipient shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and may not encumber the property without approval of the Secretary. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority:</P> <P>(1) Activities sponsored by the Federal awarding agency which funded the original project; and then</P> <P>(2) Activities sponsored by other Federal awarding agencies.</P> <P>(d) During the time that equipment is used on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies. If the equipment is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by the Federal awarding agency. User charges shall be treated as program income.</P> <P>(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the Secretary.</P> <P>(f) The recipient's property management standards for equipment acquired with Federal funds and federally-owned equipment shall include all of the following:</P> <P>(1) Equipment records shall be maintained accurately and shall include the following information:</P> <P>(i) A description of the equipment.</P> <P>(ii) Manufacturer's serial number, model number, Federal stock number, <PRTPAGE P="108"/>national stock number, or other identification number.</P> <P>(iii) Source of the equipment, including the award number.</P> <P>(iv) Whether title vests in the recipient or the Federal Government.</P> <P>(v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost.</P> <P>(vi) Information from which one can calculate the percentage of Federal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).</P> <P>(vii) Location and condition of the equipment and the date the information was reported.</P> <P>(viii) Unit acquisition cost.</P> <P>(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates ED for its share.</P> <P>(2) Equipment owned by the Federal Government must be identified to indicate Federal ownership.</P> <P>(3) A physical inventory of equipment must be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records must be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the equipment.</P> <P>(4) A control system must be in effect to insure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented; if the equipment was owned by the Federal Government, the recipient shall promptly notify the Secretary.</P> <P>(5) Adequate maintenance procedures must be implemented to keep the equipment in good condition.</P> <P>(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures must be established which provide for competition to the extent practicable and result in the highest possible return.</P> <P>(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance with the following standards:</P> <P>(1) For equipment with a current per unit fair market value of $5000 or more, the recipient may retain the equipment for other uses provided that compensation is made to ED or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment.</P> <P>(2) If the recipient has no need for the equipment, the recipient shall request disposition instructions from the Secretary. The Secretary shall determine whether the equipment can be used to meet ED requirements. If no requirement exists within ED, the availability of the equipment shall be reported to the General Services Administration by the Secretary to determine whether a requirement for the equipment exists in other Federal agencies. The Secretary issues instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures govern:</P> <P>(i) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's request, the recipient shall sell the equipment and reimburse ED an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient shall be permitted to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient's selling and handling expenses.</P> <P>(ii) If the recipient is instructed to ship the equipment elsewhere, the recipient is reimbursed by ED by an amount which is computed by applying the percentage of the recipient's participation in the cost of the original project or program to the current fair market value of the equipment, plus any reasonable shipping or interim storage costs incurred.</P> <P>(iii) If the recipient is instructed to otherwise dispose of the equipment, the recipient is reimbursed by ED for costs incurred in its disposition.<PRTPAGE P="109"/> </P> <P>(iv) The Secretary may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when the third party is otherwise eligible under existing statutes. This transfer shall be subject to the following standards:</P> <P>(A) The equipment must be appropriately identified in the award or otherwise made known to the recipient in writing.</P> <P>(B) The Secretary issues disposition instructions within 120 calendar days after receipt of a final inventory. The final inventory must list all equipment acquired with grant funds and federally-owned equipment. If the Secretary does not issue disposition instructions within the 120 calendar day period, the recipient shall apply the standards of this section, as appropriate.</P> <P>(C) When the Secretary exercises the right to take title, the equipment is subject to the provisions for federally-owned equipment.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.35</SECTNO> <SUBJECT>Supplies and other expendable property.</SUBJECT> <P>(a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other federally-sponsored project or program, the recipient shall retain the supplies for use on non-Federal sponsored activities or sell them, but shall, in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as for equipment.</P> <P>(b) The recipient may not use supplies acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute as long as the Federal Government retains an interest in the supplies.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.36</SECTNO> <SUBJECT>Intangible property.</SUBJECT> <P>(a) The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. ED and any other Federal awarding agency reserve a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.</P> <P>(b) Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR Part 401—Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.</P> <P>(c) The Federal Government has the right to:</P> <P>(1) Obtain, reproduce, publish or otherwise use the data first produced under an award; and</P> <P>(2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes.</P> <P>(d)(1) In addition, in response to a Freedom of Information Act (FOIA) request for research data relating to published research findings produced under an award that were used by the Federal Government in developing an agency action that has the force and effect of law, ED shall request, and the recipient shall provide, within a reasonable time, the research data so that they can be made available to the public through the procedures established under the FOIA. If ED obtains the research data solely in response to a FOIA request, the agency may charge the requester a reasonable fee equaling the full incremental cost of obtaining the research data. This fee should reflect costs incurred by the agency, the recipient, and applicable subrecipients. This fee is in addition to any fees the agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).</P> <P>(2) The following definitions apply for purposes of this paragraph (d):<PRTPAGE P="110"/> </P> <P>(i) <E T="03">Research data</E> is defined as the recorded factual material commonly accepted in the scientific community as necessary to validate research findings, but not any of the following: preliminary analyses, drafts of scientific papers, plans for future research, peer reviews, or communications with colleagues. This “recorded” material excludes physical objects (e.g., laboratory samples). <E T="03">Research data</E> also do not include:</P> <P>(A) Trade secrets, commercial information, materials necessary to be held confidential by a researcher until they are published, or similar information which is protected under law; and</P> <P>(B) Personnel and medical information and similar information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, such as information that could be used to identify a particular person in a research study.</P> <P>(ii) <E T="03">Published</E> is defined as either when:</P> <P>(A) Research findings are published in a peer-reviewed scientific or technical journal; or</P> <P>(B) A Federal agency publicly and officially cites the research findings in support of an agency action that has the force and effect of law.</P> <P>(iii) <E T="03">Used by the Federal Government in developing an agency action that has the force and effect of law</E> is defined as when an agency publicly and officially cites the research findings in support of an agency action that has the force and effect of law.</P> <P>(e) Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in the recipient. The recipient shall use that property for the originally-authorized purpose, and the recipient shall not encumber the property without approval of the Secretary. When no longer needed for the originally authorized purpose, disposition of the intangible property shall occur in accordance with the provisions of § 74.34(g).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 65 FR 14407, 14416, Mar. 16, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.37</SECTNO> <SUBJECT>Property trust relationship.</SUBJECT> <P>Real property, equipment, intangible property, and debt instruments that are acquired or improved with Federal funds must be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. The Secretary may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procurement Standards</HD> <SECTION> <SECTNO>§ 74.40</SECTNO> <SUBJECT>Purpose of procurement standards.</SUBJECT> <P>Sections 74.41 through 74.48 contain standards for use by recipients in establishing procedures for the procurement of supplies and other expendable property, equipment, real property, and other services with Federal funds. These standards are designed to ensure that these materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders. The Secretary does not impose additional procurement standards or requirements upon recipients, unless specifically required by Federal statute or executive order or as authorized in § 74.4 or § 74.14.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.41</SECTNO> <SUBJECT>Recipient responsibilities.</SUBJECT> <P>The standards contained in this section do not relieve the recipient of the contractual responsibilities arising under its contract(s). The recipient is the responsible authority, without recourse to the Secretary, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of an award or other agreement. This includes disputes, claims, protests of award, source evaluation, or other matters of a contractual nature. Matters concerning violation of statute are to be referred to Federal, State or <PRTPAGE P="111"/>local authority that may have proper jurisdiction.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.42</SECTNO> <SUBJECT>Codes of conduct.</SUBJECT> <P>The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. A conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of these standards by officers, employees, or agents of the recipient.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.43</SECTNO> <SUBJECT>Competition.</SUBJECT> <P>All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient shall be alert to organizational conflicts of interest as well as noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids or requests for proposals shall be excluded from competing for procurements. Awards must be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most advantageous to the recipient, price, quality and other factors considered. Solicitations shall clearly establish all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.44</SECTNO> <SUBJECT>Procurement procedures.</SUBJECT> <P>(a) All recipients shall establish written procurement procedures. These procedures must provide for, at a minimum, that—</P> <P>(1) Recipients avoid purchasing unnecessary items;</P> <P>(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government; or</P> <P>(3) Solicitations for goods and services provide for all of the following:</P> <P>(i) A clear and accurate description of the technical requirements for the material, product, or service to be procured. In competitive procurements, a description shall not contain features which unduly restrict competition.</P> <P>(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals.</P> <P>(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.</P> <P>(iv) The specific features of brand name or equal descriptions that bidders are required to meet when these items are included in the solicitation.</P> <P>(v) The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.</P> <P>(vi) Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment, and are energy efficient.</P> <P>(b) Positive efforts shall be made by recipients to utilize small businesses, <PRTPAGE P="112"/>minority-owned firms, and women's business enterprises, whenever possible. Recipients of Federal awards shall take all of the following steps to further this goal:</P> <P>(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the fullest extent practicable.</P> <P>(2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's business enterprises.</P> <P>(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises.</P> <P>(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.</P> <P>(5) Use the services and assistance, as appropriate, of organizations such as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.</P> <P>(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) shall be determined by the recipient but must be appropriate for the particular procurement and for promoting the best interest of the program or project involved. The “cost-plus-a-percentage-of-cost” or “percentage of construction cost” methods of contracting must not be used.</P> <P>(d) Contracts are made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of the proposed procurement. Consideration is given to matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by E.O. 12549 (implemented by the Secretary in 34 CFR Part 85) and E.O. 12689—Debarment and Suspension.</P> <P>(e) Recipients shall, on request, make available for the Secretary, pre-award review and procurement documents, such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the following conditions apply:</P> <P>(1) A recipient's procurement procedures or operation fails to comply with the procurement standards in this part.</P> <P>(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403 (11) (currently $25,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.</P> <P>(3) The procurement, which is expected to exceed the small purchase threshold, specifies a “brand name” product.</P> <P>(4) The proposed award over the small purchase threshold is to be awarded to other than the apparent low bidder under a sealed bid procurement.</P> <P>(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount of the small purchase threshold.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.45</SECTNO> <SUBJECT>Cost and price analysis.</SUBJECT> <P>Some form of cost or price analysis must be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of <PRTPAGE P="113"/>cost to determine reasonableness, allocability, and allowability.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.46</SECTNO> <SUBJECT>Procurement records.</SUBJECT> <P>Procurement records and files for purchases in excess of the small purchase threshold must include the following at a minimum—</P> <P>(a) Basis for contractor selection;</P> <P>(b) Justification for lack of competition when competitive bids or offers are not obtained;</P> <P>(c) Basis for award cost or price.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.47</SECTNO> <SUBJECT>Contract administration.</SUBJECT> <P>A system for contract administration must be maintained to ensure contractor conformance with the terms, conditions and specifications of the contract, and to ensure adequate and timely follow up of all purchases. Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met the terms, conditions, and specifications of the contract.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.48</SECTNO> <SUBJECT>Contract provisions.</SUBJECT> <P>The recipient shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions must also be applied to subcontracts:</P> <P>(a) Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms, and provide for remedial actions as may be appropriate.</P> <P>(b) All contracts in excess of the small purchase threshold shall contain suitable provisions for termination by the recipient, including the manner by which termination shall be effected and the basis for settlement. In addition, contracts must describe conditions under which the contract may be terminated for default, as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.</P> <P>(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) for construction or facility improvements must provide for the recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds $100,000. For those contracts or subcontracts exceeding $100,000, the Secretary may accept the bonding policy and requirements of the recipient, provided the Secretary has made a determination that the Federal Government's interest is adequately protected. If a determination has not been made, the minimum requirements are as follows:</P> <P>(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute contractual documents as may be required within the time specified.</P> <P>(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 a contract.</P> <P>(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 statute of all persons supplying labor and material in the execution of the work provided for in the contract.<PRTPAGE P="114"/> </P> <P>(4) Where bonds are required, the bonds must be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR Part 223—Surety Companies Doing Business with the United States.</P> <P>(d) All negotiated contracts (except those for less than the small purchase threshold) awarded by recipients must include a provision to the effect that the recipient, ED, the Comptroller General of the United States, or any of their duly authorized representatives, must have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.</P> <P>(e) All contracts, including small purchases, awarded by recipients and their contractors must contain the procurement provisions of appendix A to this part, as applicable.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports and Records</HD> <SECTION> <SECTNO>§ 74.50</SECTNO> <SUBJECT>Purpose of reports and records.</SUBJECT> <P>Sections 74.51 through 74.53 establish the procedures for monitoring and reporting on the recipient's financial and program performance and the necessary standard reporting forms. They also establish record retention requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.51</SECTNO> <SUBJECT>Monitoring and reporting program performance.</SUBJECT> <P>(a) Recipients are responsible for managing and monitoring each project, program, subaward, function, or activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have met the audit requirements in § 74.26.</P> <P>(b) The Secretary prescribes the frequency with which the performance reports shall be submitted. Except as provided in § 74.51(f), performance reports are not required more frequently than quarterly or, less frequently than annually. Annual reports are due 90 calendar days after the grant year; quarterly or semi-annual reports are due 30 days after the reporting period. The Secretary may require annual reports before the anniversary dates of multiple year awards in lieu of these requirements. The final performance reports are due 90 calendar days after the expiration or termination of the award.</P> <P>(c) If inappropriate, a final technical or performance report is not required after completion of the project.</P> <P>(d) When required, performance reports must generally contain, for each award, brief information on each of the following:</P> <P>(1) A comparison of actual accomplishments with the goals and objectives established for the period, the findings of the investigator, or both. Whenever appropriate and the output of programs or projects can be readily quantified, this quantitative data should be related to cost data for computation of unit costs.</P> <P>(2) Reasons why established goals were not met, if appropriate.</P> <P>(3) Other pertinent information including, when appropriate, analysis, and explanation of cost overruns or high unit costs.</P> <P>(e) Recipients are not required to submit more than the original and two copies of performance reports.</P> <P>(f) Recipients shall immediately notify the Secretary of developments that have a significant impact on the award-supported activities. Also, notification must be given in the case of problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the award. This notification must include a statement of the action taken or contemplated, and any assistance needed to resolve the situation.</P> <P>(g) The Secretary may make site visits, as needed.</P> <P>(h) The Secretary complies with the clearance requirements of 5 CFR part 1320 when requesting performance data from recipients.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="115"/> <SECTNO>§ 74.52</SECTNO> <SUBJECT>Financial reporting.</SUBJECT> <P>(a) The following forms or other forms as may be approved by OMB are authorized for obtaining financial information from recipients.</P> <P>(1) <E T="03">SF-269 or SF-269A—Financial Status Report.</E> (i) Recipients are required to use the SF-269 or SF-269A to report the status of funds for all nonconstruction projects or programs. The Secretary may not require the SF-269 or SF-269A when, the Secretary determines that SF-270—Request for Advance or Reimbursement, or SF-272—Report of Federal Cash Transactions—provides adequate information to meet the Department's needs, except that a final SF-269 or SF-269A is required at the completion of the project when the SF-270 is used only for advances.</P> <P>(ii) The Secretary prescribes whether the report is on a cash or accrual basis. If the Secretary requires accrual information and the recipient's accounting records are not normally kept on the accrual basis, the recipient is not required to convert its accounting system, but shall develop accrual information through best estimates based on an analysis of the documentation on hand.</P> <P>(iii) The Secretary determines the frequency of the Financial Status Report for each project or program, considering the size and complexity of the particular project or program. However, the report is not required more frequently than quarterly or less frequently than annually. A final report is required at the completion of the agreement.</P> <P>(iv) The Secretary requires recipients to submit the SF-269 or SF-269A (an original and no more than two copies) no later than 30 days after the end of each specified reporting period for quarterly and semi-annual reports, and 90 calendar days for annual and final reports. Extensions of reporting due dates may be approved by the Secretary upon request of the recipient.</P> <P>(2) <E T="03">SF-272—Report of Federal Cash Transactions.</E> (i) When funds are advanced to recipients the Secretary requires each recipient to submit the SF-272 and, when necessary, its continuation sheet, SF-272a. The Secretary uses this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the recipients.</P> <P>(ii) The Secretary may require forecasts of Federal cash requirements in the “Remarks” section of the report.</P> <P>(iii) When practical and deemed necessary, the Secretary may require recipients to report in the “Remarks” section the amount of cash advances received in excess of three days. Recipients shall provide short narrative explanations of actions taken to reduce the excess balances.</P> <P>(iv) Recipients shall be required to submit not more than the original and two copies of the SF-272 15 calendar days following the end of each quarter. The Secretary may require a monthly report from those recipients receiving advances totaling $1 million or more per year.</P> <P>(v) The Secretary may waive the requirement for submission of the SF-272 for any one of the following reasons:</P> <P>(A) When monthly advances do not exceed $25,000 per recipient, provided that advances are monitored through other forms contained in this section;</P> <P>(B) If, in the Secretary's opinion, the recipient's accounting controls are adequate to minimize excessive Federal advances; or</P> <P>(C) When the electronic payment mechanisms provide adequate data.</P> <P>(b) When the Secretary needs additional information or more frequent reports, the following shall be observed:</P> <P>(1) When additional information is needed to comply with legislative requirements, the Secretary shall issue instructions to require recipients to submit information under the “Remarks” section of the reports.</P> <P>(2) When the Secretary determines that a recipient's accounting system does not meet the standards in § 74.21, additional pertinent information to further monitor awards may be obtained upon written notice to the recipient until the system is brought up to standard. The Secretary, in obtaining this information, complies with the report clearance requirements of 5 CFR part 1320.</P> <P>(3) The Secretary may shade out any line item on any report if not necessary.<PRTPAGE P="116"/> </P> <P>(4) The Secretary may accept the identical information from the recipients in machine readable format or computer printouts or electronic outputs in lieu of prescribed formats.</P> <P>(5) The Secretary may provide computer or electronic outputs to recipients when these outputs expedite or contribute to the accuracy of reporting.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.53</SECTNO> <SUBJECT>Retention and access requirements for records.</SUBJECT> <P>(a) This section establishes requirements for record retention and access to records for awards to recipients. The Secretary does not impose any other record retention or access requirements upon recipients.</P> <P>(b) Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Secretary. The only exceptions are the following:</P> <P>(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken.</P> <P>(2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.</P> <P>(3) When records are transferred to or maintained by the Secretary, the 3-year retention requirement is not applicable to the recipient.</P> <P>(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in § 74.53(g).</P> <P>(c) Copies of original records may be substituted for the original records if authorized by the Secretary.</P> <P>(d) The Secretary requests transfer of certain records to its custody from recipients when it determines that the records possess long term retention value. However, in order to avoid duplicate recordkeeping, the Secretary may make arrangements for recipients to retain any records that are continuously needed for joint use.</P> <P>(e) The Secretary, the Inspector General, Comptroller General of the United States, or any of their duly authorized representatives, have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits, examinations, excerpts, transcripts, and copies of documents. This right also includes timely and reasonable access to a recipient's personnel for the purpose of interview and discussion related to these documents. The rights of access in this paragraph are not limited to the required retention period, but shall last as long as records are retained.</P> <P>(f) Unless required by statute, the Secretary does not place restrictions on recipients that limit public access to the records of recipients that are pertinent to an award, except when the Secretary can demonstrate that the records must be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had belonged to ED.</P> <P>(g) The starting date for retention of the following types of documents (including supporting records) is specified in paragraphs (g)(1) and (2) of this section: 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).</P> <P>(1) <E T="03">If submitted for negotiation</E>. If the recipient submits to the Secretary or the subrecipient submits to the recipient the proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of submission.</P> <P>(2) <E T="03">If not submitted for negotiation</E>. If the recipient is not required to submit <PRTPAGE P="117"/>to the Secretary or the subrecipient is not required to submit to the recipient the proposal, plan, or other computation for negotiation purposes, then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Termination and Enforcement</HD> <SECTION> <SECTNO>§ 74.60</SECTNO> <SUBJECT>Purpose of termination and enforcement.</SUBJECT> <P>Sections 74.61 and 74.62 establish uniform suspension, termination, and enforcement procedures.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.61</SECTNO> <SUBJECT>Termination.</SUBJECT> <P>(a) Awards may be terminated in whole or in part only—</P> <P>(1) By the Secretary, if a recipient materially fails to comply with the terms and conditions of an award;</P> <P>(2) By the Secretary with the consent of the recipient, 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.</P> <P>(3) By the recipient, upon sending to the Secretary written notification containing the reasons for the termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Secretary determines in the case of partial termination that the reduced or modified portion of the grant will not accomplish the purposes for which the grant was made, it may terminate the grant in its entirety under either paragraph (a)(1) or (2) of this section.</P> <P>(b) If costs are allowed under an award, the responsibilities of the recipient referred to in § 74.71(a), including those for property management as applicable, shall be considered in the termination of the award, and provision shall be made for continuing responsibilities of the recipient after termination, as appropriate.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.62</SECTNO> <SUBJECT>Enforcement.</SUBJECT> <P>(a) <E T="03">Remedies for noncompliance.</E> If a recipient materially fails to comply with the terms and conditions of an award, whether stated in a Federal statute, regulation, assurance, application, or notice of award, the Secretary may, in addition to imposing any of the special conditions outlined in § 74.14, take one or more of the following actions, as appropriate in the circumstances:</P> <P>(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient or more severe enforcement action by the Secretary.</P> <P>(2) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance.</P> <P>(3) Wholly or partly suspend or terminate the current award.</P> <P>(4) Withhold further awards for the project or program.</P> <P>(5) Take other remedies that may be legally available.</P> <P>(b) <E T="03">Hearings and appeals.</E> In taking an enforcement action, the Secretary provides the recipient an opportunity for hearing, appeal, or other administrative proceeding to which the recipient is entitled under any statute or regulation applicable to the action involved.</P> <P>(c) <E T="03">Effects of suspension and termination.</E> Costs of a recipient resulting from obligations incurred by the recipient during a suspension or after termination of an award are not allowable unless the Secretary expressly authorizes them in the notice of suspension or termination or subsequently. Other recipient costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if—</P> <P>(1) The costs result from obligations which were properly incurred by the recipient before the effective date of suspension or termination, are not in anticipation of it, and in the case of a termination, are noncancellable; and<PRTPAGE P="118"/> </P> <P>(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.</P> <P>(d) <E T="03">Relationship to debarment and suspension.</E> The enforcement remedies identified in this section, including suspension and termination, do not preclude ED from initiating a debarment or suspension action against a recipient under 34 CFR part 85 (see § 74.13).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—After-the-Award Requirements</HD> <SECTION> <SECTNO>§ 74.70</SECTNO> <SUBJECT>Purpose.</SUBJECT> <P>Sections 74.71 through 74.73 contain closeout procedures and other procedures for subsequent disallowances and adjustments.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 74.71</SECTNO> <SUBJECT>Closeout procedures.</SUBJECT> <P>(a) Recipients shall submit, within 90 calendar days after the date of completion of the award, all financial, performance, and other reports as required by the terms and conditions of the award. The Secretary may approve extensions when requested by the recipient.</P> <P>(b) Unless the Secretary authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in ED implementing instructions.</P> <P>(c) The Secretary makes prompt payments to a recipient for allowable reimbursable costs under the award being closed out.</P> <P>(d) The recipient shall promptly refund any balances of unobligated cash that the Secretary has advanced or paid and that is not authorized to be retained by the recipient for use in other projects. OMB Circular A-129 governs unreturned amounts that become delinquent debts.</P> <P>(e) When authorized by the terms and conditions of the award, the Secretary makes a settlement for any upward or downward adjustments to the Federal share of costs after closeout reports are received.</P> <P>(f) The recipient shall account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with §§ 74.31 through 74.37.</P> <P>(g) In the event a final audit has not been performed prior to the closeout of an award, the Secretary shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 74.72</SECTNO> <SUBJECT>Subsequent adjustments and continuing responsibilities.</SUBJECT> <P>(a) The closeout of an award does not affect any of the following:</P> <P>(1) The right of the Secretary to disallow costs and recover funds on the basis of a later audit or other review.</P> <P>(2) The obligation of the recipient to return any funds due as a result of later refunds, corrections, or other transactions.</P> <P>(3) Audit requirements in § 74.26.</P> <P>(4) Property management requirements in §§ 74.31 through 74.37.</P> <P>(5) Records retention as required in § 74.53.</P> <P>(b) After closeout of an award, a relationship created under an award may be modified or ended in whole or in part with the consent of the Secretary and the recipient, provided the responsibilities of the recipient referred to in § 74.73(a), including those for property management as applicable, are considered and provisions made for continuing responsibilities of the recipient, as appropriate.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> <CITA>[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="119"/> <SECTNO>§ 74.73</SECTNO> <SUBJECT>Collection of amounts due.</SUBJECT> <P>(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be entitled under the terms and conditions of the award constitute a debt to the Federal Government. If not paid within a reasonable period after the demand for payment, the Secretary may reduce the debt by—</P> <P>(1) Making an administrative offset against other requests for reimbursements;</P> <P>(2) Withholding advance payments otherwise due to the recipient; or</P> <P>(3) Taking other action permitted by statute.</P> <P>(b) Except as otherwise provided by law, the Secretary charges interest on an overdue debt in accordance with 4 CFR Chapter II—Federal Claims Collection Standards.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </SECTION> <APPENDIX> <EAR>Pt. 74, App. A</EAR> <HD SOURCE="HED">Appendix A to Part <E T="01">74</E> <E T="04">—Contract Provisions</E> </HD> <P>All contracts, awarded by a recipient including small purchases, shall contain the following provisions as applicable:</P> <P>1. <E T="03">Equal Employment Opportunity</E>—All contracts must contain a provision requiring compliance with E.O. 11246—Equal Employment Opportunity, as amended by E.O. 11375—Amending Executive Order 11246 Relating to Equal Employment Opportunity, and as supplemented by regulations at 41 CFR Part 60—Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.</P> <P>2. <E T="03">Copeland “Anti-Kickback” Act (18 U.S.C. 874 and 40 U.S.C. 276c)</E>—All contracts and subgrants in excess of $2,000 for construction or repair awarded by recipients and subrecipients must include a provision for compliance with the Copeland “Anti-Kickback” Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR Part 3—Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to the Federal awarding agency.</P> <P>3. <E T="03">Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)</E>—When required by Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than $2,000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented by Department of Labor regulations (29 CFR Part 5—Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to the Federal awarding agency.</P> <P>4. <E T="03">Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333)</E>—Where applicable, all contracts awarded by recipients in excess of $2,000 for construction contracts and in excess of $2500 for other contracts that involve the employment of mechanics or laborers must include a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor regulations (29 CFR Part 5). Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1<FR>1/2</FR> times the basic rate of pay for all hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.</P> <P>5. <E T="03">Rights to Inventions Made Under a Contract or Agreement</E>—Contracts or agreements for the performance of experimental, developmental, or research work must provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR Part 401—Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements, and any implementing regulations issued by the awarding agency.</P> <P>6. <E T="03">Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended</E>—Contracts <PRTPAGE P="120"/>and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et seq.). Violations shall be reported to ED and the Regional Office of the Environmental Protection Agency (EPA).</P> <P>7. <E T="03">Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)</E>—Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, or any other award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. The disclosures are forwarded from tier to tier up to the recipient. </P> <P>8. <E T="03">Debarment and Suspension (E.O. 12549 and E.O. 12689)</E>—No contract may be made to parties listed on the General Services Administration's List of Parties Excluded from Federal Procurement or Nonprocurement Programs in accordance with E.O 12549 and E.O. 12689—Debarment and Suspension. This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other than E.O. 12549. </P> <P>Contractors with awards that exceed the small purchase threshold must provide the required certification regarding its exclusion status and that of its principal employees.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)</SECAUTH> </APPENDIX> </SUBPART> </PART> <PART> <EAR>Pt. 75</EAR> <HD SOURCE="HED">PART 75—DIRECT GRANT PROGRAMS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SUBJGRP> <HD SOURCE="HED">Regulations That Apply to Direct Grant Programs</HD> <SECHD>Sec.</SECHD> <SECTNO>75.1</SECTNO> <SUBJECT>Programs to which part 75 applies.</SUBJECT> <SECTNO>75.2</SECTNO> <SUBJECT>Exceptions in program regulations to part 75.</SUBJECT> <SECTNO>75.4</SECTNO> <SUBJECT>Department contracts.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Eligibility for a Grant</HD> <SECTNO>75.50</SECTNO> <SUBJECT>How to find out whether you are eligible.</SUBJECT> <SECTNO>75.51</SECTNO> <SUBJECT>How to prove nonprofit status.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Ineligibility of Certain Individuals To Receive Assistance</HD> <SECTNO>75.60</SECTNO> <SUBJECT>Individuals ineligible to receive assistance.</SUBJECT> <SECTNO>75.61</SECTNO> <SUBJECT>Certification of eligibility; effect of ineligibility.</SUBJECT> <SECTNO>75.62</SECTNO> <SUBJECT>Requirements applicable to entities making certain awards.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <RESERVED>Subpart B[Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How To Apply for a Grant</HD> <SUBJGRP> <HD SOURCE="HED">The Application Notice</HD> <SECTNO>75.100</SECTNO> <SUBJECT>Publication of an application notice; content of the notice.</SUBJECT> <SECTNO>75.101</SECTNO> <SUBJECT>Information in the application notice that helps an applicant apply.</SUBJECT> <SECTNO>75.102</SECTNO> <SUBJECT>Deadline date for applications.</SUBJECT> <SECTNO>75.103</SECTNO> <SUBJECT>Deadline date for preapplications.</SUBJECT> <SECTNO>75.104</SECTNO> <SUBJECT>Applicants must meet procedural rules.</SUBJECT> <SECTNO>75.105</SECTNO> <SUBJECT>Annual priorities.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Application Contents</HD> <SECTNO>75.109</SECTNO> <SUBJECT>Changes to application; number of copies.</SUBJECT> <SECTNO>75.112</SECTNO> <SUBJECT>Include a proposed project period and a timeline.</SUBJECT> <SECTNO>75.117</SECTNO> <SUBJECT>Information needed for a multi-year project.</SUBJECT> <SECTNO>75.118</SECTNO> <SUBJECT>Requirements for a continuation award.</SUBJECT> <SECTNO>75.119</SECTNO> <SUBJECT>Information needed if private school students participate.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Separate Applications—Alternative Programs</HD> <SECTNO>75.125</SECTNO> <SUBJECT>Submit a separate application to each program.</SUBJECT> <SECTNO>75.126</SECTNO> <SUBJECT>Application must list all programs to which it is submitted.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Group Applications</HD> <SECTNO>75.127</SECTNO> <SUBJECT>Eligible parties may apply as a group.</SUBJECT> <SECTNO>75.128</SECTNO> <SUBJECT>Who acts as applicant; the group agreement.</SUBJECT> <SECTNO>75.129</SECTNO> <SUBJECT>Legal responsibilities of each member of the group.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Comment Procedures</HD> <SECTNO>75.155</SECTNO> <SUBJECT>Review procedure if State may comment on applications: Purpose of §§ 75.156-75.158.</SUBJECT> <SECTNO>75.156</SECTNO> <SUBJECT>When an applicant under § 75.155 must submit its application to the State; proof of submission.</SUBJECT> <SECTNO>75.157</SECTNO> <SUBJECT>The State reviews each application.</SUBJECT> <SECTNO>75.158</SECTNO> <SUBJECT>Deadlines for State comments.</SUBJECT> <SECTNO>75.159</SECTNO> <SUBJECT>Effect of State comments or failure to comment.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Development of Curricula or Instructional Materials</HD> <SECTNO>75.190</SECTNO> <SUBJECT>Consultation.<PRTPAGE P="121"/> </SUBJECT> <SECTNO>75.191</SECTNO> <SUBJECT>Consultation costs.</SUBJECT> <SECTNO>75.192</SECTNO> <SUBJECT>Dissemination.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—How Grants Are Made</HD> <SUBJGRP> <HD SOURCE="HED">Selection of New Projects</HD> <SECTNO>75.200</SECTNO> <SUBJECT>How applications for new grants and cooperative agreements are selected for funding; standards for use of cooperative agreements.</SUBJECT> <SECTNO>75.201</SECTNO> <SUBJECT>How the selection criteria will be used.</SUBJECT> <SECTNO>75.202—75.206</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>75.209</SECTNO> <SUBJECT>Selection criteria based on statutory provisions.</SUBJECT> <SECTNO>75.210</SECTNO> <SUBJECT>General selection criteria.</SUBJECT> <SECTNO>75.211</SECTNO> <SUBJECT>Selection criteria for unsolicited applications.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Selection Procedures</HD> <SECTNO>75.215</SECTNO> <SUBJECT>How the Department selects a new project: purpose of §§ 75.216-75.222.</SUBJECT> <SECTNO>75.216</SECTNO> <SUBJECT>Applications not evaluated for funding.</SUBJECT> <SECTNO>75.217</SECTNO> <SUBJECT>How the Secretary selects applications for new grants.</SUBJECT> <SECTNO>75.218</SECTNO> <SUBJECT>Applications not evaluated or selected for funding.</SUBJECT> <SECTNO>75.219</SECTNO> <SUBJECT>Exceptions to the procedures under § 75.217.</SUBJECT> <SECTNO>75.220</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(a).</SUBJECT> <SECTNO>75.221</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(b).</SUBJECT> <SECTNO>75.222</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(c).</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures To Make a Grant</HD> <SECTNO>75.230</SECTNO> <SUBJECT>How the Department makes a grant; purpose of §§ 75.231-75.236.</SUBJECT> <SECTNO>75.231</SECTNO> <SUBJECT>Additional information.</SUBJECT> <SECTNO>75.232</SECTNO> <SUBJECT>The cost analysis; basis for grant amount.</SUBJECT> <SECTNO>75.233</SECTNO> <SUBJECT>Setting the amount of the grant.</SUBJECT> <SECTNO>75.234</SECTNO> <SUBJECT>The conditions of the grant.</SUBJECT> <SECTNO>75.235</SECTNO> <SUBJECT>The notification of grant award.</SUBJECT> <SECTNO>75.236</SECTNO> <SUBJECT>Effect of the grant.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Approval of Multi-Year Projects</HD> <SECTNO>75.250</SECTNO> <SUBJECT>Project period can be up to 60 months.</SUBJECT> <SECTNO>75.251</SECTNO> <SUBJECT>The budget period.</SUBJECT> <SECTNO>75.253</SECTNO> <SUBJECT>Continuation of a multi-year project after the first budget period.</SUBJECT> <SECTNO>75.254</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Miscellaneous</HD> <SECTNO>75.260</SECTNO> <SUBJECT>Allotments and reallotments.</SUBJECT> <SECTNO>75.261</SECTNO> <SUBJECT>Extension of a project period.</SUBJECT> <SECTNO>75.262</SECTNO> <SUBJECT>Conversion of a grant or a cooperative agreement.</SUBJECT> <SECTNO>75.263</SECTNO> <SUBJECT>Pre-award costs; waiver of approval.</SUBJECT> <SECTNO>75.264</SECTNO> <SUBJECT>Transfers among budget categories.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Conditions Must Be Met by a Grantee?</HD> <SUBJGRP> <HD SOURCE="HED">Nondiscrimination</HD> <SECTNO>75.500</SECTNO> <SUBJECT>Federal statutes and regulations on nondiscrimination.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Project Staff</HD> <SECTNO>75.511</SECTNO> <SUBJECT>Waiver of requirement for a full-time project director.</SUBJECT> <SECTNO>75.515</SECTNO> <SUBJECT>Use of consultants.</SUBJECT> <SECTNO>75.516</SECTNO> <SUBJECT>Compensation of consultants—employees of institutions of higher education.</SUBJECT> <SECTNO>75.517</SECTNO> <SUBJECT>Changes in key staff members.</SUBJECT> <SECTNO>75.519</SECTNO> <SUBJECT>Dual compensation of staff.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Conflict of Interest</HD> <SECTNO>75.524</SECTNO> <SUBJECT>Conflict of interest: Purpose of § 75.525.</SUBJECT> <SECTNO>75.525</SECTNO> <SUBJECT>Conflict of interest: Participation in a project.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allowable Costs</HD> <SECTNO>75.530</SECTNO> <SUBJECT>General cost principles.</SUBJECT> <SECTNO>75.531</SECTNO> <SUBJECT>Limit on total cost of a project.</SUBJECT> <SECTNO>75.532</SECTNO> <SUBJECT>Use of funds for religion prohibited.</SUBJECT> <SECTNO>75.533</SECTNO> <SUBJECT>Acquisition of real property; construction.</SUBJECT> <SECTNO>75.534</SECTNO> <SUBJECT>Training grants—automatic increases for additional dependents.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Indirect Cost Rates</HD> <SECTNO>75.560</SECTNO> <SUBJECT>General indirect cost rates; exceptions.</SUBJECT> <SECTNO>75.561</SECTNO> <SUBJECT>Approval of indirect cost rates.</SUBJECT> <SECTNO>75.562</SECTNO> <SUBJECT>Indirect cost rates for educational training projects.</SUBJECT> <SECTNO>75.563</SECTNO> <SUBJECT>Restricted indirect cost rate—programs covered.</SUBJECT> <SECTNO>75.564</SECTNO> <SUBJECT>Reimbursement of indirect costs.</SUBJECT> <SECTNO>75.580</SECTNO> <SUBJECT>Coordination with other activities.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Evaluation</HD> <SECTNO>75.590</SECTNO> <SUBJECT>Evaluation by the recipient.</SUBJECT> <SECTNO>75.591</SECTNO> <SUBJECT>Federal evaluation—cooperation by a grantee.</SUBJECT> <SECTNO>75.592</SECTNO> <SUBJECT>Federal evaluation—satisfying requirement for grantee evaluation.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Construction</HD> <SECTNO>75.600</SECTNO> <SUBJECT>Use of a grant for construction: Purpose of §§ 75.601-75.615.</SUBJECT> <SECTNO>75.601</SECTNO> <SUBJECT>Applicant's assessment of environmental impact.</SUBJECT> <SECTNO>75.602</SECTNO> <SUBJECT>Preservation of historic sites must be described in the application.</SUBJECT> <SECTNO>75.603</SECTNO> <SUBJECT>Grantee's title to site.</SUBJECT> <SECTNO>75.604</SECTNO> <SUBJECT>Availability of cost-sharing funds.</SUBJECT> <SECTNO>75.605</SECTNO> <SUBJECT>Beginning the construction.</SUBJECT> <SECTNO>75.606</SECTNO> <SUBJECT>Completing the construction.</SUBJECT> <SECTNO>75.607</SECTNO> <SUBJECT>General considerations in designing facilities and carrying out construction.</SUBJECT> <SECTNO>75.608</SECTNO> <SUBJECT>Areas in the facilities for cultural activities.<PRTPAGE P="122"/> </SUBJECT> <SECTNO>75.609</SECTNO> <SUBJECT>Comply with safety and health standards.</SUBJECT> <SECTNO>75.610</SECTNO> <SUBJECT>Access by the handicapped.</SUBJECT> <SECTNO>75.611</SECTNO> <SUBJECT>Avoidance of flood hazards.</SUBJECT> <SECTNO>75.612</SECTNO> <SUBJECT>Supervision and inspection by the grantee.</SUBJECT> <SECTNO>75.613</SECTNO> <SUBJECT>Relocation assistance by the grantee.</SUBJECT> <SECTNO>75.614</SECTNO> <SUBJECT>Grantee must have operational funds.</SUBJECT> <SECTNO>75.615</SECTNO> <SUBJECT>Operation and maintenance by the grantee.</SUBJECT> <SECTNO>75.616</SECTNO> <SUBJECT>Energy conservation.</SUBJECT> <SECTNO>75.617</SECTNO> <SUBJECT>Compliance with the Coastal Barrier Resources Act.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Equipment and Supplies</HD> <SECTNO>75.618</SECTNO> <SUBJECT>Charges for use of equipment or supplies.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Publications and Copyrights</HD> <SECTNO>75.620</SECTNO> <SUBJECT>General conditions on publication.</SUBJECT> <SECTNO>75.621</SECTNO> <SUBJECT>Copyright policy for grantees.</SUBJECT> <SECTNO>75.622</SECTNO> <SUBJECT>Definition of “project materials.”</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Inventions and Patents</HD> <SECTNO>75.626</SECTNO> <SUBJECT>Show Federal support; give papers to vest title.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Other Requirements for Certain Projects</HD> <SECTNO>75.650</SECTNO> <SUBJECT>Participation of students enrolled in private schools.</SUBJECT> <SECTNO>75.681</SECTNO> <SUBJECT>Protection of human research subjects.</SUBJECT> <SECTNO>75.682</SECTNO> <SUBJECT>Treatment of animals.</SUBJECT> <SECTNO>75.683</SECTNO> <SUBJECT>Health or safety standards for facilities.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Are the Administrative Responsibilities of a Grantee?</HD> <SUBJGRP> <HD SOURCE="HED">General Administrative Responsibilities</HD> <SECTNO>75.700</SECTNO> <SUBJECT>Compliance with statutes, regulations, and applications.</SUBJECT> <SECTNO>75.701</SECTNO> <SUBJECT>The grantee administers or supervises the project.</SUBJECT> <SECTNO>75.702</SECTNO> <SUBJECT>Fiscal control and fund accounting procedures.</SUBJECT> <SECTNO>75.703</SECTNO> <SUBJECT>Obligation of funds during the grant period.</SUBJECT> <SECTNO>75.707</SECTNO> <SUBJECT>When obligations are made.</SUBJECT> <SECTNO>75.708</SECTNO> <SUBJECT>Prohibition of subgrants.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports</HD> <SECTNO>75.720</SECTNO> <SUBJECT>Financial and performance reports.</SUBJECT> <SECTNO>75.721</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Records</HD> <SECTNO>75.730</SECTNO> <SUBJECT>Records related to grant funds.</SUBJECT> <SECTNO>75.731</SECTNO> <SUBJECT>Records related to compliance.</SUBJECT> <SECTNO>75.732</SECTNO> <SUBJECT>Records related to performance.</SUBJECT> <SECTNO>75.733</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Privacy</HD> <SECTNO>75.740</SECTNO> <SUBJECT>Protection of and access to student records; student rights in research, experimental programs, and testing.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—What Procedures Does the Department Use To Get Compliance?</HD> <SECTNO>75.900</SECTNO> <SUBJECT>Waiver of regulations prohibited.</SUBJECT> <SECTNO>75.901</SECTNO> <SUBJECT>Suspension and termination.</SUBJECT> <SECTNO>75.902</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>75.903</SECTNO> <SUBJECT>Effective date of termination.</SUBJECT> <SECTNO>75.910</SECTNO> <SUBJECT>Cooperation with audits.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 1221e-3 and 3474, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 22497, Apr. 3, 1980, unless otherwise noted. Redesignated at 45 FR 77368, Nov. 21, 1980.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SUBJGRP> <HD SOURCE="HED">Regulations That Apply to Direct Grant Programs</HD> <SECTION> <SECTNO>§ 75.1</SECTNO> <SUBJECT>Programs to which part 75 applies.</SUBJECT> <P>(a) The regulations in part 75 apply to each direct grant program of the Department of Education.</P> <P>(b) If a direct grant program does not have implementing regulations, the Secretary implements the program under the authorizing statute and, to the extent consistent with the authorizing statute, under the General Education Provisions Act and the regulations in this part. For the purposes of this part, the term “direct grant program” includes any grant program of the Department other than a program whose authorizing statute or implementing regulations provide a formula for allocating program funds among eligible States. With respect to Public Law 81-874 (the Impact Aid Program), the term “direct grant program” includes only the entitlement increase for children with disabilities under section 3(d)(2)(C) of Public Law 81-874 (20 U.S.C. 238(d)(2)(C) and disaster assistance under section 7 of that law (20 U.S.C. 241-1).</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>See part 76 for the general regulations that apply to programs that allocate funds among eligible States. For a description of the two kinds of direct grant programs see § 75.200. Paragraph (b) of that section describes discretionary grant programs. Paragraph (c) of that section describes formula grant programs. Also see §§ 75.201, 75.209, and 75.210 for the selection criteria for discretionary grant programs that do not <PRTPAGE P="123"/>have implementing regulations or whose implementing regulations do not include selection criteria. </P> </NOTE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980, as amended at 45 FR 28669, Apr. 29, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 84059, Dec. 22, 1980, 50 FR 29330, July 18, 1985; 52 FR 27803, July 24, 1987; 57 FR 30336, July 8, 1992; 60 FR 63873, Dec. 12, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.2</SECTNO> <SUBJECT>Exceptions in program regulations to part 75.</SUBJECT> <P>If a program has regulations that are not consistent with part 75, the implementing regulations for that program identify the sections of part 75 that do not apply.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.4</SECTNO> <SUBJECT>Department contracts.</SUBJECT> <P>(a) A Federal contract made by the Department is governed by—</P> <P>(1) Chapters 1 and 34 of title 48 of the Code of Federal Regulations (Federal Acquisition Regulation and Education Department Acquisition Regulation).</P> <P>(2) Any applicable program regulations; and</P> <P>(3) The request for proposals for the procurement, if any, referenced in <E T="03">Commerce Business Daily.</E> </P> <P>(b) The regulations in part 75 do not apply to a contract of the Department unless regulations in part 75 or a program's regulations specifically provide otherwise.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30336, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Eligibility for a Grant</HD> <SECTION> <SECTNO>§ 75.50</SECTNO> <SUBJECT>How to find out whether you are eligible.</SUBJECT> <P>Eligibility to apply for a grant under a program of the Department is governed by the authorizing statute and implementing regulations for that program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27803, July 24, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.51</SECTNO> <SUBJECT>How to prove nonprofit status.</SUBJECT> <P>(a) Under some programs, an applicant must show that it is a nonprofit organization. (See the definition of <E T="03">nonprofit</E> in 34 CFR 77.1.)</P> <P>(b) An applicant may show that it is a nonprofit organization by any of the following means:</P> <P>(1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code;</P> <P>(2) A statement from a State taxing body or the State attorney general certifying that:</P> <P>(i) The organization is a nonprofit organization operating within the State; and</P> <P>(ii) No part of its net earnings may lawfully benefit any private shareholder or individual;</P> <P>(3) A certified copy of the applicant's certificate of incorporation or similar document if it clearly establishes the nonprofit status of the applicant; or</P> <P>(4) Any item described in paragraphs (b) (1) through (3) of this section if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Ineligibility of Certain Individuals To Receive Assistance</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>Sections 75.60—75.62 issued at 57 FR 30337, July 8, 1992, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 75.60</SECTNO> <SUBJECT>Individuals ineligible to receive assistance.</SUBJECT> <P>(a) An individual is ineligible to receive a fellowship, scholarship, or discretionary grant funded by the Department if the individual—</P> <P>(1) Is not current in repaying a debt or is in default, as that term is used in 34 CFR part 668, on a debt—</P> <P>(i) Under a program listed in paragraph (b) of this section; or</P> <P>(ii) To the Federal Government under a nonprocurement transaction; and</P> <P>(2) Has not made satisfactory arrangements to repay the debt.<PRTPAGE P="124"/> </P> <P>(b) An individual who is not current in repaying a debt, or is in default, as that term is used in 34 CFR part 668, on a debt under a fellowship, scholarship, discretionary grant, or loan program, as included in the following list, and who has not made satisfactory arrangements to repay the debt, is ineligible under paragraph (a) of this section:</P> <P>(1) A grant awarded under the Pell Grant (20 U.S.C. 1070a, <E T="03">et seq.</E>), National Early Intervention Scholarship and Partnership (NEISP) Program (20 U.S.C. 1070a-21, <E T="03">et seq.</E>), Supplemental Educational Opportunity Grant (SEOG) (20 U.S.C. 1070b, <E T="03">et seq.</E>), or State Student Incentive Grant (SSIG) (20 U.S.C. 1070c, <E T="03">et seq.</E>) program, or a scholarship awarded under the Robert C. Byrd Honors Scholarship Program (20 U.S.C. 1070d-31, <E T="03">et seq.</E>), a fellowship awarded under the Jacob K. Javits Fellows Program (20 U.S.C. 1134h-1134k), or a fellowship awarded under the Patricia Roberts Harris Fellowship Program (20 U.S.C. 1134d-1134f).</P> <P>(2) A fellowship awarded under the Christa McAuliffe Fellowship Program (20 U.S.C. 1113-1113e), the Bilingual Education Fellowship Program (20 U.S.C. 3221-3262), or the Rehabilitation Long-Term Training Program (29 U.S.C. 774(b)).</P> <P>(3) A loan made under the Perkins Loan Program (20 U.S.C. 1087aa, <E T="03">et seq.</E>), the Income Contingent Direct Loan Demonstration Project (20 U.S.C. 1087a, <E T="03">et seq.</E>), the Stafford Loan Program, Supplemental Loans for Students (SLS), PLUS, or Consolidation Loan Program (20 U.S.C. 1071, <E T="03">et seq.</E>), or the Cuban Student Loan Program (22 U.S.C. 2601, <E T="03">et seq.</E>).</P> <P>(4) A scholarship or repayment obligation incurred under the Paul Douglas Teacher Scholarship Program (20 U.S.C. 1111, <E T="03">et seq.</E>).</P> <P>(5) A grant, or a loan, made under the Law Enforcement Education Program (42 U.S.C. 3775).</P> <P>(6) A stipend awarded under the Indian Fellowship Program (29 U.S.C. 774(b)).</P> <P>(7) A scholarship awarded under the Teacher Quality Enhancement Grants Program (20 U.S.C. 1021 <E T="03">et seq.</E>).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30337, July 8, 1992, as amended at 59 FR 24870, May 12, 1994; 65 FR 19609, Apr. 11, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.61</SECTNO> <SUBJECT>Certification of eligibility; effect of ineligibility.</SUBJECT> <P>(a) An individual who applies for a fellowship, scholarship, or discretionary grant from the Department shall provide with his or her application a certification under the penalty of perjury—</P> <P>(1) That the individual is eligible under § 75.60; and</P> <P>(2) That the individual has not been debarred or suspended by a judge under section 5301 of the Anti-Drug Abuse Act of 1988 (21 U.S.C. 853a).</P> <P>(b) The Secretary specifies the form of the certification required under paragraph (a) of this section.</P> <P>(c) The Secretary does not award a fellowship, scholarship, or discretionary grant to an individual who—</P> <P>(1) Fails to provide the certification required under paragraph (a) of this section; or</P> <P>(2) Is ineligible, based on information available to the Secretary at the time the award is made.</P> <P>(d) If a fellowship, scholarship, or discretionary grant is made to an individual who provided a false certification under paragraph (a) of this section, the individual is liable for recovery of the funds made available under the certification, for civil damages or penalties imposed for false representation, and for criminal prosecution under 18 U.S.C. 1001.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.62</SECTNO> <SUBJECT>Requirements applicable to entities making certain awards.</SUBJECT> <P>(a) An entity that provides a fellowship, scholarship, or discretionary grant to an individual under a grant from, or an agreement with, the Secretary shall require the individual who applies for such an award to provide <PRTPAGE P="125"/>with his or her application a certification under the penalty of perjury—</P> <P>(1) That the individual is eligible under § 75.60; and</P> <P>(2) That the individual has not been debarred or suspended by a judge under section 5301 of the Anti-Drug Abuse Act of 1988 (21 U.S.C. 853a).</P> <P>(b) An entity subject to this section may not award a fellowship, scholarship, or discretionary grant to an individual if—</P> <P>(1) The individual fails to provide the certification required under paragraph (a) of this section; or</P> <P>(2) The Secretary informs the entity that the individual is ineligible under § 75.60.</P> <P>(c) If a fellowship, scholarship, or discretionary grant is made to an individual who provided a false certification under paragraph (a) of this section, the individual is liable for recovery of the funds made available under the certification, for civil damages or penalties imposed for false representation, and for criminal prosecution under 18 U.S.C. 1001.</P> <P>(d) The Secretary may require an entity subject to this section to provide a list of the individuals to whom fellowship, scholarship, or discretionary grant awards have been made or are proposed to be made by the entity.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <RESERVED>Subpart B [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How To Apply for a Grant</HD> <SUBJGRP> <HD SOURCE="HED">The Application Notice</HD> <SECTION> <SECTNO>§ 75.100</SECTNO> <SUBJECT>Publication of an application notice; content of the notice.</SUBJECT> <P>(a) Each fiscal year the Secretary publishes application notices in the <E T="04">Federal Register</E> that explain what kind of assistance is available for new grants under the programs that the Secretary administers.</P> <P>(b) The application notice for a program explains one or more of the following:</P> <P>(1) How to apply for a new grant.</P> <P>(2) If preapplications are used under the program, how to preapply for a new grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86297, Dec. 30, 1980; 51 FR 20824, June 9, 1986; 59 FR 30261, June 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.101</SECTNO> <SUBJECT>Information in the application notice that helps an applicant apply.</SUBJECT> <P>(a) The Secretary may include such information as the following in an application notice:</P> <P>(1) How an applicant can get an application package that contains:</P> <P>(i) Information about the program; and</P> <P>(ii) The application form that the applicant must use.</P> <P>(2) The amount of funds available for grants, the estimated number of those grants, the estimated amounts of those grants and, if appropriate, the maximum award amounts of those grants.</P> <P>(3) If the Secretary plans to approve multi-year projects, the project period that will be approved.</P> <P>(4) Any priorities established by the Secretary for the program for that year and the method the Secretary will use to implement the priorities. (See § 75.105 <E T="03">Annual priorities</E>.)</P> <P>(5) Where to find the regulations that apply to the program.</P> <P>(6) The statutory authority for the program.</P> <P>(7) The deadlines established under §75.102 (Deadline date for applications.) and 34 CFR 79.8 (How does the Secretary provide States an opportunity to comment on proposed Federal financial assistance?)</P> <P>(b) If the Secretary either requires or permits preapplications under a program, an application notice for the program explains how an applicant can get the preapplication form.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 84059, Dec. 22, 1980; 46 FR 3205, Jan. 14, 1981; 51 FR 20824, June 9, 1986; 51 FR 21164, June 11, 1986; 60 FR 63873, Dec. 12, 1995; 61 FR 8455, Mar. 4, 1996]</CITA> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 77.1—definitions of “budget period” and “project period.”</P> </CROSSREF> </SECTION> <SECTION> <PRTPAGE P="126"/> <SECTNO>§ 75.102</SECTNO> <SUBJECT>Deadline date for applications.</SUBJECT> <P>(a) The application notice for a program sets a deadline date for applications to be mailed or hand delivered to the Department.</P> <P>(b) If an applicant wants a new grant, the applicant shall:</P> <P>(1) Mail the application to the address specified in the application notice on or before the deadline date; or</P> <P>(2) Hand deliver the application to the address specified in the application notice by 4:30 p.m. (Washington, D.C. time) on the deadline date.</P> <P>(c) [Reserved]</P> <P>(d) An applicant must show one of the following as proof of mailing:</P> <P>(1) A legibly dated U.S. Postal Service postmark.</P> <P>(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.</P> <P>(3) A dated shipping label, invoice, or receipt from a commercial carrier.</P> <P>(4) Any other proof of mailing acceptable to the Secretary.</P> <P>(e) If an application is mailed through the U.S. Postal Service, the Secretary does not accept either of the following as proof of mailing:</P> <P>(1) A private metered postmark.</P> <P>(2) A mail receipt that is not dated by the U.S. Postal Service.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <NOTE> <HD SOURCE="HED">Note:</HD> <P>The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, an applicant should check with its local post office.</P> </NOTE> <CITA>[45 FR 22497, Apr. 3, 1980, as amended at 51 FR 20824, June 9, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.103</SECTNO> <SUBJECT>Deadline date for preapplications.</SUBJECT> <P>(a) If the Secretary invites or requires preapplications under a program, the application notice for the program sets a deadline date for preapplications.</P> <P>(b) An applicant shall submit its preapplication in accordance with the procedures for applications in § 75.102(b) and (d).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.104</SECTNO> <SUBJECT>Applicants must meet procedural rules.</SUBJECT> <P>(a) The Secretary may make a grant only to an eligible party that submits an application.</P> <P>(b) If a maximum award amount is established in a notice published in the <E T="04">Federal Register</E>, the Secretary may reject without consideration or evaluation any application that proposes a project funding level that exceeds the stated maximum award amount.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[61 FR 8455, Mar. 4, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.105</SECTNO> <SUBJECT>Annual priorities.</SUBJECT> <P>(a) <E T="03">What programs are covered by this section?</E> This section applies to any program for which the Secretary establishes priorities for selection of applications in a particular fiscal year.</P> <P>(b) <E T="03">How does the Secretary establish annual priorities?</E> (1) The Secretary establishes final annual priorities by publishing the priorities in a notice in the <E T="04">Federal Register</E>, usually in the application notice for that program.</P> <P>(2) The Secretary publishes proposed annual priorities for public comment, unless:</P> <P>(i) The final annual priorities will be implemented only by inviting applications that meet the priorities (Cross-reference: See 34 CFR 75.105(c)(1));</P> <P>(ii) The final annual priorities are chosen from a list of priorities already established in the program's regulations;</P> <P>(iii) Publishing proposed annual priorities would seriously interfere with an orderly, responsible grant award process or would otherwise be impracticable, unnecessary, or contrary to the public interest;</P> <P>(iv) The program statute requires or authorizes the Secretary to establish specified priorities; or</P> <P>(v) The annual priorities are chosen from allowable activities specified in the program statute.</P> <P>(c) <E T="03">How does the Secretary implement an annual priority?</E> The Secretary may choose one or more of the following methods to implement an annual priority:</P> <P>(1) <E T="03">Invitations.</E> The Secretary may simply invite applications that meet a priority. If the Secetary chooses this <PRTPAGE P="127"/>method, an application that meets the priority receives no competitive or absolute preference over applications that do not meet the priority.</P> <P>(2) <E T="03">Competitive preference.</E> The Secretary may give one of the following kinds of competitive preference to applications that meet a priority.</P> <P>(i) The Secretary may award some or all bonus points to an application depending on the extent to which the application meets the priority. These points are in addition to any points the applicant earns under the selection criteria (see § 75.200(b)). The notice states the maximum number of additional points that the Secretary may award to an application depending upon how well the application meets the priority.</P> <P>(ii) The Secretary may select an application that meets a priority over an application of comparable merit that does not meet the priority.</P> <P>(3) <E T="03">Absolute preference.</E> The Secretary may give an absolute preference to applications that meet a priority. The Secretary establishes a separate competition for applications that meet the priority and reserves all or part of a program's funds solely for that competition. The Secretary may adjust the amount reserved for the priority after determining the number of high quality applications received.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[46 FR 3205, Jan. 14, 1981, as amended at 57 FR 30337, July 8, 1992; 60 FR 63873, Dec. 12, 1995]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Application Contents</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.200 for a description of discretionary and formula grant programs.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.109</SECTNO> <SUBJECT>Changes to application; number of copies.</SUBJECT> <P>(a) Each applicant shall submit an original and two copies of its application to the Department, including any information that the applicant supplies voluntarily.</P> <P>(b) An applicant may make changes to its application on or before the deadline date for submitting applications under the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.200 How applications for new grants are selected for funding.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 75.112</SECTNO> <SUBJECT>Include a proposed project period and a timeline.</SUBJECT> <P>(a) An application must propose a project period for the project.</P> <P>(b) An application must include a narrative that describes how and when, in each budget period of the project, the applicant plans to meet each objective of the project.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1875-0102)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 59 FR 30261, June 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.117</SECTNO> <SUBJECT>Information needed for a multi-year project.</SUBJECT> <P>An applicant that proposes a multi-year project shall include in its application:</P> <P>(a) Information that shows why a multi-year project is needed;</P> <P>(b) A budget narrative accompanied by a budget form prescribed by the Secretary, that provides budget information for each budget period of the proposed project period.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1875-0102)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 59 FR 30261, June 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.118</SECTNO> <SUBJECT>Requirements for a continuation award.</SUBJECT> <P>(a) A recipient that wants to receive a continuation award shall submit a performance report that provides the most current performance and financial expenditure information, as directed by the Secretary, that is sufficient to meet the reporting requirements of 34 CFR 74.51, 75.590, 75.720, and 80.40.</P> <P>(b) If a recipient fails to submit a performance report that meets the requirements of paragraph (a) of this section, the Secretary denies continued funding for the grant.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1875-0102)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)</SECAUTH> <CROSSREF/> <PRTPAGE P="128"/> </SECTION> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.117 Information needed for a multi-year project, and §§ 75.250 through 75.253 Approval of multi-year projects, § 75.590 Evaluation by the recipient, § 75.720 Financial and performance reports, § 74.51 Monitoring and reporting program performance, and § 80.40 Monitoring and reporting program performance.</P> <CITA>[59 FR 30261, June 10, 1994, as amended at 64 FR 50391, Sept. 16, 1999]</CITA> <SECTION> <SECTNO>§ 75.119</SECTNO> <SUBJECT>Information needed if private school students participate.</SUBJECT> <P>If a program requires the applicant to provide an opportunity for participation of students enrolled in private schools, the application must include the information required of subgrantees under 34 CFR 76.656.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SUBJGRP> <HD SOURCE="HED">Separate Applications—Alternative Programs</HD> <SECTION> <SECTNO>§ 75.125</SECTNO> <SUBJECT>Submit a separate application to each program.</SUBJECT> <P>An applicant shall submit a separate application to each program under which it wants a grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27803, July 24, 1987; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.126</SECTNO> <SUBJECT>Application must list all programs to which it is submitted.</SUBJECT> <P>If an applicant is submitting an application for the same project under more than one Federal program, the applicant shall list these programs in its application. The Secretary uses this information to avoid duplicate grants for the same project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Group Applications</HD> <SECTION> <SECTNO>§ 75.127</SECTNO> <SUBJECT>Eligible parties may apply as a group.</SUBJECT> <P>(a) Eligible parties may apply as a group for a grant.</P> <P>(b) Depending on the program under which a group of eligible parties seeks assistance, the term used to refer to the group may vary. The list that follows contains some of the terms used to identify a group of eligible parties:</P> <P>(1) Combination of institutions of higher education.</P> <P>(2) Consortium.</P> <P>(3) Joint applicants.</P> <P>(4) Cooperative arrangements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.128</SECTNO> <SUBJECT>Who acts as applicant; the group agreement.</SUBJECT> <P>(a) If a group of eligible parties applies for a grant, the members of the group shall either:</P> <P>(1) Designate one member of the group to apply for the grant; or</P> <P>(2) Establish a separate, eligible legal entity to apply for the grant.</P> <P>(b) The members of the group shall enter into an agreement that:</P> <P>(1) Details the activities that each member of the group plans to perform; and</P> <P>(2) Binds each member of the group to every statement and assurance made by the applicant in the application.</P> <P>(c) The applicant shall submit the agreement with its application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.129</SECTNO> <SUBJECT>Legal responsibilities of each member of the group.</SUBJECT> <P>(a) If the Secretary makes a grant to a group of eligible applicants, the applicant for the group is the grantee and is legally responsible for:</P> <P>(1) The use of all grant funds;</P> <P>(2) Ensuring that the project is carried out by the group in accordance with Federal requirements; and</P> <P>(3) Ensuring that indirect cost funds are determined as required under § 75.564(e).</P> <P>(b) Each member of the group is legally responsible to:</P> <P>(1) Carry out the activities it agrees to perform; and</P> <P>(2) Use the funds that it receives under the agreement in accordance with Federal requirements that apply to the grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 59 FR 59581, Nov. 17, 1994]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <PRTPAGE P="129"/> <HD SOURCE="HED">State Comment Procedures</HD> <SECTION> <SECTNO>§ 75.155</SECTNO> <SUBJECT>Review procedures if State may comment on applications: Purpose of §§ 75.156-75.158.</SUBJECT> <P>If the authorizing statute for a program requires that a specific State agency be given an opportunity to comment on each application, the State and the applicant shall use the procedures in §§ 75.156-75.158 for that purpose.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities) for the regulations implementing the application review procedures that States may use under E.O. 12372.</P> </CROSSREF> <CITA>[57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.156</SECTNO> <SUBJECT>When an applicant under § 75.155 must submit its application to the State; proof of submission.</SUBJECT> <P>(a) Each applicant under a program covered by § 75.155 shall submit a copy of its application to the State on or before the deadline date for submitting its application to the Department.</P> <P>(b) The applicant shall attach to its application a copy of its letter that requests the State to comment on the application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.157</SECTNO> <SUBJECT>The State reviews each application.</SUBJECT> <P>A State that receives an application under § 75.156 may review and comment on the application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.158</SECTNO> <SUBJECT>Deadlines for State comments.</SUBJECT> <P>(a) The Secretary may establish a deadline date for receipt of State comments on applications.</P> <P>(b) The State shall make its comments in a written statement signed by an appropriate State official.</P> <P>(c) The appropriate State official shall submit comments to the Secretary by the deadline date for State comments. The procedures in § 75.102 (b) and (d) (how to meet a deadline) of this part apply to this submission.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.159</SECTNO> <SUBJECT>Effect of State comments or failure to comment.</SUBJECT> <P>(a) The Secretary considers those comments of the State that relate to:</P> <P>(1) Any selection criterion that applies under the program; or</P> <P>(2) Any other matter that affects the selection of projects for funding under the program.</P> <P>(b) If the State fails to comment on an application on or before the deadline date for the appropriate program, the State waives its right to comment.</P> <P>(c) If the applicant does not give the State an opportunity to comment, the Secretary does not select that project for a grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Development of Curricula or Instructional Materials</HD> <SECTION> <SECTNO>§ 75.190</SECTNO> <SUBJECT>Consultation.</SUBJECT> <P>Each applicant that intends to develop curricula or instructional materials under a grant is encouraged to assure that the curricula or materials will be developed in a manner conducive to dissemination, through continuing consultations with publishers, personnel of State and local educational agencies, teachers, administrators, community representatives, and other individuals experienced in dissemination.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.191</SECTNO> <SUBJECT>Consultation costs.</SUBJECT> <P>An applicant may budget reasonable consultation fees or planning costs in connection with the development of curricula or instructional materials.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.192</SECTNO> <SUBJECT>Dissemination.</SUBJECT> <P>If an applicant proposes to publish and disseminate curricula or instructional materials under a grant, the applicant shall include an assurance in its application that the curricula or materials will reach the populations for which the curricula or materials were developed.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <PRTPAGE P="130"/> <HD SOURCE="HED">Subpart D—How Grants Are Made</HD> <SUBJGRP> <HD SOURCE="HED">Selection of New Projects</HD> <SECTION> <SECTNO>§ 75.200</SECTNO> <SUBJECT>How applications for new grants and cooperative agreements are selected for funding; standards for use of cooperative agreements.</SUBJECT> <P>(a) <E T="03">Direct grant programs.</E> The Department administers two kinds of direct grant programs. A direct grant program is either a discretionary grant or a formula grant program.</P> <P>(b) <E T="03">Discretionary grant programs.</E> (1) A discretionary grant program is one that permits the Secretary to use discretionary judgment in selecting applications for funding.</P> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.219 Exceptions to the procedures under § 75.217.</P> </CROSSREF> <P>(2) The Secretary uses selection criteria to evaluate the applications submitted for new grants under a discretionary grant program.</P> <P>(3) To evaluate the applications for new grants under the program the Secretary may use:</P> <P>(i) Selection criteria established under § 75.209.</P> <P>(ii) Selection criteria in program-specific regulations.</P> <P>(iii) Selection criteria established under § 75.210.</P> <P>(iv) Any combination of criteria from paragraphs (b)(3)(i), (b)(3)(ii), and (b)(3)(iii) of this section.</P> <P>(4) The Secretary may award a cooperative agreement instead of a grant if the Secretary determines that substantial involvement between the Department and the recipient is necessary to carry out a collaborative project.</P> <P>(5) The Secretary uses the selection procedures in this subpart to select recipients of cooperative agreements.</P> <P>(c) <E T="03">Formula grant programs.</E> (1) A formula grant program is one that entitles certain applicants to receive grants if they meet the requirements of the program. Applicants do not compete with each other for the funds, and each grant is either for a set amount or for an amount determined under a formula.</P> <P>(2) The Secretary applies the program statute and regulations to fund projects under a formula grant program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27803, July 24, 1987; 57 FR 30338, July 8, 1992; 60 FR 63873, Dec. 12, 1995; 62 FR 10401, Mar. 6, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.201</SECTNO> <SUBJECT>How the selection criteria will be used.</SUBJECT> <P>(a) In the application package or a notice published in the <E T="04">Federal Register</E>, the Secretary informs applicants of—</P> <P>(1) The selection criteria chosen; and</P> <P>(2) The factors selected for considering the selection criteria, if any.</P> <P>(b) If points or weights are assigned to the selection criteria, the Secretary informs applicants in the application package or a notice published in the <E T="04">Federal Register</E> of—</P> <P>(1) The total possible score for all of the criteria for a program; and</P> <P>(2) The assigned weight or the maximum possible score for each criterion or factor under that criterion.</P> <P>(c) If no points or weights are assigned to the selection criteria and selected factors, the Secretary evaluates each criterion equally and, within each criterion, each factor equally.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[62 FR 10401, Mar. 6, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§§ 75.202-75.206</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 75.209</SECTNO> <SUBJECT>Selection criteria based on statutory provisions.</SUBJECT> <P>(a) The Secretary may evaluate applications by—</P> <P>(1) Establishing selection criteria based on statutory provisions that apply to the authorized program, which may include, but are not limited to—</P> <P>(i) Specific statutory selection criteria;</P> <P>(ii) Allowable activities;</P> <P>(iii) Application content requirements; or</P> <P>(iv) Other pre-award and post-award conditions; and</P> <P>(2) Assigning the maximum possible score for each of the criteria established under paragraph (a)(1) of this section.<PRTPAGE P="131"/> </P> <P>(b) The Secretary evaluates an application by determining how well the project proposed by the applicant meets each statutory provision selected under paragraph (a)(1) of this section. </P> <EXAMPLE> <HD SOURCE="HED">Example:</HD> <P>If a program statute requires that each application address how the applicant will serve the needs of limited English proficient children, under § 75.209 the Secretary could establish a criterion and evaluate applications based on how well the applicant's proposed project meets that statutory provision. The Secretary might decide to award up to 10 points for this criterion. Applicants who have the best proposals to serve the needs of limited English proficient children would score highest under the criterion in this example.</P> </EXAMPLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[60 FR 63873, Dec. 12, 1995, as amended at 62 FR 10401, Mar. 6, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.210</SECTNO> <SUBJECT>General selection criteria.</SUBJECT> <P>In determining the selection criteria to be used in each grant competition, the Secretary may select one or more of the following criteria and may select from among the list of optional factors under each criterion. However, paragraphs (d)(2) and (e)(2) of this section are mandatory factors under their respective criteria:</P> <P>(a) <E T="03">Need for project.</E> (1) The Secretary considers the need for the proposed project.</P> <P>(2) In determining the need for the proposed project, the Secretary considers one or more of the following factors:</P> <P>(i) The magnitude or severity of the problem to be addressed by the proposed project.</P> <P>(ii) The magnitude of the need for the services to be provided or the activities to be carried out by the proposed project.</P> <P>(iii) The extent to which the proposed project will provide services or otherwise address the needs of students at risk of educational failure.</P> <P>(iv) The extent to which the proposed project will focus on serving or otherwise addressing the needs of disadvantaged individuals.</P> <P>(v) The extent to which specific gaps or weaknesses in services, infrastructure, or opportunities have been identified and will be addressed by the proposed project, including the nature and magnitude of those gaps or weaknesses.</P> <P>(vi) The extent to which the proposed project will prepare personnel for fields in which shortages have been demonstrated.</P> <P>(b) <E T="03">Significance.</E> (1) The Secretary considers the significance of the proposed project.</P> <P>(2) In determining the significance of the proposed project, the Secretary considers one or more of the following factors:</P> <P>(i) The national significance of the proposed project.</P> <P>(ii) The significance of the problem or issue to be addressed by the proposed project.</P> <P>(iii) The potential contribution of the proposed project to increased knowledge or understanding of educational problems, issues, or effective strategies.</P> <P>(iv) The potential contribution of the proposed project to increased knowledge or understanding of rehabilitation problems, issues, or effective strategies.</P> <P>(v) The likelihood that the proposed project will result in system change or improvement.</P> <P>(vi) The potential contribution of the proposed project to the development and advancement of theory, knowledge, and practices in the field of study.</P> <P>(vii) The potential for generalizing from the findings or results of the proposed project.</P> <P>(viii) The extent to which the proposed project is likely to yield findings that may be utilized by other appropriate agencies and organizations.</P> <P>(ix) The extent to which the proposed project is likely to build local capacity to provide, improve, or expand services that address the needs of the target population.</P> <P>(x) The extent to which the proposed project involves the development or demonstration of promising new strategies that build on, or are alternatives to, existing strategies.</P> <P>(xi) The likely utility of the products (such as information, materials, processes, or techniques) that will result from the proposed project, including the potential for their being used effectively in a variety of other settings.<PRTPAGE P="132"/> </P> <P>(xii) The extent to which the results of the proposed project are to be disseminated in ways that will enable others to use the information or strategies.</P> <P>(xiii) The potential replicability of the proposed project or strategies, including, as appropriate, the potential for implementation in a variety of settings.</P> <P>(xiv) The importance or magnitude of the results or outcomes likely to be attained by the proposed project, especially improvements in teaching and student achievement.</P> <P>(xv) The importance or magnitude of the results or outcomes likely to be attained by the proposed project, especially improvements in employment, independent living services, or both, as appropriate.</P> <P>(xvi) The importance or magnitude of the results or outcomes likely to be attained by the proposed project.</P> <P>(c) <E T="03">Quality of the project design.</E> (1) The Secretary considers the quality of the design of the proposed project.</P> <P>(2) In determining the quality of the design of the proposed project, the Secretary considers one or more of the following factors:</P> <P>(i) The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are clearly specified and measurable.</P> <P>(ii) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs.</P> <P>(iii) The extent to which there is a conceptual framework underlying the proposed research or demonstration activities and the quality of that framework.</P> <P>(iv) The extent to which the proposed activities constitute a coherent, sustained program of research and development in the field, including, as appropriate, a substantial addition to an ongoing line of inquiry.</P> <P>(v) The extent to which the proposed activities constitute a coherent, sustained program of training in the field.</P> <P>(vi) The extent to which the proposed project is based upon a specific research design, and the quality and appropriateness of that design, including the scientific rigor of the studies involved.</P> <P>(vii) The extent to which the proposed research design includes a thorough, high-quality review of the relevant literature, a high-quality plan for research activities, and the use of appropriate theoretical and methodological tools, including those of a variety of disciplines, if appropriate.</P> <P>(viii) The extent to which the design of the proposed project includes a thorough, high-quality review of the relevant literature, a high-quality plan for project implementation, and the use of appropriate methodological tools to ensure successful achievement of project objectives.</P> <P>(ix) The quality of the proposed demonstration design and procedures for documenting project activities and results.</P> <P>(x) The extent to which the design for implementing and evaluating the proposed project will result in information to guide possible replication of project activities or strategies, including information about the effectiveness of the approach or strategies employed by the project.</P> <P>(xi) The extent to which the proposed development efforts include adequate quality controls and, as appropriate, repeated testing of products.</P> <P>(xii) The extent to which the proposed project is designed to build capacity and yield results that will extend beyond the period of Federal financial assistance.</P> <P>(xiii) The extent to which the design of the proposed project reflects up-to-date knowledge from research and effective practice.</P> <P>(xiv) The extent to which the proposed project represents an exceptional approach for meeting statutory purposes and requirements.</P> <P>(xv) The extent to which the proposed project represents an exceptional approach to the priority or priorities established for the competition.</P> <P>(xvi) The extent to which the proposed project will be coordinated with similar or related efforts, and with other appropriate community, State, and Federal resources.</P> <P>(xvii) The extent to which the proposed project will establish linkages <PRTPAGE P="133"/>with other appropriate agencies and organizations providing services to the target population.</P> <P>(xviii) The extent to which the proposed project is part of a comprehensive effort to improve teaching and learning and support rigorous academic standards for students.</P> <P>(xix) The extent to which the proposed project encourages parental involvement.</P> <P>(xx) The extent to which the proposed project encourages consumer involvement.</P> <P>(xxi) The extent to which performance feedback and continuous improvement are integral to the design of the proposed project.</P> <P>(xxii) The quality of the methodology to be employed in the proposed project.</P> <P>(xxiii) The extent to which fellowship recipients or other project participants are to be selected on the basis of academic excellence.</P> <P>(d) <E T="03">Quality of project services.</E> (1) The Secretary considers the quality of the services to be provided by the proposed project.</P> <P>(2) In determining the quality of the services to be provided by the proposed project, the Secretary considers the quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.</P> <P>(3) In addition, the Secretary considers one or more of the following factors:</P> <P>(i) The extent to which the services to be provided by the proposed project are appropriate to the needs of the intended recipients or beneficiaries of those services.</P> <P>(ii) The extent to which entities that are to be served by the proposed technical assistance project demonstrate support for the project.</P> <P>(iii) The extent to which the services to be provided by the proposed project reflect up-to-date knowledge from research and effective practice.</P> <P>(iv) The likely impact of the services to be provided by the proposed project on the intended recipients of those services.</P> <P>(v) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to lead to improvements in practice among the recipients of those services.</P> <P>(vi) The extent to which the training or professional development services to be provided by the proposed project are likely to alleviate the personnel shortages that have been identified or are the focus of the proposed project.</P> <P>(vii) The likelihood that the services to be provided by the proposed project will lead to improvements in the achievement of students as measured against rigorous academic standards.</P> <P>(viii) The likelihood that the services to be provided by the proposed project will lead to improvements in the skills necessary to gain employment or build capacity for independent living.</P> <P>(ix) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners for maximizing the effectiveness of project services.</P> <P>(x) The extent to which the technical assistance services to be provided by the proposed project involve the use of efficient strategies, including the use of technology, as appropriate, and the leveraging of non-project resources.</P> <P>(xi) The extent to which the services to be provided by the proposed project are focused on those with greatest needs.</P> <P>(xii) The quality of plans for providing an opportunity for participation in the proposed project of students enrolled in private schools.</P> <P>(e) <E T="03">Quality of project personnel.</E> (1) The Secretary considers the quality of the personnel who will carry out the proposed project.</P> <P>(2) In determining the quality of project personnel, the Secretary considers the extent to which the applicant encourages applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.</P> <P>(3) In addition, the Secretary considers one or more of the following factors:<PRTPAGE P="134"/> </P> <P>(i) The qualifications, including relevant training and experience, of the project director or principal investigator.</P> <P>(ii) The qualifications, including relevant training and experience, of key project personnel.</P> <P>(iii) The qualifications, including relevant training and experience, of project consultants or subcontractors.</P> <P>(f) <E T="03">Adequacy of resources</E>. (1) The Secretary considers the adequacy of resources for the proposed project.</P> <P>(2) In determining the adequacy of resources for the proposed project, the Secretary considers one or more of the following factors:</P> <P>(i) The adequacy of support, including facilities, equipment, supplies, and other resources, from the applicant organization or the lead applicant organization.</P> <P>(ii) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project.</P> <P>(iii) The extent to which the budget is adequate to support the proposed project.</P> <P>(iv) The extent to which the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.</P> <P>(v) The extent to which the costs are reasonable in relation to the number of persons to be served and to the anticipated results and benefits.</P> <P>(vi) The potential for continued support of the project after Federal funding ends, including, as appropriate, the demonstrated commitment of appropriate entities to such support.</P> <P>(vii) The potential for the incorporation of project purposes, activities, or benefits into the ongoing program of the agency or organization at the end of Federal funding.</P> <P>(g) <E T="03">Quality of the management plan</E>. (1) The Secretary considers the quality of the management plan for the proposed project.</P> <P>(2) In determining the quality of the management plan for the proposed project, the Secretary considers one or more of the following factors:</P> <P>(i) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks.</P> <P>(ii) The adequacy of procedures for ensuring feedback and continuous improvement in the operation of the proposed project.</P> <P>(iii) The adequacy of mechanisms for ensuring high-quality products and services from the proposed project.</P> <P>(iv) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project.</P> <P>(v) How the applicant will ensure that a diversity of perspectives are brought to bear in the operation of the proposed project, including those of parents, teachers, the business community, a variety of disciplinary and professional fields, recipients or beneficiaries of services, or others, as appropriate.</P> <P>(h) <E T="03">Quality of the project evaluation</E>. (1) The Secretary considers the quality of the evaluation to be conducted of the proposed project.</P> <P>(2) In determining the quality of the evaluation, the Secretary considers one or more of the following factors:</P> <P>(i) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the goals, objectives, and outcomes of the proposed project.</P> <P>(ii) The extent to which the methods of evaluation are appropriate to the context within which the project operates.</P> <P>(iii) The extent to which the methods of evaluation provide for examining the effectiveness of project implementation strategies.</P> <P>(iv) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible.</P> <P>(v) The extent to which the methods of evaluation will provide timely guidance for quality assurance.</P> <P>(vi) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving intended outcomes.<PRTPAGE P="135"/> </P> <P>(vii) The extent to which the evaluation will provide guidance about effective strategies suitable for replication or testing in other settings.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1875-0102)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[62 FR 10401, Mar. 6, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.211</SECTNO> <SUBJECT>Selection criteria for unsolicited applications.</SUBJECT> <P>(a) If the Secretary considers an unsolicited application under 34 CFR 75.222(a)(2)(ii), the Secretary uses the selection criteria and factors, if any, used for the competition under which the application could have been funded.</P> <P>(b) If the Secretary considers an unsolicited application under 34 CFR 75.222(a)(2)(iii), the Secretary selects from among the criteria in § 75.210(b), and may select from among the specific factors listed under each criterion, the criteria that are most appropriate to evaluate the activities proposed in the application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[62 FR 10403, Mar. 6, 1997]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Selection Procedures</HD> <SECTION> <SECTNO>§ 75.215</SECTNO> <SUBJECT>How the Department selects a new project: purpose of §§ 75.216-75.222.</SUBJECT> <P>Sections 75.216-75.222 describe the process the Secretary uses to select applications for new grants. All of these sections apply to a discretionary grant program. However, only § 75.216 applies also to a formula grant program.</P> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.200(b) Discretionary grant program, and (c) Formula grant program.</P> </CROSSREF> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.216</SECTNO> <SUBJECT>Applications not evaluated for funding.</SUBJECT> <P>The Secretary does not evaluate an application if—</P> <P>(a) The applicant is not eligible;</P> <P>(b) The applicant does not comply with all of the procedural rules that govern the submission of the application;</P> <P>(c) The application does not contain the information required under the program; or</P> <P>(d) The proposed project cannot be funded under the authorizing statute or implementing regulations for the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.217</SECTNO> <SUBJECT>How the Secretary selects applications for new grants.</SUBJECT> <P>(a) The Secretary selects applications for new grants on the basis of the authorizing statute, the selection criteria, and any priorities or other requirements that have been published in the <E T="04">Federal Register</E> and apply to the selection of those applications.</P> <P>(b)(1) The Secretary may use experts to evaluate the applications submitted under a program.</P> <P>(2) These experts may include persons who are not employees of the Federal Government.</P> <P>(c) The Secretary prepares a rank order of the applications based solely on the evaluation of their quality according to the selection criteria.</P> <P>(d) The Secretary then determines the order in which applications will be selected for grants. The Secretary considers the following in making these determinations:</P> <P>(1) The information in each application.</P> <P>(2) The rank ordering of the applications.</P> <P>(3) Any other information—</P> <P>(i) Relevant to a criterion, priority, or other requirement that applies to the selection of applications for new grants;</P> <P>(ii) Concerning the applicant's performance and use of funds under a previous award under any Department program; and</P> <P>(iii) Concerning the applicant's failure under any Department program to submit a performance report or its submission of a performance report of unacceptable quality.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[52 FR 27804, July 24, 1987, as amended at 62 FR 4167, Jan. 29, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.218</SECTNO> <SUBJECT>Applications not evaluated or selected for funding.</SUBJECT> <P>(a) The Secretary informs an applicant if its application—</P> <P>(1) Is not evaluated; or<PRTPAGE P="136"/> </P> <P>(2) Is not selected for funding.</P> <P>(b) If an applicant requests an explanation of the reason its application was not evaluated or selected, the Secretary provides that explanation.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.219</SECTNO> <SUBJECT>Exceptions to the procedures under § 75.217.</SUBJECT> <P>The Secretary may select an application for funding without following the procedures in § 75.217 if:</P> <P>(a) The objectives of the project cannot be achieved unless the Secretary makes the grant before the date grants can be made under the procedures in § 75.217;</P> <P>(b)(1) The application was evaluated under the preceding competition of the program;</P> <P>(2) The application rated high enough to deserve selection under § 75.217; and</P> <P>(3) The application was not selected for funding because the application was mishandled by the Department; or</P> <P>(c) The Secretary receives an unsolicited application that meets the requirements of § 75.222.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987; 60 FR 12096, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.220</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(a).</SUBJECT> <P>If the special circumstances of § 75.219(a) appear to exist for an application, the Secretary uses the following procedures:</P> <P>(a) The Secretary assembles a board to review the application.</P> <P>(b) The board consists of:</P> <P>(1) A program officer of the program under which the applicant wants a grant;</P> <P>(2) An employee from the Office of the Chief Financial Officer (OCFO) with responsibility for grant policy; and</P> <P>(3) A Department employee who is not a program officer of the program but who is qualified to evaluate the application.</P> <P>(c) The board reviews the application to decide if:</P> <P>(1) The special circumstances under § 75.219(a) are satisfied;</P> <P>(2) The application rates high enough, based on the selection criteria, priorities, and other requirements that apply to the program, to deserve selection; and</P> <P>(3) Selection of the application will not have an adverse impact on the budget of the program.</P> <P>(d) The board forwards the results of its review to the Secretary.</P> <P>(e) If each of the conditions in paragraph (c) of this section is satisfied, the Secretary may select the application for funding.</P> <P>(f) Even if the Secretary does not select the application for funding, the applicant may submit its application under the procedures in Subpart C of this part.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86297, Dec. 30, 1980; 64 FR 50391, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.221</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(b).</SUBJECT> <P>If the special circumstances of § 75.219(b) appear to exist for an application, the Secretary may select the application for funding if:</P> <P>(a) The Secretary has documentary evidence that the special circumstances of § 75.219(b) exist; and</P> <P>(b) The Secretary has a statement that explains the circumstances of the mishandling.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987. Redesignated at 60 FR 12096, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.222</SECTNO> <SUBJECT>Procedures the Department uses under § 75.219(c).</SUBJECT> <P>If the Secretary receives an unsolicited application, the Secretary may consider the application under the following procedures unless the Secretary has published a notice in the <E T="04">Federal Register</E> stating that the program that would fund the application would not consider unsolicited applications:</P> <P>(a)(1) The Secretary determines whether the application could be funded under a competition planned or conducted for the fiscal year under which funds would be used to fund the application.<PRTPAGE P="137"/> </P> <P>(2)(i) If the application could be funded under a competition described in paragraph (a)(1) of this section and the deadline for submission of applications has not passed, the Secretary refers the application to the appropriate competition for consideration under the procedures in § 75.217.</P> <P>(ii)(A) If the application could have been funded under a competition described in paragraph (a)(1) of this section and the deadline for submission of applications has passed, the Secretary may consider the application only in exceptional circumstances, as determined by the Secretary.</P> <P>(B) If the Secretary considers an application under paragraph (a)(2)(ii) of this section, the Secretary considers the application under paragraphs (b) through (e) of this section.</P> <P>(iii) If the application could not be funded under a competition described in paragraph (a)(1) of this section, the Secretary considers the application under paragraphs (b) through (e) of this section.</P> <P>(b) If an application may be considered under paragraphs (a)(2)(ii) or (iii) of this section, the Secretary determines if—</P> <P>(1) There is a substantial likelihood that the application is of exceptional quality and national significance for a program administered by ED;</P> <P>(2) The application meets the requirements of all applicable statutes and codified regulations that apply to the program; and</P> <P>(3) Selection of the project will not have an adverse impact on the funds available for other awards planned for the program.</P> <P>(c) If the Secretary determines that the criteria in paragraph (b) of this section have been met, the Secretary assembles a panel of experts that does not include any employees of the Department to review the application.</P> <P>(d) The experts—</P> <P>(1) Evaluate the application based on the selection criteria; and</P> <P>(2) Determine whether the application is of such exceptional quality and national significance that it should be funded as an unsolicited application.</P> <P>(e) If the experts highly rate the application and determine that the application is of such exceptional quality and national significance that it should be funded as an unsolicited application, the Secretary may fund the application.</P> <NOTE> <HD SOURCE="HED">Note to § </HD> <P>75.222: To assure prompt consideration, applicants submitting unsolicited applications should send the application, marked “Unsolicited Application” on the outside, to the Chief, Application Control Center, U.S. Department of Education, Washington, DC 20202-4725.</P> </NOTE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[60 FR 12096, Mar. 3, 1995]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures To Make a Grant</HD> <SECTION> <SECTNO>§ 75.230</SECTNO> <SUBJECT>How the Department makes a grant; purpose of §§ 75.231-75.236.</SUBJECT> <P>If the Secretary selects an application under §§ 75.217, 75.220, or 75.222, the Secretary follows the procedures in §§ 75.231-75.236 to set the amount and determine the conditions of a grant. Sections 75.235-75.236 also apply to grants under formula grant programs.</P> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See § 75.200 How applications for new grants are selected for funding.</P> </CROSSREF> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.231</SECTNO> <SUBJECT>Additional information.</SUBJECT> <P>After selecting an application for funding, the Secretary may require the applicant to submit additional information.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.232</SECTNO> <SUBJECT>The cost analysis; basis for grant amount.</SUBJECT> <P>(a) Before the Secretary sets the amount of a new grant, the Secretary does a cost analysis of the project. The Secretary:</P> <P>(1) Verifies the cost data in the detailed budget for the project;</P> <P>(2) Evaluates specific elements of costs; and</P> <P>(3) Examines costs to determine if they are necessary, reasonable, and allowable under applicable statutes and regulations.</P> <P>(b) The Secretary uses the cost analysis as a basis for determining the amount of the grant to the applicant. The cost analysis shows whether the applicant can achieve the objectives of the project with reasonable efficiency <PRTPAGE P="138"/>and economy under the budget in the application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 59 FR 30261, June 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.233</SECTNO> <SUBJECT>Setting the amount of the grant.</SUBJECT> <P>(a) Subject to any applicable matching or cost-sharing requirements, the Secretary may fund up to 100 percent of the allowable costs in the applicant's budget.</P> <P>(b) In deciding what percentage of the allowable costs to fund, the Secretary may consider any other financial resources available to the applicant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.234</SECTNO> <SUBJECT>The conditions of the grant.</SUBJECT> <P>(a) The Secretary makes a grant to an applicant only after determining—</P> <P>(1) The approved costs; and</P> <P>(2) Any special conditions.</P> <P>(b) In awarding a cooperative agreement, the Secretary includes conditions that state the explicit character and extent of anticipated collaboration between the Department and the recipient.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.235</SECTNO> <SUBJECT>The notification of grant award.</SUBJECT> <P>(a) To make a grant, the Secretary issues a notification of grant award and sends it to the grantee.</P> <P>(b) The notification of grant award sets the amount of the grant award and establishes other specific conditions, if any.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30338, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.236</SECTNO> <SUBJECT>Effect of the grant.</SUBJECT> <P>The grant obligates both the Federal Government and the grantee to the requirements that apply to the grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 74, Subpart L—Programmatic Changes and Budget Revisions.</P> </CROSSREF> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Approval of Multi-Year Projects</HD> <SECTION> <SECTNO>§ 75.250</SECTNO> <SUBJECT>Project period can be up to 60 months.</SUBJECT> <P>The Secretary may approve a project period of up to 60 months.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.251</SECTNO> <SUBJECT>The budget period.</SUBJECT> <P>(a) The Secretary usually approves a budget period of not more than 12 months, even if the project has a multi-year project period.</P> <P>(b) If the Secretary approves a multi-year project period, the Secretary:</P> <P>(1) Makes a grant to the project for the initial budget period; and</P> <P>(2) Indicates his or her intention to make contination awards to fund the remainder of the project period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.253</SECTNO> <SUBJECT>Continuation of a multi-year proj-ect after the first budget period.</SUBJECT> <P>(a) The Secretary may make a continuation award for a budget period after the first budget period of an approved multi-year project if:</P> <P>(1) The Congress has appropriated sufficient funds under the program;</P> <P>(2) The recipient has either—</P> <P>(i) Made substantial progress toward meeting the objectives in its approved application; or</P> <P>(ii) Obtained the Secretary's approval of changes in the project that—</P> <P>(A) Do not increase the cost of the grant; and</P> <P>(B) Enable the recipient to meet those objectives in succeeding budget periods;</P> <P>(3) The recipient has submitted all reports as required by § 75.118, and</P> <P>(4) Continuation of the project is in the best interest of the Federal Government.</P> <P>(b) Subject to the criteria in paragraph (a) of this section, in selecting applications for funding under a program the Secretary gives priority to contination awards over new grants.<PRTPAGE P="139"/> </P> <P>(c)(1) Notwithstanding any regulatory requirements in 34 CFR part 80, a grantee may expend funds that have not been obligated at the end of a budget period for obligations of the subsequent budget period if—</P> <P>(i) The obligation is for an allowable cost that falls within the scope and objectives of the project; and</P> <P>(ii) ED regulations other than 34 CFR part 80, statutes, or the conditions of the grant do not prohibit the obligation. </P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>See 34 CFR 74.25(e)(2).</P> </NOTE> <P>(2) The Secretary may—</P> <P>(i) Require the grantee to send a written statement describing how the funds made available under this section will be used; and</P> <P>(ii) Determine the amount of new funds that the Department will make available for the subsequent budget period after considering the statement the grantee provides under paragraph (c)(2)(i) of this section or any other information available to the Secretary about the use of funds under the grant.</P> <P>(3) In determining the amount of new funds to make available to a grantee under this section, the Secretary considers whether the unobligated funds made available are needed to complete activities that were planned for completion in the prior budget period.</P> <P>(d)(1) If the Secretary decides, under this section, not to make a continuation award, the Secretary may authorize a no-cost extension of the last budget period of the grant in order to provide for the orderly closeout of the grant.</P> <P>(2) If the Secretary makes a continuation award under this section—</P> <P>(i) The Secretary makes the award under §§ 75.231-75.236; and</P> <P>(ii) The new budget period begins on the day after the previous budget period ends.</P> <P>(e) Unless prohibited by program regulations, a recipient that is in the final budget period of a project period may seek continued assistance for the project under the procedures for selecting new projects.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30338, July 8, 1992; 59 FR 30261, June 10, 1994; 62 FR 40424, July 28, 1997]</CITA> <CROSSREF> <HD SOURCE="HED">Cross references:</HD> <P>1. See Subpart C—How to Apply for a Grant.</P> <P>2. See § 75.117 Information needed for a multi-year project; and § 75.118 Application for a continuation award.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 75.254</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Miscellaneous</HD> <SECTION> <SECTNO>§ 75.260</SECTNO> <SUBJECT>Allotments and reallotments.</SUBJECT> <P>(a) Under some of the programs covered by this part, the Secretary allots funds under a statutory or regulatory formula.</P> <P>(b) Any reallotment to other grantees will be made by the Secretary in accordance with the authorizing statute for that program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.261</SECTNO> <SUBJECT>Extension of a project period.</SUBJECT> <P>(a) <E T="03">General rule.</E> A grantee may, notwithstanding any regulatory requirement in 34 CFR part 80, extend the project period of an award one time for a period up to twelve months without the prior approval of the Secretary, if—</P> <P>(1) The grantee meets the requirements for extension of 34 CFR 74.25(e)(2); and</P> <P>(2) ED regulations other than the regulations in 34 CFR part 80, statutes or the conditions of an award do not prohibit the extension.</P> <P>(b) <E T="03">Specific rule for certain programs of the National Institute on Disability and Rehabilitation Research.</E> Notwithstanding paragraph (a) of this section, grantees under the following programs of NIDRR must request prior approval to extend their grants under paragraph (c) of this section:</P> <P>(1) The Knowledge Dissemination and Utilization Centers and Disability and Technical Assistance Centers authorized under 29 U.S.C. 761a(b)(2), (4), (5), (6), and (11) and implemented at 34 CFR part 350, subpart B, §§ 350.17-350.19.</P> <P>(2) The Rehabilitation Research and Training Centers program authorized under 29 U.S.C. 762(b) and implemented at 34 CFR part 350, subpart C.</P> <P>(3) The Rehabilitation Engineering Research Centers authorized under 29 U.S.C. 762(b)(3) and implemented at 34 CFR part 350, subpart D.<PRTPAGE P="140"/> </P> <P>(4) The Special Projects and Demonstrations for Spinal Cord Injuries authorized under 29 U.S.C. 762(b)(4) and implemented at 34 CFR part 359.</P> <P>(c) <E T="03">Other regulations.</E> If ED regulations, other than the regulations in 34 CFR part 80, or the conditions of the award require the grantee to get prior approval to extend the project period, the Secretary may permit the grantee to extend the project period if—</P> <P>(1) The extension does not violate any statute or regulations;</P> <P>(2) The extension does not involve the obligation of additional Federal funds;</P> <P>(3) The extension is to carry out the activities in the approved application; and</P> <P>(4)(i) The Secretary determines that, due to special or unusual circumstances applicable to a class of grantees, the project periods for the grantees should be extended; or</P> <P>(ii)(A) The Secretary determines that special or unusual circumstances would delay completion of the project beyond the end of the project period;</P> <P>(B) The grantee requests an extension of the project at least 45 calendar days before the end of the project period; and</P> <P>(C) The grantee provides a written statement before the end of the project period giving the reasons why the extension is appropriate under paragraph (c)(4)(ii)(A) of this section and the period for which the project needs extension.</P> <P>(d) <E T="03">Waiver.</E> The Secretary may waive the requirement in paragraph (a)(4)(ii)(B) of this section if—</P> <P>(1) The grantee could not reasonably have known of the need for the extension on or before the start of the 45-day time period; or</P> <P>(2) The failure to give notice on or before the start of the 45-day time period was unavoidable.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30338, July 8, 1992, as amended at 62 FR 40424, July 28, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.262</SECTNO> <SUBJECT>Conversion of a grant or a cooperative agreement.</SUBJECT> <P>(a)(1) The Secretary may convert a grant to a cooperative agreement or a cooperative agreement to a grant at the time a continuation award is made under § 75.253.</P> <P>(2) In deciding whether to convert a grant to a cooperative agreement or a cooperative agreement to a grant, the Secretary considers the factors included in § 75.200(b) (4) and (5).</P> <P>(b) The Secretary and a recipient may agree at any time to convert a grant to a cooperative agreement or a cooperative agreement to a grant, subject to the factors included in § 75.200(b) (4) and (5).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30339, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.263</SECTNO> <SUBJECT>Pre-award costs; waiver of approval.</SUBJECT> <P>A grantee may, notwithstanding any requirement in 34 CFR part 80, incur pre-award costs as specified in 34 CFR 74.25(e)(1) unless—</P> <P>(a) ED regulations other than 34 CFR part 80 or a statute prohibit these costs; or</P> <P>(b) The conditions of the award prohibit these costs.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circulars A-21, A-87, and A-122)</SECAUTH> <CITA>[62 FR 40425, July 28, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.264</SECTNO> <SUBJECT>Transfers among budget categories.</SUBJECT> <P>A grantee may, notwithstanding any requirement in 34 CFR part 80, make transfers as specified in 34 CFR 74.25 unless—</P> <P>(a) ED regulations other than 34 CFR part 80 or a statute prohibit these transfers; or</P> <P>(b) The conditions of the grant prohibit these transfers.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[62 FR 40425, July 28, 1997]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—What Conditions Must Be Met by a Grantee?</HD> <SUBJGRP> <HD SOURCE="HED">Nondiscrimination</HD> <SECTION> <SECTNO>§ 75.500</SECTNO> <SUBJECT>Federal statutes and regulations on nondiscrimination.</SUBJECT> <P>Each grantee shall comply with the following statutes and regulations:<PRTPAGE P="141"/> </P> <GPOTABLE CDEF="s50,r50,r30" COLS="3" OPTS="L2"> <BOXHD> <CHED H="1">Subject</CHED> <CHED H="1">Statute</CHED> <CHED H="1">Regulations</CHED> </BOXHD> <ROW> <ENT I="01">Discrimination on the basis of race, color or national origin</ENT> <ENT>Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d through 2000d-4)</ENT> <ENT>34 CFR part 100.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of sex</ENT> <ENT>Title IX of the Education Amendments of 1972 (20 U.S.C. 1681-1683)</ENT> <ENT>34 CFR part 106.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of handicap</ENT> <ENT>Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)</ENT> <ENT>34 CFR part 104.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of age</ENT> <ENT>The Age Discrimination Act (42 U.S.C. 6101 <E T="03">et seq.</E>)</ENT> <ENT>45 CFR part 90.</ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Project Staff</HD> <SECTION> <SECTNO>§ 75.511</SECTNO> <SUBJECT>Waiver of requirement for a full-time project director.</SUBJECT> <P>(a) If regulations under a program require a full-time project director, the Secretary may waive that requirement under the following conditions:</P> <P>(1) The project will not be adversely affected by the waiver.</P> <P>(2)(i) The project director is needed to coordinate two or more related projects; or</P> <P>(ii) The project director must teach a minimum number of hours to retain faculty status.</P> <P>(b) The waiver either permits the grantee:</P> <P>(1) To use a part-time project director; or</P> <P>(2) Not to use any project director.</P> <P>(c)(1) An applicant or a grantee may request the waiver.</P> <P>(2) The request must be in writing and must demonstrate that a waiver is appropriate under this section.</P> <P>(3) The Secretary gives the waiver in writing. The waiver is effective on the date the Secretary signs the waiver.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.25, Revision of budget and program plans; and 34 CFR 80.30, Changes.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 75.515</SECTNO> <SUBJECT>Use of consultants.</SUBJECT> <P>(a) Subject to Federal statutes and regulations, a grantee shall use its general policies and practices when it hires, uses, and pays a consultant as part of the project staff.</P> <P>(b) The grantee may not use its grant to pay a consultant unless:</P> <P>(1) There is a need in the project for the services of that consultant; and</P> <P>(2) The grantee cannot meet that need by using an employee rather than a consultant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.516</SECTNO> <SUBJECT>Compensation of consultants—employees of institutions of higher education.</SUBJECT> <P>If an institution of higher education receives a grant for research or for educational services, it may pay a consultant's fee to one of its employees only in unusual circumstances and only if:</P> <P>(a) The work performed by the consultant is in addition to his or her regular departmental load; and</P> <P>(b)(1) The consultation is across departmental lines; or</P> <P>(2) The consultation involves a separate or remote operation.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.517</SECTNO> <SUBJECT>Changes in key staff members.</SUBJECT> <P>A grantee shall comply with 34 CFR 74.25(c)(2) concerning replacement or lesser involvement of any key project staff, whether or not the grant is for research.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980, as amended at 64 FR 50391, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.519</SECTNO> <SUBJECT>Dual compensation of staff.</SUBJECT> <P>A grantee may not use its grantee to pay a project staff member for time or work for which that staff member is compensated from some other source of funds.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Conflict of Interest</HD> <SECTION> <SECTNO>§ 75.524</SECTNO> <SUBJECT>Conflict of interest: Purpose of § 75.525.</SUBJECT> <P>(a) The conflict of interest regulations of the Department that apply to a grant are in § 75.525.</P> <P>(b) These conflict of interest regulations do not apply to a “government” as defined in 34 CFR 80.3.<PRTPAGE P="142"/> </P> <P>(c) The regulations in § 75.525 do not apply to a grantee's procurement contracts. The conflict of interest regulations that cover those procurement contracts are in 34 CFR part 74.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980, as amended at 64 FR 50391, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.525</SECTNO> <SUBJECT>Conflict of interest: Participation in a project.</SUBJECT> <P>(a) A grantee may not permit a person to participate in an administrative decision regarding a project if:</P> <P>(1) The decision is likely to benefit that person or a member of his or her immediate family; and</P> <P>(2) The person:</P> <P>(i) Is a public official; or</P> <P>(ii) Has a family or business relationship with the grantee.</P> <P>(b) A grantee may not permit any person participating in the project to use his or her position for a purpose that is—or gives the appearance of being—motivated by a desire for a private financial gain for that person or for others.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allowable Costs</HD> <SECTION> <SECTNO>§ 75.530</SECTNO> <SUBJECT>General cost principles.</SUBJECT> <P>The general principles to be used in determining costs applicable to grants and cost-type contracts under grants are specified at 34 CFR 74.27 (for administration of grants to institutions of higher education, and other non-profit organizations) and 34 CFR 80.22 (for uniform administrative requirements for grants and cooperative agreements to State and local governments).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 74, Subpart D—After-the-Award Requirements and 34 CFR part 80, Subpart C—Post-Award Requirements.</P> </CROSSREF> <CITA>[64 FR 50391, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.531</SECTNO> <SUBJECT>Limit on total cost of a project.</SUBJECT> <P>A grantee shall insure that the total cost to the Federal Government is not more than the amount stated in the notification of grant award.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.532</SECTNO> <SUBJECT>Use of funds for religion prohibited.</SUBJECT> <P>(a) No grantee may use its grant to pay for any of the following:</P> <P>(1) Religious worship, instruction, or proselytization.</P> <P>(2) Equipment or supplies to be used for any of those activities.</P> <P>(3) Construction, remodeling, repair, operation, or maintenance of any facility or part of a facility to be used for any of those activities.</P> <P>(4) An activity of a school or department of divinity.</P> <P>(b) As used in this section, <E T="03">school or department of divinity</E> means an institution or a component of an institution whose program is specifically for the education of students to:</P> <P>(1) Prepare them to enter into a religious vocation; or</P> <P>(2) Prepare them to teach theological subjects.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.533</SECTNO> <SUBJECT>Acquisition of real property; construction.</SUBJECT> <P>No grantee may use its grant for acquisition of real property or for construction unless specifically permitted by the authorizing statute or implementing regulations for the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.534</SECTNO> <SUBJECT>Training grants—automatic increases for additional dependents.</SUBJECT> <P>The Secretary may increase a grant to cover the cost of additional dependents not specified in the notice of award under § 75.235 if—</P> <P>(a) Allowances for dependents are authorized by the program statute and are allowable under the grant; and</P> <P>(b) Appropriations are available to cover the cost.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30339, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Indirect Cost Rates</HD> <SECTION> <SECTNO>§ 75.560</SECTNO> <SUBJECT>General indirect cost rates; exceptions.</SUBJECT> <P>(a) The differences between direct and indirect costs and the principles for determining the general indirect <PRTPAGE P="143"/>cost rate that a grantee may use for grants under most programs are specified in the cost principles for—</P> <P>(1) Institutions of higher education, at 34 CFR 74.27;</P> <P>(2) Hospitals, at 34 CFR 74.27;</P> <P>(3) Other nonprofit organizations, at 34 CFR 74.27;</P> <P>(4) Commercial (for-profit) organizations, at 34 CFR 74.27; and</P> <P>(5) State and local governments and federally-recognized Indian tribal organizations, at 34 CFR 80.22.</P> <P>(b) A grantee must have a current indirect cost rate agreement to charge indirect costs to a grant. To obtain an indirect cost rate, a grantee must submit an indirect cost proposal to its cognizant agency and negotiate an indirect cost rate agreement.</P> <P>(c) The Secretary may establish a temporary indirect cost rate for a grantee that does not have an indirect cost rate agreement with its cognizant agency.</P> <P>(d) The Secretary accepts an indirect cost rate negotiated by a grantee's cognizant agency, but may establish a restricted indirect cost rate for a grantee to satisfy the statutory requirements of certain programs administered by the Department.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30339, July 8, 1992; 59 FR 59582, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.561</SECTNO> <SUBJECT>Approval of indirect cost rates.</SUBJECT> <P>(a) If the Department of Education is the cognizant agency, the Secretary approves an indirect cost rate for a grantee other than a local educational agency. For the purposes of this section, the term local educational agency does not include a State agency.</P> <P>(b) Each State educational agency, on the basis of a plan approved by the Secretary, shall approve an indirect cost rate for each local educational agency that requests it to do so. These rates may be for periods longer than a year if rates are sufficiently stable to justify a longer period.</P> <P>(c) The Secretary generally approves indirect cost rate agreements annually. Indirect cost rate agreements may be approved for periods longer than a year if the Secretary determines that rates will be sufficiently stable to justify a longer rate period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.562</SECTNO> <SUBJECT>Indirect cost rates for educational training projects.</SUBJECT> <P>(a) Educational training grants provide funding for training or other educational services. Examples of the work supported by training grants are summer institutes, training programs for selected participants, the introduction of new or expanded courses, and similar instructional undertakings that are separately budgeted and accounted for by the sponsoring institution. These grants do not usually support activities involving research, development, and dissemination of new educational materials and methods. Training grants largely implement previously developed materials and methods and require no significant adaptation of techniques or instructional services to fit different circumstances.</P> <P>(b) The Secretary uses the definition in paragraph (a) to determine which grants are educational training grants.</P> <P>(c) Indirect cost reimbursement on a training grant is limited to the recipient's actual indirect costs, as determined by its negotiated indirect cost rate agreement, or eight percent of a modified total direct cost base, whichever amount is less. For the purposes of this section, a modified total direct cost base is defined as total direct costs less stipends, tuition and related fees, and capital expenditures of $5,000 or more.</P> <P>(1) The eight percent limit also applies to cost-type contracts under grants, if these contracts are for training as defined in this section.</P> <P>(2) The eight percent limit does not apply to agencies of State or local governments, including federally recognized Indian tribal governments, as defined in 34 CFR 80.3.</P> <P>(3) Indirect costs in excess of the eight percent limit may not be charged directly, used to satisfy matching or cost-sharing requirements, or charged to another Federal award.</P> <P>(d) A grantee using the training rate of eight percent is required to have documentation available for audit that <PRTPAGE P="144"/>shows that its negotiated indirect cost rate is at least eight percent.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[59 FR 59582, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.563</SECTNO> <SUBJECT>Restricted indirect cost rate—programs covered.</SUBJECT> <P>If a grantee decides to charge indirect costs to a program that has a statutory requirement prohibiting the use of Federal funds to supplant non-Federal funds, the grantee shall use a restricted indirect cost rate computed under 34 CFR 76.564 through 76.569.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.564</SECTNO> <SUBJECT>Reimbursement of indirect costs.</SUBJECT> <P>(a) Reimbursement of indirect costs is subject to the availability of funds and statutory or administrative restrictions.</P> <P>(b) The application of the rates and the determination of the direct cost base by a grantee must be in accordance with the indirect cost rate agreement approved by the grantee's cognizant agency.</P> <P>(c) Indirect cost reimbursement is not allowable under grants for—</P> <P>(1) Fellowships and similar awards if Federal financing is exclusively in the form of fixed amounts such as scholarships, stipend allowances, or the tuition and fees of an institution;</P> <P>(2) Construction grants;</P> <P>(3) Grants to individuals;</P> <P>(4) Grants to organizations located outside the territorial limits of the United States;</P> <P>(5) Grants to Federal organizations; and</P> <P>(6) Grants made exclusively to support conferences.</P> <P>(d) Indirect cost reimbursement on grants received under programs with statutory restrictions or other limitations on indirect costs must be made in accordance with the restrictions in 34 CFR 76.564 through 76.569.</P> <P>(e) Indirect costs for a group of eligible parties (see §§ 75.127-75.129) are limited to the amount derived by applying the rate of the applicant, or a restricted rate when applicable, to the grant in keeping with the terms of the applicant's indirect cost rate agreement.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.580</SECTNO> <SUBJECT>Coordination with other activities.</SUBJECT> <P>A grantee shall, to the extent possible, coordinate its project with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 2890, and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30339, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Evaluation</HD> <SECTION> <SECTNO>§ 75.590</SECTNO> <SUBJECT>Evaluation by the recipient.</SUBJECT> <P>A recipient shall submit a performance report, or, for the last year of a project, a final report, that evaluates at least annually—</P> <P>(a) The recipient's progress in achieving the objectives in its approved application;</P> <P>(b) The effectiveness of the project in meeting the purposes of the program; and</P> <P>(c) The effect of the project on participants being served by the project.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1875-0102)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30339, July 8, 1992; 59 FR 30262, June 10, 1994; 60 FR 6660, Feb. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.591</SECTNO> <SUBJECT>Federal evaluation—cooperation by a grantee.</SUBJECT> <P>A grantee shall cooperate in any evaluation of the program by the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 86297, Dec. 30, 1980]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.592</SECTNO> <SUBJECT>Federal evaluation—satisfying requirement for grantee evaluation.</SUBJECT> <P>If a grantee cooperates in a Federal evaluation of a program, the Secretary may determine that the grantee meets <PRTPAGE P="145"/>the evaluation requirements of the program, including § 75.590.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Construction</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 74, Subpart P—Procurement Standards.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.600</SECTNO> <SUBJECT>Use of a grant for construction: Purpose of §§ 75.601-75.615.</SUBJECT> <P>Sections 75.601-75.615 apply to:</P> <P>(a) An applicant that requests funds for construction; and</P> <P>(b) A grantee whose grant includes funds for construction.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.601</SECTNO> <SUBJECT>Applicant's assessment of environmental impact.</SUBJECT> <P>An applicant shall include with its application its assessment of the impact of the proposed construction on the quality of the environment in accordance with section 102(2)(C) of the National Environmental Policy Act of 1969 and Executive Order 11514 (34 FR 4247).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.602</SECTNO> <SUBJECT>Preservation of historic sites must be described in the application.</SUBJECT> <P>(a) An applicant shall describe in its application the relationship of the proposed construction to and probable effect on any district, site, building, structure, or object that is:</P> <P>(1) Included in the National Register of Historic Places; or</P> <P>(2) Eligible under criteria established by the Secretary of Interior for inclusion in the National Register of Historic Places.</P> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 36 CFR part 60 for these criteria.</P> </CROSSREF> <P>(b) In deciding whether to make a grant, the Secretary considers:</P> <P>(1) The information provided by the applicant under paragraph (a) of this section; and</P> <P>(2) Any comments by the Advisory Council on Historic Preservation.</P> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 36 CFR part 800, which provides for comments from the Council.</P> </CROSSREF> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.603</SECTNO> <SUBJECT>Grantee's title to site.</SUBJECT> <P>A grantee must have or obtain a full title or other interest in the site, including right of access, that is sufficient to insure the grantee's undisturbed use and possession of the facilities for 50 years or the useful life of the facilities, whichever is longer.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.604</SECTNO> <SUBJECT>Availability of cost-sharing funds.</SUBJECT> <P>A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.605</SECTNO> <SUBJECT>Beginning the construction.</SUBJECT> <P>(a) A grantee shall begin work on construction within a reasonable time after the grant for the construction is made.</P> <P>(b) Before construction is advertised or placed on the market for bidding, the grantee shall get approval by the Secretary of the final working drawings and specifications.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.606</SECTNO> <SUBJECT>Completing the construction.</SUBJECT> <P>(a) A grantee shall complete its construction within a reasonable time.</P> <P>(b) The grantee shall complete the construction in accordance with the application and approved drawings and specifications.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.607</SECTNO> <SUBJECT>General considerations in designing facilities and carrying out construction.</SUBJECT> <P>(a) A grantee shall insure that the construction is:</P> <P>(1) Functional;</P> <P>(2) Economical; and</P> <P>(3) Not elaborate in design or extravagant in the use of materials, compared with facilities of a similar type constructed in the State or other applicable geographic area.</P> <P>(b) The grantee shall, in developing plans for the facilities, consider excellence of architecture and design and inclusion of works of art. The grantee may not spend more than one percent <PRTPAGE P="146"/>of the cost of the project on inclusion of works of art.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.608</SECTNO> <SUBJECT>Areas in the facilities for cultural activities.</SUBJECT> <P>A grantee may make reasonable provision, consistent with the other uses to be made of the facilities, for areas in the facilities that are adaptable for artistic and other cultural activities.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30339, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.609</SECTNO> <SUBJECT>Comply with safety and health standards.</SUBJECT> <P>In planning for and designing facilities, a grantee shall observe:</P> <P>(a) The standards under the Occupational Safety and Health Act of 1970 (Pub. L. 91-576) (See 36 CFR part 1910); and</P> <P>(b) State and local codes, to the extent that they are more stringent.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.610</SECTNO> <SUBJECT>Access by the handicapped.</SUBJECT> <P>A grantee shall comply with the Federal regulations on access by the handicapped that apply to construction and alteration of facilities. These regulations are:</P> <P>(a) For residential facilities—24 CFR part 40; and</P> <P>(b) For non-residential facilities—41 CFR subpart 101-19.6.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.611</SECTNO> <SUBJECT>Avoidance of flood hazards.</SUBJECT> <P>In planning the construction, a grantee shall, in accordance with the provisions of Executive Order 11988 of February 10, 1978 (43 FR 6030) and rules and regulations that may be issued by the Secretary to carry out those provisions:</P> <P>(a) Evaluate flood hazards in connection with the construction; and</P> <P>(b) As far as practicable, avoid uneconomic, hazardous, or unnecessary use of flood plains in connection with the construction.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.612</SECTNO> <SUBJECT>Supervision and inspection by the grantee.</SUBJECT> <P>A grantee shall maintain competent architectural engineering supervision and inspection at the construction site to insure that the work conforms to the approved drawings and specifications.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.613</SECTNO> <SUBJECT>Relocation assistance by the grantee.</SUBJECT> <P>A grantee is subject to the regulations on relocation assistance and real property acquisition in 34 CFR part 15.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.614</SECTNO> <SUBJECT>Grantee must have operational funds.</SUBJECT> <P>A grantee shall insure that, when construction is completed, sufficient funds will be available for effective operation and maintenance of the facilities.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.615</SECTNO> <SUBJECT>Operation and maintenance by the grantee.</SUBJECT> <P>A grantee shall operate and maintain the facilities in accordance with applicable Federal, State, and local requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.616</SECTNO> <SUBJECT>Energy conservation.</SUBJECT> <P>(a) To the extent feasible, a grantee shall design and construct facilities to maximize the efficient use of energy.</P> <P>(b) The following standards of the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) are incorporated by reference in this section:</P> <P>(1) ASHRAE-90 A-1980 (Sections 1-9).</P> <P>(2) ASHRAE-90 B-1975 (Sections 10-11).</P> <P>(3) ASHRAE-90 C-1977 (Section 12).</P> <FP>Incorporation by reference of these provisions has been approved by the Director of the Office of the Federal Register pursuant to the Director's authority under 5 U.S.C. 552 (a) and 1 CFR part 51. The incorporated document is on file at the Department of Education, Grants and Contracts Service, rm. 3636 ROB-3, 400 Maryland Avenue, SW., <PRTPAGE P="147"/>Washington, DC 20202-4700 or at the Office of the Federal Register, 800 North Capitol St., NW., suite 700, Washington, DC. These standards may be obtained from the publication sales department at the American Society of Heating, Refrigerating, and Air Conditioning Engineers, Inc., 1791 Tullie Circle, NE., Atlanta, Georgia 30329.</FP> <P>(c) A grantee shall comply with ASHRAE standards listed in paragraph (b) of this section in designing and constructing facilities built with project funds.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474, 42 U.S.C. 8373(b), and E.O. 12185)</SECAUTH> <CITA>[57 FR 30339, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.617</SECTNO> <SUBJECT>Compliance with the Coastal Barrier Resources Act.</SUBJECT> <P>A recipient may not use, within the Coastal Barrier Resources System, funds made available under a program administered by the Secretary for any purpose prohibited by 31 U.S.C. chapter 55 (sections 3501-3510).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474, 31 U.S.C. 3504, 3505)</SECAUTH> <CITA>[57 FR 30339, July 8, 1992]</CITA> </SECTION> <SUBJGRP> <HD SOURCE="HED">Equipment and Supplies</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.32 Real property; 34 CFR 74.35 Supplies and other expendable property; 34 CFR 74.36 Intangible property; 34 CFR 74.2 Definitions; 34 CFR 80.31 Real property; 34 CFR 80.32 Equipment; 34 CFR 80.33 Supplies; and 34 CFR 80.34 Copyrights.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.618</SECTNO> <SUBJECT>Charges for use of equipment or supplies.</SUBJECT> <P>A grantee may not charge students or school personnel for the ordinary use of equipment or supplies purchased with grant funds.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SUBJGRP> <HD SOURCE="HED">Publications and Copyrights</HD> <SECTION> <SECTNO>§ 75.620</SECTNO> <SUBJECT>General conditions on publication.</SUBJECT> <P>(a) <E T="03">Content of materials.</E> Subject to any specific requirements that apply to its grant, a grantee may decide the format and content of project materials that it publishes or arranges to have published.</P> <P>(b) <E T="03">Required statement.</E> The grantee shall ensure that any publication that contains project materials also contains the following statements: </P> <P>The contents of this (insert type of publication; e.g., book, report, film) were developed under a grant from the Department of Education. However, those contents do not necessarily represent the policy of the Department of Education, and you should not assume endorsement by the Federal Government.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86297, Dec. 30, 1980]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.621</SECTNO> <SUBJECT>Copyright policy for grantees.</SUBJECT> <P>A grantee may copyright project materials in accordance with 34 CFR part 74 or 80, as appropriate.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.22 Payment; 34 CFR 74.24 Program income; and 34 CFR 74.36 Intangible property; 34 CFR 80.25 Program income; and 34 CFR 80.34 Copyrights.</P> </CROSSREF> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 19118, May 26, 1988; 57 FR 30339, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.622</SECTNO> <SUBJECT>Definition of “project materials.”</SUBJECT> <P>As used in §§ 75.620-75.621, “project materials” means a copyrightable work developed with funds from a grant of the Department.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30339, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Inventions and Patents</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.25, Program income and 34 CFR 80.25, Program income.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.626</SECTNO> <SUBJECT>Show Federal support; give papers to vest title.</SUBJECT> <P>Any patent application filed by a grantee for an invention made under a grant must include the following statement in the first paragraph: <PRTPAGE P="148"/> </P> <P>The invention described in this application was made under a grant from the Department of Education.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86297, Dec. 30, 1980; 57 FR 30339, July 8, 1992]</CITA> </SECTION> <SUBJGRP> <HD SOURCE="HED">Other Requirements for Certain Projects</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.21, Standards for financial management systems; 34 CFR 74.48, Contract provisions; 34 CFR 80.20, Standards for financial management and 34 CFR 80.36, Procurement.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.650</SECTNO> <SUBJECT>Participation of students enrolled in private schools.</SUBJECT> <P>If the authorizing statute for a program requires a grantee to provide for participation by students enrolled in private schools, the grantee shall provide a genuine opportunity for equitable participation in accordance with the requirements that apply to subgrantees under 34 CFR 76.650-76.662.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.681</SECTNO> <SUBJECT>Protection of human research subjects.</SUBJECT> <P>If a grantee uses a human subject in a research project, the grantee shall protect the person from physical, psychological, or social injury resulting from the project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 97—Protection of Human Subjects.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 75.682</SECTNO> <SUBJECT>Treatment of animals.</SUBJECT> <P>If a grantee uses an animal in a project, the grantee shall provide the animal with proper care and humane treatment in accordance with the Animal Welfare Act of 1970.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.683</SECTNO> <SUBJECT>Health or safety standards for facilities.</SUBJECT> <P>A grantee shall comply with any Federal health or safety requirements that apply to the facilities that the grantee uses for the project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Are the Administrative Responsibilities of a Grantee?</HD> <SUBJGRP> <HD SOURCE="HED">General Administrative Responsibilities</HD> <SECTION> <SECTNO>§ 75.700</SECTNO> <SUBJECT>Compliance with statutes, regulations, and applications.</SUBJECT> <P>A grantee shall comply with applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, and applications.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.701</SECTNO> <SUBJECT>The grantee administers or supervises the project.</SUBJECT> <P>A grantee shall directly administer or supervise the administration of the project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.702</SECTNO> <SUBJECT>Fiscal control and fund accounting procedures.</SUBJECT> <P>A grantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 74, Subpart C—Post-Award Requirements and Subpart D—After-the-Award Requirements and 34 CFR part 80, Subpart C—Post-Award Requirements and Subpart D—After-the-Grant Requirements.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 75.703</SECTNO> <SUBJECT>Obligation of funds during the grant period.</SUBJECT> <P>A grantee may use grant funds only for obligations it makes during the grant period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.707</SECTNO> <SUBJECT>When obligations are made.</SUBJECT> <P>The following table shows when a grantee makes obligations for various kinds of property and services.</P> <GPOTABLE CDEF="s50,r50" COLS="2" OPTS="L2"> <BOXHD> <CHED H="1">If the obligation is for—</CHED> <CHED H="1">The obligation is made—</CHED> </BOXHD> <ROW> <ENT I="01">(a) Acquisition of real or personal property</ENT> <ENT>On the date the grantee makes a binding written commitment to acquire the property.</ENT> </ROW> <ROW> <ENT I="01">(b) Personal services by an employee of the grantee</ENT> <ENT>When the services are performed.</ENT> </ROW> <ROW> <PRTPAGE P="149"/> <ENT I="01">(c) Personnal services by a contractor who is not an employee of the grantee</ENT> <ENT>On the date on which the grantee makes a binding written commitment to obtain the services.</ENT> </ROW> <ROW> <ENT I="01">(d) Performance of work other than personal services</ENT> <ENT>On the date on which the grantee makes a binding written commitment to obtain the work.</ENT> </ROW> <ROW> <ENT I="01">(e) Public utility services</ENT> <ENT>When the grantee receives the services.</ENT> </ROW> <ROW> <ENT I="01">(f) Travel</ENT> <ENT>When the travel is taken.</ENT> </ROW> <ROW> <ENT I="01">(g) Rental of real or personal property</ENT> <ENT>When the grantee uses the property.</ENT> </ROW> <ROW> <ENT I="01">(h) A preagreement cost that was properly approved by the Secretary under the cost principles identified in 34 CFR 74.171 or 80.22</ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30340, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.708</SECTNO> <SUBJECT>Prohibition of subgrants.</SUBJECT> <P>(a) A grantee may not make a subgrant under a program covered by this part unless specifically authorized by statute.</P> <P>(b) A grantee may contract for supplies, equipment, construction, and other services, in accordance with 34 CFR part 74, Subpart C—Post-Award Requirements (Procurement Standards §§ 74.40-74.48) and 34 CFR part 80, Subpart C—Post-Award Requirements (§ 80.36 Procurement).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987; 64 FR 50392, Sept. 16, 1999]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.51, Monitoring and reporting program performance; 34 CFR 74.52, Financial reporting; 34 CFR 80.40, Monitoring and reporting program performance; and 34 CFR 80.41 Financial reporting.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.720</SECTNO> <SUBJECT>Financial and performance reports.</SUBJECT> <P>(a) This section applies to the reports required under—</P> <P>(1) 34 CFR 74.51 (Monitoring and reporting program performance) and 34 CFR 74.52 (Financial reporting); and</P> <P>(2) 34 CFR 80.40 (Monitoring and reporting program performance) and 34 CFR 80.41 (Financial reporting).</P> <P>(b) A grantee shall submit these reports annually, unless the Secretary allows less frequent reporting. However, the Secretary may require a grantee of a grant made under 34 CFR part 700, 706, 707, or 708 (certain programs of the Office of Educational Research and Improvement) to submit performance reports more often than annually.</P> <P>(c) The Secretary may require a grantee to report more frequently than annually under 34 CFR 74.14 (Special award conditions), 34 CFR 74.21 (Standards for financial management systems), 34 CFR 80.12 (Special grant or subgrant conditions for “high-risk” grantees) or 34 CFR 80.20 (Standards for financial management systems).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30340, July 8, 1992, as amended at 64 FR 50392, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.721</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SUBJGRP> <HD SOURCE="HED">Records</HD> </SUBJGRP> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.53, Retention and access requirements for records and 34 CFR 80.42, Retention and access requirements for records.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.730</SECTNO> <SUBJECT>Records related to grant funds.</SUBJECT> <P>A grantee shall keep records that fully show:</P> <P>(a) The amount of funds under the grant;</P> <P>(b) How the grantee uses the funds;</P> <P>(c) The total cost of the project;</P> <P>(d) The share of that cost provided from other sources; and</P> <P>(e) Other records to facilitate an effective audit.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.731</SECTNO> <SUBJECT>Records related to compliance.</SUBJECT> <P>A grantee shall keep records to show its compliance with program requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="150"/> <SECTNO>§ 75.732</SECTNO> <SUBJECT>Records related to performance.</SUBJECT> <P>(a) A grantee shall keep records of significant project experiences and results.</P> <P>(b) The grantee shall use the records under paragraph (a) to:</P> <P>(1) Determine progress in accomplishing project objectives; and</P> <P>(2) Revise those objectives, if necessary.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR 74.25, Revision of budget and program plans.</P> </CROSSREF> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.733</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SUBJGRP> <HD SOURCE="HED">Privacy</HD> <SECTION> <SECTNO>§ 75.740</SECTNO> <SUBJECT>Protection of and access to student records; student rights in research, experimental programs, and testing.</SUBJECT> <P>(a) Most records on present or past students are subject to the requirements of section 444 of GEPA and its implementing regulations in 34 CFR part 99. (Section 444 is the Family Educational Rights and Privacy Act of 1974.)</P> <P>(b) Under most programs administered by the Secretary, research, experimentation, and testing are subject to the requirements of section 445 of GEPA and its implementing regulations at 34 CFR part 98.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1232g, 1232h, and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30340, July 8, 1992; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—What Procedures Does the Department Use To Get Compliance?</HD> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See 34 CFR part 74, Subpart M—Grant and Subgrant Closeout, Suspension, and Termination.</P> </CROSSREF> <SECTION> <SECTNO>§ 75.900</SECTNO> <SUBJECT>Waiver of regulations prohibited.</SUBJECT> <P>(a) No official, agent, or employee of ED may waive any regulation that applies to a Department program, unless the regulation specifically provides that it may be waived.</P> <P>(b) No act or failure to act by an official, agent, or employee of ED can affect the authority of the Secretary to enforce regulations.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 75.901</SECTNO> <SUBJECT>Suspension and termination.</SUBJECT> <P>(a) [Reserved]</P> <P>(b) The Secretary may use the Education Appeal Board to resolve disputes that are not subject to other procedures. Cross reference: See the following sections in part 74:</P> <P>(1) Section 74.113 (Violation of terms).</P> <P>(2) Section 74.114 (Suspension).</P> <P>(3) Section 74.115 (Termination).</P> <P>(4) The last sentence of § 74.73(c) (Financial reporting after a termination).</P> <P>(5) Section 74.112 (Amounts payable to the Federal Government).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 86297, Dec. 30, 1980]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.902</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 75.903</SECTNO> <SUBJECT>Effective date of termination.</SUBJECT> <P>Termination is effective on the latest of:</P> <P>(a) The date of delivery to the grantee of the notice of termination;</P> <P>(b) The termination date given in the notice of termination; or</P> <P>(c) The date of a final decision of the Secretary under part 78 of this title.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86298, Dec. 30, 1980]</CITA> </SECTION> <SECTION> <SECTNO>§ 75.910</SECTNO> <SUBJECT>Cooperation with audits.</SUBJECT> <P>A grantee shall cooperate with the Secretary and the Comptroller General of the United States or any of their authorized representatives in the conduct of audits authorized by Federal law. This cooperation includes access without unreasonable restrictions to records and personnel of the grantee <PRTPAGE P="151"/>for the purpose of obtaining relevant information.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[54 FR 21775, May 19, 1989]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 76</EAR> <HD SOURCE="HED">PART 76—STATE-ADMINISTERED PROGRAMS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SUBJGRP> <HD SOURCE="HED">Regulations that Apply to State-Administered Programs</HD> <SECHD>Sec.</SECHD> <SECTNO>76.1</SECTNO> <SUBJECT>Programs to which part 76 applies.</SUBJECT> <SECTNO>76.2</SECTNO> <SUBJECT>Exceptions in program regulations to part 76.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Eligibility for a Grant or Subgrant</HD> <SECTNO>76.50</SECTNO> <SUBJECT>Statutes determine eligibility and whether subgrants are made.</SUBJECT> <SECTNO>76.51</SECTNO> <SUBJECT>A State distributes funds by formula or competition.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—How a State Applies for a Grant</HD> <SUBJGRP> <HD SOURCE="HED">State Plans and Applications</HD> <SECTNO>76.100</SECTNO> <SUBJECT>Effect of this subpart.</SUBJECT> <SECTNO>76.101</SECTNO> <SUBJECT>The general State application.</SUBJECT> <SECTNO>76.102</SECTNO> <SUBJECT>Definition of “State plan” for part 76.</SUBJECT> <SECTNO>76.103</SECTNO> <SUBJECT>Multi-year State plans.</SUBJECT> <SECTNO>76.104</SECTNO> <SUBJECT>A State shall include certain certifications in its State plan.</SUBJECT> <SECTNO>76.106</SECTNO> <SUBJECT>State documents are public information.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Consolidated Grant Applications for Insular Areas</HD> <SECTNO>76.125</SECTNO> <SUBJECT>What is the purpose of these regulations?</SUBJECT> <SECTNO>76.126</SECTNO> <SUBJECT>What regulations apply to the consolidated grant applications for insular areas?</SUBJECT> <SECTNO>76.127</SECTNO> <SUBJECT>What is the purpose of a consolidated grant?</SUBJECT> <SECTNO>76.128</SECTNO> <SUBJECT>What is a consolidated grant?</SUBJECT> <SECTNO>76.129</SECTNO> <SUBJECT>How does a consolidated grant work?</SUBJECT> <SECTNO>76.130</SECTNO> <SUBJECT>How are consolidated grants made?</SUBJECT> <SECTNO>76.131</SECTNO> <SUBJECT>How does an insular area apply for a consolidated grant?</SUBJECT> <SECTNO>76.132</SECTNO> <SUBJECT>What assurances must be in a consolidated grant application?</SUBJECT> <SECTNO>76.133</SECTNO> <SUBJECT>What is the reallocation authority?</SUBJECT> <SECTNO>76.134</SECTNO> <SUBJECT>What is the relationship between consolidated and non-consolidated grants?</SUBJECT> <SECTNO>76.135</SECTNO> <SUBJECT>Are there any requirements for matching funds?</SUBJECT> <SECTNO>76.136</SECTNO> <SUBJECT>Under what programs may consolidated grant funds be spent?</SUBJECT> <SECTNO>76.137</SECTNO> <SUBJECT>How may carryover funds be used under the consolidated grant application?</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Amendments</HD> <SECTNO>76.140</SECTNO> <SUBJECT>Amendments to a State plan.</SUBJECT> <SECTNO>76.141</SECTNO> <SUBJECT>An amendment requires the same procedures as the document being amended.</SUBJECT> <SECTNO>76.142</SECTNO> <SUBJECT>An amendment is approved on the same basis as the document being amended.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How a Grant Is Made to a State</HD> <SUBJGRP> <HD SOURCE="HED">Approval or Disapproval by the Secretary</HD> <SECTNO>76.201</SECTNO> <SUBJECT>A State plan must meet all statutory and regulatory requirements.</SUBJECT> <SECTNO>76.202</SECTNO> <SUBJECT>Opportunity for a hearing before a State plan is disapproved.</SUBJECT> <SECTNO>76.235</SECTNO> <SUBJECT>The notification of grant award.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allotments and Reallotments of Grant Funds</HD> <SECTNO>76.260</SECTNO> <SUBJECT>Allotments are made under program statute or regulations.</SUBJECT> <SECTNO>76.261</SECTNO> <SUBJECT>Realloted funds are part of a State's grant.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—How To Apply to the State for a Subgrant</HD> <SECTNO>76.300</SECTNO> <SUBJECT>Contact the State for procedures to follow.</SUBJECT> <SECTNO>76.301</SECTNO> <SUBJECT>Local educational agency general application.</SUBJECT> <SECTNO>76.302</SECTNO> <SUBJECT>The notice to the subgrantee.</SUBJECT> <SECTNO>76.303</SECTNO> <SUBJECT>Joint applications and projects.</SUBJECT> <SECTNO>76.304</SECTNO> <SUBJECT>Subgrantee shall make subgrant application available to the public.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—How a Subgrant Is Made to an Applicant</HD> <SECTNO>76.400</SECTNO> <SUBJECT>State procedures for reviewing an application.</SUBJECT> <SECTNO>76.401</SECTNO> <SUBJECT>Disapproval of an application—opportunity for a hearing.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Conditions Must Be Met by the State and Its Subgrantees?</HD> <SUBJGRP> <HD SOURCE="HED">Nondiscrimination</HD> <SECTNO>76.500</SECTNO> <SUBJECT>Federal statutes and regulations on nondiscrimination.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allowable costs</HD> <SECTNO>76.530</SECTNO> <SUBJECT>General cost principles.</SUBJECT> <SECTNO>76.532</SECTNO> <SUBJECT>Use of funds for religion prohibited.</SUBJECT> <SECTNO>76.533</SECTNO> <SUBJECT>Acquisition of real property; construction.</SUBJECT> <SECTNO>76.534</SECTNO> <SUBJECT>Use of tuition and fees restricted.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Indirect Cost Rates</HD> <SECTNO>76.560</SECTNO> <SUBJECT>General indirect cost rates; exceptions.</SUBJECT> <SECTNO>76.561</SECTNO> <SUBJECT>Approval of indirect cost rates.<PRTPAGE P="152"/> </SUBJECT> <SECTNO>76.563</SECTNO> <SUBJECT>Restricted indirect cost rate—programs covered.</SUBJECT> <SECTNO>76.564</SECTNO> <SUBJECT>Restricted indirect cost rate—formula.</SUBJECT> <SECTNO>76.565</SECTNO> <SUBJECT>General management costs—restricted rate.</SUBJECT> <SECTNO>76.566</SECTNO> <SUBJECT>Fixed costs—restricted rate.</SUBJECT> <SECTNO>76.567</SECTNO> <SUBJECT>Other expenditures—restricted rate.</SUBJECT> <SECTNO>76.568</SECTNO> <SUBJECT>Occupancy and space maintenance costs—restricted rate.</SUBJECT> <SECTNO>76.569</SECTNO> <SUBJECT>Using the restricted indirect cost rate.</SUBJECT> <SECTNO>76.580</SECTNO> <SUBJECT>Coordination with other activities.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Evaluation</HD> <SECTNO>76.591</SECTNO> <SUBJECT>Federal evaluation—cooperation by a grantee.</SUBJECT> <SECTNO>76.592</SECTNO> <SUBJECT>Federal evaluation—satisfying requirement for State or subgrantee evaluation.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Construction</HD> <SECTNO>76.600</SECTNO> <SUBJECT>Where to find construction regulations.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Participation of Students Enrolled in Private Schools</HD> <SECTNO>76.650</SECTNO> <SUBJECT>Private schools; purpose of §§ 76.651-76.662.</SUBJECT> <SECTNO>76.651</SECTNO> <SUBJECT>Responsibility of a State and a subgrantee.</SUBJECT> <SECTNO>76.652</SECTNO> <SUBJECT>Consultation with representatives of private school students.</SUBJECT> <SECTNO>76.653</SECTNO> <SUBJECT>Needs, number of students, and types of services.</SUBJECT> <SECTNO>76.654</SECTNO> <SUBJECT>Benefits for private school students.</SUBJECT> <SECTNO>76.655</SECTNO> <SUBJECT>Level of expenditures for students enrolled in private schools.</SUBJECT> <SECTNO>76.656</SECTNO> <SUBJECT>Information in an application for a subgrant.</SUBJECT> <SECTNO>76.657</SECTNO> <SUBJECT>Separate classes prohibited.</SUBJECT> <SECTNO>76.658</SECTNO> <SUBJECT>Funds not to benefit a private school.</SUBJECT> <SECTNO>76.659</SECTNO> <SUBJECT>Use of public school personnel.</SUBJECT> <SECTNO>76.660</SECTNO> <SUBJECT>Use of private school personnel.</SUBJECT> <SECTNO>76.661</SECTNO> <SUBJECT>Equipment and supplies.</SUBJECT> <SECTNO>76.662</SECTNO> <SUBJECT>Construction.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Bypass</HD> <SECTNO>76.670</SECTNO> <SUBJECT>Applicability and filing requirements.</SUBJECT> <SECTNO>76.671</SECTNO> <SUBJECT>Notice by the Secretary.</SUBJECT> <SECTNO>76.672</SECTNO> <SUBJECT>Bypass procedures.</SUBJECT> <SECTNO>76.673</SECTNO> <SUBJECT>Appointment and functions of a hearing officer.</SUBJECT> <SECTNO>76.674</SECTNO> <SUBJECT>Hearing procedures.</SUBJECT> <SECTNO>76.675</SECTNO> <SUBJECT>Posthearing procedures.</SUBJECT> <SECTNO>76.676</SECTNO> <SUBJECT>Judicial review of a bypass action.</SUBJECT> <SECTNO>76.677</SECTNO> <SUBJECT>Continuation of a bypass.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Other Requirements for Certain Programs</HD> <SECTNO>76.681</SECTNO> <SUBJECT>Protection of human subjects.</SUBJECT> <SECTNO>76.682</SECTNO> <SUBJECT>Treatment of animals.</SUBJECT> <SECTNO>76.683</SECTNO> <SUBJECT>Health or safety standards for facilities.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—What Are the Administrative Responsibilities of the State and Its Subgrantees?</HD> <SUBJGRP> <HD SOURCE="HED">General Administrative Responsibilities</HD> <SECTNO>76.700</SECTNO> <SUBJECT>Compliance with statutes, regulations, State plan, and applications.</SUBJECT> <SECTNO>76.701</SECTNO> <SUBJECT>The State or subgrantee administers or supervises each project.</SUBJECT> <SECTNO>76.702</SECTNO> <SUBJECT>Fiscal control and fund accounting procedures.</SUBJECT> <SECTNO>76.703</SECTNO> <SUBJECT>When a State may begin to obligate funds.</SUBJECT> <SECTNO>76.704</SECTNO> <SUBJECT>New State plan requirements that must be addressed in a State plan.</SUBJECT> <SECTNO>76.707</SECTNO> <SUBJECT>When obligations are made.</SUBJECT> <SECTNO>76.708</SECTNO> <SUBJECT>When certain subgrantees may begin to obligate funds.</SUBJECT> <SECTNO>76.709</SECTNO> <SUBJECT>Funds may be obligated during a “carryover period.”</SUBJECT> <SECTNO>76.710</SECTNO> <SUBJECT>Obligations made during a carryover period are subject to current statutes, regulations, and applications.</SUBJECT> <SECTNO>76.711</SECTNO> <SUBJECT>Requesting funds by CFDA number.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports</HD> <SECTNO>76.720</SECTNO> <SUBJECT>Financial and performance reports by a State.</SUBJECT> <SECTNO>76.722</SECTNO> <SUBJECT>A subgrantee makes reports required by the State.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Records</HD> <SECTNO>76.730</SECTNO> <SUBJECT>Records related to grant funds.</SUBJECT> <SECTNO>76.731</SECTNO> <SUBJECT>Records related to compliance.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Privacy</HD> <SECTNO>76.740</SECTNO> <SUBJECT>Protection of and access to student records; student rights in research, experimental programs, and testing.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Use of Funds by States and Subgrantees</HD> <SECTNO>76.760</SECTNO> <SUBJECT>More than one program may assist a single activity.</SUBJECT> <SECTNO>76.761</SECTNO> <SUBJECT>Federal funds may pay 100 percent of cost.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Administrative Responsibilities</HD> <SECTNO>76.770</SECTNO> <SUBJECT>A State shall have procedures to ensure compliance.</SUBJECT> <SECTNO>76.783</SECTNO> <SUBJECT>State educational agency action—subgrantee's opportunity for a hearing.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—How Does a State or Local Educational Agency Allocate Funds to Charter Schools?</HD> <SUBJGRP> <HD SOURCE="HED">General</HD> <SECTNO>76.785</SECTNO> <SUBJECT>What is the purpose of this subpart?</SUBJECT> <SECTNO>76.786</SECTNO> <SUBJECT>What entities are governed by this subpart?</SUBJECT> <SECTNO>76.787</SECTNO> <SUBJECT>What definitions apply to this subpart?</SUBJECT> </SUBJGRP> <SUBJGRP> <PRTPAGE P="153"/> <HD SOURCE="HED">Responsibilities for Notice and Information</HD> <SECTNO>76.788</SECTNO> <SUBJECT>What are a charter school LEA's responsibilities under this subpart?</SUBJECT> <SECTNO>76.789</SECTNO> <SUBJECT>What are an SEA's responsibilities under this subpart?</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allocation of Funds by State Educational Agencies</HD> <SECTNO>76.791</SECTNO> <SUBJECT>On what basis does an SEA determine whether a charter school LEA that opens or significantly expands its enrollment is eligible to receive funds under a covered program?</SUBJECT> <SECTNO>76.792</SECTNO> <SUBJECT>How does an SEA allocate funds to eligible charter school LEAs under a covered program in which the SEA awards subgrants on a formula basis?</SUBJECT> <SECTNO>76.793</SECTNO> <SUBJECT>When is an SEA required to allocate funds to a charter school LEA under this subpart?</SUBJECT> <SECTNO>76.794</SECTNO> <SUBJECT>How does an SEA allocate funds to charter school LEAs under a covered program in which the SEA awards subgrants on a discretionary basis?</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Adjustments</HD> <SECTNO>76.796</SECTNO> <SUBJECT>What are the consequences of an SEA allocating more or fewer funds to a charter school LEA under a covered program than the amount for which the charter school LEA is eligible when the charter school LEA actually opens or significantly expands its enrollment?</SUBJECT> <SECTNO>76.797</SECTNO> <SUBJECT>When is an SEA required to make adjustments to allocations under this subpart?</SUBJECT> <HD SOURCE="HD1">Applicability of This Subpart to Local Educational Agencies</HD> <SECTNO>76.799</SECTNO> <SUBJECT>Do the requirements in this subpart apply to LEAs?</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—What Procedures Does the Secretary Use To Get Compliance?</HD> <SECTNO>76.900</SECTNO> <SUBJECT>Waiver of regulations prohibited.</SUBJECT> <SECTNO>76.901</SECTNO> <SUBJECT>Office of Administrative Law Judges.</SUBJECT> <SECTNO>76.902</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>76.910</SECTNO> <SUBJECT>Cooperation with audits.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 1221e-3, 3474, 6511(a), and 8065a, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 22517, Apr. 3, 1980, unless otherwise noted. Redesignated at 45 FR 77368, Nov. 21, 1980.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SUBJGRP> <HD SOURCE="HED">Regulations That Apply to State-Administered Programs</HD> <SECTION> <SECTNO>§ 76.1</SECTNO> <SUBJECT>Programs to which part 76 applies.</SUBJECT> <P>(a) The regulations in part 76 apply to each State-administered program of the Department.</P> <P>(b) If a State formula grant program does not have implementing regulations, the Secretary implements the program under the authorizing statute and, to the extent consistent with the authorizing statute, under the General Education Provisions Act and the regulations in this part. For the purposes of this part, the term <E T="03">State formula grant program</E> means a program whose authorizing statute or implementing regulations provide a formula for allocating program funds among eligible States.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 84059, Dec. 22, 1980; 50 FR 29330, July 18, 1985; 52 FR 27804, July 24, 1987; 54 FR 21776, May 19, 1989; 55 FR 14816, Apr. 18, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.2</SECTNO> <SUBJECT>Exceptions in program regulations to part 76.</SUBJECT> <P>If a program has regulations that are not consistent with part 76, the implementing regulations for that program identify the sections of part 76 that do not apply.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 54 FR 21776, May 19, 1989]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Eligibility for a Grant or Subgrant</HD> <SECTION> <SECTNO>§ 76.50</SECTNO> <SUBJECT>Statutes determine eligibility and whether subgrants are made.</SUBJECT> <P>(a) Under a program covered by this part, the Secretary makes a grant:</P> <P>(1) To the State agency designated by the authorizing statute for the program; or</P> <P>(2) To the State agency designated by the State in accordance with the authorizing statute.</P> <P>(b) The authorizing statute determines the extent to which a State may:<PRTPAGE P="154"/> </P> <P>(1) Use grant funds directly; and</P> <P>(2) Make subgrants to eligible applicants.</P> <P>(c) The regulations in part 76 on subgrants apply to a program only if subgrants are authorized under that program.</P> <P>(d) The authorizing statute determines the eligibility of an applicant for a subgrant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 52 FR 27804, July 24, 1987; 54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.51</SECTNO> <SUBJECT>A State distributes funds by formula or competition.</SUBJECT> <P>If a program statute authorizes a State to make subgrants, the statute:</P> <P>(a) Requires the State to use a formula to distribute funds;</P> <P>(b) Gives the State discretion to select subgrantees through a competition among the applicants or through some other procedure; or</P> <P>(c) Allows some combination of these procedures.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 54 FR 21776, May 19, 1989]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—How a State Applies for a Grant</HD> <SUBJGRP> <HD SOURCE="HED">State Plans and Applications</HD> <SECTION> <SECTNO>§ 76.100</SECTNO> <SUBJECT>Effect of this subpart.</SUBJECT> <P>This subpart establishes general requirements that a State must meet to apply for a grant under a program covered by this part. Additional requirements are in the authorizing statute and the implementing regulations for the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[52 FR 27804, July 24, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.101</SECTNO> <SUBJECT>The general State application.</SUBJECT> <P>A State that makes subgrants to local educational agencies under a program subject to this part shall have on file with the Secretary a general application that meets the requirements of section 441 of the General Education Provisions Act.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1232d, and 3474)</SECAUTH> <CITA>[52 FR 27804, July 24, 1987, as amended at 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.102</SECTNO> <SUBJECT>Definition of “State plan” for part 76.</SUBJECT> <P>As used in this part, <E T="03">State plan</E> means any of the following documents:</P> <GPOTABLE CDEF="s50,r55,r80,xs30" COLS="4" OPTS="L2,i1"> <BOXHD> <CHED H="1">Document</CHED> <CHED H="1">Program</CHED> <CHED H="1">Authorizing statute</CHED> <CHED H="1">Principal Office</CHED> </BOXHD> <ROW> <ENT I="01">State plan</ENT> <ENT>Assistance to States for Education of Handicapped Children</ENT> <ENT>Part B (except section 619), Individuals with Disabilities Education Act (20 U.S.C. 1411-1420)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Preschool Grants</ENT> <ENT>Section 619, Individuals with Disabilities Education Act (20 U.S.C. 1419)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Handicapped Infants and Toddlers</ENT> <ENT>Part H, Individuals with Disabilities Education Act (20 U.S.C. 1471-1485)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">Application or written request for assistance</ENT> <ENT>Client Assistance Program</ENT> <ENT>Section 112, Rehabilitation Act of 1973 (29 U.S.C. 732)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Removal of Architectural Barriers to the Handicapped Program</ENT> <ENT>Section 607, Individuals with Disabilities Education Act (20 U.S.C. 1406)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">State plan</ENT> <ENT>State Vocational Rehabilitation Services Program</ENT> <ENT>Title I, Parts A-C, Rehabilitation Act of 1973 (29 U.S.C. 720-741)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">State plan supplement</ENT> <ENT>State Supported Employment Services Program</ENT> <ENT>Title VI, Part C, Rehabilitation Act of 1973 (29 U.S.C. 795j-795r)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">State plan</ENT> <ENT>State Independent Living Services Program</ENT> <ENT>Title VII, Part A, Rehabilitation Act of 1973 (29 U.S.C. 796-796d)</ENT> <ENT>OSERS</ENT> </ROW> <ROW> <ENT I="01">State plan</ENT> <ENT>State Vocational Education Program</ENT> <ENT>Title I, Part B, Carl D. Perkins Vocational Education Act (20 U.S.C. 2321-2325)</ENT> <ENT>OVAE</ENT> </ROW> <ROW> <ENT I="01">State plan and application</ENT> <ENT>State-Administered Adult Education Program</ENT> <ENT>Section 341, Adult Education Act (20 U.S.C. 1206)</ENT> <ENT>OVAE</ENT> </ROW> <ROW> <ENT I="01">State plan</ENT> <ENT>Even Start Family Literacy Program</ENT> <ENT>Title I, Chapter 1, Part B of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 2741-2749)</ENT> <ENT>OESE</ENT> </ROW> <ROW> <ENT I="01">State application</ENT> <ENT>State Grants for Strengthening Instruction in Mathematics and Science</ENT> <ENT>Title II, Part A, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2981-2993)</ENT> <ENT>OESE</ENT> </ROW> <ROW> <PRTPAGE P="155"/> <ENT I="01">State application</ENT> <ENT>Federal, State and Local Partnership for Educational Improvement</ENT> <ENT>Title I, Chapter 2, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2911-2952 and 2971-2976)</ENT> <ENT>OESE</ENT> </ROW> <ROW> <ENT I="01">State plan or application</ENT> <ENT>Migrant Education Program</ENT> <ENT>Sections 1201, 1202, Chapter 1, Title I, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2781 and 2782)</ENT> <ENT>OESE</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>State Student Incentive Grant Program</ENT> <ENT>Section 415C, Higher Education Act of 1965 (20 U.S.C. 1070c-2)</ENT> <ENT>OPE</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Paul Douglas Teacher Scholarship Program</ENT> <ENT>Section 553, Higher Education Act of 1965 (20 U.S.C. 1111b)</ENT> <ENT>OPE</ENT> </ROW> <ROW> <ENT I="01">Basic State plan, long-range program, and annual program</ENT> <ENT>The Library Services and Construction Act State-Administered Program</ENT> <ENT>Library Services and Construction Act (20 U.S.C. 351-355e-3)</ENT> <ENT>OERI</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Emergency Immigrant Education Program</ENT> <ENT>Emergency Immigrant Education Act (20 U.S.C. 3121-3130)</ENT> <ENT>OBEMLA</ENT> </ROW> <ROW> <ENT I="01">Application</ENT> <ENT>Transition Program for Refugee Children</ENT> <ENT>Section 412(d) Immigration and Naturalization Act (8 U.S.C. 1522 (d))</ENT> <ENT>OBEMLA</ENT> </ROW> <ROW> <ENT I="01">Any document that the authorizing statute for a State-administered program requires a State to submit to receive funds</ENT> <ENT>Any State-administered program without implementing regulations</ENT> <ENT>Section 408(a)(1), General Education Provisions Act and Section 414, Department of Education Organization Act (20 U.S.C. 1221e-3(a)(1) and 3474)</ENT> <ENT>Dept-wide </ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30340, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.103</SECTNO> <SUBJECT>Multi-year State plans.</SUBJECT> <P>(a) Beginning with fiscal year 1996, each State plan will be effective for a period of more than one fiscal year, to be determined by the Secretary or by regulations.</P> <P>(b) If the Secretary determines that the multi-year State plans under a program should be submitted by the States on a staggered schedule, the Secretary may require groups of States to submit or resubmit their plans in different years.</P> <P>(c) This section does not apply to:</P> <P>(1) The annual accountability report under part A of title I of the Vocational Education Act;</P> <P>(2) The annual programs under the Library Services and Construction Act;</P> <P>(3) The application under sections 141-143 of the Elementary and Secondary Education Act; and</P> <P>(4) The State application under section 209 of title II of the Education for Economic Security Act.</P> <P>(d) A State may submit an annual State plan under the Vocational Education Act. If a State submits an annual plan under that program, this section does not apply to that plan.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>This section is based on a provision in the General Education Provisions Act (GEPA). Section 427 of the Department of Education Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the extent inconsistent with the DEOA, the GEPA “shall apply to functions transferred by this Act to the extent applicable on the day preceding the effective date of this Act.” Although standardized nomenclature is used in this section to reflect the creation of the Department of Education, there is no intent to extend the coverage of the GEPA beyond that authorized under section 427 or other applicable law.</P> </NOTE> <SECAUTH>(Authority: 20 U.S.C. 1231g(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86296, Dec. 30, 1980; 50 FR 43545, Oct. 25, 1985; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.104</SECTNO> <SUBJECT>A State shall include certain certifications in its State plan.</SUBJECT> <P>(a) A State shall include the following certifications in each State plan:</P> <P>(1) That the plan is submitted by the State agency that is eligible to submit the plan.</P> <P>(2) That the State agency has authority under State law to perform the functions of the State under the program.</P> <P>(3) That the State legally may carry out each provision of the plan.</P> <P>(4) That all provisions of the plan are consistent with State law.</P> <P>(5) That a State officer, specified by title in the certification, has authority under State law to receive, hold, and <PRTPAGE P="156"/>disburse Federal funds made available under the plan.</P> <P>(6) That the State officer who submits the plan, specified by title in the certification, has authority to submit the plan.</P> <P>(7) That the agency that submits the plan has adopted or otherwise formally approved the plan.</P> <P>(8) That the plan is the basis for State operation and administration of the program.</P> <P>(b) [Reserved]</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.106</SECTNO> <SUBJECT>State documents are public information.</SUBJECT> <P>A State shall make the following documents available for public inspection:</P> <P>(a) All State plans and related official materials.</P> <P>(b) All approved subgrant applications.</P> <P>(c) All documents that the Secretary transmits to the State regarding a program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Consolidated Grant Applications for Insular Areas</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>Title V, Pub. L. 95-134, 91 Stat. 1159 (48 U.S.C. 1469a).</P> </AUTH> <SECTION> <SECTNO>§ 76.125</SECTNO> <SUBJECT>What is the purpose of these regulations?</SUBJECT> <P>(a) Sections 76.125 through 76.137 of this part contain requirements for the submission of an application by an Insular Area for the consolidation of two or more grants under the programs described in paragraph (c) of this section.</P> <P>(b) For the purpose of §§ 76.125-76.137 of this part the term <E T="03">Insular Area</E> means the Virgin Islands, Guam, American Samoa, the Trust Territory of the Pacific Islands, or the Commonwealth of the Northern Mariana Islands.</P> <P>(c) The Secretary may make an annual consolidated grant to assist an Insular Area in carrying out one or more State-administered formula grant programs of the Department.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982, as amended at 54 FR 21776, May 19, 1989; 57 FR 30341, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.126</SECTNO> <SUBJECT>What regulations apply to the consolidated grant applications for insular areas?</SUBJECT> <P>The following regulations apply to those programs included in a consolidated grant:</P> <P>(a) The regulations in §§ 76.125 through 76.137; and</P> <P>(b) The regulations that apply to each specific program included in a consolidated grant for which funds are used.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.127</SECTNO> <SUBJECT>What is the purpose of a consolidated grant?</SUBJECT> <P>An Insular Area may apply for a consolidated grant for two or more of the programs listed in § 76.125(c). This procedure is intended to:</P> <P>(a) Simplify the application and reporting procedures that would otherwise apply for each of the programs included in the consolidated grant; and</P> <P>(b) Provide the Insular Area with flexibility in allocating the funds under the consolidated grant to achieve any of the purposes to be served by the programs that are consolidated.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.128</SECTNO> <SUBJECT>What is a consolidated grant?</SUBJECT> <P>A consolidated grant is a grant to an Insular Area for any two or more of the programs listed in § 76.125(c). The amount of the consolidated grant is the sum of the allocations the Insular Area receives under each of the programs included in the consolidated grant if there had been no consolidation. </P> <EXAMPLE> <HD SOURCE="HED">Example.</HD> <P>Assume the Virgin Islands applies for a consolidated grant that includes programs under the Adult Education Act, Vocational Education Act, and Chapter 1 of the Education Consolidation and Improvement Act. If the Virgin Islands’ allocation under the formula for each of these three programs is $150,000; the total consolidated grant to the Virgin Islands would be $450,000.</P> </EXAMPLE> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <PRTPAGE P="157"/> <SECTNO>§ 76.129</SECTNO> <SUBJECT>How does a consolidated grant work?</SUBJECT> <P>(a) An Insular Area shall use the funds it receives under a consolidated grant to carry out, in its jurisdiction, one or more of the programs included in the grant. </P> <EXAMPLE> <HD SOURCE="HED">Example.</HD> <P>Assume that Guam applies for a consolidated grant under the Vocational Education Act, the Handicapped Preschool and School Programs-Incentive Grants, and the Adult Education Act and that the sum of the allocations under these programs is $700,000. Guam may choose to allocate this $700,000 among all of the programs authorized under the three programs. Alternatively, it may choose to allocate the entire $700,000 to one or two of the programs; for example, the Adult Education Act Program.</P> </EXAMPLE> <P>(b) An Insular Area shall comply with the statutory and regulatory requirements that apply to each program under which funds from the consolidated grant are expended. </P> <EXAMPLE> <HD SOURCE="HED">Example.</HD> <P>Assume that American Samoa uses part of the funds under a consolidated grant for the State program under the Adult Education Act. American Samoa need not submit to the Secretary a State plan that requires policies and procedures to assure all students equal access to adult education programs. However, in carrying out the program, American Samoa must meet and be able to demonstrate compliance with this equal access requirement.</P> </EXAMPLE> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.130</SECTNO> <SUBJECT>How are consolidated grants made?</SUBJECT> <P>(a) The Secretary annually makes a single consolidated grant to each Insular Area that meets the requirements of §§ 76.125 through 76.137 and each program under which the grant funds are to be used and administered.</P> <P>(b) The Secretary may decide that one or more programs cannot be included in the consolidated grant if the Secretary determines that the Insular Area failed to meet the program objectives stated in its plan for the previous fiscal year in which it carried out the programs.</P> <P>(c) Under a consolidated grant, an Insular Area may use a single advisory council for any or all of the programs that require an advisory council.</P> <P>(d) Although Pub. L. 95-134 authorizies the Secretary to consolidate grant funds that the Department awards to an Insular Area, it does not confer eligibility for any grant funds. The eligibility of a particular Insular Area to receive grant funds under a Federal education program is determined under the statute and regulations for that program.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.131</SECTNO> <SUBJECT>How does an insular area apply for a consolidated grant?</SUBJECT> <P>(a) An Insular Area that desires to apply for a grant consolidating two or more programs listed in § 76.125(c) shall submit to the Secretary an application that:</P> <P>(1) Contains the assurances in § 76.132; and</P> <P>(2) Meets the application requirements in paragraph (c) of this section.</P> <P>(b) The submission of an application that contains these requirements and assurances takes the place of a separate State plan or other similar document required by this part or by the authorizing statutes and regulations for programs included in the consolidated grant.</P> <P>(c) An Insular Area shall include in its consolidated grant application a program plan that:</P> <P>(1) Contains a list of the programs in § 76.125(c) to be included in the consolidated grant;</P> <P>(2) Describes the program or programs in § 76.125(c) under which the consolidated grant funds will be used and administered;</P> <P>(3) Describes the goals, objectives, activities, and the means of evaluating program outcomes for the programs for which the Insular Area will use the funds received under the consolidated grant during the fiscal year for which it submits the application, including needs of the population that will be met by the consolidation of funds; and</P> <P>(4) Contains a budget that includes a description of the allocation of funds—including any anticipated carryover funds of the program in the consolidated grant from the preceding year—<PRTPAGE P="158"/>among the programs to be included in the consolidated grant.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.132</SECTNO> <SUBJECT>What assurances must be in a consolidated grant application?</SUBJECT> <P>(a) An Insular Area shall include in its consolidated grant application assurances to the Secretary that it will:</P> <P>(1) Follow policies and use administrative practices that will insure that non-Federal funds will not be supplanted by Federal funds made available under the authority of the programs in the consolidated grant;</P> <P>(2) Comply with the requirements (except those relating to the submission of State plans or similar documents) in the authorizing statutes and implementing regulations for the programs under which funds are to be used and administered, (except requirements for matching funds);</P> <P>(3) Provide for proper and efficient administration of funds in accordance with the authorizing statutes and implementing regulations for those programs under which funds are to be used and administered;</P> <P>(4) Provide for fiscal control and fund accounting procedures to assure proper disbursement of, and accounting for, Federal funds received under the consolidated grant;</P> <P>(5) Submit an annual report to the Secretary containing information covering the program or programs for which the grant is used and administered, including the financial and program performance information required under 34 CFR 74.51-74.52 and 34 CFR 80.40-80.41.</P> <P>(6) Provide that funds received under the consolidated grant will be under control of, and that title to property acquired with these funds will be in, a public agency, institution, or organization. The public agency shall administer these funds and property;</P> <P>(7) Keep records, including a copy of the State Plan or application document under which funds are to be spent, which show how the funds received under the consolidated grant have been spent.</P> <P>(8) Adopt and use methods of monitoring and providing technical assistance to any agencies, organizations, or institutions that carry out the programs under the consolidated grant and enforce any obligations imposed on them under the applicable statutes and regulations.</P> <P>(9) Evaluate the effectiveness of these programs in meeting the purposes and objectives in the authorizing statutes under which program funds are used and administered;</P> <P>(10) Conduct evaluations of these programs at intervals and in accordance with procedures the Secretary may prescribe; and</P> <P>(11) Provide appropriate opportunities for participation by local agencies, representatives of the groups affected by the programs, and other interested institutions, organizations, and individuals in planning and operating the programs.</P> <P>(b) These assurances remain in effect for the duration of the programs they cover.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982, as amended at 64 FR 50392, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.133</SECTNO> <SUBJECT>What is the reallocation authority?</SUBJECT> <P>(a) After an Insular Area receives a consolidated grant, it may reallocate the funds in a manner different from the allocation described in its consolidated grant application. However, the funds cannot be used for purposes that are not authorized under the programs in the consolidated grant under which funds are to be used and administered.</P> <P>(b) If an Insular Area decides to reallocate the funds it receives under a consolidated grant, it shall notify the Secretary by amending its original application to include an update of the information required under § 76.131.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.134</SECTNO> <SUBJECT>What is the relationship between consolidated and non-consolidated grants?</SUBJECT> <P>(a) An Insular Area may request that any number of programs in § 76.125(c) be <PRTPAGE P="159"/>included in its consolidated grant and may apply separately for assistance under any other programs listed in § 76.125(c) for which it is eligible.</P> <P>(b) Those programs that an Insular Area decides to exclude from consolidation—for which it must submit separate plans or applications—are implemented in accordance with the applicable program statutes and regulations. The excluded programs are not subject to the provisions for allocation of funds among programs in a consolidated grant.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.135</SECTNO> <SUBJECT>Are there any requirements for matching funds?</SUBJECT> <P>The Secretary waives all requirements for matching funds for those programs that are consolidated by an Insular Area in a consolidated grant application.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.136</SECTNO> <SUBJECT>Under what programs may consolidated grant funds be spent?</SUBJECT> <P>Insular Areas may only use and administer funds under programs described in § 76.125(c) during a fiscal year for which the Insular Area is entitled to receive funds under an appropriation for that program.</P> <SECAUTH>(Authority: 48 U.S.C. 1469a)</SECAUTH> <CITA>[47 FR 17421, Apr. 22, 1982, as amended at 57 FR 30341, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.137</SECTNO> <SUBJECT>How may carryover funds be used under the consolidated grant application?</SUBJECT> <P>Any funds under any applicable program which are available for obligation and expenditure in the year succeeding the fiscal year for which they are appropriated must be obligated and expended in accordance with the consolidated grant application submitted by the Insular Area for that program for the succeeding fiscal year.</P> <SECAUTH>(Authority: 20 U.S.C. 1225(b); 48 U.S.C. 1469a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Amendments</HD> <SECTION> <SECTNO>§ 76.140</SECTNO> <SUBJECT>Amendments to a State plan.</SUBJECT> <P>(a) If the Secretary determines that an amendment to a State plan is essential during the effective period of the plan, the State shall make the amendment.</P> <P>(b) A State shall also amend a State plan if there is a significant and relevant change in:</P> <P>(1) The information or the assurances in the plan;</P> <P>(2) The administration or operation of the plan; or</P> <P>(3) The organization, policies, or operations of the State agency that received the grant, if the change materially affects the information or assurances in the plan.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1231g(a), and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.141</SECTNO> <SUBJECT>An amendment requires the same procedures as the document being amended.</SUBJECT> <P>If a State amends a State plan under § 76.140, the State shall use the same procedures as those it must use to prepare and submit a State plan.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.142</SECTNO> <SUBJECT>An amendment is approved on the same basis as the document being amended.</SUBJECT> <P>The Secretary uses the same procedures to approve an amendment to a State plan—or any other document a State submits—as the Secretary uses to approve the original document.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—How a Grant Is Made to a State</HD> <SUBJGRP> <HD SOURCE="HED">Approval or Disapproval by the Secretary</HD> <SECTION> <SECTNO>§ 76.201</SECTNO> <SUBJECT>A State plan must meet all statutory and regulatory requirements.</SUBJECT> <P>The Secretary approves a State plan if it meets the requirements of the Federal statutes and regulations that apply to the plan.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="160"/> <SECTNO>§ 76.202</SECTNO> <SUBJECT>Opportunity for a hearing before a State plan is disapproved.</SUBJECT> <P>The Secretary may disapprove a State plan only after:</P> <P>(a) Notifying the State;</P> <P>(b) Offering the State a reasonable opportunity for a hearing; and</P> <P>(c) Holding the hearing, if requested by the State.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.235</SECTNO> <SUBJECT>The notification of grant award.</SUBJECT> <P>(a) To make a grant to a State, the Secretary issues and sends to the State a notification of grant award.</P> <P>(b) The notification of grant award tells the amount of the grant and provides other information about the grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allotments and Reallotments of Grant Funds</HD> <SECTION> <SECTNO>§ 76.260</SECTNO> <SUBJECT>Allotments are made under program statute or regulations.</SUBJECT> <P>(a) The Secretary allots program funds to a State in accordance with the authorizing statute or implementing regulations for the program.</P> <P>(b) Any reallotment to other States will be made by the Secretary in accordance with the authorizing statute or implementing regulations for that program.</P> <SECAUTH>(Authority: 20 U.S.C. 3474(a))</SECAUTH> <CITA>[50 FR 29330, July 18, 1985]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.261</SECTNO> <SUBJECT>Reallotted funds are part of a State's grant.</SUBJECT> <P>Funds that a State receives as a result of a reallotment are part of the State's grant for the appropriate fiscal year. However, the Secretary does not consider a reallotment in determining the maximum or minimum amount to which a State is entitled for a following fiscal year.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—How To Apply to the State for a Subgrant</HD> <SECTION> <SECTNO>§ 76.300</SECTNO> <SUBJECT>Contact the State for procedures to follow.</SUBJECT> <P>An applicant for a subgrant can find out the procedures it must follow by contacting the State agency that administers the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CROSSREF> <HD SOURCE="HED">Cross reference:</HD> <P>See subparts E and G of this part for the general responsibilities of the State regarding applications for subgrants.</P> </CROSSREF> </SECTION> <SECTION> <SECTNO>§ 76.301</SECTNO> <SUBJECT>Local educational agency general application.</SUBJECT> <P>A local educational agency that applies for a subgrant under a program subject to this part shall have on file with the State a general application that meets the requirements of Section 442 of the General Education Provisions Act.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1232d, and 3474)</SECAUTH> <CITA>[52 FR 27804, July 24, 1987, as amended at 53 FR 49143, Dec. 6, 1988; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.302</SECTNO> <SUBJECT>The notice to the subgrantee.</SUBJECT> <P>A State shall notify a subgrantee in writing of:</P> <P>(a) The amount of the subgrant;</P> <P>(b) The period during which the subgrantee may obligate the funds; and</P> <P>(c) The Federal requirements that apply to the subgrant.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.303</SECTNO> <SUBJECT>Joint applications and projects.</SUBJECT> <P>(a) Two or more eligible parties may submit a joint application for a subgrant.</P> <P>(b) If the State must use a formula to distribute subgrant funds (see § 76.51), the State may not make a subgrant that exceeds the sum of the entitlements of the separate subgrantees.<PRTPAGE P="161"/> </P> <P>(c) If the State funds the application, each subgrantee shall:</P> <P>(1) Carry out the activities that the subgrantee agreed to carry out; and</P> <P>(2) Use the funds in accordance with Federal requirements.</P> <P>(d) Each subgrantee shall use an accounting system that permits identification of the costs paid for under its subgrant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.304</SECTNO> <SUBJECT>Subgrantee shall make subgrant application available to the public.</SUBJECT> <P>A subgrantee shall make any application, evaluation, periodic program plan, or report relating to each program available for public inspection.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1232e, and 3474)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—How a Subgrant Is Made to an Applicant</HD> <SECTION> <SECTNO>§ 76.400</SECTNO> <SUBJECT>State procedures for reviewing an application.</SUBJECT> <P>A State that receives an application for a subgrant shall take the following steps:</P> <P>(a) <E T="03">Review.</E> The State shall review the application.</P> <P>(b) <E T="03">Approval—entitlement programs.</E> The State shall approve an application if:</P> <P>(1) The application is submitted by an applicant that is entitled to receive a subgrant under the program; and</P> <P>(2) The applicant meets the requirements of the Federal statutes and regulations that apply to the program.</P> <P>(c) <E T="03">Approval—discretionary programs.</E> The State may approve an application if:</P> <P>(1) The application is submitted by an eligible applicant under a program in which the State has the discretion to select subgrantees;</P> <P>(2) The applicant meets the requirements of the Federal statutes and regulations that apply to the program; and</P> <P>(3) The State determines that the project should be funded under the authorizing statute and implementing regulations for the program.</P> <P>(d) <E T="03">Disapproval—entitlement and discretionary programs.</E> If an application does not meet the requirements of the Federal statutes and regulations that apply to a program, the State shall not approve the application.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.401</SECTNO> <SUBJECT>Disapproval of an application—opportunity for a hearing.</SUBJECT> <P>(a) <E T="03">State agency hearing before disapproval.</E> Under the programs listed in the chart below, the State agency that administers the program shall provide an applicant with notice and an opportunity for a hearing before it may disapprove the application.</P> <GPOTABLE CDEF="s120,r80,11" COLS="3" OPTS="L2,i1"> <BOXHD> <CHED H="1">Program</CHED> <CHED H="1">Authorizing statute</CHED> <CHED H="1">Implementing regulations Title 34 CFR Part</CHED> </BOXHD> <ROW> <ENT I="01">Chapter 1, Program in Local Educational Agencies</ENT> <ENT>Title I, Chapter 1, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2701-2731, 2821-2838, 2851-2854, and 2891-2901)</ENT> <ENT>200</ENT> </ROW> <ROW> <ENT I="01">Chapter 1, Program for Neglected and Delinquent Children</ENT> <ENT>Title 1, Chapter 1, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2801-2804)</ENT> <ENT>203</ENT> </ROW> <ROW> <ENT I="01">State Grants for Strengthening Instruction in Mathematics and Science</ENT> <ENT>Title II, Part A, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2981-2993)</ENT> <ENT>208</ENT> </ROW> <ROW> <ENT I="01">Federal, State, and Local Partnership for Educational Improvement</ENT> <ENT>Title I, Chapter 2, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2911-2952 and 2971-2976)</ENT> <ENT>298</ENT> </ROW> <ROW> <ENT I="01">Assistance to States for Education of Handicapped Children</ENT> <ENT>Part B, Individuals with Disabilities Education Act (except Section 619) (20 U.S.C. 1411-1420)</ENT> <ENT>300</ENT> </ROW> <ROW> <ENT I="01">Preschool Grants</ENT> <ENT>Section 619, Individuals with Disabilities Education Act (20 U.S.C. 1419)</ENT> <ENT>301</ENT> </ROW> <ROW> <ENT I="01">Chapter 1, State-Operated or Supported Programs for Handicapped Children</ENT> <ENT>Title 1, Chapter 1, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2791-2795)</ENT> <ENT>302</ENT> </ROW> <ROW> <PRTPAGE P="162"/> <ENT I="01">Transition Program for Refugee Children</ENT> <ENT>Section 412(d), Immigration and Naturalization Act (8 U.S.C. 1522(d))</ENT> <ENT>538</ENT> </ROW> <ROW> <ENT I="01">Emergency Immigrant Education Program</ENT> <ENT>Emergency Immigrant Education Act (20 U.S.C. 3121-3130)</ENT> <ENT>581</ENT> </ROW> <ROW> <ENT I="01">Financial Assistance for Construction, Reconstruction, or Renovation of Higher Education Facilities</ENT> <ENT>Section 711, Higher Education Act of 1965 (20 U.S.C. 1132b)</ENT> <ENT>617</ENT> </ROW> </GPOTABLE> <P>(b) <E T="03">Other programs—hearings not required.</E> Under other programs covered by this part, a State agency—other than a State educational agency—is not required to provide an opportunity for a hearing regarding the agency's disapproval of an application.</P> <P>(c) If an applicant for a subgrant alleges that any of the following actions of a State educational agency violates a State or Federal statute or regulation, the State educational agency and the applicant shall use the procedures in paragraph (d) of this section:</P> <P>(1) Disapproval of or failure to approve the application or project in whole or in part.</P> <P>(2) Failure to provide funds in amounts in accordance with the requirements of statutes and regulations.</P> <P>(d) <E T="03">State educational agency hearing procedures.</E> (1) If the applicant applied under a program listed in paragraph (a) of this section, the State educational agency shall provide an opportunity for a hearing before the agency disapproves the application.</P> <P>(2) If the applicant applied under a program not listed in paragraph (a) of this section, the State educational agency shall provide an opportunity for a hearing either before or after the agency disapproves the application.</P> <P>(3) The applicant shall request the hearing within 30 days of the action of the State educational agency.</P> <P>(4)(i) Within 30 days after it receives a request, the State educational agency shall hold a hearing on the record and shall review its action.</P> <P>(ii) No later than 10 days after the hearing the agency shall issue its written ruling, including findings of fact and reasons for the ruling.</P> <P>(iii) If the agency determines that its action was contrary to State or Federal statutes or regulations that govern the applicable program, the agency shall rescind its action.</P> <P>(5) If the State educational agency does not rescind its final action after a review under this paragraph, the applicant may appeal to the Secretary. The applicant shall file a notice of the appeal with the Secretary within 20 days after the applicant has been notified by the State educational agency of the results of the agency's review. If supported by substantial evidence, findings of fact of the State educational agency are final.</P> <P>(6)(i) The Secretary may also issue interim orders to State educational agencies as he or she may decide are necessary and appropriate pending appeal or review.</P> <P>(ii) If the Secretary determines that the action of the State educational agency was contrary to Federal statutes or regulations that govern the applicable program, the Secretary issues an order that requires the State educational agency to take appropriate action.</P> <P>(7) Each State educational agency shall make available at reasonable times and places to each applicant all records of the agency pertaining to any review or appeal the applicant is conducting under this section, including records of other applicants.</P> <P>(8) If a State educational agency does not comply with any provision of this section, or with any order of the Secretary under this section, the Secretary terminates all assistance to the State educational agency under the applicable program or issues such other orders as the Secretary deems appropriate to achieve compliance.</P> <P>(e) <E T="03">Other State agency hearing procedures.</E> State agencies that are required to provide a hearing under paragraph (a) of this section—other than State educational agencies—are not required <PRTPAGE P="163"/>to use the procedures in paragraph (d) of this section.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>This section is based on a provision in the General Education Provisions Act (GEPA). Section 427 of the Department of Education Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the extent inconsistent with the DEOA, the GEPA “shall apply to functions transferred by this Act to the extent applicable on the day preceding the effective date of this Act.” Although standardized nomenclature is used in this section to reflect the creation of the Department of Education, there is no intent to extend the coverage of the GEPA beyond that authorized under Section 427 or other applicable law.</P> </NOTE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1231b-2, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86296, Dec. 30, 1980; 50 FR 43545, Oct. 25, 1985; 52 FR 27805, July 24, 1987; 54 FR 21775, May 19, 1989; 55 FR 14816, Apr. 18, 1990; 57 FR 30341, July 8, 1992; 60 FR 46493, Sept. 6, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—What Conditions Must Be Met by the State and Its Subgrantees?</HD> <SUBJGRP> <HD SOURCE="HED">Nondiscrimination</HD> <SECTION> <SECTNO>§ 76.500</SECTNO> <SUBJECT>Federal statutes and regulations on nondiscrimination.</SUBJECT> <P>A State and a subgrantee shall comply with the following statutes and regulations:</P> <GPOTABLE CDEF="s50,r50,r30" COLS="3" OPTS="L2"> <BOXHD> <CHED H="1">Subject</CHED> <CHED H="1">Statute</CHED> <CHED H="1">Regulation</CHED> </BOXHD> <ROW> <ENT I="01">Discrimination on the basis of race, color, or national origin</ENT> <ENT>Title VI of the Civil Rights Act of 1964 (45 U.S.C. 2000d through 2000d-4)</ENT> <ENT>34 CFR part 100.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of sex</ENT> <ENT>Title IX of the Education Amendments of 1972 (20 U.S.C. 1681-1683)</ENT> <ENT>34 CFR part 106.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of handicap</ENT> <ENT>Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)</ENT> <ENT>34 CFR part 104.</ENT> </ROW> <ROW> <ENT I="01">Discrimination on the basis of age</ENT> <ENT>The Age Discrimination Act (42 U.S.C. 6101 <E T="03">et seq.</E>)</ENT> <ENT>45 CFR part 90.</ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allowable Costs</HD> <SECTION> <SECTNO>§ 76.530</SECTNO> <SUBJECT>General cost principles.</SUBJECT> <P>Both 34 CFR 74.27 and 34 CFR 80.22 reference the general cost principles that apply to grants, subgrants and cost type contracts under grants and subgrants.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474 and 6511(a))</SECAUTH> <CITA>[64 FR 50392, Sept. 16, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.532</SECTNO> <SUBJECT>Use of funds for religion prohibited.</SUBJECT> <P>(a) No State or subgrantee may use its grant or subgrant to pay for any of the following:</P> <P>(1) Religious worship, instruction, or proselytization.</P> <P>(2) Equipment or supplies to be used for any of the activities specified in paragraph (a)(1) of this section.</P> <P>(3) Construction, remodeling, repair, operation, or maintenance of any facility or part of a facility to be used for any of the activities specified in paragraph (a)(1) of this section.</P> <P>(4) An activity of a school or department of divinity.</P> <P>(b) As used in this section, <E T="03">school or department of divinity</E> means an institution or a component of an institution whose program is specifically for the education of students to:</P> <P>(1) Prepare them to enter into a religious vocation; or</P> <P>(2) Prepare them to teach theological subjects.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.533</SECTNO> <SUBJECT>Acquistion of real property; construction.</SUBJECT> <P>No State or subgrantee may use its grant or subgrant for acquisition of real property or for construction unless specifically permitted by the authorizing statute or implementing regulations for the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.534</SECTNO> <SUBJECT>Use of tuition and fees restricted.</SUBJECT> <P>No State or subgrantee may count tuition and fees collected from students toward meeting matching, cost sharing, or maintenance of effort requirements of a program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <PRTPAGE P="164"/> <HD SOURCE="HED">Indirect Cost Rates</HD> <SECTION> <SECTNO>§ 76.560</SECTNO> <SUBJECT>General indirect cost rates; exceptions.</SUBJECT> <P>(a) The differences between direct and indirect costs and the principles for determining the general indirect cost rate that a grantee may use for grants under most programs are specified in the cost principles for—</P> <P>(1) Institutions of higher education, at 34 CFR 74.27;</P> <P>(2) Hospitals, at 34 CFR 74.27;</P> <P>(3) Other nonprofit organizations, at 34 CFR 74.27;</P> <P>(4) Commercial (for-profit) organizations, at 34 CFR 74.27; and</P> <P>(5) State and local governments and federally-recognized Indian tribal organizations, at 34 CFR 80.22.</P> <P>(b) A grantee must have a current indirect cost rate agreement to charge indirect costs to a grant. To obtain an indirect cost rate, a grantee must submit an indirect cost proposal to its cognizant agency and negotiate an indirect cost rate agreement.</P> <P>(c) The Secretary may establish a temporary indirect cost rate for a grantee that does not have an indirect cost rate agreement with its cognizant agency.</P> <P>(d) The Secretary accepts an indirect cost rate negotiated by a grantee's cognizant agency, but may establish a restricted indirect cost rate for a grantee to satisfy the statutory requirements of certain programs administered by the Department.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[57 FR 30341, July 8, 1992, as amended at 59 FR 59582, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.561</SECTNO> <SUBJECT>Approval of indirect cost rates.</SUBJECT> <P>(a) If the Department of Education is the cognizant agency, the Secretary approves an indirect cost rate for a State agency and for a subgrantee other than a local educational agency. For the purposes of this section, the term local educational agency does not include a State agency.</P> <P>(b) Each State educational agency, on the basis of a plan approved by the Secretary, shall approve an indirect cost rate for each local educational agency that requests it to do so. These rates may be for periods longer than a year if rates are sufficiently stable to justify a longer period.</P> <P>(c) The Secretary generally approves indirect cost rate agreements annually. Indirect cost rate agreements may be approved for periods longer than a year if the Secretary determines that rates will be sufficiently stable to justify a longer rate period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.563</SECTNO> <SUBJECT>Restricted indirect cost rate—programs covered.</SUBJECT> <P>Sections 76.564 through 76.569 apply to agencies of State and local governments that are grantees under programs with a statutory requirement prohibiting the use of Federal funds to supplant non-Federal funds, and to their subgrantees under these programs.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.564</SECTNO> <SUBJECT>Restricted indirect cost rate—formula.</SUBJECT> <P>(a) An indirect cost rate for a grant covered by § 76.563 or 34 CFR 75.563 is determined by the following formula: </P> <FP SOURCE="FP-2">Restricted indirect cost rate = (General management costs + Fixed costs) ÷ (Other expenditures)</FP> <P>(b) General management costs, fixed costs, and other expenditures must be determined under §§ 76.565 through 76.567.</P> <P>(c) Under the programs covered by § 76.563, a subgrantee of an agency of a State or a local government (as those terms are defined in 34 CFR 80.3) or a grantee subject to 34 CFR 75.563 that is not a State or local government agency may use—</P> <P>(1) An indirect cost rate computed under paragraph (a) of this section; or</P> <P>(2) An indirect cost rate of eight percent unless the Secretary determines that the subgrantee or grantee would have a lower rate under paragraph (a) of this section.</P> <P>(d) Indirect costs that are unrecovered as a result of these restrictions may not be charged directly, used to <PRTPAGE P="165"/>satisfy matching or cost-sharing requirements, or charged to another Federal award.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.565</SECTNO> <SUBJECT>General management costs—restricted rate.</SUBJECT> <P>(a) As used in § 76.564, <E T="03">general management costs</E> means the costs of activities that are for the direction and control of the grantee's affairs that are organization-wide. An activity is not organization-wide if it is limited to one activity, one component of the grantee, one subject, one phase of operations, or other single responsibility.</P> <P>(b) General management costs include the costs of performing a service function, such as accounting, payroll preparation, or personnel management, that is normally at the grantee's level even if the function is physically located elsewhere for convenience or better management. The term also includes certain occupancy and space maintenance costs as determined under § 76.568.</P> <P>(c) The term does not include expenditures for—</P> <P>(1) Divisional administration that is limited to one component of the grantee;</P> <P>(2) The governing body of the grantee;</P> <P>(3) Compensation of the chief executive officer of the grantee;</P> <P>(4) Compensation of the chief executive officer of any component of the grantee; and</P> <P>(5) Operation of the immediate offices of these officers.</P> <P>(d) For purposes of this section—</P> <P>(1) The chief executive officer of the grantee is the individual who is the head of the executive office of the grantee and exercises overall responsibility for the operation and management of the organization. The chief executive officer's immediate office includes any deputy chief executive officer or similar officer along with immediate support staff of these individuals. The term does not include the governing body of the grantee, such as a board or a similar elected or appointed governing body; and</P> <P>(2) Components of the grantee are those organizational units supervised directly or indirectly by the chief executive officer. These organizational units generally exist one management level below the executive office of the grantee. The term does not include the office of the chief executive officer or a deputy chief executive officer or similar position.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.566</SECTNO> <SUBJECT>Fixed costs—restricted rate.</SUBJECT> <P>As used in § 76.564, <E T="03">fixed costs</E> means contributions of the grantee to fringe benefits and similar costs, but only those associated with salaries and wages that are charged as indirect costs, including—</P> <P>(a) Retirement, including State, county, or local retirement funds, Social Security, and pension payments;</P> <P>(b) Unemployment compensation payments; and</P> <P>(c) Property, employee, health, and liability insurance.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.567</SECTNO> <SUBJECT>Other expenditures—restricted rate.</SUBJECT> <P>(a) As used in § 76.564, <E T="03">other expenditures</E> means the grantee's total expenditures for its federally- and non-federally-funded activities in the most recent year for which data are available. The term also includes direct occupancy and space maintenance costs as determined under § 76.568 and costs related to the chief executive officers of the grantee and components of the grantee and their offices (see § 76.565(c) and (d)).</P> <P>(b) The term does not include—</P> <P>(1) General management costs determined under § 76.565;</P> <P>(2) Fixed costs determined under § 76.566;</P> <P>(3) Subgrants;</P> <P>(4) Capital outlay;</P> <P>(5) Debt service;</P> <P>(6) Fines and penalties;</P> <P>(7) Contingencies; and</P> <P>(8) Election expenses. However, the term does include election expenses <PRTPAGE P="166"/>that result from elections required by an applicable Federal statute.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59583, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.568</SECTNO> <SUBJECT>Occupancy and space maintenance costs—restricted rate.</SUBJECT> <P>(a) As used in the calculation of a restricted indirect cost rate, <E T="03">occupancy and space maintenance costs</E> means such costs as—</P> <P>(1) Building costs whether owned or rented;</P> <P>(2) Janitorial services and supplies;</P> <P>(3) Building, grounds, and parking lot maintenance;</P> <P>(4) Guard services;</P> <P>(5) Light, heat, and power;</P> <P>(6) Depreciation, use allowances, and amortization; and</P> <P>(7) All other related space costs.</P> <P>(b) Occupancy and space maintenance costs associated with organization-wide service functions (accounting, payroll, personnel) may be included as general management costs if a space allocation or use study supports the allocation.</P> <P>(c) Occupancy and space maintenance costs associated with functions that are not organization-wide must be included with other expenditures in the indirect cost formula. These costs may be charged directly to affected programs only to the extent that statutory supplanting prohibitions are not violated. This reimbursement must be approved in advance by the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59584, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.569</SECTNO> <SUBJECT>Using the restricted indirect cost rate.</SUBJECT> <P>(a) Under the programs referenced in § 76.563, the maximum amount of indirect costs under a grant is determined by the following formula: </P> <FP SOURCE="FP-2">Indirect costs=(Restricted indirect cost rate)×(Total direct costs of the grant minus capital outlays, subgrants, and other distorting or unallowable items as specified in the grantee's indirect cost rate agreement)</FP> <P>(b) If a grantee uses a restricted indirect cost rate, the general management and fixed costs covered by that rate must be excluded by the grantee from the direct costs it charges to the grant.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[59 FR 59584, Nov. 17, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.580</SECTNO> <SUBJECT>Coordination with other activities.</SUBJECT> <P>A State and a subgrantee shall, to the extent possible, coordinate each of its projects with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 2890, and 3474)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30341, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Evaluation</HD> <SECTION> <SECTNO>§ 76.591</SECTNO> <SUBJECT>Federal evaluation—cooperation by a grantee.</SUBJECT> <P>A grantee shall cooperate in any evaluation of the program by the Secretary.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1226c, 1231a, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 86298, Dec. 30, 1980, as amended at 57 FR 30341, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.592</SECTNO> <SUBJECT>Federal evaluation—satisfying requirement for State or subgrantee evaluation.</SUBJECT> <P>If a State or a subgrantee cooperates in a Federal evaluation of a program, the Secretary may determine that the State or subgrantee meets the evaluation requirements of the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1226c; 1231a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Construction</HD> <SECTION> <SECTNO>§ 76.600</SECTNO> <SUBJECT>Where to find construction regulations.</SUBJECT> <P>(a) A State or a subgrantee that requests program funds for construction, or whose grant or subgrant includes funds for construction, shall comply with the rules on construction that apply to applicants and grantees under 34 CFR 75.600-75.617.</P> <P>(b) The State shall perform the functions that the Secretary performs under §§ 75.602 (Preservation of historic sites) and 75.605 (Approval of drawings and specifications) of this title.<PRTPAGE P="167"/> </P> <P>(c) The State shall provide to the Secretary the information required under 34 CFR 75.602(a) (Preservation of historic sites).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86298, Dec. 30, 1980; 57 FR 30341, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Participation of Students Enrolled in Private Schools</HD> <SECTION> <SECTNO>§ 76.650</SECTNO> <SUBJECT>Private schools; purpose of §§ 76.651-76.662.</SUBJECT> <P>(a) Under some programs, the authorizing statute requires that a State and its subgrantees provide for participation by students enrolled in private schools. Sections 76.651-76.662 apply to those programs and provide rules for that participation. These sections do not affect the authority of the State or a subgrantee to enter into a contract with a private party.</P> <P>(b) If any other rules for participation of students enrolled in private schools apply under a particular program, they are in the authorizing statute or implementing regulations for that program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <NOTE> <HD SOURCE="HED">Note:</HD> <P>Some program statutes authorize the Secretary—under certain circumstances—to provide benefits directly to private school students. These “bypass” provisions—where they apply—are implemented in the individual program regulations.</P> </NOTE> </SECTION> <SECTION> <SECTNO>§ 76.651</SECTNO> <SUBJECT>Responsibility of a State and a subgrantee.</SUBJECT> <P>(a)(1) A subgrantee shall provide students enrolled in private schools with a genuine opportunity for equitable participation in accordance with the requirements in §§ 76.652-76.662 and in the authorizing statute and implementing regulations for a program.</P> <P>(2) The subgrantee shall provide that opportunity to participate in a manner that is consistent with the number of eligible private school students and their needs.</P> <P>(3) The subgrantee shall maintain continuing administrative direction and control over funds and property that benefit students enrolled in private schools.</P> <P>(b)(1) A State shall ensure that each subgrantee complies with the requirements in §§76.651-76.662.</P> <P>(2) If a State carries out a project directly, it shall comply with these requirements as if it were a subgrantee.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.652</SECTNO> <SUBJECT>Consultation with representatives of private school students.</SUBJECT> <P>(a) An applicant for a subgrant shall consult with appropriate representatives of students enrolled in private schools during all phases of the development and design of the project covered by the application, including consideration of:</P> <P>(1) Which children will receive benefits under the project;</P> <P>(2) How the children's needs will be identified;</P> <P>(3) What benefits will be provided;</P> <P>(4) How the benefits will be provided; and</P> <P>(5) How the project will be evaluated.</P> <P>(b) A subgrantee shall consult with appropriate representatives of students enrolled in private schools before the subgrantee makes any decision that affects the opportunities of those students to participate in the project.</P> <P>(c) The applicant or subgrantee shall give the appropriate representatives a genuine opportunity to express their views regarding each matter subject to the consultation requirements in this section.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.653</SECTNO> <SUBJECT>Needs, number of students, and types of services.</SUBJECT> <P>A subgrantee shall determine the following matters on a basis comparable to that used by the subgrantee in providing for participation of public school students:</P> <P>(a) The needs of students enrolled in private schools.</P> <P>(b) The number of those students who will participate in a project.</P> <P>(c) The benefits that the subgrantee will provide under the program to those students.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="168"/> <SECTNO>§ 76.654</SECTNO> <SUBJECT>Benefits for private school students.</SUBJECT> <P>(a) <E T="03">Comparable benefits.</E> The program benefits that a subgrantee provides for students enrolled in private schools must be comparable in quality, scope, and opportunity for participation to the program benefits that the subgrantee provides for students enrolled in public schools.</P> <P>(b) <E T="03">Same benefits.</E> If a subgrantee uses funds under a program for public school students in a particular attendance area, or grade or age level, the subgrantee shall insure equitable opportunities for participation by students enrolled in private schools who:</P> <P>(1) Have the same needs as the public school students to be served; and</P> <P>(2) Are in that group, attendance area, or age or grade level.</P> <P>(c) <E T="03">Different benefits.</E> If the needs of students enrolled in private schools are different from the needs of students enrolled in public schools, a subgrantee shall provide program benefits for the private school students that are different from the benefits the subgrantee provides for the public school students.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.655</SECTNO> <SUBJECT>Level of expenditures for students enrolled in private schools.</SUBJECT> <P>(a) Subject to paragraph (b) of this section, a subgrantee shall spend the same average amount of program funds on:</P> <P>(1) A student enrolled in a private school who receives benefits under the program; and</P> <P>(2) A student enrolled in a public school who receives benefits under the program.</P> <P>(b) The subgrantee shall spend a different average amount on program benefits for students enrolled in private schools if the average cost of meeting the needs of those students is different from the average cost of meeting the needs of students enrolled in public schools.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.656</SECTNO> <SUBJECT>Information in an application for a subgrant.</SUBJECT> <P>An applicant for a subgrant shall include the following information in its application:</P> <P>(a) A description of how the applicant will meet the Federal requirements for participation of students enrolled in private schools.</P> <P>(b) The number of students enrolled in private schools who have been identified as eligible to benefits under the program.</P> <P>(c) The number of students enrolled in private schools who will receive benefits under the program.</P> <P>(d) The basis the applicant used to select the students.</P> <P>(e) The manner and extent to which the applicant complied with § 76.652 (consultation).</P> <P>(f) The places and times that the students will receive benefits under the program.</P> <P>(g) The differences, if any, between the program benefits the applicant will provide to public and private school students, and the reasons for the differences.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.657</SECTNO> <SUBJECT>Separate classes prohibited.</SUBJECT> <P>A subgrantee may not use program funds for classes that are organized separately on the basis of school enrollment or religion of the students if:</P> <P>(a) The classes are at the same site; and</P> <P>(b) The classes include students enrolled in public schools and students enrolled in private schools.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.658</SECTNO> <SUBJECT>Funds not to benefit a private school.</SUBJECT> <P>(a) A subgrantee may not use program funds to finance the existing level of instruction in a private school or to otherwise benefit the private school.</P> <P>(b) The subgrantee shall use program funds to meet the specific needs of students enrolled in private schools, rather than:</P> <P>(1) The needs of a private school; or<PRTPAGE P="169"/> </P> <P>(2) The general needs of the students enrolled in a private school.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.659</SECTNO> <SUBJECT>Use of public school personnel.</SUBJECT> <P>A subgrantee may use program funds to make public personnel available in other than public facilities:</P> <P>(a) To the extent necessary to provide equitable program benefits designed for students enrolled in a private school; and</P> <P>(b) If those benefits are not normally provided by the private school.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.660</SECTNO> <SUBJECT>Use of private school personnel.</SUBJECT> <P>A subgrantee may use program funds to pay for the services of an employee of a private school if:</P> <P>(a) The employee performs the services outside of his or her regular hours of duty; and</P> <P>(b) The employee performs the services under public supervision and control.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.661</SECTNO> <SUBJECT>Equipment and supplies.</SUBJECT> <P>(a) Under some program statutes, a public agency must keep title to and exercise continuing administrative control of all equipment and supplies that the subgrantee acquires with program funds. This public agency is usually the subgrantee.</P> <P>(b) The subgrantee may place equipment and supplies in a private school for the period of time needed for the project.</P> <P>(c) The subgrantee shall insure that the equipment or supplies placed in a private school:</P> <P>(1) Are used only for the purposes of the project; and</P> <P>(2) Can be removed from the private school without remodeling the private school facilities.</P> <P>(d) The subgrantee shall remove equipment or supplies from a private school if:</P> <P>(1) The equipment or supplies are no longer needed for the purposes of the project; or</P> <P>(2) Removal is necessary to avoid use of the equipment of supplies for other than project purposes.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.662</SECTNO> <SUBJECT>Construction.</SUBJECT> <P>A subgrantee shall insure that program funds are not used for the construction of private school facilities.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Bypass</HD> <SECTION> <SECTNO>§ 76.670</SECTNO> <SUBJECT>Applicability and filing requirements.</SUBJECT> <P>(a) The regulations in §§ 76.671 through 76.677 apply to the following programs under which the Secretary is authorized to waive the requirements for providing services to private school children and to implement a bypass:</P> <GPOTABLE CDEF="s150,r150,10" COLS="3" OPTS="L2,i1"> <BOXHD> <CHED H="1">CFDA number and name of program</CHED> <CHED H="1">Authorizing statute</CHED> <CHED H="1">Implementing regulations title 34 CFR part</CHED> </BOXHD> <ROW> <ENT I="01">84.010Chapter 1 Program in Local Educational Agencies</ENT> <ENT>Chapter 1, Title I, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2701 <E T="03">et seq.</E>)</ENT> <ENT>200</ENT> </ROW> <ROW> <ENT I="01">84.151Federal, State, and Local Partnership for Educational Improvement</ENT> <ENT>Chapter 2, Title I, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2911-2952, 2971-2976)</ENT> <ENT>298</ENT> </ROW> <ROW> <ENT I="01">84.164Mathematics and Science Education</ENT> <ENT>Title II, Part A, Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2981-2993)</ENT> <ENT>208</ENT> </ROW> <ROW> <ENT I="01">84.186State and Local Programs</ENT> <ENT>Part B, Drug Free Schools and Communities Act of 1986 (20 U.S.C. 3191-3197)</ENT> <ENT>None</ENT> </ROW> </GPOTABLE> <P>(b) <E T="03">Filing requirements</E>. (1) Any written submission under §§ 76.671 through 76.675 must be filed by hand-delivery, by mail, or by facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.<PRTPAGE P="170"/> </P> <P>(2) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.</P> <P>(3) The filing date for a written submission is the date the document is—</P> <P>(i) Hand-delivered;</P> <P>(ii) Mailed; or</P> <P>(iii) Sent by facsimile transmission.</P> <P>(4) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.</P> <P>(5) If a document is filed by facsimile transmission, the Secretary or the hearing officer, as applicable, may require the filing of a follow-up hard copy by hand-delivery or by mail within a reasonable period of time.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b), 2972(d)-(e), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21775, May 19, 1989, as amended at 57 FR 56795, Nov. 30, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.671</SECTNO> <SUBJECT>Notice by the Secretary.</SUBJECT> <P>(a) Before taking any final action to implement a bypass under a program listed in § 76.670, the Secretary provides the affected grantee and subgrantee, if appropriate, with written notice.</P> <P>(b) In the written notice, the Secretary—</P> <P>(1) States the reasons for the proposed bypass in sufficient detail to allow the grantee and subgrantee to respond;</P> <P>(2) Cites the requirement that is the basis for the alleged failure to comply; and</P> <P>(3) Advises the grantee and subgrantee that they—</P> <P>(i) Have at least 45 days after receiving the written notice to submit written objections to the proposed bypass; and</P> <P>(ii) May request in writing the opportunity for a hearing to show cause why the bypass should not be implemented.</P> <P>(c) The Secretary sends the notice to the grantee and subgrantee by certified mail with return receipt requested.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21775, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.672</SECTNO> <SUBJECT>Bypass procedures.</SUBJECT> <P>Sections 76.673 through 76.675 contain the procedures that the Secretary uses in conducting a show cause hearing. The hearing officer may modify the procedures for a particular case if all parties agree the modification is appropriate.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.673</SECTNO> <SUBJECT>Appointment and functions of a hearing officer.</SUBJECT> <P>(a) If a grantee or subgrantee requests a hearing to show cause why the Secretary should not implement a bypass, the Secretary appoints a hearing officer and notifies appropriate representatives of the affected private school children that they may participate in the hearing.</P> <P>(b) The hearing officer has no authority to require or conduct discovery or to rule on the validity of any statute or regulation.</P> <P>(c) The hearing officer notifies the grantee, subgrantee, and representatives of the private school children of the time and place of the hearing.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.674</SECTNO> <SUBJECT>Hearing procedures.</SUBJECT> <P>(a) The following procedures apply to a show cause hearing regarding implementation of a bypass:</P> <P>(1) The hearing officer arranges for a transcript to be taken.</P> <P>(2) The grantee, subgrantee, and representatives of the private school children each may—</P> <P>(i) Be represented by legal counsel; and</P> <P>(ii) Submit oral or written evidence and arguments at the hearing.</P> <P>(b) Within 10 days after the hearing, the hearing officer—</P> <P>(1) Indicates that a decision will be issued on the basis of the existing record; or<PRTPAGE P="171"/> </P> <P>(2) Requests further information from the grantee, subgrantee, representatives of the private school children, or Department officials.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.675</SECTNO> <SUBJECT>Posthearing procedures.</SUBJECT> <P>(a)(1) Within 120 days after the record of a show cause hearing is closed, the hearing officer issues a written decision on whether a bypass should be implemented.</P> <P>(2) The hearing officer sends copies of the decision to the grantee, subgrantee, representatives of the private school children, and the Secretary.</P> <P>(b) Within 30 days after receiving the hearing officer's decision, the grantee, subgrantee, and representatives of the private school children may each submit to the Secretary written comments on the decision.</P> <P>(c) The Secretary may adopt, reverse, modify, or remand the hearing officer's decision.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.676</SECTNO> <SUBJECT>Judicial review of a bypass action.</SUBJECT> <P>If a grantee or subgrantee is dissatisfied with the Secretary's final action after a proceeding under §§ 76.672 through 76.675, it may, within 60 days after receiving notice of that action, file a petition for review with the United States Court of Appeals for the circuit in which the State is located.</P> <SECAUTH>(Authority: 20 U.S.C. 2727(b)(4)(B)-(D), 2972(h)(2)-(4), 2990(c), 3223(c))</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.677</SECTNO> <SUBJECT>Continuation of a bypass.</SUBJECT> <P>The Secretary continues a bypass until the Secretary determines that the grantee or subgrantee will meet the requirements for providing services to private school children.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 2727(b)(3)(D), 2972(f), and 3474)</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Other Requirements for Certain Programs</HD> <SECTION> <SECTNO>§ 76.681</SECTNO> <SUBJECT>Protection of human subjects.</SUBJECT> <P>If a State or a subgrantee uses a human subject in a research project, the State or subgrantee shall protect the person from physical, psychological, or social injury resulting from the project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30341, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.682</SECTNO> <SUBJECT>Treatment of animals.</SUBJECT> <P>If a State or a subgrantee uses an animal in a project, the State or subgrantee shall provide the animal with proper care and humane treatment in accordance with the Animal Welfare Act of 1970.</P> <SECAUTH>(Authority: Pub. L. 89-544, as amended)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.683</SECTNO> <SUBJECT>Health or safety standards for facilities.</SUBJECT> <P>A State and a subgrantee shall comply with any Federal health or safety requirements that apply to the facilities that the State or subgrantee uses for a project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—What Are the Administrative Responsibilities of the State and Its Subgrantees?</HD> <SUBJGRP> <HD SOURCE="HED">General Administrative Responsibilities</HD> <SECTION> <SECTNO>§ 76.700</SECTNO> <SUBJECT>Compliance with statutes, regulations, State plan, and applications.</SUBJECT> <P>A State and a subgrantee shall comply with the State plan and applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="172"/> <SECTNO>§ 76.701</SECTNO> <SUBJECT>The State or subgrantee administers or supervises each project.</SUBJECT> <P>A State or a subgrantee shall directly administer or supervise the administration of each project.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.702</SECTNO> <SUBJECT>Fiscal control and fund accounting procedures.</SUBJECT> <P>A State and a subgrantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.703</SECTNO> <SUBJECT>When a State may begin to obligate funds.</SUBJECT> <P>(a)(1) The Secretary may establish, for a program subject to this part, a date by which a State must submit for review by the Department a State plan and any other documents required to be submitted under guidance provided by the Department under paragraph (b)(3) of this section.</P> <P>(2) If the Secretary does not establish a date for the submission of State plans and any other documents required under guidance provided by the Department, the date for submission is three months before the date the Secretary may begin to obligate funds under the program.</P> <P>(b)(1) This paragraph (b) describes the circumstances under which the submission date for a State plan may be deferred.</P> <P>(2) If a State asks the Secretary in writing to defer the submission date for a State plan because of a Presidentially declared disaster that has occurred in that State, the Secretary may defer the submission date for the State plan and any other document required under guidance provided by the Department if the Secretary determines that the disaster significantly impairs the ability of the State to submit a timely State plan or other document required under guidance provided by the Department.</P> <P>(3)(i) The Secretary establishes, for a program subject to this part, a date by which the program office must deliver guidance to the States regarding the contents of the State plan under that program.</P> <P>(ii) The Secretary may only establish a date for the delivery of guidance to the States so that there are at least as many days between that date and the date that State plans must be submitted to the Department as there are days between the date that State plans must be submitted to the Department and the date that funds are available for obligation by the Secretary on July 1, or October 1, as appropriate.</P> <P>(iii) If a State does not receive the guidance by the date established under paragraph (b)(3)(i) of this section, the submission date for the State plan under the program is deferred one day for each day that the guidance is late in being received by the State.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>The following examples describe how the regulations in § 76.703(b)(3) would act to defer the date that a State would have to submit its State plan.</P> </NOTE> <EXAMPLE> <HD SOURCE="HED">Example 1.</HD> <P>The Secretary decides that State plans under a forward-funded program must be submitted to the Department by May first. The Secretary must provide guidance to the States under this program by March first, so that the States have at least as many days between the guidance date and the submission date (60) as the Department has between the submission date and the date that funds are available for obligation (60). If the program transmits guidance to the States on February 15, specifying that State plans must be submitted by May first, States generally would have to submit State plans by that date. However, if, for example, a State did not receive the guidance until March third, that State would have until May third to submit its State plan because the submission date of its State plan would be deferred one day for each day that the guidance to the State was late.</P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 2.</HD> <P>If a program publishes the guidance in the <E T="04">Federal Register</E> on March third, the States would be considered to have received the guidance on that day. Thus, the guidance could not specify a date for the submission of State plans before May second, giving the States 59 days between the date the guidance is published and the submission date and giving the Department 58 days between the submission date and the date that funds are available for obligation. </P> </EXAMPLE> <P>(c)(1) For the purposes of this section, the submission date of a State plan or other document is the date that the Secretary receives the plan or document.<PRTPAGE P="173"/> </P> <P>(2) The Secretary does not determine whether a State plan is substantially approvable until the plan and any documents required under guidance provided by the Department have been submitted.</P> <P>(3) The Secretary notifies a State when the Department has received the State plan and all documents required under guidance provided by the Department.</P> <P>(d) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable), and submits any other document required under guidance provided by the Department, on or before the date the State plan must be submitted to the Department, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary.</P> <P>(e) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable) or any other documents required under guidance provided by the Department after the date the State plan must be submitted to the Department, and—</P> <P>(1) The Department determines that the State plan is substantially approvable on or before the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary; or</P> <P>(2) The Department determines that the State plan is substantially approvable after the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the earlier of the two following dates:</P> <P>(i) The date that the Secretary determines that the State plan is substantially approvable.</P> <P>(ii) The date that is determined by adding to the date that funds are first available for obligation by the Secretary—</P> <P>(A) The number of days after the date the State plan must be submitted to the Department that the State plan or other document required under guidance provided by the Department is submitted; and</P> <P>(B) If applicable, the number of days after the State receives notice that the State plan is not substantially approvable that the State submits additional information that makes the plan substantially approvable.</P> <P>(f) Additional information submitted under paragraph (e)(2)(ii)(B) of this section must be signed by the person who submitted the original State plan (or an authorized delegate of that officer).</P> <P>(g)(1) If the Department does not complete its review of a State plan during the period established for that review, the Secretary will grant pre-award costs for the period after funds become available for obligation by the Secretary and before the State plan is found substantially approvable.</P> <P>(2) The period established for the Department's review of a plan does not include any day after the State has received notice that its plan is not substantially approvable.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>The following examples describe how the regulations in § 76.703 would be applied in certain circumstances. For the purpose of these examples, assume that the grant program established an April 1 due date for the submission of the State plan and that funds are first available for obligation by the Secretary on July 1.</P> </NOTE> <EXAMPLE> <HD SOURCE="HED">Example 1.</HD> <P>Paragraph (d): A State submits a plan in substantially approvable form by April 1. The State may begin to obligate funds on July 1.</P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 2.</HD> <P>Paragraph (e)(1): A State submits a plan in substantially approvable form on May 15, and the Department notifies the State that the plan is substantially approvable on June 20. The State may begin to obligate funds on July 1.</P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 3.</HD> <P>Paragraph (e)(2)(i): A State submits a plan in substantially approvable form on May 15, and the Department notifies the State that the plan is substantially approvable on July 15. The State may begin to obligate funds on July 15.</P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 4.</HD> <P>Paragraph (e)(2)(ii)(A): A State submits a plan in substantially approvable form on May 15, and the Department notifies the State that the plan is substantially approvable on August 21. The State may begin to obligate funds on August 14. (In this example, the plan is 45 days late. By adding 45 days to July 1, we reach August 14, which is earlier than the date, August 21, that the Department notifies the State that the plan is substantially approvable. Therefore, if the State chose to begin drawing funds from the Department on August 14, obligations made on or after that date would generally be allowable.)</P> </EXAMPLE> <EXAMPLE> <PRTPAGE P="174"/> <HD SOURCE="HED">Example 5.</HD> <P>Paragraph (e)(2)(i): A State submits a plan on May 15, and the Department notifies the State that the plan is not substantially approvable on July 10. The State submits changes that make the plan substantially approvable on July 20 and the Department notifies the State that the plan is substantially approvable on July 25. The State may begin to obligate funds on July 25. (In this example, the original submission is 45 days late. In addition, the Department notifies the State that the plan is not substantially approvable and the time from that notification until the State submits changes that make the plan substantially approvable is an additional 10 days. By adding 55 days to July 1, we reach August 24. However, since the Department notified the State that the plan was substantially approvable on July 25, that is the date that the State may begin to obligate funds.) </P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 6.</HD> <P>Paragraph (e)(2)(ii)(B): A State submits a plan on May 15, and the Department notifies the State that the plan is not substantially approvable on August 1. The State submits changes that make the plan substantially approvable on August 20, and the Department notifies the State that the plan is substantially approvable on September 5. The State may choose to begin drawing funds from the Department on September 2, and obligations made on or after that date would generally be allowable. (In this example, the original submission is 45 days late. In addition, the Department notifies the State that the plan is not substantially approvable and the time from that notification until the State submits changes that make the plan substantially approvable is an additional 19 days. By adding 64 days to July 1, we reach September 2, which is earlier than September 5, the date that the Department notifies the State that the plan is substantially approvable.)</P> </EXAMPLE> <EXAMPLE> <HD SOURCE="HED">Example 7.</HD> <P>Paragraph (g): A State submits a plan on April 15 and the Department notifies the State that the plan is not substantially approvable on July 16. The State makes changes to the plan and submits a substantially approvable plan on July 30. The Department had until July 15 to decide whether the plan was substantially approvable because the State was 15 days late in submitting the plan. The date the State may begin to obligate funds under the regulatory deferral is July 29 (based on the 15 day deferral for late submission plus a 14 day deferral for the time it took to submit a substantially approvable plan after having received notice). However, because the Department was one day late in completing its review of the plan, the State would get pre-award costs to cover the period of July 1 through July 29. </P> </EXAMPLE> <P>(h) After determining that a State plan is in substantially approvable form, the Secretary informs the State of the date on which it could begin to obligate funds. Reimbursement for those obligations is subject to final approval of the State plan.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, 6511(a) and 31 U.S.C. 6503)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 60 FR 41294, Aug. 11, 1995; 61 FR 14484, Apr. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.704</SECTNO> <SUBJECT>New State plan requirements that must be addressed in a State plan.</SUBJECT> <P>(a) This section specifies the State plan requirements that must be addressed in a State plan if the State plan requirements established in statutes or regulations change on a date close to the date that State plans are due for submission to the Department.</P> <P>(b)(1) A State plan must meet the following requirements:</P> <P>(i) Every State plan requirement in effect three months before the date the State plan is due to be submitted to the Department under 34 CFR 76.703; and</P> <P>(ii) Every State plan requirement included in statutes or regulations that will be effective on or before the date that funds become available for obligation by the Secretary and that have been signed into law or published in the <E T="04">Federal Register</E> as final regulations three months before the date the State plan is due to be submitted to the Department under 34 CFR 76.703.</P> <P>(2) If a State plan does not have to meet a new State plan requirement under paragraph (b)(1) of this section, the Secretary takes one of the following actions:</P> <P>(i) Require the State to submit assurances and appropriate documentation to show that the new requirements are being followed under the program.</P> <P>(ii) Extend the date for submission of State plans and approve pre-award costs as necessary to hold the State harmless.</P> <P>(3) If the Secretary requires a State to submit assurances under paragraph (b)(2) of this section, the State shall incorporate changes to the State plan as soon as possible to comply with the <PRTPAGE P="175"/>new requirements. The State shall submit the necessary changes before the start of the next obligation period.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, 6511(a) and 31 U.S.C. 6503)</SECAUTH> <CITA>[60 FR 41296, Aug. 11, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.707</SECTNO> <SUBJECT>When obligations are made.</SUBJECT> <P>The following table shows when a State or a subgrantee makes obligations for various kinds of property and services.</P> <GPOTABLE CDEF="s50,r50" COLS="2" OPTS="L2"> <BOXHD> <CHED H="1">If the obligation is for—</CHED> <CHED H="1">The obligation is made—</CHED> </BOXHD> <ROW> <ENT I="01">(a) Acquisition of real or personal property</ENT> <ENT>On the date on which the State or subgrantee makes a binding written commitment to acquire the property.</ENT> </ROW> <ROW> <ENT I="01">(b) Personal services by an employee of the State or subgrantee</ENT> <ENT>When the services are performed.</ENT> </ROW> <ROW> <ENT I="01">(c) Personal services by a contractor who is not an employee of the State or subgrantee</ENT> <ENT>On the date on which the State or subgrantee makes a binding written commitment to obtain the services.</ENT> </ROW> <ROW> <ENT I="01">(d) Performance of work other than personal services</ENT> <ENT>On the date on which the State or subgrantee makes a binding written commitment to obtain the work.</ENT> </ROW> <ROW> <ENT I="01">(e) Public utility services</ENT> <ENT>When the State or subgrantee receives the services.</ENT> </ROW> <ROW> <ENT I="01">(f) Travel</ENT> <ENT>When the travel is taken.</ENT> </ROW> <ROW> <ENT I="01">(g) Rental of real or personal property</ENT> <ENT>When the State or subgrantee uses the property.</ENT> </ROW> <ROW> <ENT I="01">(h) A preagreement cost that was properly approved by the State under the cost principals identified in 34 CFR 74.171 and 80.22.</ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 55 FR 14817, Apr. 18, 1990; 57 FR 30342, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.708</SECTNO> <SUBJECT>When certain subgrantees may begin to obligate funds.</SUBJECT> <P>(a) If the authorizing statute for a program requires a State to make subgrants on the basis of a formula (see § 76.5), the State may not authorize an applicant for a subgrant to obligate funds until the later of the following two dates:</P> <P>(1) The date that the State may begin to obligate funds under § 76.703; or</P> <P>(2) The date that the applicant submits its application to the State in substantially approvable form.</P> <P>(b) Reimbursement for obligations under paragraph (a) of this section is subject to final approval of the application.</P> <P>(c) If the authorizing statute for a program gives the State discretion to select subgrantees, the State may not authorize an applicant for a subgrant to obligate funds until the subgrant is made. However, the State may approve pre-agreement costs in accordance with the cost principles that are appended to 34 CFR part 74 (Appendices C-F).</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980. Further redesignated at 60 FR 41295, Aug. 11, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.709</SECTNO> <SUBJECT>Funds may be obligated during a “carryover period.”</SUBJECT> <P>(a) If a State or a subgrantee does not obligate all of its grant or subgrant funds by the end of the fiscal year for which Congress appropriated the funds, it may obligate the remaining funds during a carryover period of one additional fiscal year.</P> <P>(b) The State shall return to the Federal Government any carryover funds not obligated by the end of the carryover period by the State and its subgrantees.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>This section is based on a provision in the General Education Provisions Act (GEPA). Section 427 of the Department of Education Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the extent inconsistent with the DEOA, the GEPA “shall apply to functions transferred by this Act to the extent applicable on the day preceding the effective date of this Act.” Although standardized nomenclature is used in this section to reflect the creation of the Department of Education, there is no intent to extend the coverage of the GEPA beyond that authorized under section 427 or other applicable law.</P> </NOTE> <SECAUTH>(Authority: U.S.C. 1221e-3, 1225(b), and 3474)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86296, Dec. 30, 1980. Redesignated at 60 FR 41295, Aug. 11, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.710</SECTNO> <SUBJECT>Obligations made during a carryover period are subject to current statutes, regulations, and applications.</SUBJECT> <P>A State and a subgrantee shall use carryover funds in accordance with:<PRTPAGE P="176"/> </P> <P>(a) The Federal statutes and regulations that apply to the program and are in effect for the carryover period; and</P> <P>(b) Any State plan, or application for a subgrant, that the State or subgrantee is required to submit for the carryover period.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>This section is based on a provision in the General Education Provisions Act (GEPA). Section 427 of the Department of Education Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the extent inconsistent with the DEOA, the GEPA “shall apply to functions transferred by this Act to the extent applicable on the day preceding the effective date of this Act.” Although standardized nomenclature is used in this section to reflect the creation of the Department of Education, there is no intent to extend the coverage of the GEPA beyond that authorized under section 427 or other applicable law.</P> </NOTE> <SECAUTH>(Authority: U.S.C. 1221e-3, 1225(b), and 3474)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86296, Dec. 30, 1980. Redesignated at 60 FR 41295, Aug. 11, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.711</SECTNO> <SUBJECT>Requesting funds by CFDA number.</SUBJECT> <P>If a program is listed in the Catalog of Federal Domestic Assistance (CFDA), a State, when requesting funds under the program, shall identify that program by the CFDA number.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 6511(a), 3474, 31 U.S.C. 6503)</SECAUTH> <CITA>[60 FR 41296, Aug. 11, 1995]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports</HD> <SECTION> <SECTNO>§ 76.720</SECTNO> <SUBJECT>Financial and performance reports by a State.</SUBJECT> <P>(a) This section applies to a State's reports required under 34 CFR 80.41 (Financial reporting) and 34 CFR 80.40 (Monitoring and reporting of program performance).</P> <P>(b) A State shall submit these reports annually, unless the Secretary allows less frequent reporting.</P> <P>(c) However, the Secretary may, under 34 CFR 80.12 (Special grant or subgrant conditions for “high-risk” grantees) or 34 CFR 80.20 (Standards for financial management systems) require a State to report more frequently than annually.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> <CITA>[57 FR 30342, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.722</SECTNO> <SUBJECT>A subgrantee makes reports required by the State.</SUBJECT> <P>A State may require a subgrantee to furnish reports that the State needs to carry out its responsibilities under the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Records</HD> <SECTION> <SECTNO>§ 76.730</SECTNO> <SUBJECT>Records related to grant funds.</SUBJECT> <P>A State and a subgrantee shall keep records that fully show:</P> <P>(a) The amount of funds under the grant or subgrant;</P> <P>(b) How the State or subgrantee uses the funds;</P> <P>(c) The total cost of the project;</P> <P>(d) The share of that cost provided from other sources; and</P> <P>(e) Other records to facilitate an effective audit.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0513)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 1232f)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.731</SECTNO> <SUBJECT>Records related to compliance.</SUBJECT> <P>A State and a subgrantee shall keep records to show its compliance with program requirements.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Privacy</HD> <SECTION> <SECTNO>§ 76.740</SECTNO> <SUBJECT>Protection of and access to student records; student rights in research, experimental programs, and testing.</SUBJECT> <P>(a) Most records on present or past students are subject to the requirements of section 438 of GEPA and its implementing regulations under 34 CFR part 99. (Section 438 is the Family Educational Rights and Privacy Act of 1974.)<PRTPAGE P="177"/> </P> <P>(b) Under most programs administered by the Secretary, research, experimentation, and testing are subject to the requirements of section 439 of GEPA and its implementing regulations at 34 CFR part 98.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 1232g, 1232h, 3474, and 6511(a))</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 57 FR 30342, July 8, 1992]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Use of Funds by States and Subgrantees</HD> <SECTION> <SECTNO>§ 76.760</SECTNO> <SUBJECT>More than one program may assist a single activity.</SUBJECT> <P>A State or a subgrantee may use funds under more than one program to support different parts of the same project if the State or subgrantee meets the following conditions:</P> <P>(a) The State or subgrantee complies with the requirements of each program with respect to the part of the project assisted with funds under that program.</P> <P>(b) The State or subgrantee has an accounting system that permits identification of the costs paid for under each program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.761</SECTNO> <SUBJECT>Federal funds may pay 100 percent of cost.</SUBJECT> <P>A State or a subgrantee may use program funds to pay up to 100 percent of the cost of a project if:</P> <P>(a) The State or subgrantee is not required to match the funds; and</P> <P>(b) The project can be assisted under the authorizing statute and implementing regulations for the program.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Administrative Responsibilities</HD> <SECTION> <SECTNO>§ 76.770</SECTNO> <SUBJECT>A State shall have procedures to ensure compliance.</SUBJECT> <P>Each State shall have procedures for reviewing and approving applications for subgrants and amendments to those applications, for providing technical assistance, for evaluating projects, and for performing other administrative responsibilities the State has determined are necessary to ensure compliance with applicable statutes and regulations.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3 and 3474)</SECAUTH> <CITA>[57 FR 30342, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.783</SECTNO> <SUBJECT>State educational agency action—subgrantee's opportunity for a hearing.</SUBJECT> <P>(a) A subgrantee may request a hearing if it alleges that any of the following actions by the State educational agency violated a State or Federal statute or regulation:</P> <P>(1) Ordering, in accordance with a final State audit resolution determination, the repayment of misspent or misapplied Federal funds; or</P> <P>(2) Terminating further assistance for an approved project.</P> <P>(b) The procedures in § 76.401(d)(2)-(7) apply to any request for a hearing under this section.</P> <NOTE> <HD SOURCE="HED">Note:</HD> <P>This section is based on a provision in the General Education Provisions Act (GEPA). Section 427 of the Department of Education Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the extent inconsistent with the DEOA, the GEPA “shall apply to functions transferred by this Act to the extent applicable on the day preceding the effective date of this Act.” Although standardized nomenclature is used in this section to reflect the creation of the Department of Education, there is no intent to extend the coverage of the GEPA beyond that authorized under section 427 or other applicable law.</P> </NOTE> <SECAUTH>(Authority: 20 U.S.C. 1231b-2)</SECAUTH> <CITA>[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86296, Dec. 30, 1980; 57 FR 30342, July 8, 1992]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—How Does a State or Local Educational Agency Allocate Funds to Charter Schools?</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>64 FR 71965, Dec. 22, 1999, unless otherwise noted.</P> </SOURCE> <SUBJGRP> <HD SOURCE="HED">General</HD> <SECTION> <SECTNO>§ 76.785</SECTNO> <SUBJECT>What is the purpose of this subpart?</SUBJECT> <P>The regulations in this subpart implement section 10306 of the Elementary and Secondary Education Act of 1965 (ESEA), which requires States to <PRTPAGE P="178"/>take measures to ensure that each charter school in the State receives the funds for which it is eligible under a covered program during its first year of operation and during subsequent years in which the charter school expands its enrollment.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.786</SECTNO> <SUBJECT>What entities are governed by this subpart?</SUBJECT> <P>The regulations in this subpart apply to—</P> <P>(a) State educational agencies (SEAs) and local educational agencies (LEAs) that fund charter schools under a covered program, including SEAs and LEAs located in States that do not participate in the Department's Public Charter Schools Program;</P> <P>(b) State agencies that are not SEAs, if they are responsible for administering a covered program. State agencies that are not SEAs must comply with the provisions in this subpart that are applicable to SEAs; and</P> <P>(c) Charter schools that are scheduled to open or significantly expand their enrollment during the academic year and wish to participate in a covered program.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.787</SECTNO> <SUBJECT>What definitions apply to this subpart?</SUBJECT> <P>For purposes of this subpart—</P> <P> <E T="03">Academic year</E> means the regular school year (as defined by State law, policy, or practice) and for which the State allocates funds under a covered program.</P> <P> <E T="03">Charter school</E> has the same meaning as provided in title X, part C of the ESEA.</P> <P> <E T="03">Charter school LEA</E> means a charter school that is treated as a local educational agency for purposes of the applicable covered program.</P> <P> <E T="03">Covered program</E> means an elementary or secondary education program administered by the Department under which the Secretary allocates funds to States on a formula basis, except that the term does not include a program or portion of a program under which an SEA awards subgrants on a discretionary, noncompetitive basis.</P> <P> <E T="03">Local educational agency</E> has the same meaning for each covered program as provided in the authorizing statute for the program.</P> <P> <E T="03">Significant expansion of enrollment</E> means a substantial increase in the number of students attending a charter school due to a significant event that is unlikely to occur on a regular basis, such as the addition of one or more grades or educational programs in major curriculum areas. The term also includes any other expansion of enrollment that the SEA determines to be significant.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reponsibilities for Notice and Information</HD> <SECTION> <SECTNO>§ 76.788</SECTNO> <SUBJECT>What are a charter school LEA's responsibilities under this subpart?</SUBJECT> <P>(a) <E T="03">Notice.</E> At least 120 days before the date a charter school LEA is scheduled to open or significantly expand its enrollment, the charter school LEA or its authorized public chartering agency must provide its SEA with written notification of that date.</P> <P>(b) <E T="03">Information.</E> (1) In order to receive funds, a charter school LEA must provide to the SEA any available data or information that the SEA may reasonably require to assist the SEA in estimating the amount of funds the charter school LEA may be eligible to receive under a covered program.</P> <P>(2)(i) Once a charter school LEA has opened or significantly expanded its enrollment, the charter school LEA must provide actual enrollment and eligibility data to the SEA at a time the SEA may reasonably require.</P> <P>(ii) An SEA is not required to provide funds to a charter school LEA until the charter school LEA provides the SEA with the required actual enrollment and eligibility data.</P> <P>(c) <E T="03">Compliance.</E> Except as provided in § 76.791(a), or the authorizing statute or implementing regulations for the applicable covered program, a charter school LEA must establish its eligibility and comply with all applicable <PRTPAGE P="179"/>program requirements on the same basis as other LEAs.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1810-0623)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.789</SECTNO> <SUBJECT>What are an SEA's responsibilities under this subpart?</SUBJECT> <P>(a) <E T="03">Information.</E> Upon receiving notice under § 76.788(a) of the date a charter school LEA is scheduled to open or significantly expand its enrollment, an SEA must provide the charter school LEA with timely and meaningful information about each covered program in which the charter school LEA may be eligible to participate, including notice of any upcoming competitions under the program.</P> <P>(b) <E T="03">Allocation of Funds.</E> (1) An SEA must allocate funds under a covered program in accordance with this subpart to any charter school LEA that—</P> <P>(i) Opens for the first time or significantly expands its enrollment during an academic year for which the State awards funds by formula or through a competition under the program;</P> <P>(ii) In accordance with § 76.791(a), establishes its eligibility and complies with all applicable program requirements; and</P> <P>(iii) Meets the requirements of § 76.788(a).</P> <P>(2) In order to meet the requirements of this subpart, an SEA may allocate funds to, or reserve funds for, an eligible charter school LEA based on reasonable estimates of projected enrollment at the charter school LEA.</P> <P>(3)(i) The failure of an eligible charter school LEA or its authorized public chartering agency to provide notice to its SEA in accordance with § 76.788(a) relieves the SEA of any obligation to allocate funds to the charter school within five months.</P> <P>(ii) Except as provided in § 76.792(c), an SEA that receives less than 120 days’ actual notice of the date an eligible charter school LEA is scheduled to open or significantly expand its enrollment must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.</P> <P>(iii) The SEA may provide funds to the charter school LEA from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1810-0623)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Allocation of Funds by State Educational Agencies</HD> <SECTION> <SECTNO>§ 76.791</SECTNO> <SUBJECT>On what basis does an SEA determine whether a charter school LEA that opens or significantly expands its enrollment is eligible to receive funds under a covered program?</SUBJECT> <P>(a) For purposes of this subpart, an SEA must determine whether a charter school LEA is eligible to receive funds under a covered program based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA opens or significantly expands its enrollment.</P> <P>(b) For the year the charter school LEA opens or significantly expands its enrollment, the eligibility determination may not be based on enrollment or eligibility data from a prior year, even if the SEA makes eligibility determinations for other LEAs under the program based on enrollment or eligibility data from a prior year.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.792</SECTNO> <SUBJECT>How does an SEA allocate funds to eligible charter school LEAs under a covered program in which the SEA awards subgrants on a formula basis?</SUBJECT> <P>(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must implement procedures that ensure that the charter school LEA receives the proportionate amount of funds for which the charter school LEA is eligible under each covered program.</P> <P>(b) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1 but before February 1 of an academic <PRTPAGE P="180"/>year, the SEA must implement procedures that ensure that the charter school LEA receives at least a <E T="03">pro rata</E> portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program. The <E T="03">pro rata</E> amount must be based on the number of months or days during the academic year the charter school LEA will participate in the program as compared to the total number of months or days in the academic year.</P> <P>(c) For each eligible charter school LEA that opens or significantly expands its enrollment on or after February 1 of an academic year, the SEA may implement procedures to provide the charter school LEA with a <E T="03">pro rata</E> portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.793</SECTNO> <SUBJECT>When is an SEA required to allocate funds to a charter school LEA under this subpart?</SUBJECT> <P>Except as provided in §§ 76.788(b) and 76.789(b)(3):</P> <P>(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must allocate funds to the charter school LEA within five months of the date the charter school LEA opens or significantly expands its enrollment; and</P> <P>(b)(1) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1, but before February 1 of an academic year, the SEA must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.</P> <P>(2) The SEA may provide funds to the charter school LEA from the SEA's allocation under the program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.794</SECTNO> <SUBJECT>How does an SEA allocate funds to charter school LEAs under a covered program in which the SEA awards subgrants on a discretionary basis?</SUBJECT> <P>(a) <E T="03">Competitive programs.</E> (1) For covered programs in which the SEA awards subgrants on a competitive basis, the SEA must provide each eligible charter school LEA in the State that is scheduled to open on or before the closing date of any competition under the program a full and fair opportunity to apply to participate in the program.</P> <P>(2) An SEA is not required to delay the competitive process in order to allow a charter school LEA that has not yet opened or significantly expanded its enrollment to compete for funds under a covered program.</P> <P>(b) <E T="03">Noncompetitive discretionary programs.</E> The requirements in this subpart do not apply to discretionary programs or portions of programs under which the SEA does not award subgrants through a competition.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Adjustments</HD> <SECTION> <SECTNO>§ 76.796</SECTNO> <SUBJECT>What are the consequences of an SEA allocating more or fewer funds to a charter school LEA under a covered program than the amount for which the charter school LEA is eligible when the charter school LEA actually opens or significantly expands its enrollment?</SUBJECT> <P>(a) An SEA that allocates more or fewer funds to a charter school LEA than the amount for which the charter school LEA is eligible, based on actual enrollment or eligibility data when the charter school LEA opens or significantly expands its enrollment, must make appropriate adjustments to the amount of funds allocated to the charter school LEA as well as to other LEAs under the applicable program.</P> <P>(b) Any adjustments to allocations to charter school LEAs under this subpart must be based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA first opens or significantly expands its enrollment, even if allocations or adjustments to allocations to other LEAs in the State are <PRTPAGE P="181"/>based on enrollment or eligibility data from a prior year.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.797</SECTNO> <SUBJECT>When is an SEA required to make adjustments to allocations under this subpart?</SUBJECT> <P>(a) The SEA must make any necessary adjustments to allocations under a covered program on or before the date the SEA allocates funds to LEAs under the program for the succeeding academic year.</P> <P>(b) In allocating funds to a charter school LEA based on adjustments made in accordance with paragraph (a) of this section, the SEA may use funds from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Applicability of This Subpart to Local Educational Agencies</HD> <SECTION> <SECTNO>§ 76.799</SECTNO> <SUBJECT>Do the requirements in this subpart apply to LEAs?</SUBJECT> <P>(a) Each LEA that is responsible for funding a charter school under a covered program must comply with the requirements in this subpart on the same basis as SEAs are required to comply with the requirements in this subpart.</P> <P>(b) In applying the requirements in this subpart (except for §§ 76.785, 76.786, and 76.787) to LEAs, references to SEA (or State), charter school LEA, and LEA must be read as references to LEA, charter school, and public school, respectively.</P> <SECAUTH>(Authority: 20 U.S.C. 8065a)</SECAUTH> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—What Procedures Does the Secretary Use To Get Compliance?</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>45 FR 22517, Apr. 3, 1980, unless otherwise noted. Redesignated at 45 FR 77368, Nov. 21, 1980, and further redesignated at 64 FR 71965, Dec. 22, 1999.</P> </SOURCE> <SECTION> <SECTNO>§ 76.900</SECTNO> <SUBJECT>Waiver of regulations prohibited.</SUBJECT> <P>(a) No official, agent, or employee of ED may waive any regulation that applies to a Department program unless the regulation specifically provide that it may be waived.</P> <P>(b) No act or failure to act by an official, agent, or employee of ED can affect the authority of the Secretary to enforce regulations.</P> <SECAUTH>(Authority: 43 Dec. Comp. Gen. 31(1963))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.901</SECTNO> <SUBJECT>Office of Administrative Law Judges.</SUBJECT> <P>(a) The Office of Administrative Law Judges, established under Part E of GEPA, has the following functions:</P> <P>(1) Recovery of funds hearings under section 452 of GEPA.</P> <P>(2) Withholding hearings under section 455 of GEPA.</P> <P>(3) Cease and desist hearings under section 456 of GEPA.</P> <P>(4) Any other proceeding designated by the Secretary under section 451 of GEPA.</P> <P>(b) The regulations of the Office of Administrative Law Judges are at 34 CFR part 81.</P> <SECAUTH>(Authority: 20 U.S.C. 1234)</SECAUTH> <CITA>[57 FR 30342, July 8, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 76.902</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <P>After a hearing by the Secretary, a State is usually entitled—generally by the statute that required the hearing—to judicial review of the Secretary's decision.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 76.910</SECTNO> <SUBJECT>Cooperation with audits.</SUBJECT> <P>A grantee or subgrantee shall cooperate with the Secretary and the Comptroller General of the United States or any of their authorized representatives in the conduct of audits authorized by Federal law. This cooperation includes access without unreasonable restrictions to records and personnel of the grantee or subgrantee for the purpose of obtaining relevant information.</P> <SECAUTH>(Authority: 5 U.S.C. appendix 3, sections 4(a)(1), 4(b)(1)(A), and 6(a)(1); 20 U.S.C. 1221e-3(a)(1), 1232f)</SECAUTH> <CITA>[54 FR 21776, May 19, 1989]</CITA> </SECTION> </SUBPART> </PART> <PART> <PRTPAGE P="182"/> <EAR>Pt. 77</EAR> <HD SOURCE="HED">PART 77—DEFINITIONS THAT APPLY TO DEPARTMENT REGULATIONS</HD> <SECTION> <SECTNO>§ 77.1</SECTNO> <SUBJECT>Definitions that apply to all Department programs.</SUBJECT> <P>(a) [Reserved]</P> <P>(b) Unless a statute or regulation provides otherwise, the following definitions in part 74 or 80 of this title apply to the regulations in title 34 of the Code of Federal Regulations. The section of part 74 or 80 that contains the definition is given in parentheses. </P> <FP SOURCE="FP-1"> <E T="03">Award</E> (§ 74.2)</FP> <FP SOURCE="FP-1"> <E T="03">Contract</E> (includes definition of “Subcontract”) (§ 74.2) (§ 80.3)</FP> <FP SOURCE="FP-1"> <E T="03">Equipment</E> (§ 74.2) (§ 80.3)</FP> <FP SOURCE="FP-1"> <E T="03">Grant</E> (§ 80.3)</FP> <FP SOURCE="FP-1"> <E T="03">Personal property</E> (§ 74.2)</FP> <FP SOURCE="FP-1"> <E T="03">Project period</E> (§ 74.2)</FP> <FP SOURCE="FP-1"> <E T="03">Real property</E> (§ 74.2) (§ 80.3)</FP> <FP SOURCE="FP-1"> <E T="03">Recipient</E> (§ 74.2)</FP> <FP SOURCE="FP-1"> <E T="03">Supplies (§ 74.2) (§ 80.3)</E> </FP> <P>(c) Unless a statute or regulation provides otherwise, the following definitions also apply to the regulations in this title:</P> <P> <E T="03">Acquisition</E> means taking ownership of property, receiving the property as a gift, entering into a lease-purchase arrangement, or leasing the property. The term includes processing, delivery, and installation of property.</P> <P> <E T="03">Applicant</E> means a party requesting a grant or subgrant under a program of the Department.</P> <P> <E T="03">Application</E> means a request for a grant or subgrant under a program of the Department.</P> <P> <E T="03">Budget</E> means that recipient's financial plan for carrying out the project or program.</P> <P> <E T="03">Budget period</E> means an interval of time into which a project period is divided for budgetary purposes.</P> <P> <E T="03">Department</E> means the U.S. Department of Education.</P> <P> <E T="03">Director of the Institute of Musuem Services</E> means the Director of the Institute of Museum Services or an officer or employee of the Institute of Museum Services acting for the Director under a delegation of authority.</P> <P> <E T="03">Director of the National Institute of Education</E> means the Director of the National Institute of Education or an officer or employee of the National Institute of Education acting for the Director under a delegation of authority.</P> <P> <E T="03">ED</E> means the U.S. Department of Education.</P> <P> <E T="03">EDGAR</E> means the Education Department General Administrative Regulations (34 CFR parts 74, 75, 76, 77, 79, 80, 81, 82, 85, 86, 97, 98, and 99.)</P> <P> <E T="03">Elementary school</E> means a day or residential school that provides elementary education, as determined under State law.</P> <P> <E T="03">Facilities</E> means one or more structures in one or more locations.</P> <P> <E T="03">Fiscal year</E> means the Federal fiscal year—a period beginning on October 1 and ending on the following September 30.</P> <P> <E T="03">GEPA</E> means The General Education Provisions Act.</P> <P> <E T="03">Grant period</E> means the period for which funds have been awarded.</P> <P> <E T="03">Grantee</E> means the legal entity other than a Government subject to 34 CFR part 80 to which a grant is awarded and which is accountable to the Federal Government 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 award document. For example, a grant award document may name as the grantee one school or campus of a university. In this case, the granting agency usually intends, or actually intends, that the named component assume primary or sole responsibility for administering the grant-assisted project or program. Nevertheless, the naming of a component of a legal entity as the grantee in a grant award document shall not be construed as relieving the whole legal entity from accountability to the Federal Government for the use of the funds provided. (This definition is not intended to affect the eligibility provision of grant programs in which eligibility is limited to organizations which may be only components of a legal entity.) The term “grantee” does not include any secondary recipients such as subgrantees, contractors, etc., who may receive funds from a grantee pursuant to a grant. The definition of “grantee” for State, local, and tribal governments is contained in 34 CFR 80.3.</P> <P> <E T="03">Local educational agency</E> means:<PRTPAGE P="183"/> </P> <P>(a) A public board of education or other public authority legally constituted within a State for either administrative control of or direction of, or to perform service functions for, public elementary or secondary schools in:</P> <P>(1) A city, county, township, school district, or other political subdivision of a State; or</P> <P>(2) Such combination of school districts or counties a State recognizes as an administrative agency for its public elementary or secondary schools; or</P> <P>(b) Any other public institution or agency that has administrative control and direction of a public elementary or secondary school.</P> <P>(c) As used in 34 CFR parts 400, 408, 525, 526 and 527 (vocational education programs), the term also includes any other public institution or agency that has administrative control and direction of a vocational education program.</P> <P> <E T="03">Minor remodeling</E> means minor alterations in a previously completed building. The term also includes the extension of utility lines, such as water and electricity, from points beyond the confines of the space in which the minor remodeling is undertaken but within the confines of the previously completed building. The term does not include building construction, stuctural alterations to buildings, building maintenance, or repairs.</P> <P> <E T="03">Nonprofit,</E> as applied to an agency, organization, or institution, means that it is owned and operated by one or more corporations or associations whose net earnings do not benefit, and cannot lawfully benefit, any private shareholder or entity.</P> <P> <E T="03">Nonpublic,</E> as applied to an agency, organization, or institution, means that the agency, organization, or institution is nonprofit and is not under Federal or public supervision or control.</P> <P> <E T="03">Preschool</E> means the educational level from a child's birth to the time at which the State provides elementary education.</P> <P> <E T="03">Private,</E> as applied to an agency, organization, or institution, means that it is not under Federal or public supervision or control.</P> <P> <E T="03">Project</E> means the activity described in an application.</P> <P> <E T="03">Public,</E> as applied to an agency, organization, or institution, means that the agency, organization, or institution is under the administrative supervision or control of a government other than the Federal Government.</P> <P> <E T="03">Secondary school</E> means a day or residential school that provides secondary education as determined under State law. In the absence of State law, the Secretary may determine, with respect to that State, whether the term includes education beyond the twelfth grade.</P> <P> <E T="03">Secretary</E> means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <P> <E T="03">Service function,</E> with respect to a local educational agency:</P> <P>(a) Means an educational service that is performed by a legal entity—such as an intermediate agency:</P> <P>(1)(i) Whose jurisdiction does not extend to the whole State; and</P> <P>(ii) That is authorized to provide consultative, advisory, or educational services to public elementary or secondary schools; or</P> <P>(2) That has regulatory functions over agencies having administrative control or direction of public elementary or secondary schools.</P> <P>(b) The term does not include a service that is performed by a cultural or educational resource.</P> <P> <E T="03">State</E> means any of the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands.</P> <P> <E T="03">State educational agency</E> means the State board of education or other agency or officer primarily responsible for the supervision of public elementary and secondary schools in a State. In the absence of this officer or agency, it is an officer or agency designated by the Governor or State law.<PRTPAGE P="184"/> </P> <P> <E T="03">Work of art</E> means an item that is incorporated into facilities primarily because of its aesthetic value.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)</SECAUTH> <CITA>[45 FR 22529, Apr. 3, 1980, as amended at 45 FR 37442, June 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86298, Dec. 30, 1980; 54 FR 21776, May 19, 1989; 57 FR 30342, July 8, 1992; 59 FR 34739, July 6, 1994; 64 FR 50392, Sept. 16, 1999]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 79</EAR> <HD SOURCE="HED">PART 79—INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF EDUCATION PROGRAMS AND ACTIVITIES</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>79.1</SECTNO> <SUBJECT>What is the purpose of these regulations?</SUBJECT> <SECTNO>79.2</SECTNO> <SUBJECT>What definitions apply to these regulations?</SUBJECT> <SECTNO>79.3</SECTNO> <SUBJECT>What programs and activities of the Department are subject to these regulations?</SUBJECT> <SECTNO>79.4</SECTNO> <SUBJECT>What are the Secretary's general responsibilities under the Order?</SUBJECT> <SECTNO>79.5</SECTNO> <SUBJECT>What is the Secretary's obligation with respect to Federal interagency coordinations?</SUBJECT> <SECTNO>79.6</SECTNO> <SUBJECT>What procedures apply to the selection of programs and activities under these regulations?</SUBJECT> <SECTNO>79.7</SECTNO> <SUBJECT>How does the Secretary communicate with State and local officials concerning the Department's programs and activities?</SUBJECT> <SECTNO>79.8</SECTNO> <SUBJECT>How does the Secretary provide States an opportunity to comment on proposed Federal financial assistance?</SUBJECT> <SECTNO>79.9</SECTNO> <SUBJECT>How does the Secretary receive and respond to comments?</SUBJECT> <SECTNO>79.10</SECTNO> <SUBJECT>How does the Secretary make efforts to accommodate intergovernmental concerns?</SUBJECT> <SECTNO>79.11</SECTNO> <SUBJECT>What are the Secretary's obligations in interstate situations?</SUBJECT> <SECTNO>79.12</SECTNO> <SUBJECT>How may a State simplify, consolidate, or substitute federally required State plans?</SUBJECT> <SECTNO>79.13</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>31 U.S.C. 6506; 42 U.S.C. 3334; and E.O. 12372, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>48 FR 29166, June 24, 1983, unless otherwise noted.</P> </SOURCE> <SECTION> <SECTNO>§ 79.1</SECTNO> <SUBJECT>What is the purpose of these regulations?</SUBJECT> <P>(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 and Section 204 of the Demonstration Cities and Metropolitan Development Act of 1966.</P> <P>(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.</P> <P>(c) These regulations are intended to aid the internal management of the Department, and are not intended to create any right or benefit enforceable at law by a party against the Department or its officers.</P> <SECAUTH>(Authority: E.O. 12372)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.2</SECTNO> <SUBJECT>What definitions apply to these regulations?</SUBJECT> <P> <E T="03">Department</E> means the U.S. Department of Education.</P> <P> <E T="03">Order</E> means Executive Order 12372, issued July 14, 1982, amended April 8, 1983, and titled “Intergovernmental Review of Federal Programs.”</P> <P> <E T="03">Secretary</E> means the Secretary of the U.S. Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.</P> <P> <E T="03">State</E> 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.</P> <SECAUTH>(Authority: E.O. 12372)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.3</SECTNO> <SUBJECT>What programs and activities of the Department are subject to these regulations?</SUBJECT> <P>(a) The Secretary publishes in the <E T="04">Federal Register</E> a list of the Department's programs and activities that are subject to these regulations and identifies which of these are subject to the requirements of section 204 of the Demonstration Cities and Metropolitan Development Act.</P> <P>(b) If a program or activity of the Department that provides Federal financial assistance does not have implementing regulations, the regulations in <PRTPAGE P="185"/>this part apply to that program or activity.</P> <P>(c) The following programs and activities are excluded from coverage under this part:</P> <P>(1) Proposed legislation.</P> <P>(2) Regulation and budget formulation.</P> <P>(3) National security matters.</P> <P>(4) Procurement.</P> <P>(5) Direct payments to individuals.</P> <P>(6) Financial transfers for which the Department has no funding discretion or direct authority to approve specific sites or projects (e.g., block grants under Chapter 2 of the Education Consolidation and Improvement Act of 1981).</P> <P>(7) Research and development national in scope.</P> <P>(8) Assistance to federally recognized Indian tribes.</P> <P>(d) In addition to the programs and activities excluded in paragraph (c) of this section, the Secretary may only exclude a Federal financial assistance program or activity from coverage under this part if the program or activity does not directly affect State or local governments.</P> <SECAUTH>(Authority: E.O. 12372)</SECAUTH> <CITA>[48 FR 29166, June 24, 1983, as amended at 51 FR 20824, June 9, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 79.4</SECTNO> <SUBJECT>What are the Secretary's general responsibilities under the Order?</SUBJECT> <P>(a) The Secretary 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 Department.</P> <P>(b) If a state adopts a process under the Order to review and coordinate proposed federal financial assistance, the Secretary, to the extent permitted by law:</P> <P>(1) Uses the state process to determine official views of state and local elected officials;</P> <P>(2) Communicates with state and local elected officials as early in a program planning cycle as is reasonably feasible to explain specific plans and actions;</P> <P>(3) Makes efforts to accommodate state and local elected official's concerns with proposed federal financial assistance that are communicated through the state process;</P> <P>(4) Allows the states to simplify and consolidate existing federally required state plan submissions;</P> <P>(5) Where state planning and budgeting systems are sufficient and where permitted by law, encourages the substitution of state plans for federally required state plans;</P> <P>(6) Seeks the coordination of views of affected state and local elected officials in one state with those of another state when proposed federal financial assistance has an impact on interstate metropolitan urban centers or other interstate areas; and</P> <P>(7) Supports state and local governments by discouraging the reauthorization or creation of any planning organization which is federally funded, which has a limited purpose, and which is not adequately representative of, or accountable to, state or local elected officials.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.5</SECTNO> <SUBJECT>What is the Secretary's obligation with respect to Federal interagency coordination?</SUBJECT> <P>The Secretary, to the maximum 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 the Department regarding programs and activities covered under these regulations.</P> <SECAUTH>(Authority: E.O. 12372)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.6</SECTNO> <SUBJECT>What procedures apply to the selection of programs and activities under these regulations?</SUBJECT> <P>(a) A state may select any program or activity published in the <E T="04">Federal Register</E> in accordance with § 79.3 for intergovernmental review under these regulations. Each state, before selecting programs and activities, shall consult with local elected officials.</P> <P>(b) Each state that adopts a process shall notify the Secretary of the Department's programs and activities selected for that process.</P> <P>(c) A state may notify the Secretary of changes in its selections at any time. For each change, the state shall <PRTPAGE P="186"/>submit to the Secretary an assurance that the state has consulted with local elected officials regarding the change. The Department may establish deadlines by which states are required to inform the Secretary of changes in their program selections.</P> <P>(d) The Secretary uses a state's process as soon as feasible, depending on individual programs and activities, after the Secretary is notified of its selections.</P> <SECAUTH>(Authority: E.O. 12372, sec. 2)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.7</SECTNO> <SUBJECT>How does the Secretary communicate with State and local officials concerning the Department's programs and activities?</SUBJECT> <P>(a) [Reserved]</P> <P>(b)(1) The Secretary provides notice to directly affected state, areawide, regional, and local entities in a state of proposed federal financial assistance if:</P> <P>(i) The state has not adopted a process under the Order; or</P> <P>(ii) The assistance involves a program or activity not selected for the state process.</P> <P>(2) This notice may be made by publication in the <E T="04">Federal Register</E> or other means which the Secretary determine appropriate.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.8</SECTNO> <SUBJECT>How does the Secretary provide States an opportunity to comment on proposed Federal financial assistance?</SUBJECT> <P>(a) Except in unusual circumstances, the Secretary gives State processes or directly affected State, areawide, regional, and local officials and entities—</P> <P>(1) At least 30 days to comment on proposed Federal financial assistance in the form of noncompeting continuation awards; and</P> <P>(2) At least 60 days to comment on proposed Federal financial assistance other than noncompeting continuation awards.</P> <P>(b) The Secretary establishes a date for mailing or hand-delivering comments under paragraph (a) of this section using one of the following two procedures:</P> <P>(1) If the comments relate to continuation award applications, the Secretary notifies each applicant and each State Single Point of Contact (SPOC) of the date by which SPOC comments should be submitted.</P> <P>(2) If the comments relate to applications for new grants, the Secretary establishes the date in a notice published in the <E T="04">Federal Register.</E> </P> <P>(c) This section also applies to comments in cases in which the review, coordination, and communication with the Department have been delegated.</P> <P>(d) Applicants for programs and activities subject to Section 204 of the Demonstration Cities and Metropolitan Act shall allow areawide agencies a 60-day opportunity for review and comment.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2)</SECAUTH> <CITA>[48 FR 29166, June 24, 1983, as amended at 51 FR 20825, June 9, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 79.9</SECTNO> <SUBJECT>How does the Secretary receive and respond to comments?</SUBJECT> <P>(a) The Secretary follows the procedure in § 79.10 if:</P> <P>(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</P> <P>(2) That office or official transmits a State process recommendation, and identifies it as such, for a program selected under § 79.6.</P> <P>(b)(1) The single point of contact is not obligated to transmit comments from state, areawide, regional, or local officials and entities if there is no state process recommendation.</P> <P>(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.</P> <P>(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 to the Department.</P> <P>(d) If a program or activity is not selected for a state process, state, areawide, regional, and local officials and entities may submit comments to the Department. In addition, if a state process recommendation for a nonselected program or activity is transmitted to the Department by the single <PRTPAGE P="187"/>point of contact, the Secretary follows the procedures of § 79.10.</P> <P>(e) The Secretary considers comments which do not constitute a state process recommendation submitted under these regulations and for which the Secretary is not required to apply the procedures of § 79.10 of this part, if those comments are provided by a single point of contact, or directly to the Department by a commenting party.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2)</SECAUTH> <CITA>[48 FR 29166, June 24, 1983, as amended at 51 FR 20825, June 9, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 79.10</SECTNO> <SUBJECT>How does the Secretary make efforts to accommodate intergovernmental concerns?</SUBJECT> <P>(a) If a state process provides a state process recommendation to the Department through its single point of contact, the Secretary either:</P> <P>(1) Accepts the recommendation;</P> <P>(2) Reaches a mutually agreeable solution with the state process; or</P> <P>(3) Provides the single point of contact with a written explanation of the decision in such form as the Secretary deems appropriate. The Secretary may also supplement the written explanation by providing the explanation to the single point of contact by telephone, other telecommunication, or other means.</P> <P>(b) In any explanation under paragraph (a)(3) of this section, the Secretary informs the single point of contact that:</P> <P>(1) The Department will not implement its decision for at least ten days after the single point of contact receives the explanation; or</P> <P>(2) The Secretary has reviewed the decision and determined that, because of unusual circumstances, the waiting period of at least ten days is not feasible.</P> <P>(c) For purposes 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 the notification.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.11</SECTNO> <SUBJECT>What are the Secretary's obligations in interstate situations?</SUBJECT> <P>(a) The Secretary is responsible for:</P> <P>(1) Identifying proposed federal financial assistance that has an impact on interstate areas;</P> <P>(2) Notifying appropriate officials and entities in states which have adopted a process and which select the Department's program or activity.</P> <P>(3) Making efforts to identify and notify the affected state, areawide, regional, and local officials and entities in those states that have not adopted a process under the Order or do not select the Department's program or activity;</P> <P>(4) Responding under § 79.10 if the Secretary receives a recommendation from a designated areawide agency transmitted by a single point of contact, in cases in which the review, coordination, and communication with the Department have been delegated.</P> <P>(b) In an interstate situation subject to this section, the Secretary uses the procedures in § 79.10 if a state process provides a state process recommendation to the Department through a single point of contact.</P> <SECAUTH>(Authority: E.O. 12372, Sec. 2(e))</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 79.12</SECTNO> <SUBJECT>How may a State simplify, consolidate, or substitute federally required State plans?</SUBJECT> <P>(a) As used in this section:</P> <P>(1) <E T="03">Simplify</E> means that a state may develop its own format, choose its own submission date, and select the planning period for a state plan.</P> <P>(2) <E T="03">Consolidate</E> means that a state may meet statutory and regulatory requirements by combining two or more plans into one document and that the state can select the format, submission date, and planning period for the consolidated plan.</P> <P>(3) <E T="03">Substitute</E> means that a state may use a plan or other document that it has developed for its own purposes to meet Federal requirements.</P> <P>(b) If not inconsistent with law, a state may decide to try to simplify, consolidate, or substitute federally required state plans without prior approval by the Secretary.</P> <P>(c) The Secretary reviews each state plan that a state has simplified, consolidated, or substituted and accepts the plan only if its contents meet federal requirements.</P> <SECAUTH>(Authority: E.O. 12372, sec. 2)</SECAUTH> </SECTION> <SECTION> <PRTPAGE P="188"/> <SECTNO>§ 79.13</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> </PART> <PART> <EAR>Pt. 80</EAR> <HD SOURCE="HED">PART 80—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>80.1</SECTNO> <SUBJECT>Purpose and scope of this part.</SUBJECT> <SECTNO>80.2</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> <SECTNO>80.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>80.4</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>80.5</SECTNO> <SUBJECT>Effect on other issuances.</SUBJECT> <SECTNO>80.6</SECTNO> <SUBJECT>Additions and exceptions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Pre-Award Requirements</HD> <SECTNO>80.10</SECTNO> <SUBJECT>Forms for applying for grants.</SUBJECT> <SECTNO>80.11</SECTNO> <SUBJECT>State plans.</SUBJECT> <SECTNO>80.12</SECTNO> <SUBJECT>Special grant or subgrant conditions for “high-risk” grantees.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Post-Award Requirements</HD> <SUBJGRP> <HD SOURCE="HED">Financial Administration</HD> <SECTNO>80.20</SECTNO> <SUBJECT>Standards for financial management systems.</SUBJECT> <SECTNO>80.21</SECTNO> <SUBJECT>Payment.</SUBJECT> <SECTNO>80.22</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <SECTNO>80.23</SECTNO> <SUBJECT>Period of availability of funds.</SUBJECT> <SECTNO>80.24</SECTNO> <SUBJECT>Matching or cost sharing.</SUBJECT> <SECTNO>80.25</SECTNO> <SUBJECT>Program income.</SUBJECT> <SECTNO>80.26</SECTNO> <SUBJECT>Non-Federal audit.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Changes, Property, and Subawards</HD> <SECTNO>80.30</SECTNO> <SUBJECT>Changes.</SUBJECT> <SECTNO>80.31</SECTNO> <SUBJECT>Real property.</SUBJECT> <SECTNO>80.32</SECTNO> <SUBJECT>Equipment.</SUBJECT> <SECTNO>80.33</SECTNO> <SUBJECT>Supplies.</SUBJECT> <SECTNO>80.34</SECTNO> <SUBJECT>Copyrights.</SUBJECT> <SECTNO>80.35</SECTNO> <SUBJECT>Subawards to debarred and suspended parties.</SUBJECT> <SECTNO>80.36</SECTNO> <SUBJECT>Procurement.</SUBJECT> <SECTNO>80.37</SECTNO> <SUBJECT>Subgrants.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Reports, Records Retention, and Enforcement</HD> <SECTNO>80.40</SECTNO> <SUBJECT>Monitoring and reporting program performance.</SUBJECT> <SECTNO>80.41</SECTNO> <SUBJECT>Financial reporting.</SUBJECT> <SECTNO>80.42</SECTNO> <SUBJECT>Retention and access requirements for records.</SUBJECT> <SECTNO>80.43</SECTNO> <SUBJECT>Enforcement.</SUBJECT> <SECTNO>80.44</SECTNO> <SUBJECT>Termination for convenience.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—After-the-Grant Requirements</HD> <SECTNO>80.50</SECTNO> <SUBJECT>Closeout.</SUBJECT> <SECTNO>80.51</SECTNO> <SUBJECT>Later disallowances and adjustments.</SUBJECT> <SECTNO>80.52</SECTNO> <SUBJECT>Collections of amounts due.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart E—Entitlement [Reserved]</RESERVED> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> <P>20 U.S.C. 1221e-3(a)(1) and 3474, OMB Circular A-102, unless otherwise noted.</P> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> <P>53 FR 8071 and 8087, Mar. 11, 1988, unless otherwise noted.</P> </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 80.1</SECTNO> <SUBJECT>Purpose and scope of this part.</SUBJECT> <P>This part establishes uniform administrative rules for Federal grants and cooperative agreements and subawards to State, local and Indian tribal governments.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.2</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> <P>This subpart contains general rules pertaining to this part and procedures for control of exceptions from this part.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <P>As used in this part:</P> <P> <E T="03">Accrued expenditures</E> mean the charges incurred by the grantee during a given period requiring the provision of funds for:</P> <P>(1) Goods and other tangible property received;</P> <P>(2) Services performed by employees, contractors, subgrantees, subcontractors, and other payees; and</P> <P>(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.</P> <P> <E T="03">Accrued income</E> means the sum of:</P> <P>(1) Earnings during a given period from services performed by the grantee and goods and other tangible property delivered to purchasers, and</P> <P>(2) Amounts becoming owed to the grantee for which no current services or performance is required by the grantee.</P> <P> <E T="03">Acquisition cost</E> 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, <PRTPAGE P="189"/>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.</P> <P> <E T="03">Administrative</E> 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 <E T="03">programmatic</E> 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.</P> <P> <E T="03">Awarding agency</E> means (1) with respect to a grant, the Federal agency, and (2) with respect to a subgrant, the party that awarded the subgrant.</P> <P> <E T="03">Cash contributions</E> 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.</P> <P> <E T="03">Contract</E> means (except as used in the definitions for <E T="03">grant</E> and <E T="03">subgrant</E> in this section and except where qualified by <E T="03">Federal</E>) a procurement contract under a grant or subgrant, and means a procurement subcontract under a contract.</P> <P> <E T="03">Cost sharing or matching</E> 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.</P> <P> <E T="03">Cost-type contract</E> 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.</P> <P> <E T="03">Equipment</E> 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.</P> <P> <E T="03">Expenditure report</E> means:</P> <P>(1) For nonconstruction grants, the SF-269 “Financial Status Report” (or other equivalent report);</P> <P>(2) For construction grants, the SF-271 “Outlay Report and Request for Reimbursement” (or other equivalent report).</P> <P> <E T="03">Federally recognized Indian tribal government</E> means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him through the Bureau of Indian Affairs.</P> <P> <E T="03">Government</E> means a State or local government or a federally recognized Indian tribal government.</P> <P> <E T="03">Grant</E> 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.</P> <P> <E T="03">Grantee</E> 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.</P> <P> <E T="03">Local government</E> 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.</P> <P> <E T="03">Obligations</E> means the amounts of orders placed, contracts and subgrants awarded, goods and services received, <PRTPAGE P="190"/>and similar transactions during a given period that will require payment by the grantee during the same or a future period.</P> <P> <E T="03">OMB</E> means the United States Office of Management and Budget.</P> <P> <E T="03">Outlays</E> (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.</P> <P> <E T="03">Percentage of completion method</E> 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.</P> <P> <E T="03">Prior approval</E> means documentation evidencing consent prior to incurring specific cost.</P> <P> <E T="03">Real property</E> means land, including land improvements, structures and appurtenances thereto, excluding movable machinery and equipment.</P> <P> <E T="03">Share</E>, 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.</P> <P> <E T="03">State</E> 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.</P> <P>(1) The definition of <E T="03">State</E> in this section is used for the purpose of determining the scope of part 80 regulations. Some program regulations contain different definitions for <E T="03">State</E> based on program statute eligibility requirements.</P> <P> <E T="03">Subgrant</E> 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 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 <E T="03">grant</E> in this part.</P> <P> <E T="03">Subgrantee</E> 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.</P> <P> <E T="03">Supplies</E> means all tangible personal property other than <E T="03">equipment</E> as defined in this part.</P> <P> <E T="03">Suspension</E> 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.</P> <P> <E T="03">Termination</E> 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. <E T="03">Termination</E> does not include:</P> <P>(1) Withdrawal of funds awarded on the basis of the grantee's underestimate of the unobligated balance in a prior period;<PRTPAGE P="191"/> </P> <P>(2) Withdrawal of the unobligated balance as of the expiration of a grant;</P> <P>(3) Refusal to extend a grant or award additional funds, to make a competing or noncompeting continuation, renewal, extension, or supplemental award; or</P> <P>(4) Voiding of a grant upon determination that the award was obtained fraudulently, or was otherwise illegal or invalid from inception.</P> <P> <E T="03">Terms of a grant or subgrant</E> mean all requirements of the grant or subgrant, whether in statute, regulations, or the award document.</P> <P> <E T="03">Third party in-kind contributions</E> 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.</P> <P> <E T="03">Unliquidated obligations</E> 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.</P> <P> <E T="03">Unobligated balance</E> 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.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.4</SECTNO> <SUBJECT>Applicability.</SUBJECT> <P>(a) <E T="03">General.</E> 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 § 80.6, or:</P> <P>(1) Grants and subgrants to State and local institutions of higher education or State and local hospitals.</P> <P>(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).</P> <P>(3) Entitlement grants to carry out the following programs of the Social Security Act:</P> <P>(i) Aid to Needy Families with Dependent Children (Title IV-A of the Act, not including the Work Incentive Program (WIN) authorized by section 402(a)19(G); HHS grants for WIN are subject to this part);</P> <P>(ii) Child Support Enforcement and Establishment of Paternity (Title IV-D of the Act);</P> <P>(iii) Foster Care and Adoption Assistance (Title IV-E of the Act);</P> <P>(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and XVI-AABD of the Act); and</P> <P>(v) Medical Assistance (Medicaid) (Title XIX of the Act) not including the State Medicaid Fraud Control program authorized by section 1903(a)(6)(B).</P> <P>(4) Entitlement grants under the following programs of The National School Lunch Act:</P> <P>(i) School Lunch (section 4 of the Act),</P> <P>(ii) Commodity Assistance (section 6 of the Act),</P> <P>(iii) Special Meal Assistance (section 11 of the Act),</P> <P>(iv) Summer Food Service for Children (section 13 of the Act), and</P> <P>(v) Child Care Food Program (section 17 of the Act).</P> <P>(5) Entitlement grants under the following programs of The Child Nutrition Act of 1966:</P> <P>(i) Special Milk (section 3 of the Act), and</P> <P>(ii) School Breakfast (section 4 of the Act).<PRTPAGE P="192"/> </P> <P>(6) Entitlement grants for State Administrative expenses under The Food Stamp Act of 1977 (section 16 of the Act).</P> <P>(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;</P> <P>(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;</P> <P>(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</P> <P>(10) Payments under the Veterans Administration's State Home Per Diem Program (38 U.S.C. 641(a)).</P> <P>(b) <E T="03">Entitlement programs.</E> Entitlement programs enumerated above in § 80.4(a) (3) through (8) are subject to Subpart E.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.5</SECTNO> <SUBJECT>Effect on other issuances.</SUBJECT> <P>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 § 80.6.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.6</SECTNO> <SUBJECT>Additions and exceptions.</SUBJECT> <P>(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 <E T="04">Federal Register</E>.</P> <P>(b) Exceptions for classes of grants or grantees may be authorized only by the Secretary after consultation with OMB.</P> <P>(c) Exceptions on a case-by-case basis and for subgrantees may be authorized by the affected Federal agencies.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Pre-Award Requirements</HD> <SECTION> <SECTNO>§ 80.10</SECTNO> <SUBJECT>Forms for applying for grants.</SUBJECT> <P>(a) <E T="03">Scope.</E> (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.</P> <P>(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.</P> <P>(b) <E T="03">Authorized forms and instructions for governmental organizations.</E> (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.</P> <P>(2) Applicants are not required to submit more than the original and two copies of preapplications or applications.</P> <P>(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.<PRTPAGE P="193"/> </P> <P>(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.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0517)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.11</SECTNO> <SUBJECT>State plans.</SUBJECT> <P>(a) <E T="03">Scope.</E> 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.</P> <P>(b) <E T="03">Requirements.</E> A State need meet only Federal administrative or programmatic requirements for a plan that are in statutes or codified regulations.</P> <P>(c) <E T="03">Assurances.</E> 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:</P> <P>(1) Cite by number the statutory or regulatory provisions requiring the assurances and affirm that it gives the assurances required by those provisions,</P> <P>(2) Repeat the assurance language in the statutes or regulations, or</P> <P>(3) Develop its own language to the extent permitted by law.</P> <P>(d) <E T="03">Amendments.</E> A State will amend a plan whenever necessary to reflect:</P> <P>(1) New or revised Federal statutes or regulations or</P> <P>(2) A material change in any State law, organization, policy, or State agency operation.</P> <FP>The State will obtain approval for the amendment and its effective date but need submit for approval only the amended portions of the plan.</FP> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.12</SECTNO> <SUBJECT>Special grant or subgrant conditions for “high-risk” grantees.</SUBJECT> <P>(a) A grantee or subgrantee may be considered “high risk” if an awarding agency determines that a grantee or subgrantee:</P> <P>(1) Has a history of unsatisfactory performance, or</P> <P>(2) Is not financially stable, or</P> <P>(3) Has a management system which does not meet the management standards set forth in this part, or</P> <P>(4) Has not conformed to terms and conditions of previous awards, or</P> <P>(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.</P> <P>(b) Special conditions or restrictions may include:</P> <P>(1) Payment on a reimbursement basis;</P> <P>(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;</P> <P>(3) Requiring additional, more detailed financial reports;</P> <P>(4) Additional project monitoring;</P> <P>(5) Requiring the grante or subgrantee to obtain technical or management assistance; or</P> <P>(6) Establishing additional prior approvals.</P> <P>(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:</P> <P>(1) The nature of the special conditions/restrictions;</P> <P>(2) The reason(s) for imposing them;</P> <P>(3) The corrective actions which must be taken before they will be removed and the time allowed for completing the corrective actions and</P> <P>(4) The method of requesting reconsideration of the conditions/restrictions imposed.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="194"/> <HD SOURCE="HED">Subpart C—Post-Award Requirements</HD> <SUBJGRP> <HD SOURCE="HED">Financial Administration</HD> <SECTION> <SECTNO>§ 80.20</SECTNO> <SUBJECT>Standards for financial management systems.</SUBJECT> <P>(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:</P> <P>(1) Permit preparation of reports required by this part and the statutes authorizing the grant, and</P> <P>(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.</P> <P>(b) The financial management systems of other grantees and subgrantees must meet the following standards:</P> <P>(1) <E T="03">Financial reporting.</E> 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.</P> <P>(2) <E T="03">Accounting records.</E> 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.</P> <P>(3) <E T="03">Internal control.</E> 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.</P> <P>(4) <E T="03">Budget control.</E> 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.</P> <P>(5) <E T="03">Allowable cost.</E> 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.</P> <P>(6) <E T="03">Source documentation.</E> 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.</P> <P>(7) <E T="03">Cash management.</E> 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.</P> <P>(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.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0517)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.21</SECTNO> <SUBJECT>Payment.</SUBJECT> <P>(a) <E T="03">Scope.</E> This section prescribes the basic standard and the methods under which a Federal agency will make payments to grantees, and grantees will <PRTPAGE P="195"/>make payments to subgrantees and contractors.</P> <P>(b) <E T="03">Basic standard.</E> 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.</P> <P>(c) <E T="03">Advances.</E> 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.</P> <P>(d) <E T="03">Reimbursement.</E> 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.</P> <P>(e) <E T="03">Working capital advances.</E> 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.</P> <P>(f) <E T="03">Effect of program income, refunds, and audit recoveries on payment.</E> (1) Grantees and subgrantees shall disburse repayments to and interest earned on a revolving fund before requesting additional cash payments for the same activity.</P> <P>(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.</P> <P>(g) <E T="03">Withholding payments.</E> (1) Unless otherwise required by Federal statute, awarding agencies shall not withhold payments for proper charges incurred by grantees or subgrantees unless—</P> <P>(i) The grantee or subgrantee has failed to comply with grant award conditions or</P> <P>(ii) The grantee or subgrantee is indebted to the United States.</P> <P>(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 § 80.43(c).</P> <P>(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.</P> <P>(h) <E T="03">Cash depositories.</E> (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 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.</P> <P>(2) A grantee or subgrantee shall maintain a separate bank account only when required by Federal-State agreement.</P> <P>(i) <E T="03">Interest earned on advances.</E> Except for interest earned on advances of <PRTPAGE P="196"/>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.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.22</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <P>(a) <E T="03">Limitation on use of funds.</E> Grant funds may be used only for:</P> <P>(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</P> <P>(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.</P> <P>(b) For each kind of organization, there is a set of Federal principles for determining allowable costs. For the costs of a State, local, or Indian tribal government, the Secretary applies the cost principles in OMB Circular A-87, as amended on June 9, 1987.</P> <GPOTABLE CDEF="s25,r25" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">For the costs of a—</CHED> <CHED H="1">Use the principles in—</CHED> </BOXHD> <ROW> <ENT I="01">State, local or Indian tribal government</ENT> <ENT>OMB Circular A-87.</ENT> </ROW> <ROW> <ENT I="01">Private nonprofit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in OMB Circular A-122 as not subject to that circular</ENT> <ENT>OMB Circular A-122.</ENT> </ROW> <ROW> <ENT I="01">Educational institutions.</ENT> <ENT>OMB Circular A-21.</ENT> </ROW> <ROW> <ENT I="01">For-profit organization other than a hospital and an organization named in OBM Circular A-122 as not subject to that circular</ENT> <ENT>48 CFR part 31. Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.</ENT> </ROW> </GPOTABLE> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.23</SECTNO> <SUBJECT>Period of availability of funds.</SUBJECT> <P>(a) <E T="03">General.</E> 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.</P> <P>(b) <E T="03">Liquidation of obligations.</E> 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.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.24</SECTNO> <SUBJECT>Matching or cost sharing.</SUBJECT> <P>(a) <E T="03">Basic rule: Costs and contributions acceptable.</E> 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:</P> <P>(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.</P> <P>(2) The value of third party in-kind contributions applicable to the period to which the cost sharing or matching requirements applies.</P> <P>(b) <E T="03">Qualifications and exceptions</E>—(1) <E T="03">Costs borne by other Federal grant agreements.</E> 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.</P> <P>(2) <E T="03">General revenue sharing.</E> For the purpose of this section, general revenue sharing funds distributed under 31 U.S.C. 6702 are not considered Federal grant funds.</P> <P>(3) <E T="03">Cost or contributions counted towards other Federal costs-sharing requirements.</E> 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 <PRTPAGE P="197"/>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.</P> <P>(4) <E T="03">Costs financed by program income.</E> Costs financed by program income, as defined in § 80.25, 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 § 80.25(g).)</P> <P>(5) <E T="03">Services or property financed by income earned by contractors.</E> 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.</P> <P>(6) <E T="03">Records.</E> 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.</P> <P>(7) <E T="03">Special standards for third party in-kind contributions.</E> (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.</P> <P>(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.</P> <P>(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:</P> <P>(A) An increase in the services or property provided under the contract (without additional cost to the grantee or subgrantee) or</P> <P>(B) A cost savings to the grantee or subgrantee.</P> <P>(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.</P> <P>(c) <E T="03">Valuation of donated services</E>—(1) <E T="03">Volunteer services.</E> 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.</P> <P>(2) <E T="03">Employees of other organizations.</E> 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 are in a different line of work, paragraph (c)(1) of this section applies.</P> <P>(d) <E T="03">Valuation of third party donated supplies and loaned equipment or space.</E> (1) If a third party donates supplies, the contribution will be valued at the market value of the supplies at the time of donation.</P> <P>(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.<PRTPAGE P="198"/> </P> <P>(e) <E T="03">Valuation of third party donated equipment, buildings, and land.</E> 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:</P> <P>(1) <E T="03">Awards for capital expenditures.</E> 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,</P> <P>(2) <E T="03">Other awards.</E> 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:</P> <P>(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.</P> <P>(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 § 80.22, 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.</P> <P>(f) <E T="03">Valuation of grantee or subgrantee donated real property for construction/acquisition.</E> 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.</P> <P>(g) <E T="03">Appraisal of real property.</E> 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.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0517)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.25</SECTNO> <SUBJECT>Program income.</SUBJECT> <P>(a) <E T="03">General.</E> 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.</P> <P>(b) <E T="03">Definition of program income.</E> 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 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 <PRTPAGE P="199"/>award reflected in the final financial report.</P> <P>(c) <E T="03">Cost of generating program income.</E> 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.</P> <P>(d) <E T="03">Governmental revenues.</E> 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.</P> <P>(e) <E T="03">Royalties.</E> 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 § 80.34.)</P> <P>(f) <E T="03">Property.</E> Proceeds from the sale of real property or equipment will be handled in accordance with the requirements of §§ 80.31 and 80.32.</P> <P>(g) <E T="03">Use of program income.</E> 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.</P> <P>(1) <E T="03">Deduction.</E> 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.</P> <P>(2) <E T="03">Addition.</E> 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.</P> <P>(3) <E T="03">Cost sharing or matching.</E> 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.</P> <P>(h) <E T="03">Income after the award period.</E> 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.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.26</SECTNO> <SUBJECT>Non-Federal audit.</SUBJECT> <P>(a) <E T="03">Basic Rule</E>. Grantees and subgrantees are responsible for obtaining audits in accordance with the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.” The audits shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial audits.</P> <P>(b) <E T="03">Subgrantees</E>. State or local governments, as those terms are defined for purposes of the Single Audit Act Amendments of 1996, that provide Federal awards to a subgrantee, which expends $300,000 or more (or other amount as specified by OMB) in Federal awards in a fiscal year, shall:</P> <P>(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 Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit organizations,” have met the audit requirements of the Act. Commercial contractors (private for-profit and private and governmental organizations) providing goods and services to State and local <PRTPAGE P="200"/>governments are not required to have a single audit performed. State and local governments should use their own procedures to ensure that the contractors has complied with laws and regulations affecting the expenditures of Federal funds;</P> <P>(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, OMB Circular A-133, or through other means (e.g., program reviews) if the subgrantee has not had such an audit;</P> <P>(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;</P> <P>(4) Consider whether subgrantee audits necessitate adjustment of the grantee's own records; and</P> <P>(5) Require each subgrantee to permit independent auditors to have access to the records and financial statements.</P> <P>(c) <E T="03">Auditor selection.</E> In arranging for audit services, § 80.36 shall be followed.</P> <SECAUTH>(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474, OMB Circulars A-102, A-128 and A-133)</SECAUTH> <NOTE> <HD SOURCE="HED">Note:</HD> <P>The requirements for non-Federal audits are contained in the appendix to part 80—Audit Requirements for State and Local Governments.</P> </NOTE> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988; 56 FR 1698, Jan. 16, 1991; 62 FR 45939, 45943, Aug. 29, 1997]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Changes, Property, and Subawards</HD> <SECTION> <SECTNO>§ 80.30</SECTNO> <SUBJECT>Changes.</SUBJECT> <P>(a) <E T="03">General</E>. 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.</P> <P>(b) <E T="03">Relation to cost principles.</E> The applicable cost principles (see § 80.22) 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.</P> <P>(c) <E T="03">Budget changes—</E>(1) <E T="03">Nonconstruction projects.</E> 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:</P> <P>(i) Any revision which would result in the need for additional funding.</P> <P>(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.</P> <P>(iii) Transfer of funds allotted for training allowances (i.e., from direct payments to trainees to other expense categories).</P> <P>(2) <E T="03">Construction projects.</E> Grantees and subgrantees shall obtain prior written approval for any budget revision which would result in the need for additional funds.</P> <P>(3) <E T="03">Combined construction and nonconstruction projects.</E> 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.</P> <P>(d) <E T="03">Programmatic changes.</E> Grantees or subgrantees must obtain the prior approval of the awarding agency whenever any of the following actions is anticipated:</P> <P>(1) Any revision of the scope or objectives of the project (regardless of whether there is an associated budget revision requiring prior approval).</P> <P>(2) Need to extend the period of availability of funds.</P> <P>(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.<PRTPAGE P="201"/> </P> <P>(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 § 80.36 but does not apply to the procurement of equipment, supplies, and general support services.</P> <P>(e) <E T="03">Additional prior approval requirements.</E> The awarding agency may not require prior approval for any budget revision which is not described in paragraph (c) of this section.</P> <P>(f) <E T="03">Requesting prior approval.</E> (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.</P> <P>(2) A request for a prior approval under the applicable Federal cost principles (see § 80.22) may be made by letter.</P> <P>(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.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0517)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.31</SECTNO> <SUBJECT>Real property.</SUBJECT> <P>(a) <E T="03">Title.</E> 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.</P> <P>(b) <E T="03">Use.</E> 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.</P> <P>(c) <E T="03">Disposition.</E> 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:</P> <P>(1) <E T="03">Retention of title.</E> 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.</P> <P>(2) <E T="03">Sale of property.</E> 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.</P> <P>(3) <E T="03">Transfer of title.</E> 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.</P> <P>(d) The provisions of paragraph (c) of this section do not apply to disaster assistance under 20 U.S.C. 241-1(b)-(c) and <PRTPAGE P="202"/>the construction provisions of the Impact Aid Program, 20 U.S.C. 631-647.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.32</SECTNO> <SUBJECT>Equipment.</SUBJECT> <P>(a) <E T="03">Title.</E> 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.</P> <P>(b) <E T="03">States.</E> 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.</P> <P>(c) <E T="03">Use.</E> (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 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.</P> <P>(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.</P> <P>(3) Notwithstanding the encouragement in § 80.25(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.</P> <P>(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.</P> <P>(d) <E T="03">Management requirements.</E> 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:</P> <P>(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.</P> <P>(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.</P> <P>(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.</P> <P>(4) Adequate maintenance procedures must be developed to keep the property in good condition.</P> <P>(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.</P> <P>(e) <E T="03">Disposition.</E> 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:</P> <P>(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.</P> <P>(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.<PRTPAGE P="203"/> </P> <P>(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.</P> <P>(f) <E T="03">Federal equipment.</E> In the event a grantee or subgrantee is provided federally-owned equipment:</P> <P>(1) Title will remain vested in the Federal Government.</P> <P>(2) Grantees or subgrantees will manage the equipment in accordance with Federal agency rules and procedures, and submit an annual inventory listing.</P> <P>(3) When the equipment is no longer needed, the grantee or subgrantee will request disposition instructions from the Federal agency.</P> <P>(g) <E T="03">Right to transfer title.</E> 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:</P> <P>(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.</P> <P>(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 § 80.32(e).</P> <P>(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.</P> <P>(h) The provisions of paragraphs (c), (d), (e), and (g) of this section do not apply to disaster assistance under 20 U.S.C. 241-1(b)-(c) and the construction provisions of the Impact Aid Program, 20 U.S.C. 631-647.</P> <APPRO>(Approved by the Office of Management and Budget under control number 1880-0517)</APPRO> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> <CITA>[53 FR 8071 and 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11, 1988; 53 FR 49143, Dec. 6, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 80.33</SECTNO> <SUBJECT>Supplies.</SUBJECT> <P>(a) <E T="03">Title.</E> Title to supplies acquired under a grant or subgrant will vest, upon acquisition, in the grantee or subgrantee respectively.</P> <P>(b) <E T="03">Disposition.</E> 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.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.34</SECTNO> <SUBJECT>Copyrights.</SUBJECT> <P>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:</P> <P>(a) The copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant; and</P> <P>(b) Any rights of copyright to which a grantee, subgrantee or a contractor purchases ownership with grant support.</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.35</SECTNO> <SUBJECT>Subawards to debarred and suspended parties.</SUBJECT> <P>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.”</P> <SECAUTH>(Authority: 20 U.S.C. 3474; OMB Circular A-102)</SECAUTH> </SECTION> <SECTION> <SECTNO>§ 80.36</SECTNO> <SUBJECT>Procurement.</SUBJECT> <P>(a) <E T="03">States.</E> 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 <PRTPAGE P="204"/>and their implementing regulations. Other grantees and subgrantees will follow paragraphs (b) through (i) in this section.</P> <P>(b) <E T="03">Procurement standards.</E> (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.</P> <P>(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.</P> <P>(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:</P> <P>(i) The employee, officer or agent,</P> <P>(ii) Any member of his immediate family,</P> <P>(iii) His or her partner, or</P> <P>(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 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.</P> <P>(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.</P> <P>(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.</P> <P>(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.</P> <P>(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.</P> <P>(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.</P> <P>(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.</P> <P>(10) Grantees and subgrantees will use time and material type contracts only:</P> <P>(i) After a determination that no other contract is suitable, and<PRTPAGE P="205"/> </P> <P>(ii) If the contract includes a ceiling price that the contractor exceeds at its own risk.</P> <P>(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.</P> <P>(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 a