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and 222(a) shall be 10 percent for the period ending June 30, 1967, and 20 percent thereafter. Section 225(c) also permits the Director of OEO to establish objective criteria for approving applications with smaller percentages.

(2) This section explains non-Federal share requirements with regard to future grant actions under sections 221 and 222(a). Paragraph (b) of this section describes general non-Federal share rules applicable to most communities. The major provision in paragraph (b) of this section is the adoption of a so-called "32 month rule". In essence, all community action agencies (CAA's) and single-purpose grantees with the exception of 1967 Summer Head Start and Upward Bound will have a 32-month operation period under the 10 percent requirement prior to meeting the 20 percent non-Federal share requirement as set out in section 225(c) of the Economic Opportunity Act. The rule set forth in paragraph (b) of this section is intended to insure fair treatment as between grantees which have been funded by OEO for a substantial period of time and those initially funded in more recent months. (NOTE: Paragraph (d) of this section explains the special steps to be followed by grantees which will reach their 330 month of CAP funding during a current program year or grant period.)

(3) Paragraph (c) of this section explains special exemption rules applicable to communities with per capita incomes below $1,000 per year. These rules are Intended to provide lower non-Federal share requirements for communities and counties which have the most serious overall poverty.

(b) Basic non-Federal share require ments.-(1) General rule. (1) Grantees that are not eligible for exemption under paragraph (c) of this section will be required to provide a 20 percent non-Federal share for any portion of their program which will be conducted after the grantee has been funded by OEO for 32 months. The original groups of CAP grantees funded in November 1964 will reach their 33d month on July 1, 1967.

Those funded originally in December 1964 will reach their 33d month on August 1, 1967, and so on,

(1) All grantees not eligible for total or partial exemption under paragraph (c) of this section reaching their 33d month during a program year or grant period will thus be required to furnish a non-Federal share of at least 10 percent but not more than 20 percent of their total program costs during that program year. Those grantees affected during their current program year, should consult paragraph (d) of this section.

(ili) For purposes of computing the non-Federal share required under this rule, it will be assumed that monthly program expenditures are made evenly throughout a grant program. The nonFederal share required under the rule therefore depends on the number of program months which will occur following the 32d anniversary of a grantee's original OEO grant. The resulting percentage is to be rounded to the nearest whole number, i.e., upward if five-tenths of 1 percent or more, downward if four-tenths of 1 percent or less. The formula for computing this is shown below: Non-Federal=10% (basic)+( 0 X 10% ). A=Number of months of current program

year occurring after end of 32-month

grace period. B=Total number of months in program

year. Example: A community action agency which received its first OEO grant in March 1965, requests OEO assistance for a new component protect to run from August 1, 1967, through March 31, 1968.

Number of months of grant participation as of July 31, 1967 1s 29.

A. Number of months occurring after 32d (1.e. Nov. 1, 1967, to Mar. 31, 1968)=6 months.

B. Inclusive dates of new grant action (1.e. Aug. 1. 1967. to Mar. 31. 1968) = 8 months.

Non-Federal contribution=10% (basic) + 5/8 X 10% = 10% +6.25% = 16%. Exhibit I is attached to serve as a ready guide to the non-Federal share percentage to be approved. In all instances when the new grant is on a 12-month basis, the attached table can be used to determine the overall non-Federal percentage contribution. The table is to be used as follows: Read down Column A until the date of initial

grant from OEO. Read across the row for that date to the col

umn for the ending month of new grant

(under D). The number where the latter column Intersects the proper row is the non-Federal percentage contribution.

1 Por information concerning non-Federal share requirements in the projects under the Community Betterment and Employment Program under sec. 205(d) of the Act (42 U.S.C. 2785(d)) and the New Careers Program under sec. 205(e) of the Act (42 U.S.C. 2785(e)) administered by the Department of Labor, see 29 CFR 51.4(c) (1), 32 PR. 6440, 6443 (Apr. 16, 1967).

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When the new grant period covers less or more than 12 months, the above formula should be used.

(2) Reorganized grantees and transferred grants. Where a program has been transferred from a previous grantee to the present one or where the original grantee has been reorganized or dissolved in favor of the present one, the 32 months will be counted from the date of the original grant to the original grantee.

(3) Single-purpose agencies. (1) The non-Federal share of an established single-purpose grantee in a community where there is also a CAA will be determined on the basis of the single-purpose grantee's own history. The same will be true for applicants for independent funding of new programs.

(ii) However. the non-Federal share required of an agency which seeks independent or direct funding for a program which it previously ran as a delegate agency of a CAA will be determined on the basis of the history of the CAA.

(iii) See subparagraphs (5) and (6) of this paragraph for rules specially applicable to Summer Head Start programs and Upward Bound programs.

(4) Rule for multicounty CAA's resulting from merger. Where two or more CAA's for different counties (or other political jurisdiction) have merged into a multicounty CAA, the status of each CAA (prior to merger) will be considered in developing the overall rate of the new CAA. As a point of practical application, each prior CAA will be considered separately and then totaled in arriving at an overall non-Federal cost and rate of the newly formed CAA. However, should any of the segments be subject to the relief granted CAAs in low per capita income count

ntries (see paragraph (c) of this sec. tion), a further percentage adjustment may be in order. An exception to this general rule is the adoption of an overall 20 percent rate where, at the discretion of the OEO Regional Directors, such an action would work no hardship on the newly formed CAA.

Example 2: County "A">$200,000—funded 28 months

as of June 30, 1967. County "B"_$400,000—funded 32 months

as of June 30, 1967. County "C"$300,000_-funded 26 months

as of June 30, 1967.

On the basis of the bove, an overall rate of 18 percent will be charged the multicounty CAA. Note that any program which serves all these counties will be required to furnish the 18 percent local share. Where the specific amount, by county, is not readily available, an allocation of the total grant should be developed on a judgment basis. When data is not available to develop a cost allocation, the Regional Director will deter. mine a non-Federal contribution percentage based on whatever facts are available. In all cases, at least a 10 percent non-Federal share shall be required unless the grantee qualifies for total or partial exemption under para. graph (c) of this section.

Example 3:

"D" is a multicounty CAA which coveri counties “R," "S," and "T" as shown below All of the funds requested are for multi. county components. None of the component can be associated with any specific county of even any two of the three counties. There fore the only basis for determining non Federal share is population,

To determine the total amount of non Federal share in dollars that will be require of the CAA, follow the procedure described

1. Determine the percentage the popula tion of each county is of the total popula tion of the area covered by the CAA.

2. Multiply the total dollar amount to u requested by the population percentage fig ure thus obtained for each of the countle This apportions the total dollars requeste to each county.

3. Determine the local share percentag for each county based on the per capita i come (less than $750; $750_$1,000; Ovi $1,000).

4. Multiply the dollars apportioned 1 the county by its local share percenta figure. This determines the dollar amou of local share each county must contribut

5. Add the local share dollar amounts t each of the counties to obtain the total na Federal share that will be required.

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Total local share..

$8,000 Total Federal share..


t o Total program...

100,000 1 See paragraph (c) of this section for rules for low-income counties.

Il County T” would not reach its 32d month of operation until 3 months after the start of the new program year, the local share percentage would be only 17% percent, that is, 10 percent local share would be required for the first 3 months and 20 percent for the last 9 months.

(5) Special rule for Summer Head nomic Opportunity Act provides, in secStart programs. Commencing with the tion 225(c), that the Director of OEO programs funded for summer of 1967, all may relieve grantees of all or part of the local agencies which are not eligible for non-Federal share requirements. Prerelief under paragraph (c) of this sec- viously, when the basic non-Federal tion will be expected to provide a 20 per share required for assistance under seccent non-Federal share of the costs of tions 221 and 222(a) was 10 percent, an summer Head Start programs. This will exemption was granted to communities be true even though under preceding with annual per capita incomes below paragraphs of this paragraph (b), the $750 according to 1960 census data to same grantee may provide a smaller non- the extent that they were unable to raise Federal share for other component pro- non-Federal share. This exemption will grams which will be operating at the be continued. same time.

(ii) Moreover, with the increase in (6) Special rule for Upward Bound basic non-Federal share requirements to programs. (i) The round of Project Up 20 percent, OEO will extend a partial exward Bound grant actions effective April emption to an additional group of about 1, 1967, will all be funded on a 90 per 500 counties with per capita incomes cent-10 percent basis. This will be true above $750 but below $1,000 per year even when the grantee is a CAA which according to 1960 census data. The exwill be required to contribute a 20 per emption rules are as follows: cent local share for its other component

(A) As in the past, grantees serving comprograms which are being conducted

munities with per capita incomes below 8750 simultaneously.

per year are expected to provide 10 percent (ii) Commencing in 1968, all Upward of the program cost whenever possible. HowBound grant actions will be funded on ever, as in the past, such grantees may rean 80 percent-20 percent basis, without

quest exemption from that portion of the regard to the 32-month rule.

required non-Federal share which they are

unable to provide. (7) Special rule for Emergency Food

(B) Grantees serving communities with and Medical Services Programs. The re

per capita incomes in the $750-9999 range quirement in section 225(c) for non shall in all cases provide at least 10 percent Federal contributions is waived for all non-Federal share but may request exempprograms funded under section 222(a) (6) tion from that portion of the non-Federal of the Economic Opportunity Act. This

share above 10 percent which they are unWaiver is automatic and does not require

able to provide. a request for waiver from applicants for (iii) For these purposes, community financial assistance.

per capita incomes may be based on data (c) Exemptions from non-Federal from the 1960 U.S. Census of Population share requirements for communities or any more recent reliable source of per with per capita incomes below $1,000 per capita income data submitted by the apyear-(1) General rules. (i) The Eco- plicant agency.


(iv) The request for a waiver of the non-Federal share requirements under paragraph (A) or paragraph (B) above should be in the form of a letter accompanying the application for CAP grant and shall state clearly (a) the basis on which the community's per capita income was determined; (b) the amount of non-Federal share which the community can provide; and (c) that the applicant has made a reasonable effort to raise more non-Federal share and has been unsuccessful. OEO may require that additional evidence be submitted in support of these representations.

(2) Rule for multicounty programs. Generally, the waiver of part or all of the non-Federal share will be based on a showing that the per capita income of the entire community served by the community action programs is below $750 or $1,000 per year. However, if there are one or more counties in a multicounty area served by a single CAA having per capita incomes below $750 (or $1,000), even though the multicounty area, taken as a whole, does not, the CAA may request relief from its overall non-Federal share requirement for component projects designed to serve only the poorest counties. Note that this rule is not intended to either encourage or discourage the development or continuance of components to serve only one county in a multicounty CAA.

Example 4:

"G" a multicounty CAA, serves four counties, "W," "X," "Y," and "Z." Counties "W" and "X" have per capita incomes below $750. The other counties have per capita Incomes in the $750-$999 range. The entire Area served by "G" has a per capita income below $1,000 but not below $750. Its normal nonFederal share requirement is thus 10 percent, but for programs serving only county "W" or county "X" it is entitled to relief from that requirement i It cannot raise the non-Federal share.

The non-Federal share requirement on its grant may be calculated as follows:

Note that the Program Administration component, which serves all four counties, is required to provide non-Federal share on the basis of 10 percent because the fourcounty area, taken as a whole, has a per capita income below 81,000 but not below $750.

OEO will permit pooling of the non-Federal share as between exempt and nonexempt counties served by the same CAA. See paragraph (e) (1) of this section.

(3) Special rule for programs serving reservation Indians and migrant groups. In cases where a CAA or other Title II grantee provides a specific component program solely for the benefit of Indians on Federal or State reservations within the community or for the benefit of groups of migrant farm workers who live, or earn their living, outside of the community 6 months or more a year, the CAA shall be entitled to seek a partial or total exemption of the non-Federal share requirements for the costs of those component programs in cases where the per capita income of the groups served is below $1,000. If the per capita income is below $750, the Regional Director is authorized to grant an exemption for that portion of the non-Federal share which the CAA is unable to provide. If the per capita income is in the $750$999 range, the Regional Director is authorized to grant an exemption for the portion of the non-Federal share above 10 percent of program costs which the CAA is unable to provide. Exemptions granted under this paragraph will apply only to the particular component programs serving Indians or migrants, and shall not operate to reduce the non Federal share requirements applicable to other component programs operated by the same CAA. by

(d) Instructions to grantees reaching their 33d month during a current program year. (1) Grantees who, according to the rules in paragraph (b) of thi section, will reach their 33d month of CAP funding during their present pro. gram years (or other grant periods) wil be responsible for contributing the ad ditional non-Federal share of costi called for according to the table in Ey. hibit I. They will be expected to submi revised CAP Form 25's for affected com ponent projects identifying the valu and kind of increased local share and

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showing a corresponding reduction in Federal funds.

(2) Note that no increase in a grantee's level of approved program will be permitted on account of the increase in the required non-Federal share. That increase will be offset by a corresponding decrease in Federal support for the component projects in question.

(3) Following receipt of the revised CAP Forms 25, the appropriate OEO/ CAP office will review the changes and, upon approval, will issue a supplemental CAP Form 14 together with copies of the CAP Form 25's showing the approved

ciencies and overexpenditures of Federal funds.

(e) General (1) Pooling of non-Fed. eral share during program years. (i) Grantees are reminded that the pooling of non-Federal share among all components of the same grant during a single program year is acceptable. The policy stated in CAP Guide, Volume II (Part I, par. 4 (page 20)) with reference to pooling in terms of the Federal fiscal year is obsolete and under revision.

(ü) The pooling provision should be utilized to lessen the burden of the increased non-Federal share requirement for component programs which will have the greatest difficulty in providing increased non-Federal share.

(2) For further information. Applicants are advised to communicate with the appropriate OEO Regional Office for any further specific information they may need with regard to non-Federal share requirements.


(4) Failure to take prompt action to provide the required increase in nonFederal share and to achieve a corresponding reduction in Federal funds may necessitate remedial action by OEO. Such action may include suspension or termination of the grant, and legal action to recover non-Federal share defi


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