be implemented by the applicant which affect the community to be served.

(20 U.S.C. 241dd(b)(2)(B) and (c))

§ 186.18 Needs assessment.

In designing a program which meets the special educational needs of the Indian children to be served, the local educational agency (after consultation with the parent committee and the Indian community) must consider the inclusion of activities which build upon and support the heritage, traditions, and lifestyle of the community being served. The determination of those needs shall include consideration of such instructional or supportive services, activities, and experiences as the following:

(a) Instructional services, activities and experiences. (1) Arts (music,

graphics, etc.);

(2) Language arts, including speech therapy, reading and language instruction such as bilingual or English as a second language programs;

(3) Vocational and industrial arts; (4) Mathematics and natural science; (5) Social sciences and humanities; (6) Physical education; and (7) Cultural enrichment. (b) Supportive activities, services or experiences. (1) Academic guidance, counseling and testing;

(2) Use of dormitory and recreation facilities;

(3) Food and clothing;

(4) Medical and dental care;

(5) Psychological or psychiatric testing and care;

(6) Social work services;

(7) Pupil transportation; and

(8) Special services for physically handicapped and mentally retarded children.

(20 U.S.C. 241cc)

§ 186.19 Use of Federal funds.

(a) Grants under the Act may be used for

(1) The planning and development of programs specifically designed to meet the special educational needs of Indian children, including pilot projects designed to test the effectiveness of plans so developed; and

(2) The establishment, maintenance, and operation of programs specifically designed to meet the special educational needs of Indian children.

(b) Grants under the Act also may be used for the acquisition of necessary equipment, and for the minor remodeling of classroom or other space used for such programs currently meeting the special educational needs of Indian children.

(20 U.S.C. 241bb(a)(2)(B))

Subpart C-Amount of Grant;
Payments; Reallocations

§ 186.21 Formula for determination of amount of grants for local educational agencies.

(a) For the purpose of computing the amount to which a local educational agency is entitled under the Act for any fiscal year ending prior to July 1, 1975, the Commissioner shall determine, on the basis of the most satisfactory data available, the number of Indian children who were enrolled in the schools of such agency and for whom such agency provided free public education, during such fiscal year.

(20 U.S.C. 241bb(a)(1))

(b) The amount of the grant to which a local educational agency is entitled under the Act for any fiscal year shall be an amount equal to

(1) The average per pupil expenditure for such agency, as determined in accordance with paragraph (c) of this section, multiplied by

(2) The sum of the number of Indian children determined under paragraph (a) of this section.

(20 U.S.C. 241bb(a)(2)(A))

(c) The average per pupil expenditure for a local educational agency shall be the aggregate current expenditures during the second fiscal year preceding the fiscal year for which the computation is made, for all of the local educational agencies in the State in which such agency is located, plus any direct current expenditures by such State for the operation of such agencies (without regard to the sources of funds from which either of

90-215 O- 78 - 31

such expenditures are made), divided by the aggregate number of children who were in average daily membership in elementary and secondary schools for whom such agencies provided free public education during the second preceding fiscal year.

(20 U.S.C. 241bb(a)(2)(C))

(d) Per pupil expenditure data for the purposes of this part shall be determined by the Commissioner on the basis of the best data available to him. Such data for the purposes of average per pupil expenditure determinations shall be in accordance with the provisions of section 303(a)(2)(C) of the act and of this subpart.

(20 U.S.C. 241bb(a)(2)(C))

(e) A grant shall not be made to a local educational agency under the act unless the number of Indian children enrolled in the schools of that agency is at least 10 or constitutes at least 50 percent of that agency's total, enrollment. This requirement shall not apply to local educational agencies serving Indian children in Alaska, California, and Oklahoma, or located on, or in proximity to, an Indian reservation. (For a local educational agency to be in proximity to an Indian reservation, the Indian child's attendance area must be within reasonable pupil transportation distance of the reservation lands, which determination shall be based on criteria including length of schoolday, route traveltime, and population density factors.)

(20 U.S.C. 241bb(a)(2)(B))

§ 186.22 [Reserved]

§ 186.23 Limitation with regard to eligibility of local educational agencies for State aid.

No payment will be made under this part for any fiscal year to any local educational agency in a State which has taken into consideration payments under this part in determining the eligiblity of such local educational agency in that State for State aid, or the amount of that aid, with respect to free public education of children

during that year or the preceding fiscal year.

(20 U.S.C. 241ee(b)(1))

§ 186.24 Limitation with regard to combined fiscal effort.

(a) No payments under the act to any local educational agency in any State for any fiscal year may be made by the Commissioner unless the State educational agency of the respective State finds that the combined fiscal effort of that local educational agency and the State with respect to the provision of free public education by that agency for the preceding fiscal year was not less than such combined fiscal effort for that purpose for the second preceding fiscal year.

(b) Expenditures by a State with respect to a local educational agency, rather than by such a local educational agency itself, shall be deemed to have been maintained at the same level in the preceding fiscal year as in the second preceding fiscal year, unless the basis for making such expenditures has been altered or unless such expenditures are assumed by such a local educational agency. In such an event, the actual expenditures of that nature shall be taken into account in both years in determining combined fiscal effort.

(c) A combined fiscal effort in the preceding fiscal year shall not be deemed to be a reduction from that in the second preceding fiscal year unless the per pupil expenditure in the preceding fiscal year is less than that in the second preceding fiscal year by more than 5 percent. Any such reduction in fiscal effort by a local educational agency for any fiscal year by more than 5 percent will disqualify a local educational agency unless such agency demonstrates to the satisfaction of the State educational agency that such a reduction was the result of an unusual event, such as an unanticipated increase in school enrollment, that was beyond the control of the local educational agency, and that the fiscal effort of such agency does not otherwise indicate a diminished fiscal effort.

(20 U.S.C. 241ee(b)(2))

§ 186.25 Adjustments where necessitated by appropriations.

(a) Ratable reductions. As prescribed by section 307(a) of the act, if the sums appropriated for a fiscal year for making payments under this part are not sufficient to pay in full the total amounts which all local educational agencies are eligible to receive under this part for such fiscal year (as determined in accordance with § 186.21), the Commissioner will ratably reduce the maximum amounts which all such agencies are eligible to receive under this part for such year.

(20 U.S.C. 241ff(a))

(b) Reallocation of funds. (1) In any fiscal year in which the maximum amounts for which local educational agencies are eligible under this part have been ratably reduced in accordance with paragraph (a) of this section (and in which additional funds have not been made available to pay in full such maximum amounts), the Commissioner shall fix a date or dates by appropriate notice for the reporting, by each local educational agency which is eligible for a grant under this part determined in accordance with § 186.21, of the amount of funds available to such agency under this part which it estimates it would expend under an approved application. If such agency is applying for a grant under this part, its estimate shall set forth a detailed projection of the amount it deems necessary for carrying out its proposed project relative to the amount available to it under this part. The Commissioner shall, in fixing such date or dates, notify local educational agencies which are eligible for assistance under this part that the failure to file an application pursuant to subpart B of this part, by such date or dates, will result in the reallocation of the ratably reduced maximum amounts which such agencies are eligible to receive under this part to other eligible local educational agencies pursuant to this section.

(2) Following the submission of such reports, the Commissioner will determine those local educational agencies which will need additional funds to carry out approved applications under this part. Such additional funds may

be allocated to such agencies by the Commissioner (i) from amounts which he determines in accordance with subparagraph (1) of this paragraph, will not be used by local educational agencies during their period of availability and (ii) from amounts which he determines would have been available to local educational agencies that did not submit approvable applications and will not be used by such agencies.

(3) No amount may be reallocated to a local educational agency under paragraph (b)(2) of this section, if such amount, when added to the amount available to such agency in accordance with paragraph (a) of this section, exceeds the maximum grant for which such agency is eligible in accordance with § 186.21.

(20 U.S.C. 241ff)

§§ 186.27-186.30 [Reserved]

Subpart D-Nonlocal Educational Agencies

AUTHORITY: Pub. L. 81-874, Title III, as added by Title IV, Part A, Education Amendments of 1972, 86 Stat. 334 (20 U.S.C. 241aa-241ff).

SOURCE: 39 FR 22424, June 24, 1974, unless otherwise noted.

§ 186.31 Eligibility; purpose.

(a) The Commissioner may, in accordance with section 303(b) of the Act (as defined in § 186.2), provide financial assistance to schools on or near reservations which are: (1) Nonlocal educational agencies (as defined in § 186.2) or (2) local educational agencies (i) which have been local educational agencies for less than three years, and (ii) which enroll a substantial proportion of Indian children, and (3) which best satisfy the selection criteria set forth in § 186.33.

(b) Assistance under this subpart is to be used for the purpose of developing and carrying out, in such agencies, elementary and secondary school programs specially designed to meet the special educational needs of Indian students.

(c) Assistance may be made available under this subpart to meet the costs

incurred in connection with the establishment of such agencies.

(20 U.S.C. 241bb(b); S. Rept. 92-346, 92d Cong., 1st Sess. 1971, p. 99)

§ 186.32 Eligibility factors.

(a) Eligibility of nonlocal educational agencies. In determining whether an applicant is a nonlocal educational agency (as defined in § 186.2), eligible to apply for assistance under this subpart, the Commissioner shall consider such factors as the following:

(1) Whether the governing body of the school or school system was selected by, is representative of, and is solely responsible to the Indian tribe or community which that school or school system serves; and

(2) Whether the governing body derives authority from such community to carry out such functions as:

(i) Employing, managing, and terminating personnel;

(ii) Developing and revising curricula;

(iii) Establishing attendance, academic, and other relevant standards; (iv) Developing and approving budgets;

(v) Establishing operational policies; and

(vi) Raising funds.

(b) Applications of nonlocal educational agencies. To assist the Commissioner in making eligibility determinations regarding nonlocal educational agencies, an application shall contain:

(1) Adequate documentation of the authority to carry out the functions contained in paragraph (a) of this section such as:

(i) Incorporation certificate or other organizational charter;

(ii) By-laws or charter;

(iii) Contract or other agreement to administer the school or school system;

(iv) A certified description of the duties of the governing body; and

(2) A description of the policies under which the governing body carries out the functions described in paragraph (a) of this section.

(c) Applications of local educational agencies. To assist the Commissioner in making eligibility determinations regarding local educational agencies, an application shall contain certified

documentation of the date on which that agency was established as a local educational agency.

(20 U.S.C. 241bb(b))

§ 186.33 Criteria for selection of applications.

(a) In considering whether to approve applications, and in determining the amount of the awards under approved applications, the Commissioner will take into account, in addition to criteria contained in 45 CFR 100a.26(b), criteria such as the following:

(1) The number of Indian children enrolled in the agency applying for assistance, and the number that would be involved in the proposed program or project;

(2) The degree to which costs for which assistance is sought are connected to start up costs incurred in the establishment of community control of a school or school system or of a new local educational agency;

(3) The degree to which the program or project to be assisted addresses the particular educational and cultural needs of Indian children;

(4) The degree to which the proposed program or project offers activities and services not previously available to Indian children in sufficient quantity or quality;

(5) The adequacy of planning to provide significant long-term improvement of educational opportunities for the Indian children to be served by the school system;

(6) The degree to which the proposed program or project is related to the educational plan and priorities of the Indian community to be served; and

(7) Whether the application satisfies appropriate requirements of Subpart B of this Part.

(b) Applications submitted under this subpart must satisfy the following requirements of Subpart B of this

Part:

(1) Sections 186.11 and 186.12, dealing with required contents of applications;

(2) Section 186.13(b), requiring utilization of the best available talents and resources (including persons from the Indian community);

(3) Sections 186.13(c)(1) and 186.17, requiring an assurance that the proposed program or project will be developed, operated and evaluated in open consultation with the Indian community, including at least one public hearing at which all interested community members will have an opportunity to understand the program and to offer recommendations thereon; and

(4) Section 186.14, describing appropriate subjects for discussion at the public hearing required in paragraph (b)(3) of this section.

(c) Applications submitted under this subpart are not required to satisfy the provisions in §§ 186.13(c)(2) and 186.15-186.17 of Subpart B of this Part relating to the nomination, selection, and functions of a Parent Committee. (20 U.S.C. 241dd(b)(2))