having administrative control and direction of free public education in a reservation, county, township, independent, or other school district located within a State. Such term includes any State agency which directly operates and maintains facilities for providing free public education.

(20 U.S.C. 241aa; 20 U.S.C. 244(6)(A), S. Rept. No. 92-384, 92d Cong., 1st Sess. 18 (1971))

"Minor remodeling" means minor alterations, in a previously completed building, which are needed to make effective use of equipment or personnel in space used or to be used for programs or projects meeting the assessed needs of Indian children. The term may include the extension of utility lines, such as for water and electricity, for points beyond the confines of the space in which the minor remodeling is undertaken but within the confines of such previously completed building, to the extent needed to make effective use of the equipment. The term does not include structural alterations to buildings, building construction, maintenance, or repair.

(20 U.S.C. 241cc(2))

"Nonlocal educational agency" means the governing body of a nonprofit institution or organization of an Indian tribe which operates for Indian children an elementary or secondary school or school system, located on or near a reservation, and which is not a local educational agency as defined herein.

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

"State aid" with respect to free public education means any contribution, no repayment for which is expected, made by a State to or on behalf of a local educational agency within the State for the support of free public elementary and secondary education.

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

"State educational agency" means the officer or agency primarily responsible for the State supervision of public elementary and secondary schools.

(20 U.S.C. 244(7))

[38 FR 18018, July 6, 1973, as amended at 38 FR 30661, Nov. 6, 1973]

§§ 186.3-186.10 [Reserved]

Subpart B-Applications; Use of Federal Funds

§ 186.11 Applications.

A grant under the act to a local educational agency may be made only upon application to the Commissioner, on such forms as may be prescribed by him, when such application meets the requirements of this subpart.

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

§ 186.12 Contents of applications.

An application, in accordance with section 305(a) of the act, shall:

(a) Provide that the activities and services for which assistance is sought will be administered by or under the supervision of the applicant;

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

(b) Set forth an elementary or secondary school program specially designed to meet the special educational needs of Indian students and provide for such methods of administration (both fiscal and educational) as are necessary for the proper and efficient operation of the program;

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

(c) Provide that effective procedures, including provisions for appropriate objective measurement of educational achievement, will be adopted for evaluating at least annually the effectiveness of the applicant's programs and projects in meeting the special educational needs of Indian students;

(20 U.S.C. 241dd(a)(4))

(d) Set forth policies and procedures which assure that Federal funds made available under the act for any fiscal year will be so used to supplement and, to the extent practical, increase the level of funds that would, in the absence of such Federal funds, be made available by the applicant for the education of Indian children and in no case supplant such funds; and

(20 U.S.C. 241dd(a)(5))

(e) Provide for such fiscal control and fund accounting procedures by the applicant as are necessary to assure proper disbursement of, and accounting for, Federal funds paid to the applicant under the act, and for such reports as the Commissioner may require to carry out his functions under the act.

(20 U.S.C. 241dd (a)(6) and (a)(7); 20 U.S.C. 1232c)

(f) In the case of an application for payments for planning, provide satisfactory assurance that:

(1) The planning was or will be directly related to programs or projects to be carried out under this part and has resulted, or is reasonably likely to result, in a program or project which will be carried out under this part; and

(2) The planning funds are needed because of the innovative nature of the program or project or because the local educational agency lacks the resources necessary to plan adequately for programs and projects to be carried out under the act.

(20 U.S.C. 241dd(a)(3))

§ 186.13 Approval of applications.

(a) In general. An application may be approved only if it is consistent with the applicable provisions of the act and this part and meets the requirements set forth in § 186.12 and in this section.

(b) Utilization of talents; increase of educational opportunities. An application shall provide satisfactory assurance that the program or project for which the application is made:

(1) Will utilize the best available talents and resources (including persons from the Indian community), and

(2) Will substantially increase educational opportunities of Indian children in the area to be served by the applicant.

The talents and resources utilized to substantially increase educational opportunities of Indian children may include any individuals or organizations which have a particular and uncommon skill, ability, or delivery system, based on knowledge, assets, or existing capacities, to increase educational opportunities of Indian children. Educa

tional opportunities may include, but shall not be limited to, instructional and supportive activities, services or experiences designed to meet the assessed needs of Indian children to be served in the application.

(20 U.S.C. 241dd(b)(2)(A))

(c) Consultation and hearings. An application shall provide satisfactory assurance that the program or project for which application is made has been developed:

(1) In open consultation with parents of Indian children, teachers, and, where such program or project will serve secondary school students, Indian secondary school students, including not less than one public hearing at which such persons have been given a full opportunity to understand the program for which assistance is sought and to offer recommendations thereon; and

(2) With the participation and approval of a committee selected in accordance with §§ 186.15 and 186.16. Such assurance shall include at the minimum a description of the steps taken by the applicant to meet the requirements of this paragraph.

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

§ 186.14 Public hearings.

The public hearing required by § 186.13(c)(1) shall provide an opportunity for discussion of, among other appropriate subjects:

(1) The adequacy of current programs to meet the special educational needs of Indian children enrolled in the local educational agency; and

(2) The manner ir. which the program or project for which application is made will be coordinated with other programs to meet the special educational needs of such children. (20 U.S.C. 241dd(b)(2)(B)(i))

§ 186.15 Parent committee nominations.

The committee formed for the purposes of § 186.13(c)(2) shall be nominated and selected by procedures appropriate to the Indian community to be served, such as sanction by the tribal governor where necessary. This committee shall be known "parent committee."

as the

(a) Identification of individuals for consideration for membership on the committee shall not be determined by the applicant alone, but, to the extent practicable, shall be determined by consultation with such groups as parents of Indian children to be served, Indian tribes, tribal councils, institutions, and organizations which are part of the affected Indian community.

(b) The recommendation of such individuals by such groups shall be designed to result in the identification of persons representative of the interests of the Indian children to be served by the grant for which application is made.

(c) Representative factors in the nomination and selection of members of the parent committee shall include, but not be limited to, the following: (1) Geographical location; (2) Previous or current membership in a parent advisory committee;

(3) Experience with target schools; (4) Prior school or community activity;

(5) Willingness to participate actively and make recommendations concerning the special educational needs of the Indian children to be served; and

(6) Representation of reservation and off-reservation Indian children where necessary.

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

§ 186.16 Selection of parent committee.

(a) The parent committee shall be selected by parents of the Indian children to be served, teachers and, where the program or project will serve secondary school students, Indian secondary school students.

(b) Selection of the parent committee shall not limit the continuing participation of the Indian community in the operation and evaluation of the program pursuant to § 186.17.

(c) The applicant will arrange the mechanism for selection procedures after consultation with the groups listed in § 186.15(a), and shall provide prior notice and dissemination of information to the community concerning the selection procedures.

(d) Membership of a parent committee shall be in proportion to the total

number of Indian children to be served, with a maximum membership of 40 persons. The committee shall include only parents of the Indian children to be served, teachers, and where the program or project will serve secondary school students, Indian secondary school students, with parents constituting at least half of the members. Each member shall be designated by name and address in the application. (20 U.S.C. 241dd(b)(2)(B)(ii))

§ 186.17 Procedures for community in

volvement.

An application shall set forth policies and procedures assuring that the program will be operated and evaluated in consultation with, and the involvement of, parents of the Indian children and representatives of the area to be served, including the committee established under § 186.16. Such policies and procedures shall at a minimum include the provision by the local educational agency of the following:

(a) A repository available to the community of documentation concerning parent committee functions such as records of meetings, minutes of meetings, committee selection procedures, and a roster of committee membership;

(b) Dissemination and interpretations of bilingual proceedings and materials where necessary;

(c) An established role for the committee to be played in needs assessments, and priority determinations for meeting such identified needs;

(d) Access by the committee to budget and financial reports and analyses to determine that grant funds are being used to supplement the level of funds available to the community for the education of Indian children;

(e) Planned activities to assure review of application implementation, ongoing review of program or project activities or services, and continuing analysis for evaluation and dissemination activities and other related programs and projects;

(f) Formal mechanism for written approval, by a majority of the committee voting in open session, of the application and of projects and activities to

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 ac count 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))